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9/21/13

Economics, macro versus micro

Saturday Morning Breakfast Cereal explains all:



h/t drunkey

9/20/13

The Friday OT: Python; Crunchy Frog

Gold Resource Corp (GORO) and options

Longs of GORO will be happy to learn that the hard-working head office team yesterday took advantage of the low share price to award themselves a total of 415,000 options at a strike of $7.24. Daddy's boy Jason got 100k of those.

In other news, we'd like to point out the fact that retiring CEO Bill Reid has 400,000 options of GORO at 25c that expire on October 8th 2013 has nothing whatsoever to do with the fact that he's retiring on September 30th 2013. It's merely coincidence, ok? 

Roque Benavides of Buenaventura (BVN) and his political ambitions

News from Perumin is that Roque Benavides, head honcho of Buenaventura (BVN), wants to become a political player in the country. When asked yesterday whether he's thinking of running for a elected office (possibly aiming for the top and President of Peru in 2016), he replied, "I'm very close to making a decision on this matter" and then "I have to take into consideration and balance my personal, family and business life" before making the call.

As Roque has close ties with Peru's APRA party (for evidence, check out this photo of a young Roque with Victor Haya de la Torre, founder of the party) the opportunity to use a formal party structure for his ambitions wouldn't be difficult to arrange (though he'd need to come to some sort of agreement wih Alan García first, as Twobreakfasts' presidential ambitions for 2016 are obvious already), but you can't help but think that at the moment, Roque should be tending to his own business a little better than this:



The fawning and adulation of these Perumin-type mining conferences often goes to the head of the ego-charged mining bosses. They need to remember just how crap they are at running their businesses.


The obvious question to ask mister gold

"Is that it? That all you got? Call that a rally, do you?"


Mind you, merely asking a question of an inanimate object in such a way, or assuming anthropomorphism of a bar of metal in the same dumbass way as the rest of the dumbass goldbug world tends to do, is rather dumbass*. 


*as is repetition of the same colloquialism

Your pedophile Catholic Bishop of the month

Ecclesiastical scandal hit Peru yesterday when it was confirmed that one Gabino Miranda, until recently a bishop who worked in the Ayacucho region of Peru, was stripped of his offices by the church in August because of accusations of pedophilia. What's also interesting is how Peru's Catholic church, under the auspices of Opus Dei Cardinal Cipriani, wanted to keep the case of fellow Opus Dei member Miranda away from the public eye and had said nothing to anyone about the case until forced into the admissions last night by first a revelatory op-ed in a national newspaper and then questions arising thereof. In other words, they might have been talking a new talk recently but just like any other big and powerful organization, they'll only admit wrongdoing when forced to do so.

Hopefully, now the case is out in the open the Peruvian authorities will look into it and prosecute the piece of shit Miranda. However, in a country such as Peru, under the cosh of the Catholic church for nearly five centuries, that's nowhere near a given.

The most interesting news story of the day

Is this one. We also note that Orion has already started on its smaller mine strategy, by bunging $30m $35m at GoGold (GGD.to) earlier this week and then $50m at Aurcana (AUN.v) today. Reuters got your info:

Red Kite partner Lewnowski spins off mine finance fund
By Eric Onstad and Melanie Burton 
LONDON/MELBOURNE, Sept 19 (Reuters) - One of the founding partners of UK-based metals hedge fund firm RK Capital Management LLP has departed and taken a mining finance fund with him. 
Oskar Lewnowski, based in New York, was a founding member of The Red Kite Group, which started up in 2004 to become one of the biggest hitters in the metals industry. Red Kite had two mining finance funds, of which one, run by Lewnowski, has been spun off and renamed the Orion Mine Finance Fund, a Red Kite spokesman said in an email. 
"A mutual decision was reached by the managing partners - Michael Farmer, Oskar Lewnowski, David Lilley - to separate their business," it said. 
"Both funds expect to work together on select future deals, sharing expertise in physical sales and logistic where appropriate." 
The Red Kite Group has $2.3 billion under management and Orion Mine Finance has $1.1 billion. Lewnowski wanted to pursue a strategy of building a portfolio of smaller mining firms while RK believed mining finance should be strictly tied to offtake agreements, said a source with knowledge of the matter, declining to be identified.  Orion - with offices in New York, Denver and Sydney -provides a wide range of financing transactions in addition to offtake deals, including debt, equity, convertibles and royalties, according to its website. The Red Kite Group has offices in London, New York, Shanghai and Hong Kong. 


9/19/13

Popularity

IKN offers up this handy tip for people thinking of starting a blog with plans to become successful web entrepreneurs. Current site stats confirm that in order to run a popular, high traffic website, do not talk about South American economic trends, mining scams, criminal scumballs in the junior mining industry, market trends for gold, currency movements or political happenings South of the Rio Grande. The way to run a popular site is to have the word "penis" appear in the title line of any given post.

Mojitos served, the end.

UPDATE: Twitterpal Ross adds more smart advice:

"or post headlines in all caps followed by... Here's what you need to know"

Then this: Reader R mails in with: "you forgot the golden rule of media. Lesbians = ratings."

Continental Gold (CNL.to)

So I was reading through the Continental Gold (CNL.to) update NR this morning, like you do, when the thought suddenly struck that hey, what's all this about a PFS for 2014? They were supposed to be going into production in 2014, weren't they? As CNL is a company I follow but not closely I wasn't too sure, so it was off to see that nice mister google immediately and sure enough, in September 2011 when the company offered up its first 43-101 compliant resource number...
Continental's CEO, Ari Sussman, commented "The strength of the Continental Gold team is the desire and effort to always achieve more. This initial resource is a reflection of their dedication and puts the company on track to achieve its goal of commercial gold production in 2014.
A litte extra searching even found Ari Sussman promising production in 2014: 
Buriticá will be producing between 200,000 and 300,000 ounces of gold a year by the end of 2014, Sussman promises.
Promises promises, this is mining, sold to you suckah. That was two years ago, so what happened to the timeline and do you think that this delay may have contributed to the 50% drop in the share price of CNL.to since then? Yeah maybe, but fortunately we have no reason whatsoever to doubt that CNL will be able to deliver its pre-feas in 2014 and move to a slated production start-up (no promises any more) at the end of 2016, as it now calls. And of course, all that talk about being "on track" in the latest NR, that's beyond reproach.

Bolivia International Currency Reserves now stand at U$14.5Bn

A chart:


Since breaking through the (psychologically at least) important barrier of U$1,000 in reserves per capita at some point in early 2011 (Bolivia's population is 10.46m, according to the CIA World Factbook), its reserves position hasn't done a sudden reverse as all of its knownothing detractors expected, but has gone from strength to strength. Today it stands at U$14.543Bn (as at September 6th 2013, the latest published dataset). So, we're now at U$1,400 a head, give or take a tenspot.

And why so? Well, according to the latest six month report from the central bank which was published today (link here, because we at IKN know you just love reading 55 page densely packed financial Spanish PDFs) and reports on the period to June 30th, "The increase is mainly due to the income from YPFB exports".

YPFB being the State owned oil and gas company, the people with the pipelines that supply Brazil, Argentina, themselves and a few others with all that natgas. Yup, remember that nationalization of the oil and gas industry that Evo ran when he came to office? That one which was never going to work and would all end in tears for Bolivia? I bet you've just worked out why you never get to hear about it anymore, too. Indeed, it worked and is working very well for Bolivia, that's why. Can't say nice things about Communists now, can we? Wouldn't be right.

Chart of the day is...

...the US Dollar index (USD), weeklies:

The most important squiggly moving line of the day. Keep the dollar front and centre on you screen, all other prices of things that get bought and sold are derivatives of this one today.

And 79 / 80 looks like pretty decent support level, does it not? The USD hasn't cracked 80 to the downside since Ben & Co threw their surprise party yesterday, so we can safely assume that's a number in in play.

9/18/13

"The hospital warned locals to not use penis enhancing drugs without prescription to avoid incidents like this"

Colombia Reports would like to tell you about the man from the eponymous country who OD'd on Viagra and as a result had to have his penis amputated last weekend. Right here.

How the Taper is expected to affect climate change

This brings us to the big question, and the question is:

Did you seriously click on that title link? Get a fucking life, will you?

Chart of the day is...

...one that notes just how many mining companies had booths at the Cambridge House Toronto Resource Investment  Conference in 2013, and compares the number to the same event in 2012:


Nuff said. 

Data from here

9/17/13

(UPDATED) Famous last words, Gold Resource Corp (GORO) edition

There were many words and thoughts in IKN228, out last Sunday, but this short line is how it ended (ok, 2nd last thing to be exactly exact).


That was with GORO at U$8.30, which was a price available to short yesterday, too. I've just seen $6.50 printed, so that's 21.7% since the weekend. 

On Sunday I also mused about making the current short position into a Top Pick. Just sayin'

UPDATED: By request, here's the main write-up piece on GORO from IKN228 dated Sunday September 15th. Looks like the only thing wrong was the last sentence; you had 24 hours, not two weeks:
Gold Resource Corp (GORO): Am I allowed to make a short into a Top Pick? Would you people out there complain if I did? It’s not really about the way that Reid pere has passed the baton on to Reid fils, as seen last week (8), because the corporate style (both operational and promotional) isn’t about to change, we know that the news last week isn’t some sort of harbinger of new brooms or a change towards a serious attitude at the company. What’s more, I do get that a speculative junior gold name with a fanclub following and promotional pump from the anal yst community will see the type of rebound move we saw in it on Friday, so that’s not the issue here. 
The issue it its fundamentals, and GORO is about to hit some serious headwinds that not even its biggest promo artists will be able to ignore.  
1)      In two and a bit weeks’ time, Hochschild (HOC.L) will be allowed by SEC rules to dump another large tranche of the GORO shares it owns onto the market. It will do so,  and sooner rather than later. 
2)      At the current price for silver (and gold, but Ag is the main revenue generator) GORO is not making a profit on its operations. Let’s be clear about what that means; it means before it pays any dividends to shareholders and before it pays tax, the combination of operating costs, necessary development, necessary exploration and G&A mean that GORO makes a loss. Silver under $23/oz means GORO is a lossmaking mining company, period. 
3)      At some point the company will have to make the decision to lower its dividend payments, else the depletion of treasury will continue. That’s not opinion, that’s basic mathematics. 
4)      Mid October will see GORO releasing its 3q13 production numbers, which are unlikely to be anything else but in-line. 
 As per Friday’s close, GORO is running a market cap of $442m and I doubt it’s worth even half of that, but I’m happy enough in keeping with the $5 downside share price target. That’s a 40% upside to this short position from here and unless silver and gold put in a serious rally, we’ll see $5 printed on this stock. Today’s GORO, especially after that Friday rally, is screaming value at me and there’s perhaps two weeks of window in which to position yourself to the downside. 

Oh, we hear that the dumpage today is due to a "big newsletter" sell call. The only surprise on receiving that mail from a contact was to read that there are still big newsletters left out there. And oh yeah, the other thing, we note that GORO is now only 16% down on the day. Well, bet that's a relief for longs. 



Conga: The elephant in the room

Can we cut the crap, please? Amid all the blahblah about whether or not Yanacocha SA's (the Newmont (NEM) and Buenaventura (BVN) JV company, with the World Bank as minority partner) Conga project will move ahead or not, there's one basic, obvious fact that nobody is addressing:

NEWMONT

DOES

NOT

WANT

TO

ADVANCE

CONGA

WHILE

GOLD

IS

AT

THESE

PRICES

BECAUSE

THE

FUCKING

PROJECT

IS

UNPROFITABLE


Are we clear?

Kallpa Securities on Peru mining

I've been asked for a comment by three readers on this note over at The Gold Report, which is enough to get me out of my reticence (and stop more mails from coming in). However, I'm not going to go into specific parsing mode and will keep it to three general comments.

1) This is a note where a brokerage talks its book, which is neither good nor bad, it just is. However, the reader needs to keep that filter in their head at all times (and read the smallprint disclosures at the end of the piece).

2) There's always this whole thing about how a Peruvian will know more about Peru than an outside observer, which is true on many things. For example, if I were in Lima I wouldn't hesitate to ask these guys where to go to get a really good anticucho. But when it comes to political risk in vast expanse of Peru that lies outside the capital city, the sad fact is that Limeños have as little idea of what's going on as people thousands of kilometres away. For sure they can fake knowledge better than the rest, but they're still pig ignorant.

3) There's a Peruvian psychological wrinkle that gets them to ignore anything that might be bad until it's too late to fix (and then plead ignorance/innocence later). It's present in spades in the report.

Anyway, there you go, job done, comment made and I did it without using a single swear word too. Go read the note.

"What Liberty Silver (LSL.to) court case is that, Otto?", you say.

This one:

Monday, September 16, 2013
WEST PALM BEACH, Fla. (CN) - Liberty Silver sold stocks "at an increased price, pocketing unlawful profits amounting to tens of millions of dollars," investors claim in Federal Court.
     Lead plaintiff Todd Stanaford sued Liberty Silver Corp., Robert Genovese, Tiffeni Graves, Marnie Markin, Geoffrey Browne, BG Capital Group and Look Back Investments under the Securities Exchange Act.
     "Genovese is believed to have used a pump and dump pattern of stock manipulations in Liberty Silver, as well as in numerous other schemes," the complaint states.
     Clearly Canadian Brands, Neptune Society, Envoy Communications, Spectrum Sciences & Software, and American Lithium Minerals are just a few of Genovese's other alleged schemes. They are not parties to the lawsuit.
     Stanaford says the other defendants "should have been known" or did know what Genovese was up to.
     "Genovese is a penny stock promoter and is notorious for operating on the fringes of the financial markets, making millions of dollars by touting penny stocks," the complaint states.
continues here

9/16/13

Liberty Silver (LSL.to) pulled into the Bobby Genovese class action

Hey guys, don't forget to include James West in your action too. In fact, it's smarter than trying to get cash out of the company, because the scumbag West actually has positive net equity and has enjoyed the benefits of his ill-gotten gains, while LSL the company is basically bankrupt. If ever a pumper needed to pay for his two-faced scumbaggery, it's West (and by the way, he broke securities law by not disclosing his payment for the pump job...call it a handy hint, the rest is up to you).

And another thing: You people should really and I mean REALLY investigate just how this out-the-gates start-up managed to get a listing on the main TSX board right from the gitgo, rather than being listed on the Venture. Here's tonight's NR, here's the paste-out:
TORONTO, ONTARIO--(Marketwired - Sep 16, 2013) - Liberty Silver Corp. (LSL.TO) ("Liberty" or the "Company") has become aware that the Company and its Chief Executive Officer have been named as defendants in a proposed class action lawsuit filed against Robert Genovese, certain individuals alleged to have collaborated with Mr. Genovese, and an offshore investment firm allegedly controlled by Mr. Genovese. The action contains various claims alleging violations of the United States Securities Exchange Act of 1934 and rules thereunder relating to anomalous trading activity and fluctuations in the Company's share price from August through October 2012. The plaintiff purports to bring suit on behalf of all who purchased or otherwise acquired the Company's common shares from April 1, 2008, through and including October 5, 2012.
The complaint was filed in the United States District Court for the Southern District of Florida, and, to the Company's knowledge, neither the Company nor its Chief Executive Officer have yet been served with the complaint.
If a complaint is served, Liberty and its Chief Executive Officer intend to fully investigate the complaint and will undertake a vigorous defence.
About Liberty Silver Corp.

x

Peru GDP for July 2013 +4.5%

That's below consensus forecasts of 4.75%. Here's how the 4.5% news fits with the monthlies since 2010:


Trend is obvious, no?

Dear silver mining company analyst: Nobody gives a rat's ass about your stock pick

For example:

Fortuna Silver (FVI.to) (FSM): Small but growing producer, returns consistent net profits, well-run, cash at bank and debt free, low cash cost, rarely fails to deliver on guidance, trustworthy management.

Great Panther Silver (GPR.to) (GPL): Perma-underperforming small silver producer, pumped by bullshit artists for years, makes loss at current silver price due to high cash cost, management consistently fails to deliver on guidance.

MAG Silver (MAG.to) (MVG): Exploration only, nice main asset, spinning wheels waiting for something to happen, treading water as a company until FRES decides on development.

Pan American Silver (PAA.to) (PAAS): One of the biggest producer names out there, diversified assets, management with a patchy recent record of corporate decisions (M&A, purchases gone wrong in Argentina etc), though still profitmaking and much bigger than the above names.

People, it doesn't matter what your preferred flavour is, the market doesn't give a damn because it sees one word and acts on it: Silver:



So give us all a break with your "my pick's better than your pick" bullshit, will you? Self-important fools the lot of you.

Piñera: "Latin America has always been centre-left"

I'm going to miss Sebastian Piñera, President of Chile, when he leaves office in November. For the entertainment value of the plug dumb stupid things he says, of course. Here's the latest, as he tried to explain why (Chile's idea of) left wing candidate Michelle Bachelet was red hot favourite for the November election:
"...Latin America has always been a continent more centre-left than centre-right. You see, the previous and present governments in Latin America, the vast majority are centre-left."
Videla Argentina, Pinochet Chile, Stroessner Paraguay are the easily remembered poster children of dictatorships of course, but what about the 21 years (twenty-one) of military dictatorship government in Brazil to 1985? What about the 70s in Peru? Care to consider just why the Sandinistas decided to take up arms against its own government in the 80s of Nicaragua? If you want more, notice what kind of direction has been taken by Honduras recently, Mel Zelaya's downfall and all that. We could continue.

And that's just the dictatorships, then we move to democratically elected governments starting our examples with Goni's Bolivia (he had two terms there), the mess that the right wing authoritarian governments in Ecuador made, Álvaro Uribe's jolly japes as head of Colombia for eight years, C.A.P. in Venezuela. Even now you can hardly call Ollanta Humala's classic neoliberalism anything but centre-right and that goes for Enrique Peña Nieto's reformed PRI in Mexico...and Calderón before him. And Fox. Guatemala under OPM, perchance? 

Chile gets to share a biiiig border with Argentina and CFK's version of Peronism is clearly left of centre. Then there's Evo's Bolivia, which is as classic left as the 21st century allows. So maybe Piñera's optics are affected by proximities and present day matters, but calling LatAm as historically centre-left is plain silly. 

Which brings us back to the first point, I'll miss Piñera. Entertainment value. Box of monkeys.

Chart of the day is...

...gold, hourlies:

That late Friday surge lasted for...oh, that long?

9/15/13

The IKN Weekly, out now



IKN228 has just been sent to subscribers. It's rather duckish, particularly in a mallard way, with distinct influences of swan. 

Sunday happy music: Foo Fighters; Summers End

And I left the apostrophe out of that title on purpose.



For obvious reasons, macro-finance fans.


Reasons to become a stock promoter

Just so the IKN position is nice and clearly understood on this:
1) You are dumb.
2) You had serious problems with one or both of your parents as a child.
3) You have yet to consider suicide as a viable option.
4) You actively enjoy swallowing human ejaculate, with a marked preference for the ejaculate that comes from people with a lot of money.
5) You want to be rich but recognize your own innate laziness.
6) You have examined the depth of your soul and are aware that when push comes to shove, you do not care in the slightest about the well-being of other people.
7) You know that society owes you nothing and that you owe nothing to society.
8) All of the above.

Any further questions?


Peru Presidential polling: Ollanta's slide continues

It's the monthly Presidential approval rating snapshot from Peru's benchmark pollster Ipsos/Apoyo (update: they apparently call themselves Ipsos Perú these days) once again, with the quarterly breakdown of socioeconomic strata as special bonus prize. Here's the headline chart...

...and Ollanta Humala's drop continues, with a new low 27% registered for this month of September 2013. As for the socioeconomic breakdown...


...oh those fickle moneyed types have suddenly decided to abandon him because Peru is "only" growing at 5% and they're just not getting richer quickly enough these days. Fuck 'em.

PS: His wife Nadine got 37% approval because she looks like a guinea pig. The end.