start here

start here

The Daily IKN email digest, get all daily posts sent to you next day (& no ads)

9/10/16

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

...in reverse order:

Third Place: "Yamana Gold (YRI.to) (AUY) facing a U$1.1Bn write down". Pretty cool, my fave of the week too, my idea of fun is snuffling around in filings to find financial consequences of things companies would rather keep out the spotlight. What's that you say? Oh right! Yes I know, I'm seeing a shrink about it, thanks.


Second Place: "Robert Friedland, master salesman (from IKN382)". An excerpt from IKN382 last weekend that shone a bit of light on just how good Friedland is at this marketing game. He's the best in the mining biz, hands down, coals to Newcastle calibre.
 
First Place: "International Tower Hill (ITH.to) updates its pre-feas for Livengood" because everyone loves pictures of pigs wearing lipstick. Beats wording words and numbering numbers, dude.

9/9/16

The Friday OT: Beethoven string quartet Op130 5th movement, Brentano String Quartet

Kind of whussy of me just to feature the sublime 5th movement of this and not the entirety of Opus 130, but I don't want to put anyone off by sticking up a 45 minute Youtube so instead we go straight here, to one of the greatest sections of music written by the master while in his prime.



This version recorded in 2012 at a Princeton University performance. Youtube here.

New Gold (NGD): White Oliphant update

This humble corner of cyberspace noted the big capital costs blowout problem at New Gold (NGD) and its Rainy River project in this post earlier in the week. Today NGD head cheese Randall Oliphant went on BNN to talk about the (potential?) White Elephant, interviewed by the suave and dulcet tones of Andrew Bell. You can watch the seven minute interview right here.

Read Exploration Insights on Orezone (ORE.v) for free

On August 28th, after reading the note written by Joe Mazumdar and Brent Cook on Orezone (ORE.v) in that weekend's edition of Exploration Insights, I wrote this post on the duo and their work and said this:
Exploration Insights, the mining newsletter published by Brent Cook and Joe Mazumdar, is the best publication of its type in the business. A prime example of its quality came today with the EI write-up and commentary on the goings on at Orezone (ORE.v) last week.

What shines in the EI analysis is the skillset range. To get this ORE.v story right you need to know about geology and mining technicals for sure, but you also need a deep knowledge and understanding of capital markets, corporate politics and the ability to glean off-record information that only a team with long-standing contacts in the right places in the industry can boast. And last but not least, the writer needs the ability to put it all into a narrative that reads logically and reaches the brain of the reader easily.

If you get the chance to read the Exploration Insights analysis of Orezone, SRK, RPA and all matters arising then do so, it's a genuine tour de force.
 
And now the good news: Cook and Mazumdar have decided to release their piece on Orezone (ORE.v) as a free sample and you can read it by clicking right here on this like. Top drawer mining analysis from the best newsletter in the junior mining space. Go read.

9/8/16

Yamana Gold (YRI.to) (AUY) facing a U$1.1Bn write down

It's official. At midday today Thursday September 8th the municipal committee of Andalgalá in Argentina took into account the recent judge's ruling (that IKN told you about) and voted unanimously to ban all open pit mining operations in its district. The main effect of this legally binding vote is the permanent halt to the Yamana Gold (AUY) (YRI.to) 'Agua Rica' project, located 17km from the town centre. It makes Andalgalá the first district to ban mining in the Catamarca province.

Thing is, Yamana carried Agua Rica on its books with a U$1.1Bn asset value. As it's now effectively and permanently killed as a project, if Marrone wants to be honest to his shareholders he has no choice but to write that asset off, right down to zero. That's 20% of the book value of the whole company gone, disappeared in a puff of smoke. Remember that song "There's a hole in my bucket?", Well there's a hole in your balance sheet, dear Peter dear Peter, there's a hole in your balance sheet dear Peter a hole*.

So go on newbie retail, tell me again how Argentina is a great place to go mining all of a sudden. I love that one and the way you tell it, so refreshing and optimistic of you.


*Potentially missing a hyphen at the end. You decide.

International Tower Hill (ITH.to) updates its pre-feas for Livengood

Here's all you need to know:


For "One Of The Most Influential Economists In The World Today", Doug Casey sure says some stupid things about the economy

Take for example this, published today in The Casey Report:

"If there was a completely free market in medical care, its price would have been falling, not skyrocketing. Why? Because medicine is a high-tech endeavor. As such it would be subject to some variation of Moore’s Law, that we see in the computer world, where prices go down and quality goes up every year. Moore’s Law is at work in biotech, nanotech, and genetic engineering—all of which are currently unregulated. These things are now intimately related to medical technology. But your doctor and hospital have to spend more time and money meeting regulations and dealing with insurance minutiae than actually providing care. A lot of doctors are leaving the practice, because it’s become more trouble than it’s worth. And less people want to spend the years of time and hundreds of thousands of dollars it takes to get a medical degree, for the same reason."

Doug, a little learnin' for ya. Moore's Law isn't a law, it's an observation. It's also dying. Next up, it's not at work in biotech, nanotech and genetic engineering. Not at all. At all. It cannot be applied to a friction-laden sector such as medical care. While we're here, "a lot of doctors" and "less people " are classic examples of empty rhetoric (Google the phrase if you're not sure, dude) and mean nothing. We know you like to think of yourself as a controversial free-thinking street fighting man who goes outside the box and all that jazz but as David St. Hubbins and Nigel Tufnel so wisely pointed out, it's such a fine line between stupid and clever.

Read more about "One Of The Most Influential Economists In The World Today" here.

The Bobby Genovese Liberty Silver pump and dump scam update

In June this humble corner of cyberspce reported that Liberty Silver, the scam run by Bobby Genovese all those happy years ago in cahoots with a whole bunch of Clearly Corrupted Canadians, was going to be resurrected in September and here we are in that very month. And by the looks of the hits IKN has been getting from Monaco (where Bobby's rich brother lives, one of the people that wrote the book on Canadian stock market scamming), we're probably not far away from the re-launch now.

Will Bobby G mention that he owns 80% of all shares in Liberty Silver once the fun begins? Will he reveal that the SRK guy he boasts about in his mails is the same one who ruined the Hycroft mine with his poor work? Will James West be paid in options for pumping Liberty again? So many questions, so little time...

Latin America Daily Briefing today

LADB and Jordana Timerman with her usual good job of curating the days main events in LatAm. Here's how it starts:
"Mexican finance minister Luis Videgaray stepped down yesterday, apparently in relation to the wildly unpopular meeting between President Enrique Peña Nieto and Republican presidential nominee Donald Trump. Vidigaray is a close ally of Peña Nieto and championed the idea of the meeting, which backfired on the already unpopular Mexican leader..."

9/7/16

Nice little scoop from Global Mining Observer

Vale (VALE) is selling its big Furnas copper/gold project. GMO with all the details, right here.

A Peruvian truck driver has a message for you



Any further questions?

Orla and Pershimco update

Although dealing with Bureau and Arcand has been like herding cats and as a result the deal still isn't 100% certain to happen due to that fact, the likelihood is that the protracted negotiations between Pershimco (PRO.v) and newly formed Orla Mining (OLA.v-H) are nearly done and the deal is probably (not definitely though) going to close in the next few days. Just so you know.

Disclosure: No position in Pershimco or Orla. Or Franco Nevada, for that matter.

Why you should listen to Recomposed by Max Richter

At the weekend I stuck a piece from "Recomposed by Max Richter; Vivaldi, The Four Seasons" on the blog, namely "Summer 1". I recommend you listen to it, I recommend you listen to the whole thing but maybe before jumping in too far listen to this excerpt, Summer 3:



An experience for anyone who has listened to Vivaldi's original too many times to remember, like walking through a place you've walked a thousand times before to the point where you recognize every view angle, wall, window, lamp post, flower bed, tree. Then suddenly starting to suspect that it's not the same place, just one that looks almost identical. And then the suspicions solidify, it's not the same place. And then it's very different, but the morphing happened so smoothly and naturally.

A beautiful, compelling, weird, mind-altering experience for your inner melomaniac, it has me listening to Vivaldi's major work all over again instead of simply hearing it. Cannot be recommended too highly.


Air China reviews London

This from the Air China in-flight magazine:



And hilarity ensued.

Marin Katusa's "Project Ironman" pump is...

...nothing more or less than this piece of crap, the "Rice With Mango" fusion that's being run by Pathway Capital.

It's pure hype, pure pump and all that breathless hype from this snake oil salesman about the money the heavy hitters are purported to have in the project isn't about fresh cash, it's money they've already embedded and lost in the collection of failed companies they're simply re-packaging under a new umbrella. Give me a freakin' break here, these assets are worthless and it doesn't matter how much you pump them or what stupid name you give the newco in order to fleece a bunch of idiot greenhorns.

New Gold (NGD): A White Oliphant

On the back of its NR this morning, here's a chart of the ongoing capex blowout at the New Gold (NGD) Rainy River project, with data ripped from the decent update note out of Dundee this morning:


Please note cut down Y-axis, used to show change and not to trick your eye


It's even more impressive to think that when NGD framed the capex at U$885m in 2014 because this project is in Canada and at that time the Loonie was trading around 1.05 to the greenback. What you see above is the blowout in USD terms, it's even worse in the local currency.
White Elephant, Mister Oliphant?


UPDATE: Reader B is reminded of this Monty Python clip. He's right.



"That burnt down fell over and then sank into the swamp...but the fourth one stayed up"

UPDATE 2: For those of you joining us from Seeking Alpha, this will be of interest.

Be right, sit tight

Knowing when to do nothing is part of the armoury. It's the bit that to some may look boring, but frame it as 'making money by doing nothing' and it suddenly sounds more attractive.

It also helps to have previously made good decisions while people were telling you how stupid you were for doing something like that.

9/6/16

Copper's bottom confirmed again

Eat dirt, vampire squid.

Posting will be light for the rest of today

For secret reasons.

The next news from Eldorado Gold (ELD.to) (EGO)...

...now that the Jinfeng mine deal is closed and the company has got the cheque, will be the exit of president and CEO Paul Wright who is about "to be resigned" by its board. Shouldn't be too long.

You heard it here first.





9/5/16

Why We Fight

Happy 10th birthday, my wonderful youngest. It's difficult to believe that you're in double figures already but it's okay, you've grown up so beautifully. I love you and your sister so much.

Robert Friedland, master salesman (from IKN382)

Here's a small section of The IKN Weekly IKN382, out last night. It's about Ivanhoe Mines (IVN.to) and the way its boss, Robert Friedland, runs rings around the average mining CEO when it comes to selling a story.




Ivanhoe Mines (IVN.to): As stated on a handful of occasions this year, the reason I included the larger-sized IVN.to in this year’s list was interest (perhaps mere curiosity) in watching more closely how Robert Friedland goes about positioning, promoting and marketing his companies to the wider world. I’ve been impressed on several occasions in 2016 with what I’ve seen and the impressive share price performance is due at least in part to his abilities. But last week saw a genius stroke move, a pièce de résistance, meisterwerk level and I really have to take my hat off to Robert Friedland’s marketing prowess because the stunt he pulled (I choose my substantives carefully) should go down as a case-study for every single junior mining company CEO. Let’s first consider what normally happens to juniors when they’re approached by a larger company:



1)      They talk informally and then normally (but not always) sign a Confidentiality Agreement (CA) which offers the larger access to the smaller’s data room.

2)      The larger will then rootle around, perhaps do a site visit or two. Sometimes its interest in the smaller company is aimed at a potential buyout and that process may continue, but there are plenty of other reasons for a CA to happen that don’t involve active interest in a potential buyout.

3)      However, if a buyout has been mooted by the big company and they like what they see at this stage, it’s typical for the two sides to advance the process and move into new rounds of talks and negotiations. This is when management and board members will meet, potential advantages and problems of a fusion discussed, all sorts of other and then if things really move forward, dollar prices get a mention.

4)      A buyout deal eventually happens or does not happen.



For sure it’s not as straightforward as that, but that’s a reasonable framework and it gives an idea of the stages any given junior exploreco has to go through in order to nail down its most coveted exit, that of the juicy premium buyout. But the basic point is that a junior being approached by a larger company is normal, it’s nothing strange, it happens all the time and it’s typical for any junior to have several CAs open at the same time. And they won’t talk about that unless asked and when a nosy guy like me says “So...got any CAs running?”, they will offer up the number they have open (“Oh, we have four/seven/three/eight”) but that’s all, as CAs by their very nature mean that they can’t talk about the details.



However, normal rules do not apply to Robert Friedland.



1)      IVN is approached by a larger company or companies.

2)      IVN tells the world that it has been approached in a news release that subsequently gets picked up by wires such as Reuters and Bloomberg (and half a dozen other places, check Google for more) who write their own stories on the NR.

3)      IVN shares pop higher.



That’s what we saw from IVN in its NR last Monday (5) and with the ensuing media coverage (examples (6) (7)) and as Bloomie put it...



“Shares in the Vancouver-based company rose as much as 16 percent and was up 14 percent at 11:50 a.m. in Toronto, pushing up its a market value to C$1.5 billion ($1.1 billion).”



...because the whole pitch was “hey everybody, we’re getting bought out!” when the only substantives were nothing more than 1) we’ve signed CAs and 2) we’ve decided to eventually pay for third party advice on any eventual deal offer. And that last piece is the key, it sounds great and potentially too expensive for small-end junior, but notice that no money has changed hands. That’s all about having a board of directors 100% in line with the management and marketing of a company and that’s what happens when you have one man running the show with a keen nose for salesmanship.



The point: Any junior mining company can use the same strategy as Friedland did last week. However, it also needs the things that Friedland has and those are also part of his genius.



1)      Assets and properties that are truly interesting to larger mining companies. The reason explorecos usually keep quiet about CAs is that they don’t want to annoy or scare away majors by running up your share price on a promo by simply using their interest as a marketing tool. If your properties are mediocre and you start shouting they’ll stay away. But if you really have something top drawer and you know the majors are serious about buying you (and yeah, I’m looking at you John Black of Regulus Resources) you can shout and scream and get the share price moving, you won’t scare them away.



2)      Brass neck. Most junior CEOs don’t have the marketing chops to do what Friedland does but I’d contend that it’s already part of the skillset they need and that it’s going to be even more important as the years roll by. Having a timid geologist in love with rocks as the company top dog works in early stages, but it can become a veritable hindrance as your junior mining company grows. And listen, selling skills aren’t brain surgery, sales gurus are made not born.



3)      A board of directors that works with the company officers, not against them. And by my own experience of watching juniors from the outside I can tell you hand on heart, ladies and gentlemen readers of The IKN Weekly, that situation is far less common than you’d imagine.


Friedland may be world class at this but it’s not some magical gift exclusive to him, either. This is a formula and more juniors should take note of what he does and the way he does it, from company structure all the way up. It gets results like this:





Chart of the day is...

...copper, longview:


Jury's out, but no matter what Goldman Sachs do to try and scare us I can't help but see a bottom forming.

The IKN Weekly, out now



IKN382 has just been sent to subscribers. We're now ready for post-Labor Day.

And a message for esteemed subscriber "IJB", Google says that your mail address doesn't exist any more. Please get in touch.

9/4/16

Recomposed by Max Richter; Vivaldi, The Four Seasons, Summer 1

Oh my stars I've just fallen in love with music again.



Do your ears a service and listen to this. If you do you'll want to listen to the whole thing.