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2/13/16

Oh goody, we mortals get to ask Rick Rule some questions

Yesterday evening your humble scribe received a mailer from Sprott Global entitled "Optionality: Rick Rule answers your questions and tells listeners what he's doing with his own money". It included this paragraph.
"Next week, Rick Rule will be recording a call to let listeners know what he is doing with his own money and to answer your calls on optionality.  Please submit your questions either to your Sprott Global financial advisor or to contact@sprottglobal.com by Thursday February 18th."

And to that IKN says, vote early and often! Here are this house's two suggestions:

1) Despite being two plays that have been recently and deliberately set up for the same "optionality" play, you refuse to invest in or back Keith Neumeyer's First Mining Finance (FF.v) or that Dundee-backed Oban Mining (OBM.to). Isn't this hypocritical?

2) Admit it Rule, "optionality" is just a fancy phrase for the age-old Greater Fool theory isn't it? None of the horsecrap assets in this sub-set will ever become mines, you just want to be in early and sell a dream. Even if it works, nothing happens here except a transfer of wealth from a sucker's pocket into yours.


2/12/16

How to keep your copper mine cash costs low: Nevsun (NSU.to) knows how

Be proud Canada, be so very proud. You are the leading edge of capitalism.

A Vancouver-based mining company that struck gold in the small North African country of Eritrea is being accused in a B.C. lawsuit of permitting forced labour to be used in the construction of its mine.
The allegations filed by three former Eritrean conscripts in B.C.'s Supreme Court accuse Nevsun Resources of being "an accomplice to the use of forced labour, crimes against humanity and other human rights abuses at the Bisha mine."

Full story here.

The Friday OT: Carole King; It's too late

The original studio version, from the 1971 album Tapestry:



Argentina: Export duties on mining eliminated

It's been considered a certainty for a while, today President Macri made it official. He flew to San Juan province and made the formal announcement that export duties on mining produce from Argentina is now eliminated. Spanish language link with pretty photo here.

The First Mining Finance (FF.v) business model

I have paper.
You have shit.
Let's do a deal.
I'll give you my paper.
You give me your shit.

FF.v dilutes the only decent asset on its books even further (ex-Coastal Gold) with another laughable deal. Clifton Star (CFO.v), dog among dogs, moves into the stable of crud in exchange for 48m shares and will now be marketed as "Osisko will pick it up from us, just you watch". 

In the meantime, FF.v will boast how much its market cap has grown (no matter the stock has been diluted to kingdom come). Take it away, lovable parrot.



I'm amazed people fall for this outright scam.

PS: Truth is I'm not amazed. After all this is the precious metals mining Utopian dreamworld, where the naive have handed over their cash to the unscrupulous since at least the time of the California 1849 gold rush. The pattern shows no signs of stopping.

A Flash update...

...has just been sent to subscribers, Friday morning a few minutes after the opening bell. Taking profits on one.

Updating Canaccord's shark-jump call on HudBay

Back on January 20th we had a good old guffaw at the Can of Corn's pathetic attempt to pump on one of its major bagholder positions, HudBay (HBM). Anyone who can run a spreadsheet knows that Garofalo is bailing on HBM at the right time and the spectre of Chapter 11 is looming on the company and its everso everso clever idea of growth thru debt (i.e. it spent U$1.9Bn to build Constancia alone, it's now a U$4.12m market cap...where's all da munneh gone David?), but that's not going to stop a shameless band of whores such as the sellside anal yst community from trying to hoodwink its own clientele. 

Which is why we were told to buy HBM by Can of Corn last month, because when a dam that isn't going to collapse collapses it'll be really cool. Or something. Because science.

Anyway, here's how HBM has got on since then, compared to the copper producer ETF CPX as a benchmark:



We see that with the copper metal market price finally finding a (temporary?) floor, the stocks managed to level out too and they even managed a small rally when copper popped to U$2.15/lb or so (it's now back at U$2.03/lb). But in a shocking development HBM has underperformed its peers. 

Hey Canaccord, isn't it strange how people think financial debt bankruptcy risk is bigger than dam collapse risk?

Chart of the day is...

...the gold/oil ratio:



I don't have a clue what this means for next week, or month, or anything. It's just one helluva visual.

2/11/16

It's so bullish out there for mining stocks...

...that HudBay is only down four cents.

...that people are buying IAMGOLD (IAG) (IMG.to) because they think it's profitable now.

...that the market thinks Nevada Copper (NCU.to) will be able to fill its placement book.

...that Kevin MacArthur has stopped obsessing about IKN.

...that Keith Neumeyer is now refusing bought deal placement offers for FF.v.

Okay, I may have exaggerated about that last one.

Reasons to read IKN, Continental Gold (CNL.to) edition

In fact true props must be given to Paul Harris of The Colombia Gold Letter and also his blog right here, because he was fast on the case that Tuesday morning. But still, in this post pre-bell Tuesday IKN made it clear the news was bad for CNL.to, something that the scamster Ari Sussman tried hard to hide in his company NR the next day. Which we really laughed about in this post. Scamster is as scamster does, Ari.

And here we are Thursday morning, the gold complex is going through the roof and all gold companies are loving the pop. All except one.


Any further questions?

PS: Yes, you should read The Colombia Gold Letter.
PPS: No, it's not too late to sell your CNL. It's going to zero, just the same as the way Ari Sussman's previous scam Colossus Minerals went to zero. 

Seen on Howe St this morning


A Flash update...

...has just been sent to subscribers, pre-opening bell on this fair and balmy Thursday morning. Trades in the pipe.

Chart of the day is...

...gold, hourlies:


We're now in the upside-down world where the more Yellen is hawkish, the better it is for gold. But when she goes dovish, watch out. 

For more, Lawrence Williams does it all well in this post today.

2/10/16

Late night extra

It's been a long day doing other, real-world things (while trying to keep at least an eye on this newly interesting miners' market). A couple of loose ends that may have warranted posts under normal, non-time constricted circumstances, today they just get a line or three:

LSG Payola: Here's the thing about the "Change of Control" payments for the CEO of Lake Shore Gold (LSG) (LSG.to), Tony Makuch, as per the latest Management Information Circular: "...the CEO would be entitled to a payment equal to 30 months' salary plus an amount equal to 2.5 times the average of his previous two years’ bonus payments, and benefits coverage for two years (or payment of an amount sufficient to obtain comparable benefits coverage)" As Makuch is on $55,000/month, that's $1.65m for the salary element. As for the bonus payment element, I don't think that includes the options and shares awards payments, just the cash bonuses. If so it works out at $2.11m. If not it's more. So, at least $3.76m bonus payment for Mr. Makuch thanks to him agreeing to this shitty deal with Tahoe Resources. Nice work if you can get it.

TAHO Conflict: Scotia has been pumping this LSG/TAHO deal so hard it's like watching elephant porn. Hey, do you think Tanya Jakusconek, who is both senior precious metals analyst at Scotia and on the board of directors at Tahoe Resources, would have anything to do with that? D'yathink?

UEC is Ruled: Did you see how Rick Rule shafted Uranium Energy Corp (UEC) this morning? Wowsers, nearly a million shares awarded, the warrants dropped to $1.35, plus more payments in shares in the years ahead, all for merely booting the payments into the future. And that's just the announced stuff, as we hear there's a hefty rollover fee to be paid too (that'll get line-itemed on G&A and never see the full light shone on it, most likely). I have to be honest, I can't help but admire the way Rule shears the sheep seven times instead of killing it once for the meat (that can come later), but it's another lesson in how slanted the playing field is against us at the retail end.

CNL Beginner's luck: Mister Paul Begin of Stockwatch has his own view on Continental Gold's (CNL.to) news release today:


Two things to note:

1) He's wrong. It's very affected. See here for more.
2) Never trust somebody's view on a location if they don't know how to spell it.

Franco Nevada

The type of deal that only big-swinging-richards pull off: FNV has just bought the precious metals stream from Glencore's Antapaccay using OPM.

Dear Kevin

Instead of this deep level inquiry into your Reno office leak that's upsetting people and putting the chairman of LSG on edge, why not mail me and ask? I'm pretty approachable, really. I won't tell you who the leak is of course, but I can help you make sure it doesn't happen again and give you some good ideas on how to tighten up your confidentiality systems. I'm not looking for paid work either, don't get the wrong impression, this is purely voluntary. And you really should disclose on that death at Escobal, the way you and Ira decided to hide that annoyed people you work with greatly. Better late than never, don't wait for the YE MD&A.

PS: Do you really own a Ferrari?

Continental Gold (CNL.to): The market begins to see the problem

But only begins. It hasn't seen the real depth of the doo-doo in which scamster Ari Sussman finds himself again (and remember, he didn't tell anyone about the mess at Colossus before it was way too late either) because if the market got the fuller picture CNL wouldn't be down a mere 10% today, it would be plumbing new multi-year lows. The problem is alluded to in this section of the company's NR today and they do it as lightly as possible, even these BSsers know they need to disclose something else face courtrooms down the line. We quote:
"The court also indicated that ANLA (the National Environmental Agency) will not have sole exclusivity over permitting and maintaining environmental aspects of PINES projects."
One simple sentence, buried in the NR. Truly IKN says unto you, if 1) you don't know what that means 2) you're long CNL 3) you're out there there arguing the long case and defending its good name 4) you are the poster child for "ignorance is bliss". 

What that means is that CNL cannot get its environmental permits from the national government, what it was planning to do after doing that sneaky switcheroo last year. It now needs to involve regional body Coriantioquia and get their permission for the Buriticá project, too. 

That's bad news for CNL. 
Very bad news.
Very very bad news, isn't it Ari?

As IKN pointed out in this post on January 5th, "Continental Gold (CNL.to): Scratching an itch", Coriantioquia has already denied CNL its permit! And the dirty little secret that CNL wants to keep away from the market is that Coriantioquia denied that permit BEFORE the company pretended to withdraw from the regional permitting program and go with the national one! Here's one of the interesting bits from that January 5th post:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
"...the director of the permitting body Corantioquia, Alejandro González Valencia, told Colombia's biznews people El Colombiano that the permit was denied due to water reasons (too much of it from the mine that wasn't being managed) and enviro-control reasons. The report also said that according to the director of the body (translated),  "...on September 11th 2015 the environmental impact permit modification was denied (by Corantioquia)."

Got that? September 11th 2015. That was a Friday.

Now compare that to the CNL.to news release dated Tuesday September 15th 2015 entitled "Continental Gold Elevates the Environmental Permit Application for the Buritica Project to the National Level" in which the only mention made of the previous permitting program was, "...Company has withdrawn its application for the modification of the EIA from Corantioquia, the autonomous regional environmental authority of the department of Antioquia".

Got that? CNL tried to make out on the 15th of September, four days (and two full trading days) after Corantioquia had  DENIED the permit, that they had withdrawn their application. Maybe, like me, you see a subtle difference between "withdrawn on 15th" and "denied on 11th"."
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now, thanks to Colombia's Constitutional court ruling yesterday that IKN told you all about (but nobody believed) they have to go back to Coriantioquia and get the permits from them, the very ones already denied to them before CNL pretended to withdraw and go "fast track" with the PINES system. Hey, get the feeling that track won't be as fast as you thought, Canadian brokerage anal yst suckers? Oh man, I'd love to be in that room when the "Hi guys! Long time no see!" meeting goes on between the regional enviro people and the CNL team.


Question: How many times does one man have to lie to you in the face before you realize he's a liar?

Posting will be light today

Some life things to deal with. Just talk among yourselves til I get back...

2/9/16

President Bloomberg

Here I am, checking out the results of the NH primary and thinking that the above name doesn't sound so bad after all.

A Flash update...

...has just been sent to subscribers, Tuesday lunchtime. Ka-ching time.

Colombia court news: Bad for Continental Gold (CNL.to)

Props to Paul Harris of The Colombia Gold Letter for this scoop. Here's how his post starts:

Colombia's Constitutional Court endorsed the concept of projects of national interest (PINES) and the creation of a national system to handle them due to the high social and economic impact, but stipulated that local and regional authorities must be consulted during the permitting process and that the national environmental licensing agency (ANLA) cannot issue environmental permits, which is the competence of the local autonomous regional corporations (CARs), reported El Tiempo. The Court ruled that article 49 of the National Development Plan 2014-2018 (PND) violated the principle of territorial autonomy because it attributed to central authorities competencies that are exclusively those of territorial agencies. This means that continues here

And if you're long CNL and don't know what that means to your trade, I wish you the very best of fortune. And I also promise you, hand on heart, that Ari Sussman doesn't want you to read this.

UPDATE: The above went live about half an hour before the open. We're now an hour or so into the session and CNL.to is down 2% or so, which is all the proof you'll ever need that Canada doesn't have the first freakin' clue about Colombia political/community risk. If it did, CNL would be down by 50%, not two.

UPDATE 2: I'd rather call short on CNL at $4 than be a sycophantic sold-out toadying fucktard who lives up Frank Giustra's asshole, Tommy. Now you be having that nice day now.

Chart of the day is...

...copper, hourlies:


I think it fair to say that the Doctor is telling us something about the state of the inflation/deflation argument today. And semi-OT (but only semi, it has connections to the above chart) silverbugs should STFU because if they're a danger to themselves I don't care, but they're starting to hoodwink the naive. Silver isn't gold, never has been never will be. One is an asset class, the other is a speculation.

By the way, Janet Yellen testifies to Congress mañana Wednesday. Subbers, check out that intro piece in IKN352 for my ideas on the potential in that.

Lake Shore, Tahoe, Stockhouse and pearls amongst swine. And scenic photos

The quiz photo from this Feb 2nd IKN post. The answer was Lake Tahoe and the clue 
wasn't in the question, the clue was in the answer. Big prize? Geddit?


There are several reasons why I never bother reading stock bullboards (let alone write on them, gave up that nasty little habit a decade ago) but the main one is that, on average and over time, you need to trudge through 99 posts of brainfarts, banal streams of consciousness plus all the utter inanity from (paid?) pushers and bashers to find one post with something useful to say. In short, bullboards are an inefficient use of my time.

However there are exceptions and this link will take you to one today, a quality post on Stockhouse on the Tahoe Resources (TAHO) (THO.to) paper deal to buy out Lake Shore Gold (LSG.to) (LSG). I know about the post because its author "LatamAfrica", a man known to me and a mailpal for quite some time, shot me a mail in the wee small hours to show me. And yeah SH people, I know his true ID, shock horror eh? I'm not giving that away but I will tell you he's a smart and respected industry pro and you guys who do Stockhouse should listen carefully anytime he has something to say, you have access to a class mining brain there.

I digress. Go read his post, which does some decent numbercrunching and comes to the same conclusion that I did (using different methods), that TAHO is stealing LSG and Tony Makuch is doing his shareholders no favours by accepting this particular purse of silver (30 pieces). It's quite long and the whole discourse is necessary to get the picture so I'm not excerpting it here, to risk boring you with repetition go over there and read it. You'll be smarter about this TAHO/LSG deal once you have.

2/8/16

Lake Shore Gold (LSG) (LSG.to) management quickly fits into the Tahoe Resources (TAHO) (THO.to) corporate ethos

By lying. 

Here's an except from the "Scotia Mid-Day Blast" that covered the THO/LSG conference call and other herbs (as we say down this way). Your cast of characters are
  • "Craig Johnston", who is Precious Metals Anal yst at Scotia.
  • "LSG Management", who are liars.
Here's the excerpt:
- Friday Rumours Fueled the Expedited Negotiations: Craig Johnston noting that after a conversation with LSG management this morning, the company stated that the whole process moved quickly over the weekend following the market speculation on Friday. In short, the company was in in preliminary discussions, but nothing had been made concrete; and hence the disclosure in their press release on Friday, saying they were not aware of any material, undisclosed corporate developments. LSG management also noted they were not actively shopping themselves around; however, flagged that a key rationale for the deal from the LSG perspective, is that it provides a balance sheet to further develop the Timmins Camp quicker than under LSG ownership given LSG's balance sheet constraints….

Ha! They're trying to make out that it was lil ol' me and my pissy lil blog that precipitated the merger! Oh my, how we laughed! Take it away, my darling parrot:


Allow me to be crystalline in my clarity on this: The title of Thursday's scoop post included the words "late stage" for a very good reason. They weren't in any way, shape or form preliminary. I'm not going to tell you how I know because that little snippet may compromise my source in the Reno head office, but I know all right. As for the reason LSG management are bare-face lying to the public, well that's because their stock traded after that NR of theirs last Friday and they now realize a little late but the penny has dropped, that their US ticker might not be covered by that legalese use of the word "material" in the denial-that-wasn't-a-denial. In short, they fear a lawsuit. So they're lying to cover their tracks. Which makes it easier to understand why they think there's close synergy with TAHO, what with their awful track record on disclosure.

And on the subject, hey Kevin, have you told LSG about the employee death at Escobal in November yet? The one you're too scared to report to the public? Have you explained to him why "World Class" TAHO is the only "World Class" company that doesn't come clean when it kills its employees on the job? Don't you think "World Class" is a bit rich for companies that sneakily hide the dirt away from the investment public like that?

The latest Keith Neumeyer gossip

He's looking to run a equity placement in First Mining (FF.v) to raise cash. In the very near future. So now you know.

It's so bullish out there for gold and gold stocks...

...that Peter Marrone is thinking about spinning off Brio Gold (aka Brio-X Gold) again.

Take some advice, Pete, it's not that bullish yet. And you don't want a second serving of huevo en cara yet, do you now?


A Flash update...

...has just been sent to subscribers, Monday morning, an hour and a bit after the open. Yup it's about the TAHO/LSG deal.

Chart of the day is...

...gold.

In the chart of the day dated February 1st linked here, just one week ago, your humble scribe wrote, "Gold takes out U$1,170/oz or so and you goldbug people will have the world's attention, not just mine". And sure enough...


...there's a helluva lot of chatter about the price of gold all of a sudden. It's not confined to backwater blogs, Zerohedge or hardcore live-free-or-die chatrooms any longer.

"Whither goest thou, America, with thy shiny metal in the night?"


Tahoe Resources (TAHO) and Lake Shore Gold (LSG): Don't say you weren't warned

Your humble scribe on IKN, Thursday evening, Feb 4th:

Tahoe Resources (TAHO) (THO.to) in late stage talks to buy Lake Shore Gold (LSG.to) (LSG)

Tahoe Resources (TAHO) and Lake Shore Gold (LSG.to) (LSG), Monday morning, Feb 8th:

Tahoe Resources and Lake Shore Gold Announce Business Combination

Any further questions?

PS: If you want to know what Goldcorp (GG) (G.to) is going to do about this, that's covered by one of the other intel snippets in IKN352, out last night. But that's only for subscribers.

2/7/16

The IKN Weekly, out now




IKN352 has just been sent to subscribers. Thoughts on the gold price, thoughts on LSG and TAHO, thoughts on why CNL is never going to happen. Other thoughts too.

The top three most visited IKN posts this week are...

...in reverse order:

Third Place: "Do not feed the animals (from IKN351)". This was the rant against the scamfest of "optionality" that was the intro into last week's edition of The IKN Weekly, an out-dated idea now being pumped at you from people with large mouths and large bags who are mentally stuck in the last cycle and don't realize that a soufflé doesn't rise twice. 

Second Place: "Three more things about IKN's Tahoe Resources (THO.to) (TAHO) / Lake Shore Gold (LSG.to) (LSG) deal talks exclusive", which although containing its own information was no more and no less than the follow-up post to the week's main event on the blog...

First Place: "Tahoe Resources (TAHO) (THO.to) in late stage talks to buy Lake Shore Gold (LSG.to) (LSG)". No surprises. This post on TAHO Thursday evening may turn out to be the year's most viewed post, not just the week's, going full viral, moved the market (a 14% arb between the two stocks is a very solid reaction), caused a trading halt in LSG and exactly the sort of denial-that-isn't-a-denial from the company in its subsequent NR (which nobody believed, because on re-start of trading LSG went higher not lower) that we anticipated. All that because of the simple fact that it's a genuine scoop with 100% factual information.