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7/19/14

Cristina says nothing about the Dalai Lama

Which is probably wise under the circumstances. Meanwhile...

The Argentine side reiterated that it firmly sticks to the one-China policy and supports China's efforts to achieve peaceful reunification. 
In response, Xi said China firmly supports Argentina's claim of the sovereignty over the Malvinas Islands and the restart of negotiations based on relevant UN resolutions to solve the issue in a peaceful way.

Greg Weeks reads that Piketty book (and squeezes a semi-review out of IKN)

It's been a couple of months since I'd quietly trudged through it myself* and decided not to comment around these parts (the debate was hot at the time, one extra small voice un-needed), but Weeks' call on the tome today hit most of my main takeaways as well and gave me the feeling we'd read the same book (unlike many of the spleen-ridden reviews I've seen) so go have a look.
  • Yes, this Piketty guy really isn't that radical once you strip the r > g hype and polemic out.
  • Yes, the economics community has had a rare old fit of pique about him. Probably jealousy. Idiots.
  • Yes, the book is pitched at the layperson (though it does have the necessary academic rigour to pass muster among the 'serious people') and as such it's not that surprising that it's reached best-seller status (again pissing off the econ-crew to no small measure, e.g. Taleb's ego-spiked envy was precious). But unlike the attitude in Ivory Towers of academia, surely that's a good thing rather than a bad thing.
  • Yes, a lot of the points being raised aren't much more than fuel for ongoing debate. Piketty says this, Weeks gets this, so many others have not understood this.

For me, the only major point I'd liked to have seen from Weeks' admittedly brief summary of the book is how Piketty points out the post WW1 to late 20th century period was an exception in economics terms, rather than the rule. R>G was around for centuries before and if now left unchecked we'll return to that norm. For a brief period meritocracy ruled, but it's a ~60 year anomaly in a period at least ten times that long (and perhaps much much longer). This was for me the biggest wake-up call from reading the book, that my idea of normal isn't normal. 

Anyway, go see the Greg Weeks post, it's not that long and makes its points well.

PS: To answer a reader, I used the verb "trudged" to describe reading the book because of its length, not because it was boring. On the contrary, it was a genuinely interesting read (and my stars, that's rare in economics/finance) and I'd recommend it to anyone. Good book, that Piketty book. 

*fwiw on a pirated e-book copy, of which I strongly suspect Piketty would approve. Even if he doesn't I don't care.

7/18/14

The Friday OT: Smashing Pumpkins: Mellon Collie and the Infinite Sadness

The full double album:



I fell in love with this album again this week. Now it's your turn.

And a little reminder about the Monkeys With Dartboards that Kitco calls gold experts

1) Last week, 68% of the gold "experts" surveyed said bullion would rise on the week. 24% said it would drop. 8% said it would remain unchanged.

2) Here Friday morning, just after the opening bell, GLD is down 2.24% on the week.

3) This means the Kitco Gold Survey has scored just 16 of the last 45 weeks with correct overall predictions.

4) Even worse, for the weeks in which we receive a strong signal (i.e. more than 50% of participants elect one of the three options, bull/bear/neutral), the survey has a 10 out of 31 week record.

Monkeys. With. Dartboards.

And let's not forget the liars employed by Kitco who write false reports on this stupidity in order to cover up their woeful performance.

China and Latin America

Two reports today:

1) China offers CELAC (LatAm/Carib zone) a U$20Bn fund for infrastructure works. The fund will have an initial capital of U$10Bn and will be targeted at projects that promote economic development in the region.

2) China enters into a U$11Bn monetary swap with Argentina (similar to the deal the two countries did in 2009), which allows Argentina access to the dollars at an expected interest rate of between 6% and 7%. So much for the dollar squeeze predicted by the North.

So while you consider China as some sort of threat, we down here get to thinking, "Hey Whitey, what have you done for us lately? Apart from bomb us, of course."


Just in case you needed confirmation that Peter Hug of Kitco is a complete fucking moron...

...read this, entitled "I Wish Gold Was A Sunny Day Investment". Y'know what Peter? I wish rocks were edible, so there'd be no more hunger in the world. And wouldn't it be great if they came in different flavours too, like vanilla or bacon, just to keep everyone happy. And hey, can we do something about all these mosquitos, please?

He's even stupid enough to assume traders won't finish the week short. Because Gaza. Lord, save us from assholes with pens.

UPDATE: Reader GD writes in with a simple one liner. Your author agrees 100%:

Come back Jon Nadler, all is forgiven


7/17/14

Probably just a coincidence

Last few days of production numbers from juniors have come with these messages, either from the company itself or from the analysts that cover them:

  • McEwen Mining (MUX) (MUX.to): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.
  • Aurico Gold (AUQ) (AUQ.to): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.
  • Silvercrest Mines (SVLC) (SVL.to): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.
  • B2Gold (BTO.to) (BTG): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.
  • Argonaut Gold (AR.to): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.
  • Luna Gold (LGC.to): 2q14 disappointing, but the company is now set fair for a strong second half in 2014.




B2Gold 2q14 production

B2Gold (BTO.to) (BTG) $BTG just published its 2q14 production numbers.

Short analysis: They suck.

Read them and the corporate excuses for the sucking right here.

Tinfoil

Snowden revenge:

Question for Panoro Minerals (PML.v)

Will the plans and the estimated cost of forcibly moving the provincial capital town of Cotabambas in order to build your copper mine be included in the PEA for the project when it's published in September?

Thanks in advance.

Argonaut Gold (AR.to) to buy Timmins Gold (TMM.to) (TGD)

Please note all of the following points on that title line:

  • You heard it here first
  • The intel's from a solid source
  • Obviously can't tell you where it's from, so don't bother to ask
  • I'm long Timmins Gold (TGD) (TMM.to) so please bear that in mind. However, I've been long the stock since April this year and because a) it's what I consider a full position and b) I bought on speculation that TMM would become an M&A target, I'm not adding any more.
  • It'll probably take a while to happen, so don't expect it in the next few hours or days. But it'll happen.


That's all. Don't say I never tell you anything.


Beats me why local people in Cajamarca don't like Yanacocha ($NEM $BVN) and are against the construction of Conga

Here's the link, here's the abstract (and yes, the "gold mine" mentioned is Yanacocha):

This study evaluates the diet composition of a rural population near a gold mine in the Cajamarca district of Peru. The main consumed items by this population were tubers and cereals, and the mean energy intake (1990 kcal) was shown not to cover the recommended intake values for the male population. The concentrations of As, Cd, Hg, Pb, Zn, Al, Cr and, Cu in drinking water and food samples of items contributing to 91% of this diet (145 samples, 24 different items) were determined and used to calculate their daily intakes for risk assessment. The As, Cd and Pb daily intakes exceeded the limit values established by the European Food Safety Authority (EFSA), entailing serious concerns for the population’s health. Moreover, the intake values of As and Pb were shown to be higher, the closer to the gold mine the studied population was.

By the way, once this study was reported in the Peruvian press, the mining company Yanacocha S.A. (JV between Newmont (NEM) and Buenaventura (BVN)) issued its reply, saying that because the company wasn't invited to participate in the study it wasn't valid and therefore it can be ignored. Which was pleasant of them.

7/16/14

Ronderos in Cajamarca

A very interesting note on the rondero groups in Cajamarca, on this link. Spanish language, for those who want to know more. The rest of you, swallow the mainstream bullshit.

UPDATE: The following train of thought has been outlined at this humble corner of cyberspace previously, but a mail recently received prompts your humble scribe to humbly make the humble point again:

1) You don't speak Spanish*
2) You try to pass yourself off as an expert on mining in South America.
3) You can indeed go fuck yourself.

Admittedly, the last time this point was made it came with less strident language.

*and/or Portuguese, though proficiency in one usually comes with a legitimate comprehension of the other, at the very least in their written forms.

Luna Gold (LGC.to) 2q14 production numbers

BREAKING NEWS: Turns out there are occasional bouts of heavy rain in the middle of the fucking jungle in Brazil. Unfortuntely Luna Gold (LGC.to) has only just found out about that little nugget of top secret info.

Geoff Chater, Luna's President and CEO, stated, "Above average rainfall during the Second Quarter severely impacted the Company's ability to access ore in the pit which required processing of lower grade stockpiled ore.
So here's the quarterly production count at LGC:

Highlights include:

  • 2q14 is the worst quarter of production since 2011.
  • The way they guided for between 95,000 oz and 105,000 oz in 2013: They managed to produce 79,230 oz.
  • The way they've guided for between 85,000 oz and 95,000 oz in 2014: After half a year we're at 33,676oz.

So next time you wonder why there's no money flowing from the investment community into the mining industry, think about the quality of people running the companies. 

While we're over there, let's check in on mining cost of production news in Argentina

Here's the news, here's the translation:
The Argentina Association of Mine Workers (AOMA), San Juan section, agreed a 34% increase in basic salary for workers at the Casposo mine, located in Calingasta, with the company Troy Resources Argentina Ltd. The pay rise agreed will be implemented by a raise of 28% as from June 1st 2014 and a further 6% as from September this year.


Argentina: You know the World Cup's over when...

"Argentina is not in default and cannot be in default because Argentina pays [its dues and] regularly complies with its obligations."
and
"NML, the vulture fund, brought a lawsuit for a bond it purchased in 2008 and the judge (Thomas Griesa) has awarded it a profit of 1,608%. None of these vulture funds has invested a penny in Argentina, on the contrary they acquired (bonds) at a derisory price. They are authentically shameless."
Anyway, next supposed deadline on the bonds saga is July 31st. 


7/15/14

Evidence item: Bullet point three from the opening riff in the latest edition of The IKN Weekly, out last Sunday evening

Yup your humble scribe is bullish gold the metal in the medium-term and particularly the producing gold miners at the present time, nevertheless here's how IKN270 last Sunday evening put it:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
  • However another downmove still wouldn’t surprise me in the least, so I’m ready and willing to take another sub-$1,300/oz gold moment on the chin. There’s a difference between firmly believing that the bottom is in for gold (~$1,180/oz) and recognizing that it’s unlikely to be one-way traffic. After all, it hasn’t been that even while this recovery has set in. Again that’s all about betting at the quality end of the sector, the issues that can take a reversal and bounce back if necessary. We live in and try to solve the puzzles of a particularly volatile sector; if we get a smooth run up it would be pleasant, but don’t expect one.

Argonaut 2q14 production

Here's the NR, here's the chart:


It'll be called "in line" by the assembled substandard IQs with suits working in Canada with no sense of proportion to reality and obedient to a tee to the directives sent to them from corner offices: You know them by the name anal ysts. Though it's still a wonder how this low-producing and under-delivering company can command a $700m+ market cap. 

By the way, AR.to try to confuse things by sometimes giving gold production figures, sometimes gold equivalent production, throwing in sales and not production in some datasets and using a wholly stupid 55:1 silver/gold ratio as well. This is almost certainly deliberate and a hallmark of people trying to hide things from other people. The above chart is, for me at least, the best way to run a straight line through its production and sales numbers without blasting my brains out trying to extract every number from their quarterly obfuscations.

One of these days, scales will fall from eyes about AR.to, its non-happening San Antonio, its marginal and stupidly bought Magino and its continued underperformance from working mines, and when they do the selling will be nasty.

7/14/14

If you want to know what all this Lundin (LUN.to) thing is about...

...specifically this NR and...

"...it has been actively pursuing potential acquisition of advanced stage projects or an operating mine as part of a long standing growth initiative. While progress has been made on this initiative, there is no assurance..."
...it's been the talk of all S.Am media for days that it's buying the Candelaria mine in Chile from Freeport. There you go, no biggie. Except for Aaron Regent of course, who must be pissed.

Ross Beaty buys some Kaminak (KAM.v)

Here's the news of the combined Ross Beaty / Lundin estate buy in of Kaminak (KAM.v), which will bring in gross proceeds of a tad over $13.5m to the company and knowing the Beaty fanboys (e.g. the toadying ass-licker Tommy Humphreys) is bound to get the share price to move, too. 

It is therefore IKN's solemn duty to remind readers that we know Beaty is a highly successful entrepreneur in the metals world, particularly with his hands-on companies, and of course Beaty's third party investments in things such as Ventana and Augusta are good winners to point to, but the mega-fail Blue Sky Uranium and CB Gold deals also exist (to name but two). There are no guarantees in this cwazy wabbit game and I'm quite certain Beaty would be the first to point that out to you. But his fanboys and hangers-on, less so.

Setty on PDVSA's lost $644m

Setty's on the case of the people behind the $644m arbitration award with Venezuela's State oil company. Here's how his piece begins:
PDVSA, Venezuela’s state oil company, released financial statements last month. One of the more remarkable items in there was a $644 million loss for an arbitration award in a case that I had never heard about before — and no Venezuela expert I’ve talked to had heard about, either. This is all that PDVSA has ever disclosed about the case:
In November 2013, the award related to the arbitration request filed by Gulmar Offshore Middle East LLC and Kaplan Industry Inc. was issued against PDVSA, corresponding to early unilateral termination of contract by PDVSA. The award established a compensation of $644 million.
That is a tremendous amount of money. (Continues here)

Now ain't that the truth. Go read it all, it's fascinating stuff and a top piece of investigative journalism.

Chart of the day is...

..gold, hourlies:


Today might turn out to be a good buying day after all.

UPDATE: Iwnattos does some chart reading on gold and the mining ETFs. He's pretty good at this type of concise op-ed post.

The IKN Weekly, out now




IKN270 has just been sent to subscribers. Compact and bijou.

7/13/14

World Cup winners and losers

Winners
1) Germany: For obvious reasons. The best team in the tournament and improved all the way through. Perhaps the most important word there is 'team', because it was a true group effort from the Germans. Eleven players win matches but squads win tournaments, they've proven that truism once again.
2) Argentina: For reaching the final, for playing great football, for playing hard but fair, for the team's humility and grounding (that last one a particularly refreshing change). In Sabella, a world-class man manager and footballing brain is born.
3) Costa Rica: For being the surprise package. The tiny country drawn with three previous World Cup winners in its group (Italy, England, Uruguay) topped them all and reached the quarter-finals, only losing on penalties to Holland
4) Colombia: For its attractive, bright and attacking football, which was a pleasure while it lasted. In James Rodriguez the World Cup has thrown out its new star player to the world.
5) Brazil the organizers: Some of the stadiums weren't finished and the infrastructure too, plus prices for transport, hotels and tickets bordered on the insane at times, but overall it was a well run and smoothly executed tournament that didn't see the threatened disruptions from protesters materialize in force.

Losers
1) Brazil the football team: They'd already creaked and looked suspect against the lesser footballing nations. Then they weren't just beaten but humiliated by the first serious team they came across. Brazil was found tactically and animically wanting and its game strategies looked 20 years out of date. Added to the overwhelming arrogance the nation had about its chances on home soil and the only thing that could have been worse for them would have been to watch Argentina win the final.
2) Spain: The defending champions were an unmitigated disaster, the team that had tried one year too long on old legs. Spain's Del Bosque brought in little new blood to his team in the intervening four years and paid a heavy price for that error.
3) Uruguay: The Suárez incident was bad, the team's blanket defence of the indefensible was worse. The South American champions of two years ago guilty of the same "old legs" mistake as Spain, without Suárez they looked ordinary.
4) Arjen Robben: For being a cheating piece of shit. He couldn't stop himself from diving even in the non-event 3rd/4th place play-off. Such footballing talent, such an asshole.
5) England: But at least it wasn't a surprise. This final place of the losers list was nip-and-tuck with Italy, but in the end the total no-show attitude of the English made the difference. The world's most expensive and arguably exciting league and it can't throw a squad of 23 together to beat Costa Rica.


Congratulations Germany

You deserve to be World Cup winners in 2014. An excellent final and well played during the whole tournament, the best team won. My team Argentina came close, but in the end and over 120 minutes the slightly better team on the day won the match and that's exactly how it should be in this game.


Enrique Peña Nieto is unwell. Possibly.

For the past few days this desk has heard the rumours about Mexico's President being seriously ill with...well, with something, because the rumours are mixed, varied and have been off-record gossip. Today Mexico's Proceso picks up on the hearsay and publishes this piece, so it's time for more LatAm politico-watchers to get wiser on this, methinks.