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The IKN Weekly, out now

The peanut stood on the railway line,
His heart was all aflutter,
The 461 came down the track,
Toot Toot! Peanut butter.

IKN461 has just been sent to subscribers. A better edition than last week's mess, the main gig is B2 but there's plenty more. All aboard!


First Majestic (AG) ( decides not to tell us about its cyanide spillage... its newly acquired San Dimas mine in Mexico (ex-Primero), so it falls to this pissant blog. According to the Mexican environment people, on March 11th (six freakin' days ago) First Majestic was trucking cyanide solution out of the mine when the truck ran out of fuel (weird in itself). The truck stopped on a hill and it turns out that one of the taps was either faulty (service dept?) or had been badly closed by the company. The result was the loss of 245l of cyanide solution, which then ran down 245 metres to the local river and proceeded to kill no end of fish when it entered the river.

Another Canadian mining company, winning friends and influencing people in Mexico.


Christopher Hitchens on Vladimir Putin

A nine minute segment of a speech and Q&A given by a Hitchens at the height of his powers, in Canada in 2005. The first six minutes give necessary background (including the Berlin Wall and Serbia), the last three minutes are impressively perceptive on the "KGB Weasel" Putin. Hitchens called it first and well.

The Friday OT: Smashing Pumpkins; Zero

Because zero:

Youtube here.

Fun Asanko (AKG) things

On checking out the 4q17 financials and MD&A out of Asanko Gold (AKG) today, I couldn't help but wonder how it managed to mine just 802kt of ore but mill 1087kt. The norm at the company, as you can see below, is that the company mines more than it mills.

The difference goes on the low grade stockpile and gets added to assets at the company. So you'd expect that stockpile to drop in value and sure enough...

...carried stockpile inventory dropped by U$4.5m during Q4. You can expect that stockpile number to drop further in the next two quarters too, what with AKG telling us how its' going to have to concentrate on cutting back the pit walls. That means the low 1.5g/t grade average will continue. As will the losses. 

There was also that weird thing about how AKG claimed mill throughput of 1087kt, 1.5 g/t and 94% recoveries. If you do the math on that they should have produced 49,282 oz but somehow managed to claim 51,550 produced ounces. That's 2,268oz magically created out of nothing. Clever trick, especially when there was another 2,047oz of gold magically created in the same way during first three quarters of last year.


IKN Welcomes Brent Gilchrist, president of JDS Resources

Hi Brent,

Thanks for signing up to the mailing list today March 15th, so good of you to take an interest in this humble corner of cyberspace. Now you're here, perhaps you could enlighten on just why your company managed to underestimate capex at VIT.v's Eagle project to the tune of around 47%? And all that stuff you guys are trying to do at Curraghinalt, too. Just drop me a line, it'd be great to hear from you. Anyway, thanks again for signing up and here's a link you may be interested in reading.

Kisses, Otto.

Mo' B2

It's not exactly setting the street on fire, but...

...if you sit B2Gold (BTG) next to the Gold and Silver Index (XAU) on the one minute intervals and the last two day to show how the earnings numbers were received last night, that's not bad. As noted to one mailer this morning, I've seen worse reporting days.

Peter Arendas snowflake alert (Victoria Gold Part Deux)

After this humble corner of cyberspace did some 'splainin' to Peter Arendas, self-appointed expert on mining numbers and stuff over at Sinking Alpha, somebody pointed out the post and he decided to act...and comment:

Peter Arendas, Contributor
Comments (963) |+ Follow |Send Message |
Author’s reply »
Yes, I made a mistake and only mechanically decreased the NPV by 5%. Although I reflected the impact of the royalty sale on the attributable gold production and AISC, I neglected the total impact of the royalty sale on the NPV. After I used the gold price of $1,300 and the new 5% NSR in Victoria's NPV model presented in their feasibility study, the resulting after-tax NPV(5%) should be around $370 million (I'm not familiar with the Canadian tax system enough to determine the exact impact of the royalty sale and the 2017 tax changes on Victoria's tax obligations which means that the actual number may differ slightly). I submitted a correction of the related numbers, it should be visible soon.I apologize for the mistake, however, I must say that I absolutely don't like the blog author's arrogant writing style. If someone makes a mistake, you can notice him also without personal attacks, in a more cultivated way.

Oh the poor dear, has no trouble about spouting BS, pumping stocks in public forums using false information and potentially leading thousands of naive sheep up the proverbial garden path, but doesn't like his thin skin being pierced. Well Peter, it's true I'm an arrogant piece of crap but it's also true that I'm not nasty and horrible to just anyone. I save that for people who deserve it, such as you because you may think you've fixed your BS anal ysis now but it still wildly overestimates the NPV of Victoria Gold (VIT.v). This is one reason I asked you whether you actually know what NPV stands for.

You are seriously telling us that the Eagle project will be built for CAD$370m? They've just raised CAD$505m, didn't you see that? Well in fact you did and somebody else pointed it out to you in the comments section, but lo and behold that fact didn't fit your prejudices so you were moronic enough to defend your position with "Well they might not spend all that cash on the capex"! Dude, have you ever met a mining company CEO in your life?

A few facts for you, Peter:

1) VIT raised C$505m to build Eagle because they need C$505m to build Eagle. Period.
2) That C$370m (U$288m) number you seem to be fond of is a work of fiction, made up by JDS and published in cahoots with VIT. It's fraudulent. One of these days JDS is going to get slapped with a lawsuit and go bankrupt after losing the case, because they do this shifty move all the time and you're simply a fool if you haven't noticed it yet
3) As they've already spent C$38.4m on Capex at Eagle in 2017, you're staring down the barrel of a C$543m capex project here. And even that may turn out to be generous, because I'm not including the $20m contingency bridge loan they've set up or their treasury position.
4) And here's how I framed that fact to subscribers of The IKN Weekly last Sunday evening in IKN460: "That’s an overrun of C$173m, or a whopping 46.75%. And as according to JDS every 5% extra spent on capex means C$27m less on the NPV, the subtraction is C$252.45m".
5) Got that, Peter? Y'see, the problem is that you cannot simply ignore a capex overrun. You can try of course, you can even publish about it (either due to dumbass ignorance or nefarious reasons, I'm going to assume the best of you and say you're the former) but don't start whining when your gross errors and miscalculations are brought in front of your eyes. 
6) So let me help you with the next correction you need to make to your utter work of fiction. You're claiming a U$370m NPV for VIT.v at U$1.3k/oz gold. You're going to need to subtract around U$197m from that now. And that means your NPV per share is down to 22c. And you're looking really stupid now.

Have a nice day, Peter.

B2Gold ( (BTG) reports its 2017 financials

Fair to say they're not desperate for cash:

First of a squillion charts I get to play with this weekend. Anyway, go check out the BTO filings yourself, on SEDAR this evening.


NR headline of the day

Only in Canada.

Peat Resources Limited Announces Shareholder Vote to Change Name to Cobalt Blockchain Inc. and Other Results from its Annual and Special Meeting

Two scams for the price of one. And no children were harmed in the production of this DRC cobalt, pretty promise. Buy now! Hurry!

A song for March 14th

Kate Bush's Pi

Enjoy some tasty baked goods today, people.

Parsing the First Quantum ( NR on the Panama Cobre strike

Here's the NR, below comments from your humble scribe:

TORONTO, March 14, 2018 /CNW/ - First Quantum Minerals Ltd. ("First Quantum" or the "Company", TSX Symbol "FM") today reported that the Cobre Panama project is currently experiencing industrial action which has reduced the level of work being performed on the project. 

This action was started by a small number of personnel and their outside union leadership on March 9, 2018. The dominant union, which represents the majority of workers, is not involved in the action. Currently, development activity is continuing in two of the four main construction areas.
The project's security team is working with the authorities to ensure the safety of its employees and assets.
Cobre Panama has received significant support from the government including visits from senior Ministers to assist in reaching a resolution. These efforts are continuing.
Further updates will be provided as warranted.
On Behalf of the Board of Directors of First Quantum Minerals Ltd.                     G. Clive NewallPresident

1) The industrial action began in January
2) After a brief interruption, management and workers sat down and on January 18th hammered out a deal
3) One stipulation of the deal was that nobody would be fired for their militancy in the lead-up to the January stoppage.
4) First Quantum promptly fired 34 people for being "union ringleaders".
5) The union represented by those 34 fired workers has 2,000 personnel on site. It's the second largest representative union on site, but refuses to deal with them directly. It says it will only deal with the largest union (with around 3,500 workers on site).
6) Therefore tells us that 2,000 of the 7,000 total workers is "a small amount".
7) There are now 3,500 workers on strike due to the heavy-handed management who couldn't resist breaking their own word. In other words, the strike has spread due to solidarity among the unions.
8) Well done, Clive Newall.


Stephen Hawking

A brief history.

Further thoughts on the Tinka Resources (TK.v) bought deal

Hi, I'm a loyal retail shareholder! Just one moment, let me adjust correctly...

Thank you for the way you look after me.

Трамп пожаров Тиллерсон

Serves Rex right for preferring the Brits over Russia, silly man.

Tinka: A bought deal at 48c

With a half warrant. Freakin idiots.

Link here.

My stars there are some dumbasses on Sinking Alpha, Victoria Gold (VIT.v) edition

Seriously, how the blinking flip can you write this in an anal ysis of a company...
"Victoria Gold will also sell a 5% NSR royalty on the future production from the Eagle mine. The royalty will be sold for C$98 million (~$75 million) to Osisko Gold Royalties.
 ...and then write this just a few lines later?
"At a gold price of $1,300/toz, the after-tax NPV(5%) was estimated at $442 million (C$567 million) and the IRR at 32%. However, after the 2017 tax rate reduction, it increased approximately to $460 million. As 5% of the gold production will be sold to Osisko Gold Royalties in the form of NSR, the NPV attributable to Victoria Gold's shareholders should be around $437 million."
Riddle me that again, Sinking Alpha mining expert Peter Arendas (who pretends to be a PhD)? You are telling me that:

1) You recognize Sean Roosen is prepared to pay U$75m for an NSR.
2) That NSR reduces NPV of a project as pertains to VIT.v by U$23m.

So Sean Roosen has turned into a source of philanthropic charity money for needy and deserving junior mining companies, is that right? I will therefore continue with questions:
Do you understand what "NPV" stands for?
Do you know where to apply an NSR reduction on a financial model?
Are you seriously this stupid about financials?
If you are this stupid, why are you trying to fob yourself off as an expert?
And let's not even start on how the capex blowout changes the NPV (hint; by a lot). If it weren't for the fact that there are people who are going to take your complete dumbassery at face value and invest in VIT.v on the back of your words, this would be funny.


Louis Lobito Little Wolf James: A question

Is it just me, or does he sound exactly like Jared Kushner?

There will be no posts on this blog today

For secret reasons.


The IKN Weekly, out now

IKN460 has just been sent to subscribers. Another sub-standard edition.


The top three most visited IKN posts this week are... reverse order:

Third Place: "PDAC 2018: The most effective and impressive company presentation today". The GDX rose by 0.4% last week, the GDXJ lost a penny but this company rose by 8.3% during a tough PDAC week, no mean feat.

Second Place: ""Otto Rock? More like Otto Wrong! Our lawyers are taking care of it, don't worry about him."". We note that the video has had 6,283 views as at this weekend. Not bad, but instead of Otto Rock references they should have used cute cats or puppy dogs doing endearing things, 100k guaranteed.
First Place: "On payday loans, Tinka Resources (TK.v) and Matt Badiali (from IKN459)". And when TK.v returned to that 57c trigger point the next day, we dinged the trade here.


The Friday OT: BT; 1.618

One for the math fans, a musical and visual delight.

From BT's album, This Binary Universe. Youtube here.

The tightening lead (Pb) market (from IKN459)

This was part of last weekend's edition of The IKN Weekly. Just one small edit, the name of a company at the end.

More on Lead (Pb)
It was hectic and a bit of a squeeze to get the edition out on time last week, since then I’ve had time to fill in some blank spaces and none more so than the intriguing situation in the lead market. What I’ve found by checking the data is that there’s every reason to suppose an acceleration in the demand for lead that justifies the current voracious appetite of smelters for product.

The place to go for reliable supply demand data is the International Lead and Zinc Study Group (ILZSG), based out of Portugal and comprised of a selection of industry experts from all corners of the sector. We’ve made use of their database (22) on these pages previously for the zinc exercise which showed in 2016 the rise in demand (that’s worked out very nicely thank you) and it’s now time for its ugly sister, known in Latin as plumbum and the reason we call out the plumber who’ll often bring his plumb line. This chart derived from the data shows the supply make-up of Pb and the first thing to note is the high percentage of end user supply that comes from the re-cycling business. There are well-established firms that do this and as much as 97% of the lead used in car batteries is scavenged and sent back to battery makers to use again. However, mined supply is also on the rise and with 11 months of data for 2017 already published, our estimated as seen in the charts is likely to be within a tight margin of error and shows supply expanding again after a couple of stagnant years.

When it comes to demand, there are a few extra uses for the metal out there such as electrical cable wrap (around 6% of supply) and ammunition (shot takes around 3% of the supply) and there’s even lead still put in some fuels and paints around the world (long past time to stop that, people) but the main use for the metal by a long way is for lead/acid batteries, taking around 80% of all the metal out there. Therefore when we talk lead demand we’re talking about cars, trucks, all types of moving vehicles and look no further for the demand driver (and therefore the reason for price changes. On this score, let’s take the aggregate supply as seen in the above chart and place it next to the demand columns for the same years (plus the ILXSG forecast for 2018 added in for reference) but please note the cut down Y-axis, which I’ve done to show surplus/deficit differences more clearly and not to try and fool your eye.

As you can see, supply and demand were reasonably lockstep for the five years to 2016, but 2017 saw it move into a deficit and with the ILZSG predicting further demand growth for this year, we should expect more pressure to deliver. What’s more, if we scratch around at some of the underlying data we see details of the demand hike. 

This chart right shows the quarterly net imports of lead into China (the world’s leading user of Pb, which is another way of saying that it makes the most car batteries). Inside the numbers included in that China chart are other intriguing datapoints too, such as the way in which up to 2016 China exports more pure refined Pb than imported (around 11,000 tonnes), but last year the numbers flipped and they imported a net of 77,000 tonnes).

My final exhibit today is a chart from a report compiled by Grandview Research (23) from 2016 which shows the lead/acid battery market for the USA only, which is set to grow substantially in the years to come with two of the forecasts added in for your consideration. It may be counter-intuitive what with the rise and rise of lithium batteries, but traditional lead/acid units aren’t about to go out of style whether they be SLI (starting, lighting and ignition, what we consider a “normal car battery”), motive (e,g, the large banks of batteries used by fork lift trucks and the like) or stationary (which are seeing growth due to the need to store alternative power, such as solar).

The bottom line: The lead market has quietly grown to the point where it’s tighter than the headline-grabbing zinc market and the likelihood is that Pb’s run is far from over. All the more reason to like (company name), in my view.


The best bit of the Pretium Resources (PVG) 4q17 results is...

...without a shadow of a doubt, this line from the NR:
"The Company has working capital of $40.6 million excluding the current portion of long-term debt as at December 31, 2017."

1) can't exclude current debt from working capital. Well you can, but not while keeping a straight face.
2) ...when you include that debt, working capital becomes negative three hundred and thirty-four point four zero nine million. Y'know...details.

Reader CM explains zinc inventories

Nicely done, CM:

Victoria Gold (VIT.v) announces its capex blowout early

So, if I have this straight:

  • In 2016, Victoria Gold (VIT.v) tells us in its Feasibility Study that it needs CAD$369m to build its Eagle Gold mine in the Yukon.
  • In 2017 it arranges a U$220m credit facility and starts the ball rolling by spending CAD$40m on phase one capex.
  • Today it announces a funding package that comes to CAD$505m, including an equity raise that adds a little under 50% to an already blown out share count (we go from around 515m S/O to 765m S/O) and giving a 5% NSR to Roosen. To be clear, this new C$505m package includes those previously announced facilities, but it's still way over what VIT told us it would need.

Which begs the obvious question, why so much money? Why, when according to the company's own literature the company did indeed spend C$38.4m on capex at Eagle in 2017, doesn't it put together a funding package for around CAD$330m to complete construction? Either they're planning to keep a contingency fund of epic proportions or VIT.v has just told the market that its project is built on the back of an unreliable Feasibility Study, which of course means in turn that all the NPV and IRR figures it's used to sell Eagle are complete balderdash.

Tahoe Resources (TAHO): Guatemala's Constitutional Court asks for more

Yesterday, Guatemala's Constitutional Court (CC) made noises on the Tahoe Resources Escobal mine case but, rather than give the type of resolution the company tried to hint at during BMO last week, told the lawyers in the case it wanted more studies and evidence before handing down a judgement in the case. The CC wants a study of the population around the mine (again to see if there are indigenous there) as well as more information on the way the licences were originally granted by the Ministries at the time.

The separate bodies have 10 to 15 days to submit the evidences. From that moment the CC says it will take the time it considers prudent before making a decision.

Info here.


International Women's Day according to Latin American politicians, version 2018

Not the first time we've run this subject. However, still true.

For women:

For men:

PDAC 2018 attendance is 25,606

The annual chart, updated:

You want me to be impressed. I'm not. Press release here.

Meanwhile, what I have learned from PDAC this year is that there are 500 operating mining companies all making a profit and 1500 junior exploration companies with highly prospective, robust flagship properties that will all become extremely profitable and anyone who is first in the queue and invests in them will make an awful lot of money.

Peru President PPK goes under a new impeachment process today

As from today, things hot up for PPK as the Peru congress is about to officially start a new impeachment (precisely called "vacancia" or "vacancy") process against the dude. The accusation is moral incompetence, it's again connected to the way in which he benefited from Odebrecht cash over a decade ago, this time they're linking it in with the way he's been bending the truth and using his presidential position in order to get out of the direct line of fire.

The process will need the month of March to unfold, but even now it's clear that this is a serious threat to PPK and the vote, which needs 87 of the 130 Congress members to pass and force him out, by my reckoning is going to fall somewhere between 80 and 98 and by the reckoning of a couple of the more vociferous Peru political watchers is already a done deal. And waiting in the wings is 1st Veep Martín Vizcarra, who has been given the nod by the main opposition party 'Fuerza Popular' as someone they'd support taking over the job until 2021 and according to plenty of sources has already been in negotiations with the opposition to form a cabinet of ministers which suits the approval of all. 

The LatAm-wide Odebrecht scandal may be about to claim its first true head state.


Joe Mazumdar and the slacker with the beard do Market Call

And here's the linko. Enjoy.

Tinka Resources (TK.v): I rest my case

You could have bought this as 50c yesterday at the open. More than one person who read this on Sunday evening did so (I have the mails):

Further questions?

PDAC 2018: The most effective and impressive company presentation today

This humble corner of cyberspace makes a safe call that today's best corporate presentation and the one that most impressed its audience was...

...Alexco Resource Corp (AXU) (

Inca One (IO.v) reminds us of the need to read to the end of NRs

This today, with the key info right at the end:

"We anticipate steady improvement in our throughput and production in the coming months as we deploy additional working capital towards mineral purchases, keeping Inca One on pace towards company-wide profitability."

In other words, it's still not making at a profit.

Tonight (Tuesday) on BNN Market Call

Joe Mazumdar and his hanger-on sidekick, Brent Cook.

Worthy TV.


"Otto Rock? More like Otto Wrong! Our lawyers are taking care of it, don't worry about him."

Ok, this is funny. Watch the whole thing because it's great stuff, but snippet at 1:07 resulted in my screen getting coffee-spattered:

Headsup via the EI people, thanks guys. Youtube here.

Rick Rule on Pretium (PVG) put through the Ottotrans™

Rick Rule did BNN's Market Call today and the whole thing is up on the website's video shelf now. I'm going to offer up this segment on Pretium (PVG) as the most interesting (for my taste, anyway). Here's the transcript and below that, the Ottotrans™:

Rule: "I have been a recent buyer of Pretium Resources. I have a very very high degree of confidence in the CEO Bob Quartermain, who I backed in his first venture which was Silver Standard I remember it going from 72c to $45 which of course engendered a certain fondness in me. Pretium as you may know started up a mine in Northern British Columbia and the first quarter they had was extraordinarily good which set market expectations very high. The second quarter was fairly bad. I think what you have to do in a deposit like this is you have to let them break the mine in. I remember saying to my clients six or seven months ago, "It's going to take four quarters before we see what we see here". I'm not saying that Pretium is out of the woods, what I'm saying is it is way oversold, risk relative to reward. I personally object to some market participants' criticism of Bob Quartermain, who has become over 30 years, in addition to somebody who has made me look smart, a close personal friend and any criticism of Quartermain is insane.

Interviewer: "And that aside, what would you say is the biggest misconception about this stock?"

Rule: "I just think it's too early to know how it's going to work out. They had a spectacular first quarter which is tough to do when you're breaking a mine in, obviously with regards to grade they got lucky. In the second quarter they had a lousy quarter. We have known for some period of time, given the erratic and very high grade nature of that gold, you're going to have good quarters and you're going to have bad quarters, you're going to have to look over the course of a year to get a feeling of how that thing is going to produce over time.

Ottotrans™: "I am underwater on Pretium and have averaged down."

On payday loans, Tinka Resources (TK.v) and Matt Badiali (from IKN459)

Part of the intro to yesterday's weekly. It's less about the abject stupidity of Badiali and more the case study of another way greenhorns are separated from their money. And I know most of the readers of this humble corner of cyberspace have the necessary market experience to understand this scenario without the need for an explainer, but I also know that people new to these shark-infested venture exchange waters read IKN as well. 

How would you like to learn, the easy way or the hard way?


Dumb money

On seeing the TV adverts, the full-page dead wood news ads, the sponsorship deals with football teams etc I’ve often wondered just who takes out a payday loan. And last month I found out that my best guess of 20-something low paid manual labour workers who just wanted a few banknotes to get them through the last party weekend of the month wasn’t even half the story. In totally separate instances two people I know (one an age-old sparring partner from the UK, the other a solid friend in Peru) have come to me, desperate about the situation in which they’ve put themselves. Both are male, married, blue collar and though perhaps not the most intellectual or academic of people they are witty, know how to make a living, honest, hard-working types. As a personal bonus they’re nice people and good to be around. But for totally separate reasons in different places, they’ve both fallen into the payday loan trap.

Now you’re probably like me and know what it means when somebody says “the interest rate is 20% per month” but my friends have learned the hard way. Although a minor detail for this script, for what it’s worth I’ve sat down with both and got to the bottom of their financial woes and along with the creditors (another of their mistakes was not to talk with the people they owe) worked ways out of their separate messes, so as long as they stick to the plans now in place. What matters here is the reflection: I was taken aback by their lack of financial wherewithal, but being naïve about the sharks waiting round the corner isn’t a criminal offence, either. My friends weren’t in their area of expertise (they can do things I have no chance of copying) and hard or easy way, they get a lesson and unless really stupid, won’t repeat. However, anyone who employs an expert (qualified, self-styled or whatever) to advise them in investment should expect far more financial nous than that showed by Matt Badiali in the episode surrounding Tinka Resources (TK.v) on Friday. I was dumbfounded and to highlight the abject stupidity on show:

1)     If you have a large subscriber base of “non-sophisticated investors” (1)

2)     Who buy into a company like TK.v

3)     And you have a strict policy of calling sell if a 20% trailing stop is triggered

4)     Do you think the sharks of Vancouver might find out? And when they do, maybe drag down stock prices of vulnerable issues to your trigger?

5)     At which point you execute on your “strict rule” and your non-sophisticated followers all do the same thing at the same time, sending (in the case of TK) around half a million shares of at-market sale orders into a bid that doesn’t have a chance of handling that type of sudden influx.

6)     And the Vancouverites who have spotted this dumbest of dumb money up for grabs suck up the shares, flip short positions into longs which then rise back on the inevitable relief rally rebound.

The result? Badiali claims a minor loss, thousands of retail sheep wonder where their money has gone, a handful of people on Howe St have the answer (but will never tell them). Applying discipline to investing is fine, announcing to the world that a whole bunch of dumb money is being directed by a strict rule that is easily taken advantage of by a voracious and notoriously dog-eat-dog market is a one-way ticket to permanent losses. Since I heard about this sell call and exactly why I’ve been dumbfounded by the financial naïveté on show, as either Badiali is running his list under a more nefarious double agenda or he’s a supposed experienced financial professional making the type of mistake a rookie would only make once at most (likely never). The stupidity on show here is on the same level as my payday loan friends, but considering its source is unforgivable. For the rest of us, it’s an invitation to free money.


The best movie of the year wins its Oscar

No matter that it wasn't nominated for Best Film.

Coco wins. 

The IKN weekly, out now

IKN459 has just been sent to subscribers. No photos, plenty of script this time.

Mining booths and the Ottotrans™

As a variation to our normal Ottotrans™ service on mining NRs, today we consider how the mining sector delivers its message via the booths at PDAC. The example is from the Rye Patch Gold (RPM.v) display:

Value driven = Unprofitable at current cash costs.


Matt Badiali and the dumbest of dumb money

I hear a couple of things, reliable sources too:
1) Matt Badiali got 3,000 lifetime subbers signed up for his Banyan gig at $2k a pop. Yeah, do the math.

2) He's running a strict 20% trailing stop on picks, which has caused him to send sell notes out on first Sabina (early Feb) and then Tinka on Friday. See the TK trading action on Friday as an example of the fun and frolics these calls cause. 

Was he this freakin' stupid at birth, or was there a lobotomy involved somewhere along the way? He may as well walk up and down Howe St with a big target drawn on his back while shouting "Please Take My Subbers' Money" into a megaphone.

The top three most visited IKN posts this week are... reverse order:

Third Place: "Angry Geologist does Cordoba Minerals (CDB.v)". Why do we love TAG so much? Well it's not just her good looks and charm, it's more the way in which she gets to the heart of the geological matter so neatly. The generous use of sarcasm and biting irony helps things along nicely, too.

Second Place: "Just two things from the HIVE (HIVE.v) quarterly financials last night". I'm really in the wrong line here. These days, anything crypto or blockchain gets 2X the number of hits than the boring old miners. By the way, I think HIVE.v jumped at the bell Thursday on first reaction of its quarterly report and then dropped swiftly afterwards due to literacy. The first buyers were the usual suspects, the mouthbreather mining suckers who believe every last piece of stupidity that comes out of Fiore but HIVE is in a different world, not the mining sector where anal ysts and commentators have a limited grasp of what company financials are and how to read them. One of HIVE's weakest points is that it's in a sector covered by people who understand basic math (often advanced) and can see straight through the blather and nonsense.
First Place: "Your 2018 PDAC Bingo Card". Well yes, it's always a popular one.

Choose Life. Choose PDAC.

With apologies to Irvine Welsh and Danny Boyle.

Choose life. Choose geology. Choose engineering. Choose a family you see 50% of your working life. Choose a bigscreen television in the corner of the eating hall showing the sport everyone else likes but you don't. Choose flowcharts, scoops, scratch pens, and electrical mine winches. Choose hour long health and safety meetings, rice and potatoes with every meal and dental insurance. Choose fixed-interest mortgage repayments you just about keep up with. Choose a starter home you never see. Choose your friends you never see. Choose leisure wear you get to use two hours a week and luggage that's beaten to a pulp. Choose a three piece suite. Choose DIY and wondering where the hell you are on a Sunday morning as you get off shift. Choose sitting in that canteen watching mind-numbing spirit-crushing game shows, stuffing tuna bake into your mouth. Choose rotting away at the end of it all, pishing your last in a miserable home, nothing more than an engineer or geologist embarrassment to the selfish brats you have spawned to replace yourselves. Choose your future. Choose life,  . . . But why would I want to do a thing like that? I chose not to choose life: I chose something else. And the reasons? There are no reasons. Who needs reasons when you've got PDAC?


Your 2018 PDAC Bingo Card is available at the Silver Range Resources booth

Right here. Print yours off and avoid the rush or if you prefer, hunt down Silver Range Resources (SNG.v) at the show as Mike Power and guys have printed off a whole bunch of them and are putting up a bottle of scotch as a prize for the most complete of their cards. They'll explain their rules to you.

UPDATE: Nope, this isn't a joke:

From here.

The Friday OT: Madonna; Ray of light

Twenty years? Are you kidding me, did you say twenty years? The saddest part is that it's still the best pop album ever. But that's also the best part.

Madonna at her zenith, undisputed queen in all pomp and glory, appearing on Oprah to show off the title track for the first time and my stars she was in storming form that day. Anyone who still thinks she doesn't have a class voice need to see this, the rest of you who already know will enjoy every second. Youtube here.

Why are stock markets dropping? IKN explains

They haven't been in the greatest of shapes recently, but as from around midday yesterday and continuing this morning the USA and world stock markets have been accelerating the slump. For example, the Dow is down 3% from midday yesterday. 

Apropos, this humble corner of cyberspace has decided to take on the task of explaining why the markets are down in a way that even executive-level political leaders (mentioning no names of course) can understand. Here:

Further questions?

Chart of the day is...

...the dollar index (USD), monthlies:

Reports of my death have been etc etc.


Ok, so here's the deal with that Lithium X (LIX.v) NR just out

One of my first thoughts was of Shakespeare, of As You Like It, of the character Jacques and his famous "Seven Ages of Man" speech, specifically the fourth age of his soldier who is, "Seeking the bubble reputation/Even in the cannon’s mouth." This is a ballsy call by Brian Paes-Braga and I admire him for that, because this NR goes above and beyond the necessary message and has him saying, "I say this deal closes, follow me". Not the others at LIX, you'll note, this is Bri-Bri talking, taking the helm, signing off the NR, making a full-on stand and that requires real guts because if it falls through now anyone buying into the rebound today will have a litigation field day, those with the right sized treasury chest can consider going long LIX on the back of prose such as...
NextView continues to finalize the debt facilities to provide the remainder of the cash consideration to complete the Arrangement and, if it is not finalized before the end of next week, it will draw-down on its funding commitment from Tibet Summit in order to fund the Arrangement no later than March 9, 2018
Key executives and other insiders of the Company have indicated that, since they are not currently in possession of any undisclosed material information, they intend to purchase the Company's common shares on the open market if available at prices that they believe represent a significant discount to the consideration payable under the Arrangement. a virtual no-lose trade. We also now have a clear Drop Dead Date in March 9th and that's a solid marker, too. Therefore credit where it's due, this is an example of what all CEOs are supposed to do and IKN applauds the leadership shown today by Bri-Bri. If the deal now closes this humble corner of cyberspace will be tracking his moves for the next 30 years. Mind you, if not...less so.

Lithium X (LIX.v):Well that's all right then

Beats me why you're worried. Cheque's in the post.

VANCOUVER, March 1, 2018 /CNW/ - Lithium X Energy Corp.  ("Lithium X" or the "Company") (TSXV: LIX) (OTC: LIXXF) in response to recent trading in its shares, the Company is providing an update on the expected completion date (the "Effective Date") of the previously announced plan of arrangement (the "Arrangement") with NextView New Energy Lion Hong Kong Limited ("NextView").
The trading price of the Company's common shares has fallen over 20% in the past day of trading and resulted in a single stock circuit breaker that caused a temporary 5-minute halt in trading this morning.  The Company is not in possession of any undisclosed material information and is not aware of any change that would support this negative market sentiment.
In terms of completion of the Arrangement with NextView, in a conference call Tuesday evening with NextView's personnel, financial advisor and legal counsel, the Company was advised that NextView continues to finalize the debt facilities to provide the remainder of the cash consideration to complete the Arrangement and, if it is not finalized before the end of next week, it will draw-down on its funding commitment from Tibet Summit in order to fund the Arrangement no later than March 9, 2018.  NextView was incorporated under the laws of Hong Kong, S.A.R., with its head office located in Hong Kong. NextView was incorporated by Shanghai NextView Xiangjin Investment Partnership (Limited) ("Shanghai NextView") and Tibet Summit as an acquisition vehicle to complete the Arrangement.
Key executives and other insiders of the Company have indicated that, since they are not currently in possession of any undisclosed material information, they intend to purchase the Company's common shares on the open market if available at prices that they believe represent a significant discount to the consideration payable under the Arrangement.
Additional information regarding the terms of the Arrangement is set out in Lithium X's management information circular dated January 3, 2018, which is filed under the Company's SEDAR profile at
On behalf of the Board of Directors of Lithium X
By: "Brian Paes-Braga"
President and CEO, Director

Checking in on Rye Patch Gold (RPM.v) in 2018 so far

They'll be happy to discuss the contents of this chart with you at their PDAC booth.

You know those obnoxious, irritating bastards who sneer at you with smarmy looks on their faces and whine, "Haaa haaa, toldyaso" in that nasal tone guaranteed to stir desires of fists against noses? Well, toldyaso.

Royal Road (RYR.v): This is why I like Tim Coughlin...

...and the way he goes about the job. We can summarize today's NR with "We drilled Piedra Imán, it's dogshyte, kill it, move on". No hanging on, no faffing around, no pretending the project is worth keeping and just this attitude separates RYR from roughly 98% of all other explorecos. Totally refreshing, a pity more aren't as upfront.

I don't own any RYR yet, but it's one I watch closely.  You should, too.

KPMG reports on risks faced by top mining executives

Original news release right here.

TORONTO, March 1, 2018 /CNW/ - Overbooking at quality lunch establishments is the top risk facing mining and metals companies this year, finds an annual survey of Canadian mining executives by KPMG in Canada.  As volatility re-emerges in reservations markets, shifting prices will be a key theme as mining industry participants from around the world gather in Toronto next week for the 86th annual Prospectors & Developers Association of Canada convention to get absolutely lathered.
The latest issue of Insights into Mining shows a relatively consistent risk landscape compared to previous years as Canadian and global mining businesses continue to navigate Michelin three star restaurants in a highly competitive industry. Booking risk and the average price for Dom Perignon returned to the Top 10 this year, while access to private rooms, AMEX rhodium cards, controlling bowels and trying to drive Ferraris while drunk, maintaining an antisocial right to talk loudly and managing walking instability also figure high on the list of top risks.
"Restaurant booking risk is once again the leading challenge facing mining executives as they consider the downside of the recent upswing in prices," says Heather Cheeseman, GTA Mining Leader and Partner, Audit and Risk Consulting, KPMG in Canada. "With weed and crypto stocks making gains, the competition for the best tables at lunch is now fierce and PAs are under pressure to secure the best lunch spots without going on long waiting lists, else incur the wrath of the utter pieces of shit who pay their monthly salaries."
Below are the Top 10 risks facing Canadian mining and metals companies in 2018:
  1. Restaurant lunch reservation risk
  2. AMEX rhodium availability (includes risk of embarrassment in using a mere Platinum or Black card in front of peers)
  3. Access to best tables
  4. Having to be pleasant to "the staff" else face discrimination lawsuits
  5. Dom Perignon price risk
  6. Private room availability
  7. PDAC hangover risk
  8. Ability to drive back to office without DUI arrest 
  9. Controlling bowels
  10. Capital allocation of lunch on expense account without anyone noticing the line item
Each year, KPMG in Canada updates the market with critical insights into the risks, challenges and multi-year trends that are top of mind for Canadian miners. Learn more by accessing the Insights into Mining report.

Torex Gold (TXG): Both sides

When a mining company starts shouting about THE TRUTH of a difficult CSR situation but is also very selective with the facts it decides to present to its audience, it raises the hackles of those of us with a better idea of the shades of grey that lay between the black and the white of propaganda presentation. This humble corner of cyberspace is not saying that TXG is in the wrong in its ongoing dispute with locals, what it is saying is that minor technical details are not quite the same as the story it prefers to present to the world:
  • That part about the strike, blockade and protest being all done and things getting back to normal by the end of February? Nope, sorry, still going strong.
  • The way they don't tell you that the local landowners want to rescind the contract and state that the contract has been broken by the company due to their lack of compliance to promises? That too.
  • The same local landowners who have now set up a protest at the edge of the El Limon pit, taking over the area and stopping mining activities from happening. That, too.
  • The way that locals have stopped the flow of water to the company? Errr....this one's important, because the No Water = No Mine equation is not a difficult one to understand wherever you're from. TXG calls it "extortion", the locals call it protest, the impasse continues.

Those of who who want the other side to the story should check out this report and also this, filed last week in the Guerrero news site El Sur (no Spanish ability? Google Translate will get you 90% of the way there). Again, be clear that in the view of this blogger neither side is the owner of absolute truth, but getting both sides will help the more discerning investor get a handle on the FUBAR. The moral is really simple, don't go mining in Guerrero. But hey...the rocks were there...and they were cheap...right?

Just two things from the HIVE (HIVE.v) quarterly financials last night

You can fight out the meaning of the borderline-passable gross margin, the stored coins and what have you all by yourself. I just want to point out two numbers on the P+L that stuck out at me:

That travel number is hilarious, you can run a neat and efficient junior exploreco for the price of HIVE's travel. It also gives you some idea how much it costs to fly a fully loaded private jet down to Cartagena from Vancouver, but that's another story.

But the really interesting one is that DD&A number, because I know I'm not the brightest lightbulb when it comes to the intricacies of the wonderful world of crypto, but I do know my way around a set of RegFs. And you're telling me that $16.2m of that snazzy shiny computery kit that goes out of fashion quickly due to the well-documented ETH hashrate burden was only marked down by a million, guys? Seriously? Wonks and nerds like me who care about such things will know why this could be important for the future, the rest of you can hi-five over the temperature in Sweden. Okay, never mind and no need to answer, let's move on so here's a pleasant tune with which to brighten your day:


Thanks, Bobby!

Bobby Genovese and BG Capital Group just sent me over an RSVP invite for the Bunker Hill Mining bash at PDAC on Sunday. And that's a good thing:

Because we all need to remember that Bobby G is the biggest shareholder, is pulling all the strings on this vehicle and is also the very same Bobby Genovese facing criminal fraud charges from the US SEC for the way he pumped and dumped Bunker Hill in its last incarnation, Liberty Silver, for millions in ill-gotten gains. Presumably James West will be there, his partner in crime the last time around. Say hi for me, yeah? 

Anyway, all readers of IKN should get their tails down to the BNKR bash at the Hockey Hall of Fame (30 Yonge St) on Sunday March 4th, starts 6:30pm and goes on til 11pm. Tell the doorman Otto sent you, mmmkay?

Angry Geologist does Pretium (PVG)

Blinking flip and gawd love us, the lady is on a roll at the moment. Here's TAG doing Pretium (PVG), with eyes on the presentation the company just gave to BMO this week. And by the way, I was out by 0.16g/t and that on the math is a good call, in this type of production environment we're talking about rounding errors. Anyway, consider me in agreement with TAG on this one.

PS: We also note that Pretium (PVG) had its first fatal accident of a worker at the Brucejack mine two days ago. Maybe they forgot to announce that to the wider world, or perhaps they're going the Tahoe Resources route and just burying (pardon the pun) any bad news of this type.

By the way, that Lithium X (LIX.v) break fee and escrow agreement

Reader 'D' pointed this out in a mail this morning:

"The reverse break fee has been secured through the deposit of US$16,000,000 in trust with Lithium X’s counsel in Hong Kong, subject to the terms of an escrow agreement under which those funds may not be released without the consent of both parties"

Ever seen an escrow with a veto clause before? What kind of wet-behind-the-ears CEO agreed to these terms, can't be ver....ah, yeah. Right.

Aurania Resources (ARU.v): At last! Geologists who can speak my language!

This from the current Aurania Resources (ARU.v) photo gallery:

Wonderful. IKN thanks A. Reader for the heads-up.


Bacanora (BCN.v), NextView and Lithium X (LIX.v)

Your humble scribe's attention is caught by this news release from Bacanora Minerals (BCN.v) this evening, in which this company dedicated to lithium states that it has failed to receive the C$53.5m approx promised to it by NextView Capital. The deal, first announced in mid-December 2017, was supposed to have closed at the end of January. When it didn't BCN announced that it was giving NextView more time and stated among other things that... "...both parties remain committed to proceeding with the Placing."

But now it looks like NextView couldn't come up with the cash. Time's up. Deal's off. No soup for you. Now, does that remind you of anything? Well...
  • Lithium X (LIX.v) is a lithium junior
  • In mid-December it received a buyout offer from a company called NextView Capital, ticket price C$265m.
  • Yes, that's the same NextView Capital, why did you ask?
  • The deal was supposed to have closed a couple of weeks ago, but then on February 14th LIX.v announced that NextView needed more time. To quote that NR, "NextView has advised the Company that it is seeking alternative funding from a commercial lender in order to obtain the required funds on the most competitive terms available and that the proposed facility with the commercial lender is currently anticipated to be established and funded shortly but has been delayed by, and until after, the Chinese New Year holiday."

But hey, I'm sure everything will be all right. Y'know, just get the Chinese New Year out the way and the cheque will be winging its way over. Right?

"There's a sardonic blogger called Inca Kola..."

The dulcet tones of Andrew Bell give the 2018 IKN Bingo Card a pumperooney on 'Market Call today. Right here, minute 1:50.

Kintavar (KTR.v)

Seriously, why do I bother? This gets pumped in one of those blather and nonsense NRs in mid-January that gets the mouthbreathers all worked up, including...

In total, 10 of the 12 drill holes intercepted the favorable lithologies with copper mineralization in the form of bornite and chalcopyrite. Out of these holes, 7 holes intercepted several tens of meters of copper mineralization.
“We are very pleased with this first drilling program on the Mitchi project. We drilled more meters than expected because several of the holes showed mineralization deeper than first thought. We now believe this could be both a near surface open pit type target and also an underground target beneath.” commented Kiril Mugerman, President and CEO of Kintavar Exploration.

"KINTAVAR DRILLS 206.3 METERS OF COPPER MINERALIZATION (0.18% Cu & 1.65 g/t Ag) WITH TWO MAIN ZONES OF 21.9m OF 0.52% Cu & 5.62 g/t Ag AND 16.5m OF 0.50% Cu & 4.30 g/t Ag" the NR today. If the CEO is "very pleased" with those kind of numbers he'd have a multiple orgasm in public if he ever found something economically viable on his property. And be clear, you can call it "mineralization" til the cows come home, but even with the best will in the world and favourable met, recoveries and current metals prices that rock is worth no more than U$11.50 per tonne. The only company who could mine that number at a profit is Nevsun and that's because their....cough...labour costs are so low. Why this KTR thing's  share price is down just 3c today and the company still running a market cap of $28m is beyond me, it's worth zero. Plain fat zero.

In the end, the neophytes who buy into these pumps have three choices:

1) Learn the cheap way (this involves not acting like a nodding donkey every time you get a pitch run at you)
2) Learn the hard way (e.g. KTR.v, but please remember the names of the people who got you into this crapola).
3) Just carry on flushing your own money down the toilet, all your life. And as we live in a (relatively) free society, don't think for a minute that I'm going to try to stop you. Your life, do with it what you want. Hell, do it long enough and become one of the scumbag pumpers if you like.

Your friendly reliable Cassandra on the Lucara ( news

There are so many red flags to this idea it's difficult to know where to start.

1) Wouldn't you love to know just why Lamb decided to resign rather than go along with this whole "disrupt diamonds" gig?

2) You remember how he got its hind quarters handed back on a plate on the Lesedi La Rona? How LUC put it up for auction in its raw state for U$70m reserve, how the establishment warned the market to stay away, how bidding only got to U$61m, then how it was quietly sold a year later for U$53m? 

3) And now LUC is taking on the establishment again, only in a much more dangerous way for De Beers and all its friends.

4) What's more, Marin Katusa manages to get a seven thousand word report out on the LUC plan, with nuance and the whole "disrupt mining" strategy, within about three minutes of the  NR coming out yesterday. Katusa of all people! The single worst and most blatant pump and dumper in the sector (and my stars there's competition) gets the quiet inside backstory from the Thomas/Lundin/McLeod Seltzer triumvirate and manages to put it all into a long 'splainer words of two syllables max for his willing crop of retail, proofed to within an inch of its life and all shiny-clean ready to roll. I mean, gimme a break here, the quiet tip-off to the chattering classes is one thing, blatant inside information from a supposedly whiter-than-white board of directors to the worst offending BS artist in Vancouver is quite another.

5) The thing is, the "disrupt mining" plan is being laid out as if LUC is the diamond world's answer to Uber. It's not. Big differences. As in biiiiiiiig differences. Taxi driving is a business model that has a deep supply pool and had a product with obvious cost weakness. The majority of adult human beings can supply the skill (drive a car) but only a few people were allowed to charge money to drive a taxi (badge holders, who paid a prohibitive price for the privilege). So lets talk about diamonds for a second:
  • The rough diamond is a small part of the price you pay for the finished product. I'm not a diamond expert and will never pretend to be, but even I know the difference between a rough diamond and what you see set in an engagement ring. I know the price a company like LUC gets for its diamonds on average and the price of a cut stone. I know what the "Four Cs" are and only three of them depend on the quality of the stone, while at least one is all about how human hands treat it and arguably two others are highly influenced by the skill of diamond cutting.
  • Which brings us to the second key point, the finished product depends on highly skilled labour. This is not driving a car, it's not letting out your owned property for a night. Very few human beings can do the job we're talking about here, the equipment is expensive, the sector prohibitive to enter. 
  • Which also means that a small overall supplier to those human beings, i.e. Lucara, can either try to steal the lunch of the big player in the sector (De Beers) and be crushed like a pesky insect, or it can STFU and make its reasonable profit on the things that come out of its mines. When the call goes out from De Beers to stay away from all LUC diamonds, not just a single 1,109 carat example, LUC will suddenly find its wares on a secondary market at secondary prices.
  • And we haven't even mentioned the certification process yet! A closed shop like no other and controlled by serious, establishment money, they will of course let a big, headline-making diamond of size get the labels it deserves but what happens to the normal run-of mine material from a company that wants to wrest the market away from the people who pay their dinners?

What LUC announced yesterday is its own suicide note as a diamond miner. The upper echelons of De Beers will be worried about what was announced, but do you seriously think they're just going to let LUC take their market away thanks to a new-fangled blockchain idea? They've never faced competition to their quasi-monopoly before? They haven't squashed any newcomers like nuisance gadflies before? They've remained at the very top of one of the most profitable businesses in the world using totally above-board and proper business strategies? That Marin Katusa is in cahoots with this scheme is all the more sophisticated sector player needs to know about LUC going forward, but it only takes a few minutes' thought to see the glaring holes and obvious mortal weaknesses in what LUC is trying to achieve. It's less "disrupt diamonds", more "disrupt retirement plans of LUC shareholders" and the daydreaming fools now running this company need to be stopped for their own good.