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6/21/14

Machaq Mara 5522

Happy Andean New Year number 5,522 to you all, known as Machaq Mara in the Altiplano of Peru and Bolivia.


Wishing you all a good year.

On the matter of the Association Football abilities of Lionel Messi

Argentina 1, Iran 0.

It was a horrible game to watch. Iran came with a simple plan and played it well; wall defence from the first minute, all players behind the ball, defend hard and well, look for a counter-attack. Meanwhile, Argentina probed and pushed for 90 minutes, played well enough but often lacked the precision pass that would unlock the Iran ploy and the game in general. Argentina's goalkeeper Sergio Romero had to be alert too and made a couple of excellent saves after Iran counters. 

As a spectacle it was frustrating and nerve-wracking, while at the same time admiration grew large for an Iran that deserves total respect for the way they played (and relatively cleanly with good sportsmanship, too). Then this happened:



Good teams will sometimes play badly. The best teams will sometimes play badly but also have a world-class player that digs them out of a hole. 

It's not just football of course; a Michael Jordan clutch shot at the buzzer anyone? However and remaining on-topic, Lionel Messi has now scored two goals of supreme class in Brazil 2014, both in games where neither him nor his team played at their optimum. It's moments like the above that separate the good, the very good and the pinnacle best.






IKN Recommends: 'Brazil 360'

There's a World Cup going on if you hadn't noticed, and while the matches go on there's a metric tonne of script coming out of the country from the world's assembled press. However one series that's been great to read is Brazil 360, written by Brit sports journalist Reda Maher, who's been sending back great postcards on Brazil life both involving and away from the games. Today's example is on Sao Paulo and how its reaction to the cup is different from other places, with reasons offered and sharp observations. But today's post is just one of a dozen and so far at least, each one is a window on Brazil and World Cup life well worth reading. 

Long may this top series of posts continue, go read on this link.

Kitco Gold Survey Watch: The monkeys with dartboards got one right

News from the Kitco Gold Survey is that last week the monkeys with dartboards (they prefer "experts" as chosen vocab) managed to call the gold market correctly for once. As 66.66% of the participants called gold higher and GLD (our benchmark) rose by 2.88% in the five days it's a clear win.

  • That brings the overall score to 16 weeks out of 41 called correctly.
  • That also brings the "strong signal" score (when any of the three options up/down/sideways gets over 50% of votes) to 10 weeks out of 28 called correctly.

For the record, next week 69.2% of the monkeys with dartboards say gold's going even higher. Do with that what you will.

6/20/14

The Friday OT: Boston Symphony Orchestra: J.S.Bach, Chaconne (BWV 1004)

It came to mind while watching Brazil vs Mexico earlier in the week, as sometimes great and stirring events have no need of a simplistic, binary, win/lose result.


Afterwards your humble scribe searched and found this BSO version on the Tube machine, which really nails it. Enjoy

Times are hard at Casey Research

As this link shows, excerpt below. Cash flow problems, guys?

Thanks to reader 'JG' for the headsup.

Casey complains about copyright infringement
Ticker Symbol: C:*CURRENT
Casey complains about copyright infringement
Current Events (C:*CURRENT) 
Friday June 20 2014 - Street Wire
by Mike Caswell
Newsletter publisher Casey Research LLC has filed a petition in the Supreme Court of British Columbia looking to identify somebody who has been posting its investment recommendations on-line. The company says that its recommendations are a paid service that costs up to $4,500 per year. Posting the information verbatim in public view infringes its copyright and may harm to its business, Casey claims.
The allegations are contained in a petition that Casey filed at the Vancouver courthouse on June 17, 2014. The company identifies itself as a publisher with an office in Vermont that generates several different newsletters and investment alerts. They range in price from $80 per year to $4,500 per year. Subscribers receive the information via e-mail or by logging in to Casey's website.
Casey claims that in April, 2014, a Stockhouse user named "rollercoaster2" started posting its recommendations on the Stockhouse forums verbatim. The material included content from publications offered at $995 per year and $4,500 per year. Among the postings were a recommendation for a stock that the petition identifies as "Petromas Energy Inc." (probably Petromanas Energy Inc., a company that Casey advised buying on April 16, 2014, at 28.5 cents).
Casey says it did not consent to the reproduction and is concerned that continues here

Oh yeah, the Pretium (PVG) (PVG.to) Feas was published last night

Looks good (not VERY good, but quite good) on the offered numbers, though don't forget to skip over the headlines they prefer and remember that the mine will indeed have to pay tax on earnings. All this of course assuming that you believe the gold's there, in the size and grade the company insists upon, as we know that at least one reputable third party that has had an intimate, up-close and careful look at it doesn't believe them.

Anyway, here's the NR. And expect the stock to drop because no CEO of any major in their right mind would risk their job buying this at the moment, $0/oz gold pop or not.

Disclosure: No position PVG, not planning on one either.


Never forget how stupid and lazy the world's press truly is

If you watched the prelims to the Ivory Coast/Colombia match at the World Cup, you would have seen Ivory Coast team member Serey Die bawling his merry eyes out. You may well have caught later that it was because his father had apparently died a couple of hours before the kick-off, because that particular piece of news was relayed to the world in all the languages you care to consider and in a hundred thousand reports.

1) Nope, his father hadn't just died
2) He was crying due to the emotion of the occasion, nothing else
3) The whole thing was started by a single Brazilian match commentator who thought up the story on the spur of the moment
4) The whole world's press and media just decided to run the "news" without bothering to check sources, veracity or anything approaching decent reporting standards.

Hey guys, don't let facts get in the way of a good story now, will you? The World Cup Brazil 2014, from the same people that brought you 'Iraq has WMD'. 

More on Barrick's (ABX) cozying up to China from Reuters (via TD Sec) today

Right here. Excerpt here

VANCOUVER, June 19 (Reuters) - Any alliance between Barrick Gold Corp and China's sole state-owned gold mining company is likely to involve a smaller, non-core Barrick mine or project and not any of the Canadian miner's main assets, a China National Gold Group official said on Thursday.
Barrick, the world's biggest gold producer, and China National, China's largest producer, have held talks at least three times this year on ways to cooperate, China National President Xin Song said in an interview.
Barrick's appointment of John Thornton, a China expert, as chairman this year has heightened expectations that the Toronto-based company may be seeking an alliance with Chinese investors, possibly for its large but stalled Pascua-Lama gold and silver project in South America
And remember folks: Citic and a JV on Pascua Lama is a separate deal (and you heard it here first back in February)

This call last weekend is looking pretty good

Here's the opening section of The IKN Weekly, issue 266, out last Sunday evening:

Something just changed for the better in the precious metals market. Maybe. 
I added that “maybe” on the end because however much I’d like to be more bold or definite about the call, one week (nay, three days) of evidence is much too thin and we’ve suffered through too many false dawns as it is. But last week’s market action looked great for the miners, whichever way you examine it. 
One of the very few charts I’ve cared about and keep caring about over the years is the Gold/Silver Ratio (GSR), because when it’s working it can give a useful signal about the risk appetite of our sector (very quickly a higher GSR means gold’s loved more than silver which means the market doesn’t want to take on as much risk or is battening down the hatches, the opposite applies too, of course). 
That looks like a change in tide to me, and when coupled with the way stocks bounced hard while gold put in reasonable but small percentage gains, it looks as though people are ready to bolt on more risk to their portfolios.  
Once again, I remind readers the same as I need to remind myself on occasion: We’re investors in companies at The IKN Weekly, not investors in metals. Those companies just happen to make (or want to make) metals as their finished product, but the difference is still a vast one. 

At the time the GSR was at 65X and just starting to roll over. Here's the gold/silver ratio today, just four trading days later:


That's not shabby at all, especially as both gold and silver have popped hard to the upside. I put that "maybe" in the title of last weekend's intro setcion because there have just been way too many false dawns in the metals complex over the last couple of years. This one is by no means a done deal and could go either way too, but there's zero zip nada no doubt that what we've seen this week fits right in with the call made by The IKN Weekly before it happened. We're no sort of permabull round here, either.

6/19/14

Warning: More M&A rumours than you can shake a stick at

Suddenly, from what seems like nowhere, all I'm getting in the inbox is talk/rumour/anyminutenow about buyouts, mergers and any noumber of deals in the junior miner sphere. Some even sound logical (the best ones do) while others so left-field they could be true (my fave so far is Great Panther buying Santacruz, that one made me laugh out loud but don't start playing with the idea just on these words, as I'm long SCZ and may be trying to double-psyche you...right?).

No, the warning here is more general in nature. When this type of pent-up talk starts, you can bet dollars to donuts that 95% of it is pure hot air. Yes for sure there are going to be more deals, there always are, but beware those that would FUD you into a deal. There's way too much BS in the sector already, so if you like charts (nobody's perfect) stick to those and if you like fundies (idem) keep searching for your earnings or asset edge. Don't swallow the hype, just because it happens to be a story that you want to hear. Things do look better out there, but moving from abject pessimism to total to-da-moon euphoria says more about your weaknesses as an investor than it does about the market.

UPDATE: Your humble scribe receives the following from Iwnattos, owner of Market Narrative:
Y'know, you should just post all the merger rumours on your blog.

Why should the mouth-breathing functionaries of capitalist oppression deserve to keep secrets from the proletariat? It's not as if people like us have any other way to make money.

The reply: No, if only because I've spent over half a decade trying to avoid becoming a mouthpiece for the asshole end of the junior market. 

A reminder

It's worth repeating this chart every couple of months, particularly on days like these (and fwiw, the original running of the thing still gets heaps of hits):


Chart of the day is...

...gold, weeklies:


One thing that people forget about this most contentious of metals: The anti-goldbug brigade is just as mouthbreathingly entrenched and syphilitically stupid as the goldbug brigade.

6/18/14

Coming to a mining operation near you: Drones firing pepper spray bullets. For peace.

A nice catch by reader 'JG' in the shape of this report. An un-named "international mining company has bought 25 pretty nasty looking drones. Here are a couple of excerpts:
The maker of a drone that fires pepper spray bullets says it has received its first order for the machine. South Africa-based Desert Wolf told the BBC it had secured the sale of 25 units to a mining company after showing off the tech at a trade show. 
Desert Wolf's website states that its Skunk octacopter drone is fitted with four high-capacity paintball barrels, each capable of firing up to 20 bullets per second. In addition to pepper-spray ammunition, the firm says it can also be armed with dye-marker balls and solid plastic balls. The machine can carry up to 4,000 bullets at a time as well as "blinding lasers" and on-board speakers that can communicate warnings to a crowd.
Full story here

Argentina plans to make its bond coupon payments via Bitcoin

So says Felix Salmon.

If true, my best guess is that Argentina would need to secure around U$1Bn in Bitcoin for the transfers, as its next coupon payment to the restructured debt holders (the 93%) is around U$900m

Interesting times, we live in.

Argentina bonds: Cute posters in town, FinMin Kicillof speaks

First the posters that Buenos Aires residents found plastered all around the city centre this morning:


That transates as, "Enough, vultures!" and then, "Argetina united in a national cause". Remind you of the Braden or Perón poster and all its baggage? Yup, me too.

Next, newspaper La Nacion (normally no friend of this government) does a good job of picking the strongest soundbite lines from the declarations of Argentina's Minister of the Economy Axel Kicillof yesterday. Here they are translated:
  • Everybody relax, this has been studied deeply. Actions have been taken to conteract the risk posed by a small group of bond holders that wants nothing else than to ruin countries and try to stop the reconstruction of the Argentine fianncial situation.
  • Some people (bond holders) don't want to let Argentina pay its debts.
  • My feeling is that they want to bring down our debt restructuring
  • If we apply the Griesa ruling and Argentina is obliged to pay the vulture funds, the country will go into default
  • We are going to try everything in order to pay [keep paying] the restructured debt
  • Some [presidential] candidates propose the overendebted model (a clear reference to Macri)
  • This government did not put the country into debt. We have dedicated ourselves to paying for the financial mess left by the neoliberal fiesta.
  • They [the vulture funds] shall not pass, they're not going to change the restructuring of the debt
  • This judgement says that in order to pay bondholders we have to pay the vulture funds as well, this would push Argentina into default.
  • The vulture funds are vultures because they do not negotiate
  • If a sentence tells us to commit suicide, we cannot accept it
  • We cannot be in a situation again where, in order to pay the debt, hunger will rule
  • They're coming for everything, for all the possessions of Argentina

Along with all that, Argentina has also stated that it's willing to keep paying out to ther 93% of bond holders who entered into the restructured debt all those years ago but will bypass the US system and pay them via a window to be set up in country. In other words, Argentina's doing exactly what your humble scribe predicted on Monday morning.

Two volcanoes in South Peru waking up

Sabancaya (part of a three peak system) and Ubinas (one of the more active volcanoes of the Andean cordillera) have been making plenty of rumbling sounds in the last 48 hours. Here's an example of the Sabancaya news (from many) and here's one for Ubinas (again, lots to choose from).


They're pretty close to one another as well. Oh, but that's just coincidence. Just coincidence.

All this is copper mining country of course, with Moquegua host to Southern Copper's (SCCO) two big operations of Toquepala and Cuajone, then Arequipa region with the monster Cerro Verde (JV ownerships)  and not so far away places like Tintaya. As for that city sitting right next to the number 6 volcano, Misti, that's a mere one million people or so in Peru's second largest urban concentration. For more reading on all that, IKN recommends The Black Swan by Nassim Nicholas Taleb.

Chart of the day is...

...copper, hourlies:


It's trying, give it that.

6/17/14

Tuesday tune: Coolio; 1,2,3,4

A slice of fine oldskool

Remember that strong rumour in February about China's Citic wanting in on Barrick's (ABX) Pascua Lama?

Here was the post.

Now we have this, entitled, "China's top gold firm talking to Barrick, has Friedland 'hotline", about another Chinese goldie talking to the Munkshop. I wasn't joking, y'see.




A Flash update...

...has just been sent to subscribers on this crisp and sunny Tuesday morning, just after the opening bell. Time to do some buying.

Lumina (LCC.v) halted

Chart:



Update later, but it sounds like they've managed to flog it after all.

UPDATE: Yup, and it's First Quantum grabbing yet another asset. Pipeline strategy, anyone? Looks as though the mining sector has given up waiting on a metals recovery to generate some action and has decided to move its own market. Good signal.

Peru GDP growth: Luck runs out

Yesterday evening Peru's beancounter stats people, INEI, released a large bucket of cold water on the Peru economy. It's way past time that the "economic miracle" bullshit were laid to rest and the 2.01% number, well under even dampened down expectations, may be the start of the necessary reality check. Here's a chart:


(and here's another one, with the same dataset but running from pre-crisis 2008, just for a little more context to the main current trend).


So much for Peru FinMin Castilla's confident predictions in late 2013 of a rebound in growth come 2014, typical political bullshit. Peru got lucky and has rode the high margins from commodities for a while, but now the luck has ran out they have no special formula, no secret sauce, nothing but a few prayers to offer to the copper price Gods. Far from creating some new and fanciful growth miracle, Peru is falling into the same classic traps of shoring up a reduced margin primary growth export model with expanded credit. And as the Pope so correctly said yesterday, it's the poor who'll take it up the ass when the bills need paying. Well, he didn't quite phrase it like that because he's a nicer person than me, but you get the drift.



Chart of the day is...

...gold's reaction to the higher than expected US CPI number:

CFK addresses the nation re. bonds

As Abel notes in his thoughtful analysis of the situation, last night's appearance of CFK (after all the football matches had finished, obviously) had three parts to it. She explained (this link has the youtube, so go watch it yourself) to her citizens in the type of terminology that non-financial experts can absorb easily and with the obvious government position bias:
1) How Argentina had got to the position it finds itself in today regarding external debt, with a lot of emphasis on the 1976-2001 period when the dictatorship and subsequent governments took out the "cheap looking" debt, then later restructured it to put the country into hock even further.
2) Gave an overview of what the "vulture funds" are, differentiating their position from those foreign holders who were severely affected by the 2001/2002 default. It's at this point she said that Argentina would not default on its honoured positions (as predicted) and talked of the vulture funds position of extorsion (also right on playbook).
3) Explained in general terms the position of her government to the court decision and decisions the country will need to make in the near future after the US Supreme Court ruling yesterday.
The last point is obviously the most interesting one for us today, and it was notable how she kept things very vague and did not go into any sort of specifics. One impression I did get, that was reinforced by a couple of repeat viewings, is that CFK is preparing Argentina for a period where the country is locked out of the external debt market. But overall what she did say fits right in with your author's call yesterday morning; she's not going to pay. No way.

The most interesting views and opinions won't be those of CFK, however. This is going to be one of the central topics of the 2015 Presidential election, so the positions of the main candidates on the Bonds question will be key. We know Macri will say "pay" and Scioli will say "no pay", but what of Massa?


6/16/14

The Cochilco yearbook, out now

On this link. The latest edition of single best database known to metallic man, published in English and Spanish, was published this morning. Unmissable, get your copy immediately.

Argentina and bonds and defaults and business death and stuff and money: Things the media will show you today (and things they won't)

Here's one of the charts they'll show you today: The five day chart of the Argentina main stock index, the Merval:



OH MY GOD! ALL GONNA DIE! 4% DOWN! etc etc [UPDATE: Right on time, here's the current headline story in La Nacion in Argentina, complete with necessary worried floor brokers photo]

Here's one they won't show you: The one year chart of the very same Argentina main stock index, the Merval:



Notice anything?

As for the specific issue of Argentina defauling on bonds, here's how I explained it on the Twittermachine this morning. It's so simple you can indeed cover the whole "drama" in 140 characters:
Argentina will say: 
1)We're not in default 
2)We'll pay 
3)Only US isn't allowing us to pay 
4)Creditors line up at new window, we pay

Nuff said. but whatever happens, be very very clear on one thing: For Cristina this whole "not pay the Vulture Funds" thing has become personal. There's no way, absolutely totally completely no way at all that they get their money. Here's why:


Know your history.

Junior mining success, Solvista Gold (SVV.v) edition

Here's Solvista (SVV.v) today, proclaiming the end of one era of success and wonderfulness and the start of a new era of success and wonderfulness:
TORONTO, ONTARIO--(Marketwired - Jun 16, 2014) - Solvista Gold Corporation ("Solvista" or the "Company") (TSX VENTURE:SVV)(SVVZF) announces that effective today Miller O'Prey has resigned as President and CEO of the Company to pursue other interests. Mr. O'Prey will remain as a member of the Board of Directors of the Company. Bruce Durham, P.Geo, currently a director of the Company, has been appointed as the new President and CEO of Solvista with immediate effect.
Commenting on the news, Gerry McCarvill, Solvista's Chairman stated, "on behalf of the Board, I wish to thank Miller for his excellent guidance since the inception of the Company. Under his leadership we have made discoveries at both our projects and successfully negotiated an option agreement with IAMGOLD for our Caramanta project that will ensure the advancement of the project while at the same time protecting the Company's treasury of approximately $4 million. We are well positioned to advance the Company's interests in Colombia or wherever we identify opportunities. Given Bruce's broad experience and Toronto base we anticipate that Solvista will be reviewing a host of new opportunities in both base and precious metals in multiple jurisdictions."
Bruce Durham, the Company's new President and CEO commented, "I look forward to building on the solid base that Miller has created for the Company. We have two excellent projects in Colombia, with Caramanta currently under option to a major mining company who continues to aggressively explore the project and plans to commence drilling in the third quarter of this year. In addition, the high-grade gold-silver discovery made in 2012 at our Guadalupe project warrants further exploration. We will continue to review new opportunities with a view to expanding the Company's portfolio of quality projects."

Excellent guidance. Quality projects. Successfully negotiated. Well positioned. New opportunities. You'd think from all that we're witnessing the handing over of the baton from one winner to another, now wouldn't you kind reader? So let's check that there chart now:


Oh, just the 75% down since the start of 2013, is it? 

A mere trifle I'm sure. 

Because winning.

And don't think I'm picking the timeline on that chart too carefully either, as just three months previously to the start of this one (Sept'12) SVV.v was trading 50% higher than on January 1st 2013. So here's a special message for SVV.v and all other juniors who continue to lipstick their pigs in this way: You're deceitful little shits the lot of you and need to learn how to...

Congratulations, Simon Ridgway

Looks like net proceeds of around $300,000 (maybe a touch under) from the exercising and subsequent dumpage of your 93,800 Fortuna Silver (FVI.to) (FSM) options priced at $1.66.

Don't spend it all at once now, will you?


The IKN Weekly, out now


old school

IKN266 has just been sent to subscribers. No kidding.

6/15/14

A big day for Latin American politics

Colombia votes for its President today and the result will affect country and region alike. After Uribe Zuluaga's bigger than expected win in round one he's now probable favourite (which surprised the merry hell out of me compared to the near lock on the election that Santos had at the beginning of 2014). However Santos is by no means out of it and a larger turnout than in the poorly attended round one is likely to help the sitting President.

It's Sunday morning and polls are now open. As Colombia's post-close fast count system lives up too its name and is a very accurate read on the true numbers, we'll know who's in charge for the next four years in 12 hours' time. For more, this is AP today and here's Colombia Reports yesterday via a guest post in Think Progress

PS: And of course, for news as it happens including real-time coverage in English of the results this evening, no better place than the Colombia Reports main page, right here.