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9/9/17

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

...in reverse order:


Third Place: "Novo Resources (NVO.v), Kirkland Lake (KL.to) and the Rabbit Warren prospect in 1980". Novo is like Hansel, so hot right now. Therefore you put the name in the title line and the post is going to get extra hits. Normal.

Second Place: "Sandstorm (SAND) (SSL.to): Mailbag and share buybacks (from IKN433)". Also normal is that posts with real content get more hits than the usual tripe and nonsense on this humble corner of cyberspace.
 
First Place: "A message for Brian Paes-Braga". Lots of people looking forward to reading the LIX YE MD&A, Brian.

9/8/17

Brian Paes-Braga is having funding issues

More Bri-Bri!

Sources down under inform this humble corner of cyberspace that DV Resources, the shell that's reversing into Deepgreen Resources and will list on the TSXV as Deepgreen in order to promote the merry bejeez out of a very silly underwater mining wankfest idea, has come up short on its seed round of financing. Potentially wary of having Bri-Bri as head, not even having Frankie G in the background and Tommy Humphreys as pom-pom waver is enough for them. Result? Bri-Bri has told the private Deepgreen shareholders that he and his pally pals are willing to make up the difference, but as long as they get an extra slab of dirt cheap paper to sweeten things.

Bottom line: Deepgreen is already regretting falling for the Frank Giustra spiel. Hilarity will ensue.


The Friday OT: BT; Divinity

For hurricane Irma, a little Ima.



What gets me about BT's album Ima is its age; 1995 and still sounds absolutely up there with anything new, undated in a musical genre which morphs so rapidly. This is the track from the album BT liked the most. Youtube here.

Copper today

Definitely the most interesting chart in the metals stable:



The wise tell me it's due to profit-taking. Ok I believe that, but it also means the move up was largely speculative, which begs the question on what price is truly supported by fundies rather than market hot air.

PS: Have to applaud HudBay's (HBM) timing, the C$242m financing announced at the close yesterday is a bought deal and therefore somebody else's problem.

Mexico 8.1mag

Sending best wishes to friends in Oaxaca State, as well as all the South of Mexico. So far 16 people are confirmed dead, that's almost certain to rise.




So far, those aftershocks have been in the 4.0 to 5.7 mag range, which aren't funny to experience but not too heavy. Hopefully we don't get to add a 7+ to the cluster. USGS map from here.

9/7/17

Au 1350

ding!


IKN recommends: Geology For Investors

I came across this website, Geology For Investors, by pure chance this afternoon and having spent a while checking it out, it's one that readers of this humble corner of cyberspace should know about too. Written by a team of geologists and with plenty to chew on, even professional geols and experienced mining professionals will find it worth their while. Here's part of the blurb on the "about us" page, read about the site in their own words:

What we do

At Geology For Investors we seek to demystify mineral exploration and mining projects for resource investors by:
  • Creating a knowledge base of useful articles on exploration geology and geological methods written with the non-professional in mind and,
  • Provide ongoing evaluations of data presented by real companies on current exploration and mining projects.
Our writers and contributors all have a background in geology, mineral exploration or mining. It is our collective goal to become part of your educational process, especially when it comes to geology and mineral exploration.

They also run a free weekly newsletter subscription, so sign up for that here (I've done so already, it comes on Fridays). So now you know, go there too.

Your Sandstorm (SAND) (SSL.to) thought for the day

If you had bought SAND while John Doody's subscribers were selling, on the back of Doody's dumbass sell call in late April, you'd now be 50% up.

A Flash update...

...has just been sent to subscribers on this warm and sunny Thursday morning.

Kinross (KGC), Goldcorp (GG) and Cerro Casale: Compare and contrast

Kinross (KGC) 2017 year to date chart, compared to the Gold & Silver Index (XAU):

Goldcorp (GG) 2017 year to date chart, compared to the Gold & Silver Index (XAU):

It takes a special level of idiocy to make the board of directors at Kinross look smart. David Garofalo is the man for that job.

9/6/17

The U.S. Open

That moment when your two favourite players are playing each other and you just want them both to win.

Delpo won.

A message for Brian Paes-Braga

Dear Brian,

We note with interest that the annual financials of the company at which you are (still? currently?) CEO are due out soon, in the next week or so.

With that in mind, a piece of advice, Brian; Make sure you include ALL the material disclosures, Brian. It isn't just IKN y'see Brian, there are a lot of people interested in comparing what you publish to what's been happening in Salta.

We wouldn't like you to have to re-state your annuals, Brian. Frank wouldn't like that.

Lots of love, Otto.

Sandstorm (SAND) (SSL.to): Mailbag and share buybacks (from IKN433)

This was a small section of IKN433, out last Sunday, that covered the share buyback currently being run by Sandstorm Gold (SAND) (SSL.to). Feedback from the piece (which in turn came from reader mailbag from 'JH') was interesting and as one of them said, there are thoughts here that apply to other companies, not just SAND.

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I received a mail from JH who took issue with the fact that I seem to support the share buyback policy at SAND, that’s been in place for a while but only in the last few weeks has the company got busy on it. It got a quick mention last week, but the last time I went into the issue was while looking at SAND’s 2q17 numbers in IKN427. Here’s that section of the anal ysis:

“I’m assuming that what Nolan Watson said on the ConfCall (transcript link below(1)) comes to pass and SAND gets “aggressive” on its plans for share buybacks this current quarter. It wants to buy stock now, it has the right to buy 7.598m shares from now until March and it wants to buy as many as it can now before the ETF rebalancing period kicks in at the end of September (SAND strongly suspects Van Eck and its friends will be buying chunks of SAND shares). At the moment and now the Mariana purchase is closed, SAND has 184.514m shares out. I’m guesstimating that as going down to 181m S/O by the end of this quarter, that means SAND would use its Q3 cash flow on buying its own shares, plus a bit more.”

As for JH’s opinion, here’s most of his mail to me (I’ve snipped bits and pieces out to keep it focussed, then cleaned up a couple of very minor grammar things, but there’s nothing missing on the message):

“I am a shareholder of SSL, have been for a long time, and am quite against this way of using cash considered excess to requirements by management. Can I point out a few numbers?

“There are 184 million shares. The programme is for a maximum of 7.6 million shares, or 4.1% of the outstanding. So if the whole thing were done, which it will not be as the price has gone up, earnings per share would be increased by 4%. Using the numbers you suggest, the number of shares going from 184.5 to 181 by September, the reduction is 2%, and the increase in earnings per share more or less the same.

Since 6 August, gold has gone from 1267 to 1309, so up U$42 dollars an ounce.

“The company sold 12,700 oz in Q2, so assuming no change in Q3 that would be an extra half million in, which would go straight down to gross profit, so from 4.6 to 5.1 million, so 10% increase. In the same time, the share price has gone from 3.87 to 4.75.  Up 22% which is very cheering.

“Do you really think the driver for the share price increase is the reduction of the number of shares by 2%, or the increase in the price of gold? Conversely, if the price of gold drops back to 1260 do you really think the share price will hold up?  I will bet no, but in the meanwhile Mr. Nolan and his board will have given several million of shareholders money to people who do not wish to be shareholders any more, and those who have kept their shares will be back to stage one, without having benefitted from anything, which they would have if they had received a dividend.

“…ultimately we are talking about mines, which are finite resources. The least management can do is try to return to investors the cost of buying and developing the mine before it is exhausted.

“Share buybacks are part of the "pass the parcel" culture and shareholders are not the beneficiaries. All that to say that when a chap like Nolan declares a buyback programme, I wish people like you would call him out rather that condone it.”

IKN433 back. OK JH (and others) here’s my position on the subject, nice and clear: I’m not and never will be the greatest fan of stock buyback programs and a lot of that is represented in the argument presented above by JH. I realize the company can always turn around and say “We think our share price is cheap and think that today, using cash to buy back shares is a great way of improving Return on Equity”, or they say, “There’s really not much out there that better than our own shares”, wrapping itself in the flag along the way. JH is right in several respects, it is an exercise in ‘pass the parcel’ and surely a company like SAND can find something better to do with U$12m or so (my best guess on how much they’ll spend on the buyback).

On the other hand, I’m not the biggest opponent to the policy, either. For one thing yes, it looks good and the wider market (especially the US market which SAND is trying to woo) likes the policy on an optics level. Secondly, I am clear in the fact that SAND has just made a big investment, it’s not planning on doing any more big ones for the rest of the year and if it’s collecting cash it’s okay (not great, just okay)  to generate a marginally better return for the time being.

As for the idea of declaring a dividend, yes I’d like that from SAND eventually but a dividend policy at this point could turn out to be a rod for its own back. Once in place and unless it’s specifically declared as a special dividend (which needs to be larger sized to make a difference to the share price else just become a wash), it needs to be a regular and ongoing payment. It can’t be opened in 2017 and then closed, because the optics would be awful (for more on the subject see TAHO and what’s just happened to that stock price). At this stage in SAND’s existence I don’t want to see a regular divi, I want them to grow and develop a more mature asset book before devoting a chunk of its quarterly free cash flow to us.  But that period will end and in SAND’s case, once Hot Maden is up and running I won’t just want a dividend, I’ll be demanding one.

Bottom line: It’s a bit mediocre yes, but the current buyback policy fits in with their new conservative, well run, tightly managed financial image. If it were me I’d want to explore other opportunities and ways of deploying the cash before running a buyback, but I have no massive gripe about SAND’s decision for this current quarter.


9/5/17

Mining PRs and the Ottotrans™, Part 101

 

Our occasional series moves into the new century with today's NR out of Silver Bear Resources (SBR.to), a veritable gem of a missive that rambles on and on, but in essence carried a simple message that can be translated in just nine words.

TORONTO, Sept. 05, 2017 (GLOBE NEWSWIRE) -- Silver Bear Resources Plc (“Silver Bear” or the “Company”) (TSX:SBR) takes note of the recent conversion by the Company’s major shareholders, A.B. Aterra Resources Ltd. (“Aterra”) and Inflection Management Corporation Limited (“Inflection”), of their respective outstanding convertible promissory notes (the “Notes”), which was announced on August 30, 2017 by both Aterra and Inflection (the “Major Shareholders”). The Aterra and Inflection Notes represented C$4,505,144 and C$13,515,432 principal amount respectively, in addition to their respective accrued and unpaid interest.
Prior to the conversion, Aterra held 40,468,579 common shares of Silver Bear, representing 24.8% of the Company’s then shares outstanding and Inflection held 41,176,471 common shares of Silver Bear representing 25.2% of the Company’s then shares outstanding.  After the conversion of the principal amount of the Notes and accrued and unpaid interest thereon, Silver Bear now has an aggregate of 668,047,513 common shares outstanding. Of these, Aterra holds 166,611,092 common shares, representing 24.9% of the total issued and outstanding common shares and Inflection holds 419,833,120, representing 62.8% of the total issued and outstanding common shares.
Graham Hill, President and Chief Executive Officer, commented: “We understand that the Major Shareholders’ decision has caused significant dilution. However, it should be noted that their action has significantly reduced the company's outstanding debt and resulted in a healthier balance sheet. This will improve cash flows after the Company goes into production and should allow for further financing on more attractive terms.
“The Notes were originally issued in November 2015 and in January 2016 were overwhelmingly approved by minority and disinterested shareholders at shareholder meetings. The conversion price of the Notes was set at a significant premium to the market price of Silver Bear’s common shares at the time which were trading in and around the $0.02 range.”
Mr. Hill continued: “We are exceedingly grateful to Aterra and Inflection for their support at a crucial time in the Company’s development, in addition to their continued and ongoing support. Aterra and Inflection provided financing at a time when no other investors would and have afforded the Company the opportunity to advance the project for the benefit of all of its shareholders. Their decision does not at all affect the robustness of the Mangazeisky Silver Project, which, as reported in our previous press release on the 28th of August, is well advanced in its development towards production and continues to be a very attractive project, both economically and technically.”
About Silver Bear

And this is what it means:

Our share price is screwed and we know it.

Mailbag: "An important message from Rick Rule"

Your humble scribe has just received a mail from Sprott USA with the title line "An important message from Rick Rule" and while that would normally get filed under O for Oxymoron, today's is indeed different and worthy of further dissemination. Link here, full text below:


Sprott Inc., Sprott U.S. Holdings Inc., and several Sprott employees would like to help Texas communities in need. The Houston area has given a lot to the Sprott enterprise, both in terms of investor support, and investment returns.
We would like to show support, now that the Texas community is in need. Sprott's Thoughts is read by tens of thousands of people, and we are soliciting our readers help, in finding meaningful and efficient was to show our support.
If you are aware of non-governmental organizations, with low fee structures and efficient support systems, we would like to know about them. Particular attention will be paid to libertarian oriented organizations.

Please send your suggestions to editor@sprottmedia.com
Sincerely yours,

Rick Rule, President & CEO
Sprott U.S. Holdings, Inc.

Derek and Clive Update: It would seem that K92 Mining (KNT.v)...

...may have some news for the market soon. While the rest of the market zooms...


...the Derek and Clive stock falls off its own little cliff. Nothing on the wires yet, but KNTs inside the company may well know something we don't.

By the way, scam pumper Tommy Humphreys doesn't like talking about KNT any longer, not because it's fallen off a cliff (though that is his usual M.O.), but because his best pally pal Brian Paes-Braga had a falling out with KNT's IR people Skanderberg. That was over Lithium X (LIX.v)...and that's another very but VERY interesting company right now.

UPDATE: Thanks to reader 'PB' for these links. This news report tells us that around U$4.1m worth of damage was done to Derek & Clive mine assets during the recent protest, the company expects to lose another U$2.5m in revenue while operations are suspended for repairs. Meanwhile this report has Derek & Clive going touchy-feely on us, saying the problems are over. Yeah right, until the next time. Stupid KNTs.

The Colombia Gold Symposium, 2017

As the 2016 event was a great success, as the upcoming 2017 version is set to be even better and as IKN is a sponsor this time around (seriously), here's the blurb on the Colombia Gold and Copper Symposium 2017, to be held in Medellín in November. Well worth your time, get information on when and how to attend on this link right here.

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The Colombia Gold and Copper Symposium is rapidly establishing itself as one of the must-attend events for the mining and exploration sectors in Latin America, with an increasing number of companies presenting and drawing delegates from around the world to find out more about gold and copper project opportunities in Colombia and the region.

With over 250 people forecast to attend this year, Mining Journal is a media partner and will be providing extensive coverage.

Some 15 companies will talk about their projects over the two days including presentations about development stage projects with Minesa (private) talking about the Soto Norte gold project in Santander that was formerly owned by AUX; Continental Gold (CN:TSX) presenting Buritica, Metminco (AU:MNC) talking about Miraflores and AngloGold Ashanti talking about Gramalote.

A separate session will focus on gold producers including Red Eagle Mining (TSX:R) San Ramon, Antioquia Gold (CN:AGD) Cisneros and Colombian producer Mineros SA talking about its operations in Colombia and Nicaragua.

But it is the exploration potential that is drawing considerable interest, particularly for copper.

CGS2017 features a sizeable copper session that will be led-off by Gloria Prieto of the Colombian Geological Survey (CGS). The CGS has focused a lot of attention on working up information about Colombia’s copper potential given that the government plans to focus on copper for its first auction of exploration concessions.

Proof of the copper potential in the region will be provided by Joseph Salas of Atico Mining (CN:ATY) who will talk about exploration around its El Roble mine and volcanic massive sulphide deposit in Choco, Mario Stifano of Cordoba Minerals (CN:CDB) and its San Matias project that has potential for being district-scale, and just south of Colombia’s border with Ecuador, Jason Ward of Solgold (CN:SOLG) will present about the potential of Cascabel that has elicited such interest amongst majors.Jeff Toohey of MineraCobre(private) a company formed by the founders of Red Eagle, will talk about the potential of its extensive land package in the Murindo copper belt.

For those more interested in gold, Ignacio Salazar of Orosur (CN:OMI) will provide an update about the Anza project in Antioquia where it has recently restarted drilling; Gran Colombia Gold (CN:GCM) Will present about the high-grade mineralisation it is finding at its Marmato project and Tim Coughlin of Royal Road Minerals (CN:RYR) will talk about exploration in Nariño, one of Colombia’s most promising areas now that the civil conflict with the FARC is ending. Earlier stage exploration opportunities include Angel Gold (CN:ANG).

Colombia is not without its operational and regulatory issues and CGS2017 features presentations by Silvana Habib, president of the National Mining Agency about the agency’s efforts to make administration of the sector more efficient, and Santiago Angel of the Colombian Mining Association about the main areas of work on the legislative7administrative agenda. The regulatory session will also include a roundtable discussion by leading natural resource lawyers of strategies for companies to adopt to deal with particularly aspects of bureaucracy.

Regulatory issues are but one class of challenges that mining faces in the region and obtaining the social license to operate often eclipses all others. CGS2017 will look at strategies that can help companies turn potential threats into opportunities, with Don Clarke of Birsa International talking about optimizing community relations. Water is a critical issue for many communities in the Andean region and fears for their water sources often sees communities want to put the brakes on mining developments. Water issues and impacts are much misunderstood and mining companies generally do a poor job of communicating on water issues, and so Patrick Williamson of INTERA will talk about responsible water management and communication for mining. The environment can be an equally emotive and sensitive issues, and equally misunderstood. Brigitte Baptiste of the Humboldt Institute is one of the few voices of reason amidst the hysteria that environmental issues can arouse and will speak about under what conditions mining is compatible with the environment.  With a peace deal recently concluded, Sergio Guzman of Control Risks will talk through some of the issues and opportunities this represents for natural resource companies.

Mining and exploration occur within an investment context, and CGS2017 includes the participation of several experts to share their thoughts, including a keynote presentation by Rick Rule of Sprott Asset Management, Canadian bank CIBC and Peru’s Kallpa Securities amongst others.

The future of mining requires innovation for competitiveness and efficiency, a session that will be led by Javier Quintana of EY, and followed by Roger Pettman who will talk about the Cycladex process for processing gold without or cyanide and Thomas Hentschel of the Better Gold Initiative about ways to work with small miners.

A key element of CGS2017 is the field trip programme, and this year sees visits to San Matias (Cordoba Minerals), San Ramon (Red Eagle Mining), El Roble (Atico Mining), Buritica (Continental Gold), Anza (Orosur) and Cisneros (Antioquia Gold).

Novo Resources (NVO.v), Kirkland Lake (KL.to) and the Rabbit Warren prospect in 1980


Kirkland Lake also being the counterparty to the Newmont (NEM) news on Friday, that's news.

However, the story of the Rabbit Warren prospect, that's not news. That's 37 years old.

In 1980, Sydney 'Snowie' Barnes, and Peter Thompson, uncovered about A$130 000 worth of gold here in a few days. The site is 9 kilometres north-east of Leonora, and less than 50 metres north of the Leonora-Nambi Road. It appears the endeavours about to be discussed produced a small pit, now largely filled in.
One oral source states, Barnes and Thompson, had dug a 15 foot pit, and set explosive charges into the wall, uncovering a thin plate of gold 3 feet across at a depth of 7 feet. A subsequent 8.5 tonne parcel produced 232 ounces to the tonne, or 7430 grams of gold.

The discovery led to a rash of exploration, during a period when certain local entrepreneurs had more money than sense. The prospectors got paid just over half a million for the lease by Peter Englebrecht, who then made some unwise comments about the deposit in the hope of generating interest, which had to be retracted on the insistence of the Australian Stock Exchange.

After much wheeling and dealing, a joint venture was formed between Cliffminex headed by Englebrecht, Endeavour Resources, Amber Gold Ltd, and Bond Corporation headed by Alan Bond, infamous in Western Australia for some less than ethical business dealings in the 1980's.

Seven years later Endeavour and Amber are still persisting at the site, but announce the deposit is only worth 17.7 g/t (which is good), but a 8.5 tonnes of ore yields 48 ounces worth A$3000 (which is bad, considering the half million purchase price). Essentially this a classic case of companies falling over themselves to buy a bonanza, which turns out to be a small but rich find, which does not extend to any depth or width beyond the original discovery.
Continues here.

Let us consider how Tommy Humphreys operates in his dirty world

That CEO.ca's Tommy Humphreys is a two-faced slimeball who would sell his grandmother's lunch hasn't been lost on this humble corner of cyberspace for many moons. That the wonderful world of Vancouver capital markets is waking up to the fact is a new and welcome development. 

Case in point: Sources that must remain nameless working in a brokerage that must remain nameless (but Hey! Would you like to guess?), reliably inform your humble scribe that during the recent merger of GRP Mineral (owners of the Pan FUBAR) and Fiore Gold (one of Frank Giustra's plethora of vehicles), Tommy Humphreys tried to con the parties out of over a million dollars. What happened was that Tommy got wind that GRP was up for sale from the broker in charge of the account. Once he did he ran full pelt to his paymaster, told Frank that he could get GRP for Fiore and, because he was the bearer of the news (about 15 minutes before the real person in charge) claimed a finder's fee that Tommy insisted was in the seven figure range. And he nearly got away with it too, until the moment the compliance people read the fine print, saw the outrageous and totally illegitimate claim and threatened Giustra with the breaking of the whole shebang if he refused to bring his overweight poodle to heel. Frank hadn't noticed the scam Tommy was trying to pull before the compliance guy brought it up, so it is to Giustra's credit (such words are impressive from this blog, but they have to be written) that Giustra sided with the bitter complaints from GRP's shareholders, agreed to annul Tommy's millionaire claim and brought the finder's fee down to around $100,000 so that the deal could go through.

That's the two-faced weasel Humphreys for you, capable of trying to steal somebody else's fee after being told something in complete confidence by a person who thought Tommy was his "friend". Vancouver's movers and shakers should think twice before trusting this snake in the grass with their gossip.

Sociopaths have no friends, they have people they use and then discard. Right, Frank?

9/4/17

Happy Labor Day...

...in the USA, happy Labour Day Canada.


Take it easy today, do some light reading or visit the great outdoors with friends or something.

9/3/17

Cockroaches don't like sunlight, Allan Barry edition

Back in mid-May, the liar and thief CEO of Alset, Allan Barry, wrote some choice words about your author:


As noted at the time:
Silly boy, Allan. For one thing you can't be taken seriously when using phrases like "pro tip" because you are not a pro. You're not a geologist, not an engineer, not a lawyer, not anyone with a reasonable professional background or qualification to run a serious mining company. Being a professional lip-flapper only qualifies you for running scam juniors. For another, you don't even understand what the word "troll" means. For another, "Oh noooo! I'm a CEO and somebody said nasty things about me!" Comes with the territory, little boy. Grow up.

But the real one is at the end, that utter stupidity about drilling, because if you did have half a brain about explorecos you'd know that drilling selectively and then cherrypicking unrealistic results in order to pump a stock is exactly what scams like yours do. All the time. Run along now, get back to your everso everso busy CEO's desk.

So let's see how those "right things" getting done at ION.v have added value to the stock price:



Oh look! After a drill program that took a ridiculous amount of time to get published and in the end turned out to be the liquid version of dusters, the stock is now 45% down from the date of thin-skinned Allan's hissyfit.

The IKN Weekly, out now


Barcelona play it best


IKN433 has just been sent to subscribers. Ringing the changes.