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3/9/13

I've turned off comments on the blog

Why? Because I'm bored stiff with opening my mailbox and reading:

Anonymous has left a new comment on your post "XXXXXXXXXXXXXXXXX"  
Ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance  ignorance ignorance ignorance ignorance  ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance  ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance  ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance ignorance  ignorance ignorance ignorance ignorance

Some of the time comments come from decent voices (tweetie, fredl, bakeapple, adonispappa, others as well...even the occasional nice one who prefers to remain anon) and if you guys want somewhere to comment from now on I strongly recommend Iwnattos's blog, because he actually seems to care about what other people write and even replies to them UPDATE: Errr, maybe not. And hey, I throw in the odd thought over there on occasion too so let's all play together. Not only that, but I hear that his place is getting quite popular (quite right too, it's good) so there'll be a decent amount of eyeballing for your comments and debate material. Meanwhile, you're always welcome to mail in to me for an exchange, the address is freely available over there on the right side of the blog page. But over here at IKN I've had it up to my ears with fielding brainless, witless, shapeless, formless, moronic blatherings from people who somehow think they're contributing to the world and can influence an argument by writing utter dumbassery under insignificant posts at a backwater like this one so today I've lifted that weight off my shoulders, once and for all. No more comments available on IKN, the end.



Reuters covering Caracas

And doing it wellThe "what Chávez meant to the people" reports can easily be overdone, too schmaltzy, too biased to pro or anti sides. This one is several cuts above the norm as it doesn't fall into any of those traps, but still tells its story well.

PS: One of a million photos, but one that captures the current tone well.


Also featuring Chávez when he was a handsome buck.

Every fucking website

With due thanks to Counterparties (Ryan McCarthy, Felix Salmon), here's every fucking website.

3/8/13

A new record for Peru's economy

Its worst ever single month commercial deficit has just been reported by the Peru Central Bank for the month of January 2013.


Just so you know.

Bolivia: Evo Morales at 59% approval rating

Evo's back. After slumping to just 35% approval at the end of 2011, largely due to the failed attempt to slap a massive fuel tax on the country, Evo Morales's approval ratings have improved substantially and the new set of numbers, just released by country benchmark pollster IPSOS, puts Evo Morales on a very respectable 59% approval.


Disapproval rates show an even better improvement, down 13% to 33% in the period. According to the analysis in Bolivia on Evo's improvement the better image is due to the middle class, who are looking with newly found approval on the way the Evo government is handling the country economically and socially.




A gold chart

Was there news?


From yesterday's post, option 2 chosen.
(by the way, 130k people taken out the stats bucket, Jan'13 revised down by 38k, participation rate unchanged. This jobs report has the cool headline numbers but it's not all hearts & flowers once the surface is scratched. However, that won't stop the euphoria this morning. Garth and Wayne, party on)

UPDATE: An impressive rebound now happening, less than an hour after that chart was snapped. Gold saying something positive here. 

Kinross (K.to) (KGC): Oh look, it's the second half of the year already

The last time we heard about the La Coipa gold mine in Chile from owner Kinross was in its 4q12 results announcement, dated February 13th and this is what was said:
"As previously disclosed (in the Company''s 2012 Annual Information Form), the Company expects to suspend mining of the existing orebody at La Coipa in the second half of the year. "

Today we hear that production at La Coipa was suspended yesterday due to reserve depletion, workers laid off, gates shut. Now, forgive me if mistaken but i could have sworn that March 7th was plumb in the middle of 1q13, rather than early in 3q13 or something even a little later. 

FWIW, La Coipa was good for 178k AuEq ounces in both 2011 and 2012. Cash cost reported for FY12 was U$966/oz (though you kinda get the feeling, what with the news today, that the cash cost number reported wasn't all the costs of running the mine there).

UPDATE: What? Kinross hasn't informed the market that it's shut down production at its mine yet? That's a bit naughty, isn't it? 

The Falklands/Malvinas referendum: The only useful information that will result from the vote

Between tomorrow and Monday, the residents of The Falkland Islands/Las Malvinas will vote in an internally organized referendum on what nationality, sovereignty etc they prefer to be. It goes without saying that the result will be UK very very many indeed, Argentina very few (perhaps even zero), but aside from the pre-ordained result, there will be at least one snippet of useful information to come from the vote: We'll get to find out exactly how many people this fuss and nonsense actually concerns.

Your author's best guess: Roughly the same amount of people present at a Wednesday night third division football match in mid-March between two mid-table teams with little left to play for in the league that season. 

3/7/13

The jobs report tomorrow

Let's consider the options on how gold reacts to the U.S. jobs report, as we have the batch of numbers for February before the bell tomorrow:
  • If the jobs report is deemed weak the market will assume investment liquidity will drop, therefore less money will be available for the gold market. Also, the cash pulled from equities will rush to the most obvious liquid safe haven , t-bills and bonds, thus strengthening the US Dollar. As a result, gold drops.
  • If the jobs report is deemed strong the positive potential for ongoing growth in activity will cause movement out of low risk holdings and into sectors that benefit directly from economic growth. Funds and investors take heart from the dissipating uncertainty in world economies and put more money to work in higher yielding oportunities, which will undoubtedly include cash reaped from that stored in precious metal bullion devices. As a result, gold drops.


Any questions?


Geoff Burns of Pan American Silver (PAA.to) (PAAS) on Argentina

Has this made it into an English language report? If not, here's the original Spanish language piece and here's the translated quotes from Geoff Burns of Pan American Silver (PAA.to) (PAAS):
"If I said that we were going to buy something in Argentina today, [shareholders] would ask for my head." 
"There are a lot of opportunities there right now, but in reality you need to have big balls."
"Frankly, I wouldn't build Navidad today."  

"One of my worst nightmares, and this may sound funny, is that they [the regional government of Chubut] change the law and then to be in the position where we are forced to build in what's possibly the worst business climate in which to build a mine in Argentina in the last 10 years."

Frankly, after the money Burns has pissed down the river by betting and failing on Argentina already, I don't know what's holding the shareholders back from demanding his head right now. Anyway, whatever, cute quotes I thought.

A queue in Venezuela


Estimates are that it's 7km long and about two million people in total right now. Interesting that no single photo seems to be able to capture the whole scene, such is the size, so more good shots here at Venezuela's largely unbiased (to left or right) media channel Noticias 24, which together give a good idea of the magnitude of the whole shebang, going off in Venezuela today.

PS: Reuters doing a good job of coverage in English here

UPDATE: We need to quote a bit of Python, what with the news that Chávez's body will be embalmed and on permanent show.


Mandy:        What is myrrh, anyway?
Wise Man 3:   It is a valuable balm.
Mandy:        A balm, what are you giving him a balm for?  It might
       bite him.
Wise Man 3:   What?
Mandy:        It's a dangerous animal.  Quick, throw it in the trough.
Wise Man 3:   No it isn't.
Mandy:        Yes it is.
Wise Man 3:   No, no, it is an ointment.
Mandy:        An ointment?
Wise Man 3:   Look.
Mandy:        (sampling the ointment with a grubby finger)
       Oh. There is an animal called a balm or did I dream it?

Sulliden (SUE.to)

An interesting report about the local politics and community issues around the Shahuindo project of Sulliden Gold (SUE.to) from Noticias SER, right here. March 13th looks like being an interesting date for that company's calendar.


Comment on the Fraser Institute Mining Survey (from IKN200)

This from last Sunday's edition, by way of answer to a mailer this morning.


The Fraser Institute 2012/2013 Mining Survey: A comment
The Fraser Institute took another step towards making its annual mining survey redundant last week with the publication of its 2013/2013 Mining Survey that offers plenty of evidence as to how out of touch with reality the institute has become. Seeing Chile, a world-class mining jurisdiction, shuffled down to 23rd position by the survey results was bad enough, but there was worse to come. Along with unsolicited comments reaped by your author from readers after last week’s blog post that gave the link to the report (36) such as...

MF: The annual rankings by Fraser Institute “global survey of mining executives” carry about as much weight as the USA Today Men’s Basketball Coaches Poll.

IB: The DR, Namibia, Turkey, and Bulgaria are all more politically stable than Colorado, Minnesota, and BC. WTF?

...the one that jumped out of the page at me was seeing three regions of Argentina ranked higher than Mexico and five of them (in order Salta, Neuquen, Rio Negro, Catamarca, San Juan)  higher than Peru, while arguably the best and most welcoming Argentina province of them all, Santa Cruz, ranked as the lowest of them all on the Fraser list, below even Mendoza and its notoriously bad risk factors for metals mining, as well as below Panama, Colombia and Guyana.

This segment could turn into a long refutation of the Fraser findings but it’s difficult to know where to start. The report is asinine, wide open to ridicule on several fronts, useless as practical reference material due to its cornerstone findings, patently unaware of the situation on the ground in the region and shines far more light on the failures of the survey compilers than the Latin American mining scene (or the world for that matter, though I’ll stick to LatAm for my own commentary). The good news; it’s one less thing I’ll have to read this time next year.

Chart of the day is...

...the US Dollar (USD) index:

An interesting move.

Brent Cook on Market Call last night


The Bearded One did one hour of junior mining blahblah on BNN last night and the link to part one of the show is here. The rest should follow straight on from watching part one, but if not here part two, here's part three, here's part four, here's part five, here's part six, here's part seven and here's part eight

Well worth your time and just for a change I actually agree with one of his top pick calls this time.

3/6/13

Mining company plane crash kills nine in Peru

Reports are now coming in of a plane crash in Peru. The plane, owned by Peru air company APSA and on lease to the Peru mining company MARSA, owners of the Retamas gold mine in the La Libertad region of Peru, was travelling between Lima and the mine when it crashed, killing all nine occupants. Here's Gestion with its report.

UPDATE: Apparently, initial reports are that bad weather conditions caused poor visibility and the plane crashed into high tension power cables near the runway at the Pías aerodrome, where it was due to land


What Rio Alto (RIO.to) (RIOM) teaches us today

Today's lesson: Don't put ANY news out into this market, it doesn't even matter if it's good news. Stick your head above the parapet and you'll get sniper fire.

Rio Alto Mining (RIO.to) (RIOM) down 4.5% at the open on this news (which is positive stuff all told..I mean, even those hard to please dudes over at Scotia agree) Oh, well, only 516% up on the trade now, how stupid of me not to sell when I was 616% up, eh?

UPDATE 3pm: Oh that's better



A Flash update...

...has just been sent to subscribers, Wednesday morning pre-bell. Nothing mega-important, one small planned sale and another small planned purchase, then a couple of small comments. Small, y'see.

Appreciation

IKN would like to take a few lines today to thank all those people who know little or no Spanish and whose maximum exposure to Latin America was that three weeks when they did the Inca Trail, who kindly took time out of their busy winter day to write in and tell your humble scribe all about their intellectually untouchable, logically perfect, deep and expert understanding of Hugo Chávez. The experience of reading through inbox content this morning was a fine way of being reminded about the general level of intelligence and mental synapsis that occurs within the cerebral matter of the average gringo when it comes to LatAm affairs, for which I am grateful. This one's for you, folks:


Wednesday AM, March 6th 2013

3/5/13

The Revolution Will Not Be Televised

A documentary like no other.



QEPD

BREAKING: Chávez dead (with updates)

Venezuela VP has just announced it.

Updates to come

UPDATE: On TV about a minute ago, Venezuela VP Nicolas Maduro announced that Hugo Chávez had died at 4:25pm today. Rest In Peace.

UPDATE 2: There are a lot of obviously pre-prepared and pre-written obituaries now hitting the world from media of all angles. No point in going there, you can find one to your own taste all by yourself. I would make mention of Greg Weeks' post here though, as in few words it covers the importance of Chávez to the LatAm  psyche, the outline of the mechanism for the next Presidential election (30 days) and how, contrary to the understanding of many North of the Rio Grande, VP Nicolas Maduro is in a very strong position to take the election and be the next President of Venezuela.

UPDATE 3: Here's the recording of Maduro's announcement


His voice starts to crack in a couple of moments, but he holds it together. He also calls for calm in Venezuela.

UPDATE 4: One of a thousand photos from Caracas this afternoon.



Chile: Sebastian Piñera getting some polls love at last

The latest opinion poll from Chile's benchmark pollster Adimark shows a clear improvement in President Sebastian Piñera's approval ratings. Here's page 11 of the PDF you can find here, with the moneyline chart (that I've left in Spanish....you can handle it, people):

At 38%, it's his best score since April 2011. His best area of improved score is the economy, but I reckon he's also getting bonus points from Chileans for taking a new, harder line with Bolivia.




Colossus Minerals (CSI.to)

When Colossus Minerals (CSI.to) broke through $4 to the downside in early February I took the first close look at the company for many months (about a year ago in fact, if memory serves), weighed that-against-that and thought, "OK, so I'm not a buyer now, but it's not a bad price for someone who wants to take a risk". That was at $4:


Here we are at $2.50. What a market, eh? Apparently the dump is being fuelled by the near certain deletion of CSI from the S&P/TSX Composite, with the quarterly adjustments to be announced this Friday coming. 

There'll be more on CSI this weekend, subbers.

UPDATE: Don't blame me for this rebound, I was just thinking out loud and I have no current position, either

Chávez


Between the desire
And the spasm
Between the potency
And the existence
Between the essence
And the descent
Falls the Shadow

T.S. Eliot, The Hollow Men

The government of Venezuela should give full and frank information about Hugo Chávez's current state of health and his prognosis. His political opposition should act in a far more dignified way than they're currently acting. And then once that's done, he and his family should be left in peace. The man may be the single most public figure in the Spanish-speaking world, but anyone in the final stages before death has a right to privacy and dignity, something being denied to him by friend and foe alike. The whole circus, on both sides of the fence, saddens your humble scribe. 

Chart of the day is...

...the dollar versus gold, 12 months:


I think this one interesting. You take the dollar index (DXY) and you take a 1X inverse gold ETF (DGZ), which is basically flipsided gold, you stick them on the same 12 month chart. What we see is that gold has basically performed as an inversely leveraged currency against the dollar for the last year, which puts a lot of things into perspective (not least of which the never ending calls of market manipulation from the goldbug permabull brigade). Gold has basically been a trade on the United States Dollar for the whole year folks, no more no less. No wonder the miners are getting crushed by costs eating into margin.

Hugo Chávez is unwell

"A worsening of the respiratory functions" and "very delicate" amongst other elements of this latest update.




3/4/13

Peru: Copper vs Gold vs Laundered Drug Money, 2012

Peru's three biggest exports and here's how they stacked up in 2012:


To get the number for copper, we take the monthly national production figures and multiply the copper produced by the monthly average price of copper on the Comex exchange.

To get the number for gold, we take the same monthly national production figures and multiply the gold produced by the monthly average price of gold on the London PM fix.

To get the number for drug money laundered in Peru, we read a report on findings from The Geneva Group International.

I wonder why Peru's politicians, armed forces and police force aren't cracking down so hard on the cocaine trade?

A quick comment on PDAC and market action today

On observing market action this morning, it looks as though people aren't going round the booths at PDAC thinking, "What shall I buy?". They're going round thinking, "What shall I sell?".

Pope selection flowchart

In order to save time at the upcoming papal conclave, the cardinals have decided to use a vetting flowchart for the first stage of the selection proces,




I'ts a wheat from chaff thing, y'know. Saves embarrassing scenes later.

IAMGOLD (IMG.to) (IAG) and its asshole on costs

Oops sorry, my mistake, that should say "assault on costs". Here's the under pressure CEO Steve Letwin on IMG's latest move to appease his haters, from my fave NR today (so far):
Mr. Letwin added, "Our assault on costs will continue until we have exhausted all possible opportunities to reduce spending. Our management team is fully focused on meeting this goal and intends to report on our progress as we move forward."

Hey Steve, only 5.2% down at the open on this news! Way to go!

How not to do investor relations at PDAC

Your humble scribe receives this mail today. 

click image in order to enlargisize

Floyd, you fail. It's also the type of attitude that might explain (in part at least) the share price performance of Thundermin (THR.to).


Therefore, IR people, do a better job than this type of amateurish slop. Assuming of course that you want to stay being IR people.

Gold Resource Corp (GORO) delays filing its annuals

Just when you thought you get to see this dog of a company's annuals, Gold Resource Corp (GORO) decides to delay filing them because...
"The registrant needs additional time to finalize the financial information received from its Mexican subsidiaries for the financial statements and the disclosures contained in Management’s Discussion and Analysis in order to properly prepare a complete and accurate report."

Oh very professional, guys. I mean, it's not as if you've suddenly realized that you have Mexican subsidiaries, considering that the Mex end of your company is the one that produces the silver (and a bit of gold by-product), rakes in the revenues, things like that. You wouldn't be dragging your heels deliberately to keep crappy news from us now, would you? You wouldn't be thinking about that there PDAC conference and stopping 25,000 assembled mining peeps from laughing directly in your faces, we hope? Anyway, you now have until March 15th to get the 10-K in else face the wrath of the SEC. Clock's running.

Disclosure: Short GORO.

PDAC sees a real deal: Hecla (HL) does the white knight thing for Aurizon (ARZ.to) (AZK)


Amongst the dross and "oh hello look at me" NRs now starting to fill up your humble scribe's inbox, we have real straight news of a mining M&A deal as Hecla (HL) is outbidding Alamos for Aurizon (ARZ.to) (AZK). News here and a bit of the deal here below:
Under the terms of the Arrangement, Aurizon shareholders may elect to receive in exchange for each Aurizon Share, CAD$4.75 per share or 0.9953 of a Hecla share or a combination of both, subject in each case to pro-ration based on a maximum cash consideration of approximately CAD$513.6 million and a maximum of approximately 57,000,000 Hecla shares. Assuming that all shareholders elect to receive either cash or Hecla shares, the consideration will be fully pro-rated with each shareholder being entitled to receive CAD$3.11 in cash and 0.3446 of a Hecla share for each Aurizon share.  Continues 

FWIW, that work's out at roughly 2/3rds cash component maximum and a third in shares. The question now is whether McCluskey counters (i don't think he will).

It's PDAC Monday which means...

...a crapload of news releases from now til midday. Let's set the bar at 140. Under or over, people?

3/3/13

The IKN Weekly, out now


IKN200 has just been sent to subscribers even though most of them are drunk as skunks in PDAC right now and won't get round to reading it until about Thursday. If at all.

The potential for a LatAm Pope

Your humble scribe is crystalline in his clarity that the change at the top of the Catholic church, in process now, is less than important for most readers of IKN, of passing interest, a bit of a sideshow that doesn't really affect their lives. However for Latin America this period and the choice that is made for the next Pope is of tremendous importance, getting no end of coverage in any media channel you care to mention, Tijuana to Tierra del Fuego. It's also a decision that, should it go to a candidate from the LatAm region, could change things down this way permanently. With that in mind we present this neat overview piece from Mike over at Central American Politics, which is succinct and recommended reading on the whole shebang. Here's an extract:
"Electing the next Pope from Latin America, or anywhere in the global south, would be symbolically important. Latin America is still home to the world’s largest concentration of Catholics even though Africa counts the fastest growing Catholic population. While most Catholics today voluntarily profess their religion, Catholicism was violently imposed on the indigenous population that originally inhabited what we today call Latin America over five hundred years ago. And, it was only fifty years ago that Latin American bishops first traveled to Rome to participate in the Second Vatican Council after having been seen as second class for centuries. Given the large number of Catholics residing in Latin America and the global south, a successor from the south would be tremendously symbolic even if he were cut from the same conservative mold as his two most recent predecessors." Continues here
Mike also mentions the potential names for the big job from the LatAm region and starts his list with the two LatAm candidates considered most "popeable" by the consensus, Brazilians Joao Braz de Aviz and Odilo Pedro Scherer.