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1/3/15

And for those of you looking for some gold stock chart thoughts this weekend...

...Iwnattos does a nice overview of the GDX and GDXJ ETFs, a couple of specific stocks that are worth following, plus his patented "Gold ex-US Dollar" chart that compares the shiny, malleable, ductile, expensive stuff to the rest of the world's currencies (I think...you'd have to ask him for an exact definition). Then rants a bit too, as special bonus. An interesting post, click here go see.

1/2/15

Peru's GDP in 2014 and 2015

Jürgen Schuldt deconstructs the numbers, points out just how poor growth in Peru in real terms was in 2014 (an even-worse reality hides behind the mediocre ~2.7% headline number) and then goes on to explain why Peru will grow at 4% in 2015. An excellent job of work on this link, with tables and numbers and all.

The Friday OT: Sibelius; Finlandia

Expect plenty Sibelius in your ears in 2015, it's the 150th anniversary of his birth.



So why not start with this; bite-sized length compared to many works, high-quality music and just to make it topical, anti-Russian Empire. 

Water in Mendoza

For those of you expecting the San Jorge project to be approved shortly, a photo from this report:


That's the El Potrerillos Dam, with photo above November 2013 and photo below November 2014. And if Mendoza is refusing to give more water to the neighbouring downstream province of La Pampa, think about what it's going to say to the Russians who want to build that copper mine.

Nah, on second thoughts don't bother thinking. You far better off pretending in your own little fantasies about South America and what's good for the region. The people here don't understand how much wiser you all are up there and how you're only thinking of them when proposing more industrial development funded by your own cash. Right?


And the world's best performing stock market in 2014 was...

...Argentina's, with the main Merval index up 59% on the year. It must be true because CNBC says so and they're television and everything. I enjoy these little curveballs that capitalism throws at people, just to confuse 'em.

Chart of the day is...

...the US Dollar index, dailies:


Greenback continues to kick pure ass.

Happy New Year to all readers. Make an effort to look after your health in the year ahead.

1/1/15

Scottish Terriers and the concept of monetary reality

A disjointed rant to get some strange stuff off my chest on the night of New Year's Day. Feel free to ignore.

Here in the 21st century, the absolute arrogance we have on the subject of what is or is not real is something I've worried about without being able to get a satisfactory handle on the issue for a long time. The centre of my issue is money and why we think money is something that's real. I honestly don't understand it. There's been this whole thing in my head recently, ever since I happened to be flicking through the TV channels a few weeks ago, hit Discovery Channel while a documentary on The Greek Gods was on and heard some talking head or other tell us that back in the day, Greeks considered the Gods just as real as anything else because "their concept of real was different from ours today"*.

The obvious question was to ask just when our concept of "real" changed. And the answer is to that one is Aristotle. Go check for yourself at your own leisure, but I'd at least ask you to read Pirsig's ZAMM** as that covers the main points in a very digestible and fun way. But then there's all that empiricism thing that you have to buy with Aristotle too, unless you want to discount his philosophy entirely. Which means tabula rasa is part of the show (the name comes from Locke, but he's an ideas copycat). Which again came to mind a few days ago while watching my dog attack his stuffed rabbit toy. As with any terrier (he's of the Scottish variety) he'll play at attack by grabbing the toy by the neck and shaking hard, thus preparing himself for the moment when he catches the small mammal and kills it by breaking its neck. No other dog taught him how to do that and he never had the chance to watch other dogs before he, as a puppy, started the technique. It's instinct (I'd dare to say it's in his DNA but somebody's sure to jump on me for such biological presumption), it's not learned, it's some sort of hardwire. And therefore it gives lie to the whole concept of tabula rasa.

If tabula rasa is false, then so is empiricism and therefore the foundations of Aristotle are worthless. As Aristotle and his whole empirical hierarchy thing started this modern man ball rolling, our concept of what is real and what is not real is based on false assumptions. In the case of money, it's something that started as an idea in people's heads, it didn't exist before that. The tokens did (e.g. spondylus shells) but the concept of assigning a value (damn that's a hard word) to the thing is a mental structure, nothing "real" about it at all, just like assigning reality to a God and giving her or him a whole life history, anecdotes and all. It's a modern day ghost, but for some reason it fits into our concept of real and is therefore allowed to exist as a real thing. I'd very much like to know what that reason is and even more interesting, why we're not allowed to believe in the things that the ancient Greeks thought normal and natural. My stars it would be awesome, in the true sense of the word awesome, to assume equality in reality and give equal respect to a whole bunch of things we modern arrogant empirical human beings now discard as mere ghosts or figments of the imagination. 

Another thing is how religious dogma of many shades, Eastern and Western, is built on the same hierarchical structure, but that's for another day. 



*paraphrasing, but I stuck it in quotes anyway
**Zen and the Art of Motorcycle Maintenance

Frank Giustra, man enough to wear women's clothing in public

“If I am wrong, if this gold bull market is over, I will stand in the centre of Robson Square and I will sing Patsy Cline’s So Wrong wearing ladies’ underwear,” Mr. Giustra said in an interview this week.
To date a roaring silence from Giustra, even though the gold chart looks like this compared to the S&P500 in the period concerned:



Frank Giustra, will you keep your word? Or are you going to duck out and be a coward?

President Dilma Rousseff of Brazil starts her second term of office...

..and Alonso Soto does a good job in this English language Reuters wire report of the day's proceedings, as well as background and things. FWIW I followed the main speech given by Dilma on this liveblog (Portuguese) that also stands up well as a look-back report on the day, if that's your kind of thing.


Also, her daughter Paula got to play at First Lady. Nice vintage Roller, too.

Copper average price for 2014: U$3.113/lb

According to the presser from Chile's reliable copper oversight people Cochilco today, copper averaged U$3.113/lb in 2014 and that compares to previous years in this way:


So now you know.

12/31/14

IKN recommends: Big Hero 6

Find some excuse to take children to the movies (your kids, your sister-in-law's kids, borrow your neighbours' kids, work it out for yourself) and do what we did yesterday afternoon, go watch Big Hero 6. Solidly entertaining from start to finish, it brims with mindbending ideas, premium level visual effects and it'll press emotional buttons (in a good way) on several levels.

Oh yeah, another thing: The kids will love it. 

Barrick (ABX) at Pascua Lama: The latest from the Chilean courtrooms

The judgment handed down from Chile's Supreme Court yesterday was on a majority, was largely technical in nature and it's still missing a ruling on a couple of key points, but the essence of the thing is:

  • Barrick wanted to pay the ~U$16m fine that was slapped on it by Chile's Environment Superintendency (SMA), because it considered it a good deal under the circumstances and once paid, they could get on with reactivating their white elephant supreme.
  • But the courts stopped them from paying it, saying it was badly done and too little. The case reached the Supreme Court a couple of months ago and the partial ruling came yesterday.
  • And the ruling: The Supreme Court says ABX can't pay the $16m because it says the SMA went about its job incorrectly and should have fined Barrick for separate infractions, rather than lumping them all into one fine.
  • With this ruling the chances are that ABX is facing a much bigger enviro fine, with estimates ranging between U$130m and U$300m. Yeah, seriously.
  • Whether or not that kind of number happens, or whether ABX will eventually pay, is a question for 2015. What we do know is that the SMA has to come up with a new number to fine ABX. 

Meanwhile, the lack of enviro resolution and green light that will come from a fine payment continues. This is why the JV deal with Zijin (and some say Citic is still in the wings) hasn't happened yet. After all, would you want to walk in on a large percentage of a $300m fine just for fun?

Bottom line: FUBAR meets SNAFU at Pascua Lama. Kind of ironic that Argentina is the one that's all happy and welcoming about this project while Chile causes all the problems, isn't it? 

Nevada Copper's (NCU.to) financing deal

Yesterday post-close we got this, Nevada Copper (NCU.to) announcing it was re-booting its $200m financial loan facility with Red Kite (RK). Here's the interesting bit:

1) The facility originated in March 2013 when NCU.to borrowed $35m of the $200m total. Another $15m was advanced in October 2013. Therefore $51m came out of it.

2) NCU paid RK a $6.5m "origination fee" (i love the names they make up for these things, while we in the real world call them "legalized kickbacks") in March 2013 for the deal.

3) Yesterday, NCU announced that of the $90m advanced to RK, $57.1m was being "used to repay the Previous Facility". In other words, NCU borrows $51m in 2013 and repays $57.1m this year. Add in the "origination fee" and so far, Red Kite has managed to make $12.6m on a $51m advance in a year and a half.

4) BUT WAIT! THERE'S MORE! With yesterday's re-boot, NCU is paying another origination fee! This time $7m or so is legalized kickback that returns straight to the lender RK after having written a cheque for $90m to NCU.

5) So if you're following so far, it means that in the period March 2013 to December 2014, Red Kite has lent Nevada Copper $90m, but has already reclaimed $19.6m of that in cash. Meanwhile, the new $90m is collecting interest of LIBOR +10%, Red Kite won't have to mail the other $110m cheque until NCU has secured the rest of the financing it needs to build its mine (because unlike the message that Bonnyface tries to send in the NR yesterday, there's still a serious financing shortfall on this Pumpkin Hollow build-out) and as if mere detail, the RK deal is senior secured on the entirety of NCU's assets.

Red Kite? Nice work if you can get it
NCU equity holder? Back of the queue.

Say bye-bye to Petaquilla (PTQ.to)

This from Panama's "Critica" newspaper, linked here. Translation your author:

The government of Panama has initiated the paperwork to revoke the operating permit of the Petaquilla Gold mining company, due to its non-compliance in payment of social security dues to its work force, said the Minister of Work today, Luis Ernetso Carles. Carles said that the legal representative of the company, Richard Fifer, was now under criminal charge from the Social Security Office (CSS) due to the non-compliance of social security payments for the company's 604 workers, according to a government communique."The actions of the legal representative of Petaquilla stain the employment opportunities in the country", said Carles, while informing that Petaquilla Gold currently owes three months of salaries and employees debts that total around U$3.8m. The Panamanian Minister showed his concern of the situation faced by the workers, due to the lack of responsibility for the payment of dues by the Canadian capital company.The Petaquilla Gold company is located in the district of Donoso, in the province of Colón, some 130km West of the capital.
Don't say we didn't warn you.

12/30/14

The five most popular Friday OT posts of 2014

Other websites can and often do review what they believe to be their best pieces of script at the end of the year, but as the vast majority of written words on this humble corner of cyberspace are total trash, guff and nonsense that's not a viable option at IKN. Instead, your humble scribe spent exactly 4 minutes trawling the stats tonight to find out which of the Friday OT music posts from 2014 had received the most direct hits from you people out there. 

The answers give this top five (and indeed you are cordially invited to click on the names in order to experience the music delights contained therein once again):






For some reason, and even though I love the track, it's somewhat depressing to see U2 head the ranking; it won by quite a distance, too. Though I was happy to see the Sibelius post make the top five as that really kicks ass. The second spot has to be for the video as much as the song, it's the best video ever. Devo making it that high surprised me. For what it's worth, after putting this post together I clicked on the Beethoven Pastoral, then those first few bars strike up and....ahhhhhh...45 minutes of bliss.


Brent Cook does BNN

Here's the link.

Cook talks explorers, gives us a key word for the sector in 2015 (spoiler alert, the word is "apathy") and gives recos on three stocks. All that and more in just ten minutes (or so) of video pleasure, aptly accompanied by the smooth and dulcet tones of Andrew Bell.

PS: the stock recos are on the second part, which is here.

This Modern World 2014 review

Yes, yes and thrice yes you want to check out the 2014 review strip from the best cartoonist in The United States of America. And indeed you can by doing a click right here for part one doing a click right here for part two. Enjoy.

Chile copper mining electricity consumption forecasts, 2014 to 2025

An important industry paper out of Cochilco this morning, which you can download and read from this link, that goes into power consumption expectations for the country's key copper mining sector from now until 2025. Here's a chart ripped from (page 15 of) the report that gives an idea of contents:



Translation, your author. In a nutshell, with current electricity demand at 21.86 TWh and forecast consumption set at 39.47 TWh for 2015 we're close to a double on power requirements under expected circumstances (which goes much higher in best case, of course). But this report is detailed and deserves more consideration than just glancing at a single chart. Those in the sector need to get this info incorporated (particularly interesting are breakdown projections for the SING/SIC systems, quite a contrast being factored in and that's geographically important). Here's the link again, just in case.

Copper's now or never

So says Gary over at Biiwii and as he's the best chartist I know of he'll get no argument from these parts. Here's a monthly chart of the metal with just three lines to help the mind's eye (though in this case they're only underscoring the obvious):


PS: Elvis Presley's 1960 hit "It's Now Or Never" was of course era-code for "c'mon let's do the fuckyfucky one time, baby". The song was adapted from the 19th century Italian tune "O Sole Mio" which was all about a dude hanging out under the window of his muse and comparing her to a sunny day. Which was a direct rip-off of Shakespeare's Romeo and Juliet. Which was a play written in Elizabethan code that said "c'mon let's do the fuckyfucky one time, baby". 



Get ready for a new round of ebola news, because...

...yes you guessed it, a white person has been infected. What's more she's an English language speaker. She even has a name that doesn't sound Asian/Muslim/suspiciously-brown-coloured. 

We need to get comments on this from that world-renowned expert on ebola, Eric Sprott.

12/29/14

Ten IKN random predictions for 2015

Here we go with the blog's official forecasts and soothsayerations for the year to come. After the effort in 2014 (politics good, financials ok, sport calls crappy) we're sticking to the same general format, a bit from each. After that 5.5/10 in 2013 and 6/10 in 2014 we'll be batting for 6.5 or above this year to keep the trend rolling, so here come the big ten that carry the hopes, fear, dreams and stuff of your author in the 12 months to come. As usual, you get a mix of financial, political and sporting forecasts, most with a LatAm flavour:
1) Gold to trend up gradually, with a rough U$1,400/oz target for some time at the end of the year. For sure with the normal wobbly stuff along the way and I wouldn't bat an eyelid to see it go under U$1,100/oz again at some point or other, but talk of its utter demise (South of 1k) strikes this author as plain silly talk from people who don't get the sector.
2) The gold/silver ratio to stay high, by which we mean 1/70 or above. It can spike down briefly under that along the way, but I don't expect it to trend down meaningfully. When they call silver "the poor man's gold", the real message is "the choice that poor people make". Semi-on-topic, I'd definitely hold gold miner stocks over silver miner stocks this year.
3) Uranium will go nowhere again. We're in the high $30s today, it could fluctuate up into a 4-handle, down through to the 2s, but the prediction is to watch it flatline in general terms. Uranium's going the way of the buggy whip, the world has moved on from the fallacy of "near limitless/near free energy" and knows how expensive these things are to decom, the type of cost that's built into projections by serious countries (China an obvious exception to that category). 
4) Barrick (ABX) will merge with Newmont (NEM). It's long past fusion date for these two. The sooner the outsized self-important egos on both boards start caring less about themselves and more about their shareholders, the better. 
5) Copper to maintain around U$3/lb average for 2014. This is perhaps the toughest and most important commod market to call in the year ahead. Also (and to push my luck on the prediction) it wouldn't surprise me in the least to see Cu weak in the first part of the year, trending higher in the second part. If it exits between $3.10/lb and $3.20/lb I'd be a happy long.
6) Venezuela's government to be bailed out by China. It's no secret that Venezuela's finances are under severe pressure due to the drop in oil prices, but it's not going to lead to a fall in the government in 2015 (sorry haters, it's the way it is). China wants crude oil and has dollars, Venezuela wants dollars and has crude oil, the two countries get along just fine, the synergies are obvious. The question is how much Venezuela will have to cede for the bailout.
7) It's a difficult call this early in the process, but I'm contractually obliged to make a call on the Argentina presidential election so the forecast is for Daniel Scioli to be the next President of Argentina. Main opponent is Massa, in with a squeak is Macri, outsider Randazzo, the rest are just noise. But it's still a very fluid situation so this one is only tentative. For the record, the Argentina vote slated for October is the biggest single political event in LatAm this year and arguably the most important one in terms of regional repercussion potential for the last five or even ten. It's going to be big, noisy and full of FpV/CFK-hate in your English language press (who'll be rooting for Massa and/or Macri).
8) Argentina to win the Copa America 2015, the equivalent of the European Championships for the continent, held in Chile in June/July this year. If that doesn't turn out right, hosts Chile must be in with a strong chance and I'd place them as clear second faves today. FWIW it's easy to bet against a Brazil that will need a couple of years to re-build after its World Cup disaster (no other word for it). 
9) River Plate to win the Copa Libertadores (for those of you who don't know, that's the LatAm equivalent of the Champion's League trophy). This is the easiest forecast of the year. Vamo lo millo.
10) Argentina to beat Ireland in the Quarter Finals stage of the 2015 Rugby World Cup, held in the UK in October. How about that for a specific forecast? (Also, the All Blacks for the cup).

Astur Gold (AST.v): and if you're wondering who Douglas Turnbull is...

...he's one of Chet Idziszek's lackeys. Today's news here, excerpt here:

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec 29, 2014) - Astur Gold Corp. (TSX VENTURE:AST)(CDC.F) ("Astur Gold" or the "Company") announces the appointment of Astur Gold Director Mr. Douglas Turnbull as new Chief Executive Officer and President of the Company effective immediately. He is replacing Cary Pinkowski, who is stepping down as Chief Executive Officer and President to pursue other opportunities. The Board of Directors of Astur Gold thank Mr. Pinkowski for his efforts as President and Chief Executive Officer of the Company. Mr. Pinkowski will remain on the Board of Directors.
"I have great confidence in Doug Turnbull to take over as CEO and President of Astur Gold," stated Mr. Pinkowski. "He was previously a Director of Astur Gold for several years and is very familiar with the Company and its projects."
Mr. Turnbull stated: "Although the Company faces many challenges in these difficult times culminating in the recent news about Salave, my decision to take on this position is based on my belief that new opportunities can be sought out for the Company. In the meantime, we will wait to review the detailed report of the decision by the Commission for Environmental Affairs of the Principality of Asturias and to address the specific technical concerns expressed by the Cantabrian Hydrographic Confederation that lead to the recent denial of our permit application. Our immediate focus will be to protect our assets in Spain in the interest of our shareholders and our principal Salave financier, RMB Resources Limited."

Indeed, the people behind Petaquilla (PTQ.to) are perfect for the job of taking a project that's been refused environmental permits and moving it forward, because unicorns.

And how's Lydian International (LYD.to) getting on since it brought in an ex-ECU Silver guy?

"Associate with men of good quality if you 
esteem your own reputation; for it is 
better to be alone than in bad company" 
George Washington

This post dated June 5th 2014 was the last time Lydian (LYD.to) was mentioned on this humble corner of cyberspace*. It was entitled "Lydian (LYD.to): Now officially untouchable" and celebrated the fact that LYD had just brought in one Stephen Altmann to its board, a person that used to be president and director of ECU Silver. Here's a small chunk from that post to explain IKN's heartfelt opinion of Altmann and all who sail with him:
"Anyone with a memory about how long ECU Silver bullshitted the world and what that bullshit managed to do with the naive idiot cash poured into it from the incessant GATA-centric pumps (Bill Murphy, Wistar Holt, "Mexico Mike" Kachawhatsit) will know what Altmann is about. The mere fact that the LYD management team is desperate or stupid (or both) enough to want him on board is testament to their business nous: it's zero. Scam pumper scumballs like Altmann shouldn't be on junior mining boards of directors. They should be in jail. Lay with dogs and get fleas, dumbass LYD people."

And here's the price chart of LYD.to from that date to this:


Any further questions?




*I made sure by running a search. Yup, not a mention since then

KORES, South Korean mining ambassadors to Latin America

At least when mining is the sector, it always strikes me as strange how people will shake their heads and warn about "those Chinese" coming over, working people to death, paying them pittances when in fact what we've witnessed recently from Chinese capitals companies coming to LatAm and setting up shop has been pretty good and responsible corporate culture that makes sure workers are onside. Meanwhile and for reasons that fly straight over my head, South Korea seems to get a free pass to treat anyone they come into contact with in the worst possible way.

Take KORES for example, the South Korea State run resources company, which has its fingers in many pies in mining operations and projects. Here's how workers at the KORES-owned Boleo copper mine in Mexico's Baja California Sur got to send their Christmas via this report (translated) dated December 25th:
Santa Rosalia, Baja California Sur (BCS). A large  part of the workforce of the El Boleo mining company, located in Santa Rosalia, were evacuated at around 11am today by order of management due to the escape of strongly polluting smoke that threatened to poison personnel at the plant.
According to reports from some of the workforce, several people left the zone with irritated eyes, nausea and stomach aches among other symptoms due to the smoke coming from chimneys that covered all work zones.
This is not the first time that the company has seen a similar situation, according to unofficial reports.
Employees were threatened with losing their jobs if anyone reported the irregularities of the Korean company, according to a reporter in the area.

We particularly like that last sentence. So that's how they do social relations in South Korea, is it? Cute.

Beats me why the people of Baja California Sur are so against setting up more mining operations in their state and fight companies such as Argonaut Gold tooth and nail to keep them from developing their patches of land. 


12/28/14

Your updated IKN ebola news update latest report update

You need smarter PR, ebola.
Not thinking it through, ebola.
Not killing white people, ebola.
Nobody cares about you, ebola.
Turkey sandwich.


No, Bolivia is NOT nationalizing the San Cristobal and San Vicente mines

When you get to the third mail received, something needs to be said. I've been sent this report by worried readers today, because it's from Bolivia's decent newspaper La Razon and says Bolivia's President Evo Morales would today announce the nationalization of the San Cristobal (Sumitomo) and San Vicente (Pan American Silver) mines in the country. 

It's false information.

The reason behind it all is the date, December 28th, which is "Day of the Innocents" ("Día de los inocentes", or sometimes "Día de los Santos Inocentes") in Spanish speaking countries, with innocent in this case meaning gullible or naive. The day works the same way as April Fool's Day (April 1st) in other places. 

The Nationalization thing is a joke, a gag, a trick and nothing else. Promise. Relax. 

The IKN Weekly, out now



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