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7/27/17

More TMAC news

It turns out that TMAC Resources (TMR.to) didn't just waste its money on one Python plant. They bought two. No news on whether they bothered to install the second once they realized the first one doesn't work.

7/26/17

TMAC Resources (TMR.to): The IKN First Law of Mining News Releases strikes again

On July 14th, we wondered out loud in this post just why TMAC Resources (TMR.to) had dropped just a modest 6% or so on the back of obviously bad news from its operation (aka Monty Python's Flying Metallurgy) and invoked the First Law of Mining NRs as evidence:
 "The IKN First Law of Mining News Releases: Considering that anything contained in a mining news release is presented in the best possible way for the company in question, any piece of information contained in a NR that comes across in any way negative means the real news and/or events behind it must be very, very bad indeed."

And since then?

 
And GDX is up 5% since July 14th, too.

Moral: Don't mess with the fundamental laws of nature.

Mailbag on FOMC

Reader 'CM' sums up the FOMC in twelve words and one photo:



The last six Fed meetings in one picture
Different shape, same content.




Nicely done, CM.

Three juniors moving up, one midcap moving down

Novo (NVO) is going wappy:



Trilogy (TMQ) is trading like that road is already built:

Constantine (CEM) has broken out:

But Asanko (AKG) is hitting new lows, even lower than the bottom of the Muddy Waters day:


Copper pushes higher

Copper contracts were trading at over U$2.90/lb earlier today.



That's the highest price since early 2015.

7/25/17

Cordoba Minerals (CDB.v) hole ACD-063

Here's the NR and here's the funny jokey bit about hole ACD-063

"0.5 metres @ 5.97 g/t gold, 0.24% copper (from 67.2 metres)
 with visible gold in the preserved half-core."



Well, you know what they say...



Sigh.

Copper breaks out. Probably.

Chart of the day is copper, of course. Here's the weekly version, your author adds the thin red line.


It's broken out from the U$6,000 metric tonnes (U$2.72 and bits) level but we still haven't got a definitive new high on our hands. The big question is whether this approx 10c move sticks, not whether it goes any higher. Glad I wrote this on Sunday in IKN427, too:

Over at the copper pit things were buoyant and gave solid fundy reasons for the stocks’ rally. This daily chart shows that we’re back at the top of the recent trading range, so it’s natural that thoughts would turn to whether a breakout is in the cards. Personally I think there’s a reasonable chance of that, what with the world finally cottoning on to the fact that the whole Trump economic policy is about weakening the dollar in order to promote growth (and close that trade deficit he’s so obsessed about). This is, by the way, the main reason we’re seeing record after record hit on the US broad markets…cheaper future dollars mean higher equity prices in dollar terms.

However, other copper anal ysts aren’t quite as bullish as your author, according to a report (decent stuff for a mainstream medium) from Chile’s La Tercera this weekend (11), which did the rounds of houses to get the collected thoughts of copper market analysts on where the metal is going next. No need to delve into the Spanish language report, your author does the legwork and reduces it to the need-to-know bullet points:

  • Caroline Bain of Capital Economics: Copper to end 2017 at U$2.36/lb
  • Francisca Pérez of BCI Estudios: Copper to fluctuate between U$2.40/lb and U$2.70/lb to December, then U$2.80/lb in 2018
  • Goldman Sachs: Copper to reach U$2.812/lb “in near term”.
  • Andrew Cole of Metals Bulletin Research: Copper comfortably above U$2.72 in 2018
  • Bloomberg average of anal yst forecasts: U$2.60/lb in 2017, U$2.62 for 2018, U$2.76 in 2019, U$3.00 in 2020.


Experts, eh...

Educating Peru

It's Independence week in Peru, what with the country celebrating its Independence Day on July 28th as it has done for close on 200 years (then the winter break vacation kicks in), so Peru's Ministry of Education...repeat, MINISTRY OF EDUCATION...decided to do something patriotic on its website and put this up yesterday: 


That translates roughly as, "From this moment Peru is free and independent, by the general will of its peoples and for the justice of its cause that God defends. Long live the Fatherland, long live freedom, long live independence!". Those were the words spoken the day Peru became independent and every schoolkid in the land knows them by heart, your actual "We The People..." thing (or perhaps "of/by/for the people" Gettysburg is a closer fit). 

Therefore, Peru was shocked by its Ministry of Education and today, in its place this appeared...


...which is basically a long-winded and humble apology. That's because Simon Bolivar didn't speak those words above, nor did he declare Peru's independence, it was José de San Martín. For context, this leaves Dan Quayle's potatoe in the dust, you need to imagine the reaction if Donald Trump announced that George Washington was assassinated while watching a play in a theatre. Read Peru's daily paper "La Republica" on the scandal and fallout right here (Twitter having  field day in Lima, of course).

Anyway, happy Birthday for Friday, Peru. Enjoy your President's speech and the nice parade.

7/24/17

The demolition of the Argentine Peso continues

Longer-term watchers of Latin America know what this means:


The Argentine Peso came under heavy selling pressure today, it touched 17.66 until just before the end of the day when the government, via the Buenos Aires Province bank, intervened and dumped dollars onto the market to stop the rot. It closed 17.43 after the late flurry, but there's a real finger-in-the-dyke feel about this, the government is getting desperate to cover over the systemic weaknesses that the market knows all about.

The ironic thing about Argentina in the last ten years; When Cristina is President, the rest of the world begs for the country to implode. It doesn't. Now with Macri President, the rest of the world is wishing it the best of fortune. And it goes down the tubes.

Imperial Metals (III.to) refinancing news

Word reaches IKN Nerve Centre today that a bunch of South Korean and Chinese miners and financiers have had a pleasant weekend at Imperial Metals (III.to) Red Chris mine. Lots to see and lots to talk about.

Votorantim going public (from IKN427)

A snippet from yesterday's edition of The IKN Weekly, IKN427:



Votorantim moves to IPO
Coming soon, a big LatAm based mining IPO. Reports first appeared in April (25) about Brazil’s privately controlled (by the Ermirio de Moraes family) Votorantim Metais (26) plans to float and become a public company, now news from local press (27) last week stated with more confidence that, the country’s big base metals/iron ore producer that also owns the majority stake in Peru’s Milpo, is in advanced discussions for an international IPO with target listings in the NYSE and the Toronto TSX. The New York listing procedure is being led by JP Morgan, Morgan Stanley and Credit Suisse, with the Toronto IPO end being covered by BMO. Though details are still sketchy as they tend to be before the prospectus gets published, the reports talk of the company looking to get market by the end of this year and to raise around U$750m in the share allocation. This would move up its market cap to around U$4Bn and make a new major miner available to Northern investment cash. Those kind of ratio figures clearly show that the Ermirio de Moraes family intend to keep tight executive control of the company after the IPO is done.

7/23/17

The IKN Weekly, out now



Look I'm not the biggest car fan in the world by any means, while you go gaga for a Ferrari or Maserati I'm happier taking a taxi to visit an art gallery. But there are exceptions to my four wheel indifference and there was no way this post could go by without a photo of the Shelby Cobra 427 on it, the sexiest car ever built. Right colour and the white hood stripe too. I mean, just look at that beast.

Anyway, IKN427 has just been sent to subscribers and as for the main featured stocks this week...


...I just know that something good is going to happen.

7/22/17

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

...in reverse order:

Third Place: "thinking zinc". IKN is not the only place thinking zinc. We knew that.

Second Place: "Regarding discount rates and junior promo bullshit". I enjoyed reading the feedback on this post, too. Thanks to all who took the time, both before and after the update post.
 
First Place: "Hey Jordan Roy-Byrne". Hey Jordan! You're popular!

7/21/17

The Friday OT: Aretha Franklin; Think (from The Blues Brothers)

Can you believe this was 37 years ago? I remember listening to my local breakfast show DJ screaming and begging us all to go and see this film. I took his advice. It was good advice.




The guys order their chicken and toast, the song gets set up, then The Voice takes over for one of the most memorable scenes in the movie. And my stars, she makes it all look so easy. Youtube here.

The Alset (ION.v) scam: Ten weeks and no assay results

Only complete idiots could take this total scam of a company and its zero-qualification CEO seriously now. Which is exactly why its CEO Allan Barry spends all his week flapping his gums on CEO.ca. Plenty of idiots to choose from over there.

The bet I lost

I bet a pal $10 that Sean Spicer wouldn't last six months as White House Press secretary. He lasted six months and two days. I lost.

Scaramouche, Scaramouche, will you do the fandango?

UPDATE: I knew Felix Salmon would put together something readable on the new appointment today, remembering as I did their long-standing fremeny thing on several stages, including NYC and Davos. Salmon didn't disappoint, here's the link.

More sell side airbrushing bullshit, Cormark edition

After yesterday's post on the way Canaccord bullshits its own clients about its pisspoor calls and stealth downgrades of Asanko Gold (AKG), I received an excellent mail from A. Reader (requires anonymity) who points the finger at Cormark, with (utter surprise) one of the offending socks also Asanko. This exhibition of how sell side lies to its audience comes in three acts:

Act One: This morning, Cormark released its 2q17 review (plus Q3 preview) note, in which one of the charts (below) shows the performance of the producers in its coverage universe:



Act Two: But wait! In the shocking development, it turns out the above chart isn't ALL the names on the Cormark list...somehow they managed to forget three of the stocks. If you do a search and find the full list (then add some red ink) this is what you get:


Act Three: Well riddle me ree, it turns out that Cormark "forgot" to put the three worst performing stocks on that review table. If they had done, it would have looked more like this:



As A. Reader put it to me, "I wonder what their selection criteria is for name exclusions from the graph?

Tough one, eh.....

7/20/17

The Friday OT on a Thursday: Linkin Park; Numb

For obvious reasons. For sad reasons. From sad blogger.




A damned good piece of music, too. Youtube here.

Tahoe Resources (TAHO) (THO.to): News on the Xinca people who, according to Kevin MacArthur, do not exist

This link has the story from yesterday outside Guatemala's Constitutional Court. This one has this photo:




In short, hundreds of the Xinca people that Tahoe Resources (TAHO) (THO.to) insist do not exist turned up at the Guatemala Constitutional Court yesterday, proved by their mere presence that TAHO is plain wrong (a fact that has also been firmly established by the Guatemala Supreme Court, like it or not Ferrari Kev) and demanded that the mine be closed immediately and permanently.

Asanko Gold (AKG): Canaccord's worldbeating brass neck

Perhaps because I've been watching the scumbaggery that goes on inside the Canadian sell side world for too long, there's really not much those thieves in suits can do to leave me gape-mouthed these days. But the nefarious stunt Canaccord pulled on its own clientele this morning is an exception that proves my cynicism rule. Seriously, this one is so two-faced and deceitful I almost stood up and applauded the computer screen on finding it out. Consider the following:

Yesterday July 19th, Asanko Gold (AKG) announced its 2q17 production results and on receipt of the news, Canaccord's Rahul Paul sent a note to clients reiterating his C$5.00 target price and "Buy" rating. Here's the top box of his note:


Today, just one day later, Canaccord cut its target price price on AKG from C$5.00 to C$2.75. But Canaccord didn't do this in a specific note, it sneaked it in via a macro sector update report. In this report covering a multitude of companies, the only segment on AKG was this one (circled in red):


This is brass neck of the highest level. And when you consider the three "reasons" Canaccord gives for this massive downgrade it gets even better because numbers (2) and (3) were already known to both Canaccord and the whole world beforehand, there was no reason whatsoever to ignore them in the July 19th update (just one day before). And of the third reason, the (1) change of house gold price deck, if we check the new ratings and target changes on the whole deck of Canaccord price targets for smallcap/midcap miners there is only one that stands out:


And sticks out like the proverbial sore thumb. While all other stocks are adjusted between 0% and 17%, Asanko gets a whopping 45% drop to its target price (and wonderfully, it's still a "buy"!).

To cap it all, there are some of you who are bound to remember back in February 2017, when AKG finally came clean with its manifold problems, starting with the Nkran reserve downgrade. At that time Rahul Paul called the issue "A speed-bump, not a roadblock" and UPGRADED (!!!) AKG to buy with a $5.00 price target.



At that time AKG was a $3.90 stock. Today Nahul Paul has decided that AKG is worth $2.75. Nahul Paul will of course keep his job, because he's being a good little boy and doing exactly what corner office is telling him to do. You can expect his "downgrade to hold" on AKG about a day after it goes into bankruptcy protection.


thinking zinc

A quiet, under the radar run on the back of its deal closure.


7/19/17

Dear Mister Becker Boris, I am from Bhartistan...

...and I would be humbled for you to consider a most excellent investment opportunity in the beautiful country of Nigeria and its oil industry, of which I am a great expert. I am happy to await your reply at my import & export business Forbes & Manhattan, but time is limited on this special opportunity only for you.

With love in most happiness, Stan.




You think I'm joking? Think again. This link starts by telling us...

Boris Becker 'invested in Nigerian oil firms that 
plunged in value', before losing £100m fortune

...and later tells us this:
The magazine claims it has seen details of a single investment of “more than $10m” in Nigerian oil prepared for Mr Becker by Forbes & Manhattan, a Canadian investment bank and a former associate of the tennis player. Forbes & Manhattan did not reply to a request for comment.


Boris learns the hard way about the political risk of Bhartistan. My thanks to reader S for the heads up.

Discount rate feedback

Several decent mails by way of feedback on this post yesterday, 5% discount rate stupidity and all that. All mailers kept anonymous and some are just excerpts, to protect IDs of both innocent and guilty:

Some people just grouched along with me:

"Well said - there is no capital available to junior mining for 5% or 10%. My biggest issue is that the purchase price of the project is not included in the financial analysis in the 43-101. It's just a sunk cost, prior to the feasibility study, and so can be neglected in the NPV and  AISC calcs. Its no wonder that the cash flow is marginal compared to what you would expect with an AISC of $700."

Some people still don't get how 43-101s are being used for ulterior motives...

"Hey Otto - I couldn't agree more that if you take the company's stated 5% discount rate or whatever they choose as the correct one, you shouldn't be investing in the mining space at all.

With that being said, I have always had a viewpoint that there was a purpose to the 5% discount rate for golds or let's say 8% for base metal projects. Is it really the 43-101's job to assess the level of geopolitical risk? From an operating / construction / processing etc. side, sure, but that's where I would stop. I would say that the 5% is simply a rule of thumb that let's anyone reading the 43-101 report generally speaking compare the relative quality of one project versus another, without considering geopolitical and other risks. Obviously there are limitations as the price decks are not uniform, which I think is something the industry should be pushing for to change, but it is a starting point.

Everyone's perception or tolerance for risk is different and an investor is solely responsible for applying a discount rate he/she believes addresses risks external to the project. I guess in my mind the 43-101 on the npv side is aimed at providing you with a relative data point rather than a factual one - once you have gotten past that point then other risks can be factored in, which in my mind are more external than internal to a project's quality."

Some people do and defend the system (a bit), but still miss the promo BS angle:
"There is another way at looking at discount rates – granted that a junior in an exploration phase pays say 12% interest, however when they find an economic deposit that promises to make a very good return, interest rates for the junior will go down and approach that paid by producing companies. Accordingly it does not really make sense to use a very high discount rate in an EPA, or Feas. as this could cause a company to discard what otherwise could be a money maker once producing. Therefore using a discount rate equal to a junior’s explorers’ cost of capital while in the exploration stage would be a huge mistake."

Other people really get it, like this one:
"The 5% rate serves only one very important purpose: it allows the entire junior market industry to function (raise and pay $$). If actual cost of capital rates were used (only) 10% of projects would be economic..."
And this one:
"My dearest Mr. Otto,... I once questioned an analyst on whether a 5% discount properly reflected risk for a sketchy project in a difficult mining jurisdiction and his answer was, if everyone uses a 5% discount, it is easy to compare project to project.  I guess I just never spent enough time to understand  the incredible similarities of the risk profiles of a project in BC to a project in the DRC.  Silly me."

But I'll leave the final word to a geologist:
"FWIW I don't quietly masturbate over 43-101 reports. I try to make it as loud as possible (and) put on 'Ace of Spades' for tempo."

Nuff said.

Gran Colombia Gold (GCM.to) workers on strike as from July 21st

That's what the report says.

Asanko (AKG) 2q17 production

Due to Muddy Waters and K2 this stock is now BigShort material and to be honest, I wouldn't have bothered with a post on its 2q17 production numbers this morning if it weren't for the blatant corporate BS stuck as the last bullet point. What you need to know about its Q2 is...


...AKG needs to move an awful lot of dirt around to produce an ounce of gold these days, that's exactly what K2 predicted a year ago, too. But the thing that got me riled was this bullet point in the NR:

  • Strong balance sheet with unaudited cash and immediately convertible working capital balances of approximately US$59.2 million (June 30, 2017)

Strong balance sheet? STRONG BALANCE SHEEEEEEEET? From which alternate universe did this message arrive? I mean...




...that U$155m pile of fun in the red circle starts moving over to the current liabilities at the speed of around U$16/qtr as from next month. As from July 2018 AKG needs to pay it all back in 10 equal chunks per quarter, from 2q18 through the end of 2020. That's not going to be easy when you consider the mine makes no money. 

For some unknown reason, AKG rallied this morning by a point or two on the back of its news. More proof (if you needed it) that gringos will buy anything.

7/18/17

Regarding discount rates and junior promo bullshit


IKN Nerve Centre received a mail today from A. Reader, who prefers to remain anonymous but can fairly be called an experienced financial professional. He was in grouch mode and his lament was on the "State of The 43-101", a subject we've covered previously at this humble corner of cyberspace but there's nothing wrong with a revisit either. Here's an extract or two:
Lundin Gold, from IKN 370's commentary, had a discount rate of 5% for NPV. Somewhat ludicruous given extremely high political risks over the centuries in Ecuador as you mentioned.  Recently I saw an iron ore mine FS that had a discount rate of 8% for NPV for northern Canada.  Seriously.  Higher than Ecuador!   Now obviously there's no "standard" for assessing discount rates and other FS variables across the global risk spectrum and never will be.  But this is getting ridiculous, as these FS's and NI 43-101's  just seem to lead to more questions for investors rather than answers. 
Feasibility studies and NI 43-101 summaries feel more like marketing power point pitches than bare bones factual guts.  
Lastly, I don't have the time or energy, but it would be interesting to hire an intern or analyst to take say the top 100 mining companies of all time and compare the feasibiity study estimates to actual mining output and profits in a spreadsheet. Don't even bother with the sub 100, you know what those results would be.

Good points made and let's consider that whole 5% NPV discount rate issue a little further because yes, that one is a fetid turd on a stick. If you care enough (and if you do it will immediately place you in the top 1% of retail investors because most people who trade junior miners are freakin' morons) check out the latest few financing deals for juniors raising or servicing capital for their projects. To give you a start, here are two that come to your humble scribe's mind quickly (because I've analyzed and traded both in the last 12 months):
  • Continental Gold (CNL.to) cost of capital for capex raise; approx 14%
  • Red Eagle (R.to) current interest rate on loan; LIBOR +11%
Those just two off the top of my head, thing is that they're pretty typical and I'm quite sure you have half a dozen more to offer me of the same ilk. The point is, what the merry jinkums and blinking flip do those numbers have in common with a discount rate assumption of 5%? Or even 8% for that matter, a figure that used to be a type of benchmark standard for financial anal ysis in previous years? Answer; Nothing, not a sausage and bugger all. But that's not going to stop the purveyors of high quality bullshit (you know them as junior miners, their consultants, their paid whore promoters and their under-strict-instruction paid lackeys in sellside houses) from using them to throw sequins in your eyes. And if you, dear and kind reader, think there isn't much difference between a 5%, 8% or 10% discount rate when running a financial anal ysis you live in the same world of dumbass mathematics as Allan Barry.

When floating such comments about 43-101s on the blog, it's round about now that the geologists (normally) or engineers (sometimes) pipe up and say "AHA! But my dearest Mister Otto, a 43-101 isn't meant for the public world, it's by nature a technical document designed for an audience who understands the funny graphics, quietly masturbates over mill plan flowcharts late in the evening or knew the difference between a greywacke and a schist before you were out of short trousers; dearest Mister Otto". Which just goes to prove how stupid geologists and engineers are. Their insistence on this point, when it's crystal clear that Company XYZ has put a 5% discount line into its PEA and then trumpeted it in the accompanying NR and then got all the hangers-on and parasite lackeys to repeat the spin verbatim on their radio show, youtube channel, coldcall phone spiel, anal ysis report, chatroom wankery, blog, weekly subscriber report or wherever else is too much of an insult to be taken seriously (note to geologists and engineers; please check out definition of 'common sense' in your preferred dictionary).

So what's the answer to this mess, reader A. Reader and others? Pretty simple really, know more than your peers. Yeah yeah, I know I know but once you do you're allowed to put in place a BS filter that quickly separates the mining wheat from the chaff. In this specific case you can boil it all down to something like:

"Immediately ignore any company, promoter or market voice who tries to get me into a stock using an analysis based on a 5% discount rate."

You see them trying to do it, immediately blackball the assholes. It's how a free market works, after all.


The price of copper...

...has this thing about the U$2.70/lb line:



In fact it's more likely the U$6,000/tonne line, as that's U$2.72 (and bits) per Lb.

Atico Mining (ATY.v) 2q17 production

NR out today here, chart here:


A pretty reasonable quarter. You're getting a lot of value for the CAD$64m market cap here. The day this company starts paying a penny per quarter dividend is the day its current share price is left in the dust. Shouldn't be long now, either.

Novo Resources (NVO.v): Speculators having fun

Here's the ten day price chart of Novo Resources (NVO.v), one that priced the company at around $150m last weekend and a bit more today.


Volatile? You bet. The discovery it announced last week is perfect stuff for a speculative end of the market, but (and to make clear to the sartorially challenged jackass Jordan Roy-Byrne) your humble scribe is not joining in on this one because even though it could be anything, it could also be overbought already. I wish those people playing the stock the best of fortune but it's not a trade for me and here, in the piece from IKN426 published Sunday, is why:

Novo Resources (NVO.v): Difficult to value
I think most of us saw the video, results, photos and news release out of Novo Resources (NVO.v) last week, the wonderful nuggets of gold dug up after the metals detector went crazy in its first trench at its Purdy’s Reward project in Western Australia (if not, start here (19)). The stock shot higher on the news of course and closed up nearly 50% on the week with outsized volume, but the action late Friday was interesting too because there were clearly sellers.

Here’s the problem with NVO and its Purdy’s Reward discovery. Yes it’s exciting, anytime you discover rocks with large lumps of visible gold it’s always going to grab the attention of the market and rightly so. It’s also the type of result you’d want from this type of paleoplacer deposit at this early stage, as it’s long odds-on that if your first bucket of rock gives you impressive gold returns you’re going to find the same stuff in other places, again and again. But it’s going to be tough to value:

How big is the deposit? No idea, and there are only two ways of finding that out with any type of security: You either SwissCheese it with a very expensive drill program or you start mining it out now and see how long it lasts.

How much can you produce a year? This is Nugget Effect mineralization to the Nth degree, so what kind of throughput will it support? And what amount of production will that give you? And how long until the rock runs out? Without a good handle on size and grade, these questions become best guesses and you may end up spending way too much on your capex for the eventual mine.

NVO is already a $150m Market cap company and that’s expensive for a junior, exciting discovery or not. I’m not saying there’s not speculative potential in the stock, I am saying it’s hardly a riskless trade by any means. It’s way too early to make any firm statements or start assuming things, but from the scant evidence to date I can imagine Purdy’s Reward becoming a nice and very profitable source for a small mine in private hands that can run for years. Is it big mine material? I don’t know and to answer that one, NVO will have to spend a LOT of money and time on the deposit, Is it worth $150m? Frankly, it could be worth half that or it could be worth ten times that. What I do know is that if you’re going to speculate on its future I wish you the best of fortune (as I do Quinton Hennigh and his team) but I won’t be joining them until we know more.


PS: Today's price isn't even the 52 week high yet. Just saying.

7/17/17

Big fire at Tenke Fugurume

Large-scale damage, explosions and at least two of the workers dead, we hear. Expect reports.

The Alset (ION.v) scam: Nine and a half weeks...




...since this scam run by a blowhard charlatan sent its samples off to the labs and they STILL won't release the results. At what point does this move from stupidity into the actively criminal?

Cordoba Minerals (CDB.v) will release hole 063...

...assay results, along with a bunch of other holes, before the company AGM. So says the CEO. As the AGM is set for July 27th, that means either this week or next. Now you know what I do.

Global Mining Observer does Alex Black

In the nicest possible way, of course. Link here to the Alex Black meets GMO extravaganza and don't miss the GMO Glencore piece either, that's here.

The IKN Weekly, out now




IKN426 has just been sent to subscribers. As tasty as an Old England Toffee.

7/16/17

Gran Colombia Gold (GCM.to) loves its workforce

Tomorrow Monday the workers employed* by Serafino Iacono's joke of a mining company Gran Colombia Gold (GCM.to) will vote for what seems like the 50th time to go on strike. This time it's because GCM hasn't kept its promise to improve pay and conditions as it said it would by June 22nd, a date it confirmed and ratified with both workers and government. Because that's how this company works, it lies and cheats and gets your money, then flushes it down its own worst practices toilet. Lather, rinse, repeat.

Don't expect Fino to be at the meeting or the negotiations, he's too busy living it up at his new boutique hotel in Italy.



*in fact GCM isn't much more than a very large toll milling operation and the combo of thousands of informals and a company that doesn't give a rat's ass gives you one of the worst environmental polluters you can imagine.

Hey Jordan Roy-Byrne

I may be a jackass, but as anyone who has met me will testify (a list that does not include you) I admit that readily. On the other hand humility has never darkened your doorstep, you are widely considered as an asshole of the highest order, pompous, arrogant and just plain fucking stupid. So the next time you decide to slag off somebody in your subscriber-only material, I suggest you avoid writing about the personal character of people you've never set eyes upon or even spoken with, make it about yourself and learn a life lesson, you fucktard.

Lots of love, Otto.

PS: And buy some clothes that fit.

7/15/17

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

...in reverse order:

Third Place: "Cordoba Minerals (CDB.v) should release hole ACD-063 immediately". News on this in the Weekly tomorrow Sunday, subbers.

Second Place: "The anonymous seller of Cannabis Wheaton (CBW.v)". Graham Saunders didn't like this post. Shine a light.

 
First Place: "Novo Resources (NVO.v): "That's disgusting!"". Previously 16 views of the Youtube, now 3,332. NVO up 26% since this post went live.

7/14/17

TMAC Resources (TMR.to) and the First Law of Mining NRs

I was kind of surprised to see TMAC Resources (TMR.to) down just 6% on low-ish volume today on the back on this NR, the issue looks pretty serious especially if we take IKN's First Law Of News Releases* into consideration. Then again, this is an extremely supported stock and story in the sell side community and...


...the firms have a vested interested in not seeing the stock break down. The 2q17 regulatory filings will be interesting, though.

*which is this:
"The IKN First Law of Mining News Releases: Considering that anything contained in a mining news release is presented in the best possible way for the company in question, any piece of information contained in a NR that comes across in any way negative means the real news and/or events behind it must be very, very bad indeed."

The Friday OT: Frank Zappa; Watermelon in Easter Hay

From a 1988 live show. Zappa was on a different plane of consciousness to the rest of us, it shows best when he played guitar. I always get mixed feelings when listening to him, the appreciation of his work mixed with the absolute certainty I don't really understand what the hell is going on.



Youtube here.

Ollanta Humala...

...and his wife Nadine spent the night in the court holding cells. The ex-Prex is about to be transferred to the same jail that houses Alberto Fujimori. As for his wife, she's off to the women only prison in the North of the city.

For the record, the Humala couple are being done ostensibly for the U$3m bribe received from Odebrecht, as reported by IKN in this post dated January 15th.

7/13/17

Looks like Ollanta Humala is going to spend the night in jail

We're about an hour into the three hour judicial ruling on whether ex-President of Peru Ollanta Humala accepted bribes from Odebrecht. So far the ruling is going very badly for him and his wife.

There are four elements needed to decide whether they will be taken into pre-trial custody, and the first two have gone against them. If the other two are ruled against them as well, they'll need to pack pyjamas because there are new beds waiting for them this evening.

Expect an update on this post later.

UPDATE: The judge imposes "preventative prison" on both. Go to jail, go directly to jail, do not pass go, do not collect three million dollars in bribes from Brazialian construction companies.

In The IKN Weekly this weekend...

...and after meeting with its management today for a long chat, we answer the key question regarding Red Eagle Mining (R.to): Buy, sell or hold? }

Edition out Sunday evening.

The Guardian does Tahoe Resources (TAHO) (THO.to)

Mining company love it when mainstream media start looking at their operations, right? Right? But of all the report, the list and catalogue of corporate abuse, this is by far my favourite quote:

“There are a small number of vocal opponents who foment intimidation and violence in the region. This has led to a number of violent incidents which sometimes creates a general environment of impunity that violent activists foment,” said spokeswoman Edie Hofmeister.

Yes indeed ladies and gentlemen, Edie Hofmeister* really is this freakin stupid. Full report here.

UPDATE: And then there's this today from Bloomie:

Tahoe Resources Inc., whose flagship Guatemalan mine has been suspended, is taking steps to cut costs, including possibly slowing an expansion of a project in Peru and trimming exploration.
The Reno, Nevada-based company may also discuss halting its dividend at an August board meeting and might slow down the payment of bills, Chief Executive Officer Ron Clayton said  Thursday in a telephone interview.
“We certainly are already cutting back on things that are very discretionary,” Clayton said, adding the company will decide in the next two to three weeks what else it can save on. “Our gold mines, if we clip back a little bit on our exploration and capital spending, can generate cash.”

Whole thing here.

*Who got her job at TAHO because she's the tennis partner of Ferrari Kev's wife.

Cordoba Minerals (CDB.v): Right to reply

After posting the mail sent by Robert W. Allen regarding Cordoba Minerals (CDB.v) yesterday, as well as adding a second post with my personal opinion on the hole 63 delay, I received the following from CDB yesterday. It's a mail that CDB CEO Mario Stifano sent to Robert Allen as a reply to his complaints. I've been given permission by Stifano to reproduce it here and that's good for me, right of reply is something IKN has always appreciated. Read on:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Bob,

On behalf of Cordoba, its management and shareholders, it is necessary that I respond to your patently false and libelous statements. As CEO of Cordoba and one of Cordoba’s largest individual shareholders, I must ensure that all shareholders understand the transaction and do not rely on the libelous claims you are making which are based on an inaccurate set of facts.

I will set the record straight in this response.

The key point for all shareholders is that this transaction is neutral with respect to HPX’s current San Matias ownership, and is not at all negative to shareholders as you are stating. We have estimated that if the sole focus of the joint venture was to complete a feasibility study for the Alacran Deposit, it could be completed for approximately C$10 million. Under the previous joint venture structure, Cordoba’s existing shareholders would retain a 35% interest in San Matias upon HPX delivering a feasibility study. The transaction and concurrent financing will allow existing Cordoba shareholders to retain an effective 43% interest in San Matias – approximately 20% more than the ownership under the previous joint venture structure.  In fact, if Cordoba had raised over USD$30 million it would still have a greater than 35% interest in San Matias. 

I have to state that the details of the HPX joint venture have been made by Cordoba on numerous occasions. There is nothing new, or undisclosed, in what I am stating.

Cordoba entered into the joint venture with HPX in 2015. This has delivered significant shareholder value to Cordoba as HPX spent over $30 million on the project in less than 3 years, even though the option agreement only required HPX to earn a 51% interest at San Matias by spending $19 million over 7 years.  HPX has therefore been extremely supportive of the San Matias project, and this has been reflected in share price growth that benefits all shareholders.

The joint venture does not, contrary to your assertion, require that HPX carry the San Matias project to feasibility. HPX does not have a sole funding commitment to feasibility. HPX holds an option, and in fact HPX can require Cordoba to fund its 49% interest in the project going forward.  If Cordoba had to raise half of the cost of any exploration program, existing Cordoba shareholders would indirectly be diluted down from their current 49% economic interest in San Matias. As a result, your concerns about future dilution are unfounded. HPX has the right under the transaction, which is the same right that it currently holds, to maintain its pro-rata ownership interest in Cordoba.  That has not changed.

HPX also currently owns approximately 36% of the Cordoba common shares. HPX will exchange its current approximately 69% controlling economic interest in San Matias (consisting of a 51% direct stake in San Matias and its 36% direct share ownership interest in Cordoba) for an approximate 67% share ownership interest in Cordoba following completion of the concurrent financing.  HPX is not increasing its economic benefit in San Matias as a result of the transaction. Again, this transaction is neutral to HPX.

I will also correct your statements on Cordoba’s drilling results. Simply put, there is no material fact or change that has not been publicly disclosed and therefore your claim of illegal insider dealing has no basis in fact or law. Cordoba issued drill results on May 17, 2017 and not before PDAC as you have claimed.  Cordoba will be issuing additional drill results when all the assays are finalized for the remaining holes at Alacran and compiled and appropriate for public dissemination.  

Finally, I will address your governance assertions and allegations of management impropriety. The independent directors on the Board have positively endorsed the transaction as it is in the best interest of shareholders.  Haywood has also provided a positive fairness opinion on its terms.  Cordoba has a very strong independent Board.  Our independent board members include Tony Makuch, who is CEO of Kirkland Lake Gold, Ignacio Rosado who is CEO of Volcan, David Reading former CEO of European Goldfields and Bill Orchow former CEO of Kennecott USA.  These are highly experienced Board members, independent of HPX, and each of whom recommended that the shareholders approve the transaction. 

In addition, the renowned governance advisory firm, International Shareholder Services, which makes recommendations for institutional funds, has come out in support of the transaction. If it had concerns, it would have stated so.

As well, rather than receiving significant payouts in the transaction, Cordoba management has agreed to waive their change of control provisions under their contracts, which would otherwise have been triggered as part of the transaction. We as management are as committed as the Board and HPX to delivering significant shareholder value, and by waiving our rights, have taken steps to put the interests of the Company ahead of our own. That is proper governance.

Why are all of these positive recommendations being made?

It is because this is a transaction that stands up to scrutiny when examined in a factually accurate manner as it is an independently reviewed transaction that is in the best interests of shareholders.

On the contrary, your request that shareholders vote against the transaction is not founded in fact or any objective independent assessment, and is more likely based on your personal grudges against Cordoba for entering into a joint venture you opposed, aggressively fought against and failed.   

Cordoba’s partnership with HPX has delivered significant shareholder value, while you decided to exit your shares at the lowest point of Cordoba’s share price in 2015.  (The recipients of your email should know that you sold the vast majority of your Cordoba shares in 2015 at the lowest point in the market and (amongst other things) as a result, you have not had board representation since 2015.)  Fortunately, we have strong supportive shareholders who recognize the potential of our San Matias Copper Gold project and the benefit of having HPX as our largest shareholder.

I am also attaching a letter that I sent to shareholders explaining the benefits of the transaction.

Regards,

Mario Stifano

7/12/17

Cordoba Minerals (CDB.v) should release hole ACD-063 immediately

This morning we got to see what Bob Allen (Bullet Group) thinks about the proposed deal between CDB and HPX (spoiler: not a lot). The mail, which was circulated to his group of friends and colleagues, made it to IKN even though he got a basic fact wrong because it makes one excellent point.

1) Wrong: He said we haven't had an assay result since PDAC.
2) Right: An assay is way waaay overdue and it looks very suspicious in the eyes of your humble scribe.

In this NR dated May 17th CDB announced to the world a bunch of assay results for its main Alacran target that didn't impress the market (see chart below). They obviously knew the numbers wouldn't wow anybody because a little further down the NR they wrote this:
"Our geological understanding of the multiple mineralizing events and structural interpretation at Alacran is improving with visible gold recently intersected in drill hole ACD063, with assays pending."
Oooh! Ooooh! Visible Gold! And for those that recall, it was a hole that hit impressive VG in the same part of Alacran that saw the stock zoom higher in January and February. 


That May 17th NR was exactly eight weeks ago (56 days, count em up). And that's weird because for one thing, there's no way that hole would take 8 weeks to test and for another, at the time that NR came out I asked CDB CEO Stifano when we could expect the assay result and he told me by the end of June latest.

In other words, the delay on releasing this hole's results is total bullshit, obviously connected to this crap-assed deal to buy out HPX Colombia. If it looks like a duck, and quacks like a duck...






This is no small matter. I have no doubt that CDB, under the directive of Robert Friedland (the dude at the very centre of this retail shareholder rip-off), is witholding material information from the market. And even if they're not, the optics on this foot-dragging of an important hole are awful and makes the whole operation look dirty, shady and scammy.

IKN calls on CDB to release the results of ACD-063 immediately. Stop farting us around, the lack of respect for the people who have sponsored your company is disgusting.

Breaking: Lula da Silva convicted of corruption

Lula, ex-Prez of Brazil, just got handed a sentence of 9 1/2 years for corruption. He won't do time while the appeals process continues. Expect a bunch of newswire reports on this one.

Roger Federer is the best tennis player ever

Sport as art.


UPDATE: IKN reminds readers of David Foster Wallace on Roger, the peerless sport essay. Here's how it starts:

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

A word on Novo Resources (NVO.v)

The combo of...

1) The video posted to Youtube yesterday (as seen in this IKN post last night)
2) The trading pattern in NVO.v
3) The trading halt and news release this morning
4) The 30% price increase in the last two days

...is the most blatant example of selective disclosure and illegal trading you could possibly imagine. It's long past time that Canadian regulatory authorities clamped down on this type of bullshit. A heavy fine for NVO should be the absolute minimum that happens.