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4/9/16

Skanderbeg Capital hearts IKN

One of the Vancouver pumphouses behind the Lithium-X bullshit scam, Skanderbeg Capital, has decided that it loves IKN so much that it wants to come and read its contents every single day on multiple occasions. For what it's worth, Skanderbeg's Carson Seabolt is also a regular on the CEO.ca chat board where, using a chat handle, Carson keeps the name on everyone's lips by exchanging LIX pleasantries with Tommy Humphreys and the others getting paid to push this worthless scam at the naive and stupid.

Oh Mister Giustra, your petticoat's beginning to show...

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

...in reverse order:

Third Place: "Peru Presidential election: Final week voter intention polling says Keiko and PPK into the run-off", which may turn out to be a headline too soon. Or may not. What we do know is that since then the situation has become very fluid and plenty of Peru political insiders are calling lefty Veronika Mendoza to pip PPK to the coveted second spot. We'll find out first preliminary numbers around 9pm Sunday evening Peru time.

Second Place: "Regarding Dynasty Metals & Mining (DMM.to) debt and misconceptions (a rant) (from IKN360)", which is pleasing. I got some nice mail feedback from this one too.

First Place: "Three of the 15 stocks Porter Stansberry is pumping (maybe four...or now more)". This one won the count by a mile. Trust me on this one, the whole mine stocks commentary community is abuzz with this promotion with people pro/contra about what's going on, but only a tiny few are talking about it in public because the pissant tipsters are insanely jealous of Porter's heft and reach. And yes I am one of the pissants, but no I'm not jealous, just highly amused.
I'll give Porter Stansberry credit too, he sure knows how to run one of these and makes the rest look like pikers. More information on the details (eg. we're up to seven names) and some of the interesting background to this whole pumpo in this weekend's edition of The IKN Weekly, subbers. It may stink to high heaven but hey....it's capitalism, baby.

4/8/16

The Friday OT: Alain Souchon and Laurent Voulzy: Bad boys

Catching up with Voulzy this week, the guitar riff he put together for this 2014 song with Souchon got me. And the video's fun.



Cool, class, Voulzy makes it sound easy. It's not.

Intergra Gold (ICG.v): George Salamis tells IKN...

...this, on the record, after all that ICG and Eastmain and Columbus hoo-hah rtoday:

“Integra is happy with today’s outcome. Now investors can get back to getting excited about the rocks again. Onwards and upwards”.

Quote ends. Have a weekend.

Word on the street in Lima...

...late Friday afternoon, among journalist and reporter pals who are well-placed to get the latest readings and pulsa, is that most people "inside politics" are expecting Veronika Mendoza to beat PPK for the coveted second spot and make it to the run-off against Keiko.

So now you know.

UPDATED: A logical assumption about Lundin Gold (LUG.to)

We're getting a placement announcement soon.


UPDATE: My mistake, it turns out that LUG.to is also one of the Stansberry pumpo picks. And be in no doubt, this is now crazy-expensive.

Three of the 15 stocks Porter Stansberry is pumping (maybe four...or now more)

Porter Stansberry is pushing hard at the suckers, with his new $1,500 service* that gives out 15 names for greenhorns to buy. So far I've nailed down three, maybe four. Interested in hearing your views if you have others names on the list identified, nice and pretty IKN audience:
  • Almaden Minerals (AMM.to) (AAU)
  • Brazil Resources (BRI.v)
  • Midas Gold (MAX.to)

The possible to join those three is Pan American Silver (PAA.to) (PAAS).

Undoubtedly, Porter's picked BRI.v to give Casey and Marin a liquidity event in which to dump their positions before the dog implodes. And for what it's worth, I actually think he's right about AMM.to, it's just that people are now paying way too much for this paper as its only exit strategy is to sell to a larger miner and nobody's going to pay a premium on top of this new market cap. The others, who knows...

UPDATE:  Try this scenario out for size...

1) Porter is now in cahoots with Paulson
2) Porter pumps MAX.to, Paulson gets a 58c (and counting) print on his $55m worth of 35c convertibles on MAX
3) They all live happily ever after.

So if you want to know which world famous hedge fund manager rang our scammu little retail pumper and then met with him in New York for Kobe beef and carrots, while talking book on gold and gold miners, take a deep breath and think who might fit the bill....

UPDATE 2: Other suggestions as pumped names so far are Yamana (AUY), NovaGold (NG) and New Gold (NGD). All reasonably logical and have shown strength these last two days. However and same as PAAS, these aren't thinly traded explorecos being manipulated for the direct benefit of Porter's pals.

UPDATE 3: Add Newmarket Gold (NMI.to) to the list of suspects. Readers are smarter than I am.

*servicing his back pocket very nicely

Peru Presidential election: Two days to go, everyone's attacking Veronika Mendoza

Really interesting to see how Peru's media channels are out in force this morning and they all have one message: "Stop Vero". It's pretty clear that the late polls out yesterday which either have her just behind PPK or in a dead heat means there's everything to play for and being the only real lefty in the pack, she's scaring the moneypeople.

Here come a couple of comments. First this from Scotia this morning, which reflects the standard gringo view of what's going on:
- ELECTION WATCH: Show and Peru-ve:  Strong Showing for Mendoza Could Be Negative for Mining Stocks with Peru Exposure:  Our Mining Research Team saying that Peruvians will head to the polls on Sunday April 10th to elect their national congress and president. The presidential election is a two-round process with the first round this Sunday and the second round run-off vote scheduled for June 5. A run-off is widely expected, with no individual candidate polling near the 50% threshold required for an outright win in the first round.  In the latest polls, front-runner Keiko Fujimori came in at ~37% while contenders Veronika Mendoza and Pedro Pablo Kuczynski were neck-and-neck at around 15%. Recent polls also show that Ms. Fujimori is expected to only have a slight edge in a run-off scenario with either of the other two candidates, so each of these three candidates seems to have a legitimate chance at the presidency.  Ms. Fujimori and Mr. Kuczynski appear to generally advocate for continuity in the country's economic and mining policies while Ms. Mendoza promises to introduce a new economic model for the country, which would rely less on extractive industries. More specifically, she proposes to halt a scheduled cut to the corporate tax rate and tighten Peru's already-strict environmental regulations for miners. Ms. Mendoza has been surging in the polls lately.  A result on Sunday that puts Ms. Mendoza in a run-off could be perceived negatively for mining stocks with Peruvian exposure. We flag the companies in our precious and base metals mining coverage with exposure to Peru.

Now this from your humble scribe, from The IKN Weekly IKN360 out last weekend. 
Come the evening of April 10th the most likely scenario at this point is:

  • Keiko Fujimori wins the first round with over 30% of the vote (it could be as high as 38%), which won’t be enough to win outright.
  • Pedro Pablo Kuczynski comes second with around 18% to 20% of the vote and runs off against Keiko in the ballotage set for June.

We can consider the potential outcome of a PPK vs Keiko run-off in due course, let’s make sure it happens that way first though I can say at this point that voter intention polls have it very close between those two in the run-off, with some pollsters giving a slight edge to PPK, others an edge to Keiko (12). The potential fly in the ointment of this scenario is Veronika Mendoza, the only true left wing candidate who has made late strides in the intention polls and in some surveys is now in a technical dead heat with PPK. There are two things to say on that:

1) Veronika Mendoza will not win against Keiko in round two. All voter intention polls show that clearly, the country collective is scared of “lefties” (it’s very easy to conjure images of lefty Commie terrorists in the mind of the average Peruvian). So even if she makes it, you up there will get your miner-friendly administration.

2) As round two is going to be all about Keiko Fujimori vs “No Keiko” (or perhaps better said “No Fujimori”), I expect many “No Keikos” to switch from similar candidates such as Barbanchea and García to PPK, in order to keep Veronika out and give the “No Keiko” option a real chance at victory.

Bottom line: If Mendoza squeaks into the second round you should consider it an investment opportunity, not an investment risk. What is important is to have patsies such as the ones at Scotia and their clients, the ones who can't see beyond four days into the future and raise country risk without seeing the bigger picture

4/7/16

Updating the Bloomberg gold headline generator

Been a while since we did this, time to bring it up to 2016 levels:



It's always fears...why is it always fears?

Gold bullion holdings in GLD, 2016 to date

NB: Please note the cut down Y-axes used in these charts, done to highlight the changes, not to try and fool you.

Here's 2016 to date in gold bullion holdings in GLD, the world's biggest gold ETF:


Here's the last month isolated, from the same dataset:


Yesterday came as a relief for bulls.

Gold inside a trading range, copper falls off a cliff

Yup goldbugs, I know gold's up U$20/oz this morning but I also know that it's been stuck inside a tight trading range for plenty of days and today isn't much of a change. I as a precious metals miner anal yst and long didn't care when it dropped to 1215, why should I care about this move to 1240?

No people, the real move today is in the copper pit. This...


...is a new thing. It's also very welcome at IKN, because subscribers know that I called short on a well-known copper name last Sunday with one of the reasons being perceived weakness in the world copper market. That trade is now around 18% up, which isn't bad for four days. Decent sized position, too.

Peru Presidential election: Final week voter intention polling says Keiko and PPK into the run-off

What happens in Peru is that in the last week before an election, polls are illegal to publish. But that doesn't stop the polling companies from getting out there, taking voter opinion readings and then leaking them to the public. This is the one that's doing the rounds in Peru this morning, daisyfresh:


It predicts Keiko without the votes to get to 50% +1 vote and an automatic round one win. Then PPK improving to over 20% as people move away from the also-ran candidates (Barnachea has seen his numbers fall considerably) and  into the two-horse second round run-off.  Veronika Mendoza's late surge in the last few weeks won't be enough to get her into the second spot and the run-off...or so this polls says.

The vote's Sunday, we'll have a decent idea of the result by Monday morning Americas time.

UPDATE: This morning, Latin America Daily Briefing has a note on the election run-up, the issues and implications, link to that right here. As always, an excellent job of compilation and comment from LADB, those of you who want access to LatAm current affairs in English language should read this every day (hint: get the free daily mailer)

UPDATE 2: Two more unofficial polls this evening put it at level pegging between PPK and Veronika Mendoza.

4/6/16

No posting today

For secret reasons.

4/5/16

After Wisconsin

Here's an interesting website for numbernerds who also happen to be election junkies. It shows the latest numbers, post-Wisconsin wins for The Bern and Flat Tax Ted. Screenshot here:



The world's biggest copper producer: Codelco vs Freeport

I am asked to adjudicate, it's an easy one:


This is the last five years of annual production at the big two (BHP does less, around the 3.3Bn Lbs level) according to the two company websites and please note the cut down Y-axis, done not to fool you but to show the differences more clearly. I choose five years because it cancels out any influence from the 2008/2009 financial crisis and also cancels out any influence from when FCX was Phelps Dodge and Freeport and McMoran and things. And we need to know the story now, not back then. So...
  • Codelco beat out Freeport (FCX) in four of the last five years and has produced a total of 20.01Bn lbs copper in the period. 
  • Freeport beat out Codelco in one of the last five years and has produced a total of 19.41Bn lbs copper in the period.

And 600m Lbs Cu is a lot of Cu. Codelco is the biggest. The End. Reader BH, you owe reader SH a beer.

Mailbag on Continental Gold (CNL.to)

Reader 'P' (an industry professional) has kindly given permission to publish the mail he sent into IKN Nerve Centre this morning. It goes like this (names removed, rest as-is):

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
On December 23, 2013, the company submitted an EIA to Corantioquia, representing the final modification to the environmental license for the entire surface infrastructure required to build a mine in the Higabra Valley.
 
On September 15, 2015, the company announced that it had requested the National Government of Colombia to assume responsibility for reviewing the application for modification to the EIA for the Buriticá Project as a PINES Project (Proyecto Estratégicos de Interés Nacional), as contemplated under Colombian law. Consequently, the company withdrew its application for the modification of the EIA from Corantioquia.

Isn’t it the case that Corantioquia had actually rejected the Continental application in September 2015? (which would make the last phrase nonsense).

Reading the report, they are quite gung-ho on the project and seem to think that it’s a goer. Your thoughts?
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Your humble scribe replied:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Indeed (name removed), it's all here including the quote from the head of Coriantioquia, stating that his office had denied the permit for CNL at Buriticá on September 11th.
And why that matters now is here because CNL has to go back, cap in hand to that very same person, and get the permit approved from Coriantioquia before anything can happen. As I noted in the Weekly on Sunday while writing up on the last three months in Colombia...
The Constitution Court, which has ruled in favour of the Páramo protection laws and against companies such as Eco Oro at Angostura. In the same ruling the court also said that the country’s PINES program for fast-tracking specific projects was all well and  good, but the projects will also need permits from regional enviro people. This part didn’t go down well in the offices of Continental Gold (CNL.to).
Re-read that section of the 43-101 script you sent to me. Note how it tells no lies. That's lawyer-speak..."
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

I may have spelled it wrong in my mails to P but, oh to be a fly on the wall when the CNL team meet up with the Coriantioquia Corantioquia people again.

Singing in the shower

The Lithium X (LIX.v) pump continues. An object lesson in mass hypnosis, fuelled by paid pumpers and deep pockets ($50k here, $40k there, access to cheap shares for the anointed) hitting the greed buttons of the naive, we breached the $1.50 line this morning:


It's also interesting to note how the people at the centre of this scam are acting, too (my thanks to reader T for sending this one in, who doesn't want to be banned from the chatroom so gets just one initial here by request). This was written by Tommy Humphreys over at CEO.ca this morning when the subject was the rise in LIX share price:


That links to the video below, which is fun. I assume the other people mentioned by Tommy Humphreys are also critical of LIX, they're not the only ones. You know what they say about catching yourself singing in the shower, don't you now Tommy?

For the rest of you, the word of caution: The only people who know when a classic pump turns to dump are the people at the centre of it all. Tommy Humphreys is only one degree of separation from the very centre, being a regular on Frank Giustra's private jet these days. It's like musical chairs with money, don't be left dancing when the music abruptly stops. In the meantime, feel free to do with your money what you wish and trust it to a expanding chain of Vancouver stock promoters playing a larger game than you might imagine.


4/4/16

Regarding Dynasty Metals & Mining (DMM.to) debt and misconceptions (a rant) (from IKN360)

A small section of IKN360, out last night



Regarding Dynasty Metals & Mining (DMM.to) debt and misconceptions (a rant)
Reader ‘FS’ sent the following in after reading my succinct appraisal of the fast-deteriorating situation at DMM.to last week (13), one that even came before the company’s second NR Friday afternoon (14) that told us of its employee walk-out (reason is simple: don’t pay people and people don’t work for you). Here’s FS:

“Hi Otto.  I read your note about Dynasty being insolvent and no longer a viable economic entity.  But I would like to know why you don't think there is at least some value in its 3 projects with 6 million oz of gold and the Zaruma plant, equipment and mine development plus all the technical work that's been done over the past 10 to 15 years.

“I would have thought competitors would be willing to pay say $10 per ounce in the ground for the whole company.  That would be 60 million dollars and would leave some money for shareholders.   What is wrong with this rationale?”

And here’s what I wrote back to FS:

Shares are better understood by their formal name 'equities' and they get crushed to death by financial debt, it doesn't matter what price is put on the supposed and apparent fixed assets. Look at what happened to Jaguar Mining (JAG.v) shares during the re-structuring there. Or look at Colossus. Or Atna. Or Allied Nevada (aka Hycroft). A company like Vertex One will not play cute and pay their money to third parties when they can get the assets for no money. Equities are behind in the queue, debt creditors are first.

Also, DMM has no money, 2700oz Au shipped or not. No money is very very not good.

Many many years ago, somebody much smarter than I gave me a wonderful definition of company shares, i.e. equities: “The small sliver of hope that sits between assets and liabilities on a balance sheet”. To expand a little on that, I understand where reader FS is coming from on certain levels, he sees the potential for a third party to move into DMM, pick up “cheap assets” by “only” paying $10/oz, paying off the debtors, injecting capital, getting the company running on a positive cash flow basis, reaping the rewards of acting on a “bargain basement opportunity”.

Which may be so but first we need to ask questions. Who knows more about the DMM assets, a third party or the people developing this company for over a decade? We need to consider the never-ending delays, screw-ups and broken promises delivered by Robert Washer and his team. We need to wonder about the high cash cost, the succession of operating losses and the way the company can never seem to deliver on its development programs. And why workers have had enough and walked out. And Ecuador (let’s not even go there today). To cut to the chase we need to consider the word “value”, the one used by FS in his mail, a little more carefully. When it comes to balance sheets and fixed assets, within reason a company can claim the asset value it likes and if it decides not to cut the value of the thing it owns from time to time (i.e. impairment or write-down) it’ll stay that way. Examples:

  • If Argonaut Gold (AR.to) thinks its Magino project is worth the same (in fact more) than the $341m it paid in October 2012 for the property, when gold was at over U$1,700/oz, and doesn’t write down a bean of its value because it claims that if gold stays at U$1,142/oz over the long-term it will be able to re-coup all the price paid...well, they can do just that if they want (and my stars, they have).

  • Topically (15), if Kaizen Discovery (KZD.v) magically makes its $4m purchase into a $12.5m asset without adding a single drill hole to Pinaya then we can sit back and applaud (or laugh).

Two examples, we could play around with dozens but the point should be clear: Just because a company says it has an asset, it doesn’t mean that it is an asset. An asset that does nothing for your company apart from level charges and lose money isn’t one, it’s a liability (or at best a non-performing asset). Or as stated in IKN351:

A billion ounces of uneconomic gold is worth zero dollars and zero cents because if it costs more to get out the ground than you can sell it for, it’s worthless. But hey let’s up the ante because according to USA’s oceanic people NOAA, there are around 20 million tonnes of gold in the world’s seawater (3). In old money, that’s 643 billion ounces (yeah, with a B). Not only that, but about twenty seconds on Google will show you that people have spent time working out successful methods for extracting that gold (4).* But despite there being oodles and oodles of ounces of gold, out there, identified and available, they’re all worth nothing.

Combine the misconceptions of “in-situ gold value” and the magical accountancy so prevalent in the junior mining world and I find myself naturally circling back to DMM to wrap this rant up.

After making decent money in a DMM trade way back when, then losing about the quarter of the profits in a bad second trade afterwards, it just so happens to be a company I’ve studied carefully, watched over the years and...yup I’ve never been back. But rather than me again, here’s what A. Mining Professional told me just a couple of weeks ago because he nailed it so well. He’d met with Washer at PDAC, was on the receiving end of a romancing, knew I knew a bit about DMM and asked me for an opinion which I gave in no uncertain terms. He looked more carefully and...

“... I downloaded the three 43.101 reports on Friday (and) had a glance through the attached on their operating Zaruma mine this evening. Shocked, gobsmacked, appalled… take your pick… there are so many deficiencies in this report I wouldn’t know where to begin. That this is the basis for the mine plan and business is shocking….
BTW, the Dynasty Goldfield vein target, there great hope is comprised of 110 veins in a polygonal resource.  Yikes!  

There are sometimes interesting fights that go on when a company implodes on debt but has an asset hanging around. A few examples that come are San Gold, Rubicon, Gran Colombia, and even Pacific (PRE.to) in the O&G sector. People swoop in on the distressed, pick over the asset book and try to find value. More often than not they don’t and that’s largely because of something of the utmost simplicity; If the assets it has were (or are still) good ones, the company wouldn’t have got into financial trouble in the first place!

Bottom line: DMM is going bankrupt because its assets are not assets, nobody will jump in to save them from their creditors, those creditors will hit the non-compliance button and people holding equities that day will get a sharp lesson in why balance sheets are the single most important financial documents for companies. Perhaps they’ll end up selling the mill to INV Metals, or perhaps somewhere down the line after a restructuring a newco rises but if it does, you can bet any money you like that the current equity holders will have been diluted to a Pacific Ocean scale.


4/3/16

The IKN Weekly, out now




IKN360 has just been sent to subscribers. It's over 18,000 words long it was fun to write, it felt like writing 4k. In my humble opinion it's also one of the better editions for a while.

Louis Lobito Little Wolf James of Casey Research: His 2015 track record is rolling straight into 2016

You have to admire consistency.

Back in 2015, Louis Lobito Little Wolf James told us about his Top Pick stock early in the year and assured us all that, "If I could buy only one stock this year, Rubicon would be the one". Those of you who follow the mining market closely will know that Rubicon (RMX.to)...well...errr...let's just say the trade didn't quite work out the way Lobito planned:


But that hasn't put our intrepid Little Wolf off calling Top Pick trades for 2016, oh no. Here's what he gave as the splashy headline of the first edition of his International Speculator in 2016, out January 21st:


Move to the contents of the letter and we get the formal reco (also a direct clip from the letter, ain't no faking it at IKN):


And to make sure you fully understood the timescale...



...yup, no doubt about it, this is the Lobito Top Pick trade for the year we know as 2016. So how is that Casey Research Top Pick trade in SDS getting on since it was published on January 21st 2016?


Answer: It's down 21%. Keeping your track record intact, Lobito. Good man!



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