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12/28/13

Bad news for Dynacor Gold (DNG.to)

As from January 1st 2014, the Peruvian authorities are cracking down on the illegally mined ores coming into Nazca and Chala. IKN predicts a margin squeeze at DNG as from 1q14.


12/27/13

The Friday OT: Foo Fighters, Wasting Light (full album)

About a month ago we featured one of the album's tracks, Miss The Misery, on these pages. That weekend reader FD wrote in with a very cool mail which included...

"It's one of the few modern albums you need to listen to all the way through and in track order."

...and he's right (his line under the 'and' as well). So here you go, the full album, see what he means yourself. And after flipping out to this music yesterday, it's also a good excuse to spread some love because it's one helluva strong album of rock.


And special bonus prize, check out this "Making of Wasting Light" mini-docu.


Because if you didn't know, this music was laid down old-school.

See if you can spot the exact date Sandspring Resources (SSP.v) announced its innovative funding deal with Silver Wheaton (SLW)

But hey, who are we to kvetch on the formidable due diligence powers of SLW?


What's that you say? Pascua Lama? Oh stop splitting hairs!

Average copper grade in Chile is up in 2013

Here's an interesting report and from it, your author has compiled this interesting chart*

"annual" and "per year": Welcoming Captain Redundant to the blog

It turns out that 2013 saw a significant upturn in the average grade of copper mined in Chile. To get things totally accurate, 2012 saw a small reversal from the long-term trend when 0.84% average copper grade (2011) became 0.86% Cu (2012), but the big trend-change is this year because according to Cochilco, 2013's average copper grade in Chile has been 0.94%, the highest since 2008.

Both Cochilco and the El Mercurio report goes on to credit, partially, the new Hales mine for helping to raise grade, but the notable thing is how existing mines are raising grade, for example a whopping 44% increase in the average at Collahuasi. This is presented as something good, but that doens't pass the smell test especially in a year (years) of rising costs. Yup folks, all things point to Chilean copper mines high-grading their deposits in order to maintain a reasonable level of profitability. And as Chile is roughly a third of world copper production, that's a little snippet that needs to be chewed over, swallowed and duly digested by the metals market community.

*Well, I think it's interesting. And it's my blog. So there.

12/26/13

Bolivia's record GDP growth year

Business media, capitalist think-tanks, free world* leaders and other assorted paid-off/paid-for experts will again do their best to avoid talking about the economic success story that is Evo Morales' Bolivia...

WE REPEAT: THE ECONOMIC SUCCESS STORY THAT IS EVO MORALES' BOLIVIA

...but it's going to be a little more difficult for the assembled dumbasses in suits, because as revealed by the country's Finance Minister on Tuesday and repeated by Evo today, Bolivia's estimated 2013 GDP growth is 6.5%, which is a new country record.


However, I'm sure them those there smart people up North who insist that capitalism is the only way will manage to avoid the subject again. 

*restrictions apply

Gold Resource Corp (GORO) drops its dividend to just 1c over the number it can truly afford

Now down to 1c from 3c, it now only needs to drop another penny to leave its own little fantasy land and join mining reality. Company whinges and excuses here, including the funny ones about "maintain flexibility for future opportunities" (translation: maintain solvency) and the 8% royalty in Mexico affecting things. Never mind that the royalty is levied on EBIT and GORO is making a pre-tax loss, just tell the rubes whatever, right Jason?

A silly company for silly people.

Chart of the day is...

...a comparative of the major traded LatAm regional currencies to the US Dollar in the last three months:


click on chart to enlarge and for sharper focus

The Real has taken a right battering, but the interesting one is the Peru Nuevo Sol. Its Central Bank has been pretty aggressive in protecting the PEN from downside and considering that Chile and Peru have similar exports mixes, there's the type of gap beginning to appear that would appeal to the currency futures traders.

And by the way, "major currencies" of the region do not include the Argentine Peso or Venezuelan Bolivar Fuerte any longer. One look at the internal parallel rates for those currencies will give you a very big clue as to why.

12/24/13

Christmas cheer for Lara Exploration (LRA.v)

Some context is necessary because Lara Exploration (LRA.v) has had a rough year, just like the rest of the sector...



...and let's not kid ourselves that the rally is on anything but modest volumes. However, the last few days of price action in LRA has been more than interesting...



...and insiders have been buying this move, too. LRA has its finger in many project pies and maybe, just maybe, one of them is showing something out of the ordinary (let's recall, LRA is the same stable as Reservoir Minerals (RMC.v)). All in all, it's pleasant to be able to write something positive and optimistic about a junior on this Christmas Eve morning, what with the year the sector has had.

So Merry Christmas to you all. Thanks for reading this humble corner of cyberspace this year, it wouldn't have been the same without you. Catch you on the 26th, I'm off to enjoy some blazing hot sunny weather...and peel a bunch of potatoes.

Disclosure: Long LRA. It's a longer-term investment position rather than trading and I have no intention of adding or selling at the moment.

12/23/13

The accuracy of the Kitco News Weekly Gold Survey

In yesterday's IKN Weekly, IKN242, we ran a short piece on the predictive powers of the Kitco News Gold Survey, a weekly exercise run by said website that polls a group of experts and gets them to call the next week in gold (here's the link to the latest example, from last Friday, to give you an idea).

A couple of readers have mailed in this morning to say that it would be a good piece to see on the open blog but I don't really want to share it all, so by way of compromise (and hey, to put something easy on the blog this AM) here's just the table that went with the article, plus the explanatory notes on what the table shows below. From here you can draw your own conclusions, methinks.



Notes on the table:

  • On the left the date of each survey. Simple.
  • The next five lines are the raw data from Kitco, including a) the number of people asked (part), b) the number of responses garnered c) the number of bullish calls d) bearish calls e) and neutral calls on the week ahead in gold.
  • Next the numbers were crunched into the percentage of bulls bears and neutrals, which you see in the centre of the above table (all cute with a colour code, too). Also in this section, I’ve highlighted in peach the most popular call of the week, i.e. the direction in which the overall survey is pointing for gold.
  • Then comes paydirt. First the price of the gold bullion ETF (GLD that weekend and then the percentage change in the price of gold that week (result %).

  • The final column of the table is the answer to a simple question: Was the survey accurate that week in its prediction for the price of gold. To decide this, I assumed any plus/minus movement on the week of under 0.5% was neutral, then above was a bullish result and below a bearish result.

Theft reported at Colossus Minerals (CSI.to): Somebody's stolen a zero

I'm sorry, does that say 230,000 ounces of gold in your brand new 43-101 resource?


Are you guys telling us that after all this schamoozle, you only had...? Ah, forget it.

Oh my stars, this one's going to be fun.

12/22/13

Ten IKN random predictions for 2014

First let's point you to the 2013 predictions and note that unashamedly I score myself an utterly biased 5.5/10, though anyone who has a look will quickly see that the political and sporting calls were way better than the financial calls (calls related to the gold price were particularly dumbass and depressing, 20/20 and all that). Overall, last year's forecasts were for me a big fat failure, though the good political calls made up a little for the main money stupidities. Feel free to write in and laugh....har de har style.

However, hope springs eternal! On to 2014 and ten predictions for the year to come: Four metals market calls, four regional politics calls and two sporting calls but when push comes to shove, only number 10 on the list really matters.
1) Gold, at ~$1,200/oz today, is close to its bottom. I'm going to allow perhaps another $100 and make the 2014 low call $1,100/oz and the high $1,500/oz, which we'll see as the year draws to a close. 
2) Quality junior mining companies and explorecos will finally split away from the cruddy juniors and we'll see an all-important gap develop between the companies that need to die and those that will survive and eventually thrive. 
3) Copper will be weak in 2013, with supply outstripping demand and new lows of under $3/lb registered (put me down for $2.80/lb on multiple days, not just a single spike). Average for the year to be around $3.10/lb 
4) Uranium won't break $40/lb at any point and the sector will continue to get the rah-rah from the promo people still holding their large bags. 
5) Dilma Rousseff, President of Brazil, will be re-elected in 2014. The election is set for October 5th and Dilma will win it, no matter whether her coutnry manages to lift the major trophy of next year or not (see below). Dilma is liked and likeable, gets the key backing of Lula and notwithstanding bumps in the road during her current terms (economy not motoring well, corruption scandals in her government) has done a more than acceptable job so far. She'll get a second bite, no worries. 
6) Evo Morales, President of Bolivia, will be re-elected in 2014. The presidentials in Bolivia are currently slated for October 5th  2014 (that might move by a couple of weeks, or might not) and even though there are doubts as to whether Evo can run again (Supreme court says yes because the constitution is a new one, opposition says no it's against the law because re-election is still not allowed) the chances are that he'll be the MAS Party candidate and once there, win his next (first? other?) mandate. 
7) Juan Manuel Santos, President of Colombia, will be re-elected in 2014. We complete our trifecta of presidents to get second terms with Juanma. He's currently favourite without being a lock for the May 25th 2014 vote, but as the FARC talks make slow but sure progress (contrary to my 2013 prediction) and the economy is doing ok (GDP growth modest but acceptable, unemployment now at record lows) he should have enough in the tank to defeat the main opposition that comes from the Uribe-backed right wing, whose anti-talks/anti-FARC-deal candidate looks set to be Oscar Zuluaga. 
8) Both Argentina and Venezuela will continue to defy and confound the non-stop barrage of criticism from the western media and get through 2014 just fine. Inflation in both countries will still be a problem, but there will be no defaulting of bonds, no forced changes of government no large-scale citizens uprising, no matter what dreams the country haters might have to the contrary. 
9) Juan Martin Del Potro will win at least one of the Grand Slam tournaments this year. Argentina's ace tennis player is up against tough competition in Joker, Rafa, Murray and even a Roger who could put in a swan song, but I reckon it's time for Delpo to make good on the promise of a few years ago and shake off time lost through niggling injuries. 
10) And finally, the big one: Brazil will win the 2014 World Cup. I'll be cheering for Argentina, but my head will rule my heart on the predictive stakes (love to see them both in the final, though). Obvious dangers are (and in order) Germany, Spain, Italy and Holland. The rest make the show, not the semis or the final. 

The IKN Weekly, out now



IKN242 has just been sent to subscribers. It's a fruity combination of mango and strawberry, with just a hint of lime. Served over cracked ice and garnished with a playful paper umbrella.

Ah yes, you know Cusco don't you?

You did the Inca Trail, you marvelled at Machu Picchu, you took that pleasant and informative City Tour bus and visited Coricancha, Tambo Machay, Qenqo and the other spots. You had your evening fun in the local nightclubs, bars and assorted hotspots (though were surprised that the prices weren't that different from home). Yes indeed, you know all about Cusco so there's no need for you to read "Alto Cusco - your tour guide didn't take you there" over at the Life In Peru blog. 

As the catchy slogan goes in the Ollanta Humala government TV ads: Perú, Progreso Para Todos*



*restrictions may apply


The 'Coqui-Dictionary': Argentina has fun translating Jorge Capitanich

New cabinet chief and potential successor to Cristina for TheBigJob, Jorge Capitanich (nickname 'Coqui') has been causing guffaws and general amusement in polite Argentine circles with his convoluted use of language and teminologies for things that he'd....well, he'd surely like to say them out loud but he's a politico, right? 

Anyway, here's a neat list of Capitanich-isms (dat a word?) already out there in the public sphere along with their definitions, according to Argentina's serious newspaper (and CFK opposers) La Nacion. English translations your author and before we start let's make this clear: WE ARE NOT MAKING THESE UP (and fwiw, I really like the ones for inflation and energy crisis).

We say: "Inflation"
Coqui says: "Dispersion of prices"

We say: "Devaluation"
Coqui says: "Exchange rate with evolution according to the parameters followed with respect to other currencies in order to guarantee competitivity."

We say: "Wage increases"
Coqui says: "Recognition for the security forces"

We say: "Wage caps"
Coqui says: "Rationalization from the point of view of the capacity to comply and the preservation of the adquisitive power of salary"

We say: "Dollar flight"
Coqui says: "Inertial tendency in the reduction of international currency reserves"

We say: "Price capping"
Coqui says: "Perspective of greater certainty from the effect of achieving a convergance of prices and salaries with the effect of defusing price increase expectations"

We say: "Energy crisis"
Coqui says: "When one has the strategy of economic, development and income growth, obviously this creates conditions for a determinate amount of inconveniences to appear."

We say: "Error"
Coqui says: "Incorrect expression from myself"

We say: "Looting"
Coqui says: "Deliberate actions by determined groups with a view to provoking damage and/or crimes of whatever nature"

We say: "Price freeze"
Coqui says: "Voluntary price agreement"

We say: "Programmed black-outs"
Coqui says: "System of service interruption on a rotational basis"