The Daily IKN email digest, get all daily posts sent to you next day (& no ads)
Straight-shot, no-frills, Friday-feelgood, crank-it-up, Rock-And-Roll-Music.
...voting closed yesterday and here are the results:
- On the rare occasions IKN runs a poll we get about 200 voters. This time 451, which is a lot.
- Voting was split so I don't think we can draw any scientific conclusions about this one. However we need to bow to Vox Populi a little and recognize that the "he's an alcoholic" option came top.
- The jokey get-out option polled lowest. From that I'd infer that yes, BTO does have a problem on its hands here.
In fact Boris, you're already closer than you think:
"Within a light-hearted presentation on NI 43-101 reports at the Prospectors & Developers Association of Canada’s annual convention came a hard message: the industry is publishing speculative project studies that are misleading investors."
PVG NR today here, which starts like this:
VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 11, 2016) - Pretium Resources Inc. (TSX:PVG)(NYSE:PVG) ("Pretivm" or the "Company") is pleased to announce that Orion Co-Investments II (ED) Limited ("Orion") will subscribe for 752,906 Pretivm common shares (the "Common Shares") at a price of US$4.58 per Common Share in a non-brokered private placement (the "Private Placement").
It's called 'entitlement', little person. Get a sense of it yet?
For secret reasons.
Japan pulls the interest rates down, Yen pops. Europe pulls the interest rates down, Euro pops. Beginning to see a trend?
The three questions to take away from PDAC 2016 so far
1.) Who trims Brent Cooks beard?
2.) Who chooses Rick Rules ties?
3.) Do they smile a little more smiley when they are interviewed by Daniela Cambone?
btw: the world is still standing here in Europe although the ECB announced some crazy shit today. I mean everybody is screaming about zero % key interest rate but what is far more interesting in my eyes is that the ECB now buys corporate bonds with Investment grade Rating as well to be able to pump 80 Billion euros in the system. As this is a quite small market with around 500 Billion or so the ECB could end up with a fourth of the corporate Investment grade bond market. Which then would destroy any margins for Banks who would be willing to give loans to companies... Thank good I am not responsible for investing the reserve funds of an insurance company nor the own book of a bank.
Police in Colombia arrested Eduardo Otoya who is suspected of being one of the organizers behind criminal mining in Antioquia, including the invasion by thousands of illegal miners at the Buritica project of Continental Gold. Upon hearing of his arrest, President Juan Manuel Santos Tweeted “congratulations to [the police] for the decisive blow against criminal mining in Antioquia. Capturing Eduardo Otoya, alias ‘The Doctor’”.
The Tahoe Resources (TAHO) (THO.to) year-end financials were reported this evening and Kven MacArthur continues to refuse to acknowledge the death of his worker at the Escobal mine in Guatemala. The death of a worker while on duty at Escobal in a workplace accident during the fourth quarter in November 2015 is not mentioned in the Year End disclosure.
Pretty disgusting, Kev. You should be ashamed of yourself. I know some of your staff are.
It's "over 22,000" this year according to the official PDAC NR just out. That's down from 23,578 last year and marks the fourth year running of declining attendances.
The verdict has just been handed down by Peru's election people.
Particularly controversial is the barring of Guzmán, more on electoral technicalities and the use of legalities by his opponents, he was until today a clear second place in voter intention polls and set to contest the run-off with Keiko Fujimori.
Ten thousand people maybe more
People talking without speaking
People hearing without listening
"...something crossed my mind last night when looking at the online poll re Clive. Have you given any consideration as to what the poll might reveal about your readership volumes / subscription volumes - and if that matters?"
1) CS.to now says its price fixed 90% of its 4q15 copper sales at U$2.13/lb. I'd dearly like to know how it managed to do that when in its 4q15 audited financials it claimed an adjusted 4q15 price of U$2.26/lb. I mean, I know that copper sold at U$2.30/lb or so in the first weeks of 4q15, but a 13c/lb difference on just 10% of non-priced copper? That sounds weird. Sure would like to see the details on that little deal.2) Let's be clear about the quality of assets at Capstone too, because there's a crystal clear message here: CS.to has been shopping them around but clearly no takers, nobody wants to buy Santo Domingo, nobody wants to buy Cozamin, nobody wants to buy Minto. And whole we're here, CS must have been offered a particularly shitty silver stream deal from April 2017 onward to have refused.3) Darren "drop the" Pylot tells us today that "...our first priority is to reduce our debt risk...". This is the very same Darren Pylot that stuffed the company full of the very debt now strangling it financially. No sign of a change at the top, though. Ask yourself why.
Here are the tickers of companies they fielded on the viewer's questions sections (rather than their boring past picks or new top picks, watch the vid yourself for those), with IKN translating the duos' sometime diplomatic answers:
- GSV.v: Not bad, the corporate buying (OGC and GG) is interesting, next set of drills (to South) will be critical.
- ER.to: Run away.
- PVG: Leery.
- NXE.v: Great discovery, but will need plenty of drilling out. No value in owning now.
- THO.to: They like it, but then again they don't understand the off-scale Guatemala risk so don't blame them too much.
- MND.to: Likeable
- NMI.to: Joe likes and is buying. As he's the boss of the duo that's good enough for me.
- CLZ.v: Brent likes and owns, new discovery.
- EVR.to: Brent likes/owns it. Backing the jockey (the new geol Alain Charest)
- EMX.v: Fairly positive noises.
- TGM.v: Neutral, but now it's being bought out no biggie.
- EDV.to: Buying TGM, neutral noises.
- VIT.v: They tried hard to say something diplo and almost succeeded. Run away.
- BSX.to: If they get the permit they'll like it more. Duh.
- RMX.v: Run away.
- Market views on reflation, realignment and re-levering have driven a premature surge in commodity prices that we believe is not sustainable. Last year commodity prices were driven lower by deflation, divergence and deleveraging which were reinforcing through a negative feedback loop. Deflationary pressures from excess commodity supply reinforced divergence in US growth and a stronger US dollar which in turn exacerbated EM funding costs and the need for EMs to de-lever though lower investment and hence commodity demand. While we believe that these dynamics likely ran their course last year resulting in signs of rebalancing, the force of their reversal has created a new trend in market positioning that could run further. However, the longer they run, the more destabilizing they become to the nascent rebalancing they are trying to price.
- The reversal started last month with ‘green shoots’ of rebalancing. Deflation turned into reflation with evidence of long-awaited oil supply curtailments in both the US and other non-OPEC producers which supported energy prices. Divergence lost out to realignment with increased fears about US economic growth. This together with strength of EU manufacturing data over the same period and a pickup in China credit data in January led the market to question the idea that the US is fundamentally outperforming its peers. These worries are reflected in the recent weakness of the US dollar and strength in the gold price. And recent policy announcements in China combined with the pickup in Chinese credit raised the prospects of leverage-driven investment demand as a focus on de-leveraging faded.
- While these dynamics could run further, they simply are not sustainable in the current environment, in our view. Energy needs lower prices to maintain financial stress to finish the rebalancing process; otherwise, an oil price rally will prove self-defeating as it did last spring. The most recent macro data coming out of the US reinforces US growth divergence. Increases in core CPI, strong employment growth and a rebound in manufacturing, pushed the US MAP score – a metric for how much macro data surprises – up significantly to nearly positive for the first time in 2016. Most importantly, our US economics team continues to expect solid consumer spending growth of 2.5% to 3.0% in 2016. Finally, credit growth in China remains too high relative to GDP growth underscoring the need for de-leveraging.
- While we still believe oil will likely rebalance this year and create a deficit market by year end, ‘green shoots’ of a deficit alone are not sufficient for a new sustainable bull market. Only a real physical deficit can create a sustainable rally which is still months away should the behavioral shifts created by the low prices in January and February remain in place. Commodity markets are physical spot markets, not anticipatory financial markets that are driven by expectations. This is why an early rally in oil prices would prove self-defeating before a real deficit materializes as it would reverse the supply curtailments that are expected to rebalance the market in 2H16.
- The ‘green shoots’ for oil include US E&P’s guiding production lower (c.600 kb/d), supply disruptions in Iraq and Nigeria (c.750 kb/d), non-OPEC ex-US producers reporting significant potential reductions (c.400 kb/d) and strong US oil demand. While the Iraqi and Nigerian disruptions will likely prove temporary, they do help in the rebalancing process and have likely helped to tighten Brent timespreads. However, the other green shoots are both price sensitive and are still more relevant for expectations of rebalancing, than the rebalancing seen to date. The current oil market is still in a large surplus as witnessed by last week’s large US inventory build and the large global stock overhang. To keep the financial pressure on producers, we maintain our near-term view of a trendless oil market with substantial volatility between $40/bbl (under which creates financial stress) and $20/bbl (under which creates operational stress).
- We also maintain our bearish view on gold that has rallied along with the other commodities. Our short gold recommendation (which we opened with a 17% upside, in line with our $1000/toz 12-m forecast) is currently at a c.5% loss, with a stop loss at 7%. This gold rally was driven by a lack of conviction in divergence in US growth as a weak US dollar has been highly correlated with a higher gold price. We believe this realignment view of weak global growth is not supported by the US data, which will likely reinforce higher US yields, a stronger US dollar and the return of divergence, particularly should strong US consumer growth dissolve market fears regarding US growth. This in turn will likely put downward pressure on gold prices towards our near-term target of $1100/toz (current price is $1265/toz).
- Despite a continued deterioration in Chinese manufacturing data in the face of recent easing measures, copper and metal prices have also surged to fresh highs. Again we believe these rallies are also not supported by the broader financial environment in China. China is credit constrained and likely to use limited stimulus to promote consumption over investment through fiscal policy. The only real avenue for metals demand growth is through an improvement in property sales and prices that will eventually feed into higher construction activity, which the current data does not support and would be a difficult policy outcome to achieve by design.
- The Chinese government is publicly targeting a reduction in the inventory of residential structures to create higher housing prices and promote associated positive wealth effects, such as improved consumer confidence. As a result, the government is restricting new starts in cities with high inventory levels while stimulating sales through credit availability. As a result, China property new starts and completions are likely to remain weak in 2016 despite the recent policy measures. Accordingly, we are maintaining our near-term copper price target of $4500/mt (current price is $5000/mt).
- Iron ore rallied the most in the past week, breaching $60/t today. We believe this rally too will likely prove temporary and are maintaining our end-of-year target of $35/t . The rally in iron ore prices was the result of a surge in steel prices needed to widen mill margins in order to incentivize operators to pay the restart costs and rebuild operating inventories of raw materials as China enters this year’s peak construction season. However, the physical shortfall in steel supply can be filled easily and the subsequent deterioration in steel margins is likely to put iron ore prices under renewed pressure. In other words, the market fundamentals are unchanged and the current rally is only a brief lull before production cuts at high-cost mines are required to make room for low-cost producers.
- While deflation, divergence and de-leveraging are all likely to reassert themselves and reapply modest downward pressure on commodity prices in the near-term, we do believe that the negative feedback loop that they create has mostly played out in this cycle from a bearish price trend perspective, particularly in oil which is why we maintain a bullish end-of-year view in energy. However, it is important to remember that in the end this was a supply-driven bear market and will not trade like a demand-driven market. In a demand-driven market, once demand gets ahead of supply following an economic recovery, supply struggles to catch up as it was also likely slowed by the lower prices. In the current supply-driven market, demand hasn’t really changed, it takes lower prices to push and keep supply below demand to create a deficit. As a result, higher prices are much harder to sustain in a supply-driven market since supply is primed to return with higher prices. But this lesson will likely only be learned through false starts.
Hole VU-565 intersected 206.23 grams of gold per tonne uncut over 17.00 meters, including 6,980 grams of gold per tonne uncut over 0.50 meters
...at the top of the shop. You're supposed to be impressed of course, but when you stick it through the handy-dandy drill hole calculator you get this:
ZUG, Switzerland , March 8, 2016 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announces that at 06.00 local time on 8 March 2016 , a geotechnical failure was experienced on the north wall of the KOV open pit mine at Katanga's operation in the DRC. Seven persons who were believed to have been working in the vicinity of the failure are currently unaccounted for. In addition, an unknown amount of damage to the dewatering infrastructure in the pit is expected to have occurred. KCC has mobilized its search and rescue team and the process of locating the unaccounted for personnel is in progress, as well as an assessment of the damage and recoverability of the affected infrastructure. Mine operations are currently suspended. The families of the missing workers are in the process of being contacted and will be offered full support. All relevant authorities have been informed and KCC is working closely with them. Further updates will be issued as appropriate.
Jeesh, what a whuss. Here's the op-ed he's just published, "The Risk I Will Not Take"
That leaves us with mediocrity to choose from on either side. Again.
The best buffet in town, gratis. Buen provecho, varones blancos gordos y viejos.
UPDATE: Reader Claudio says:
"Biggest surprise of the PDAC 2016 so far: Rick Rule did not make IVN his Top Pick on BNN.
Second: Ecuador's buffet."
Looking goooooood there, Chuck!
See you down The Pilot, Chuck!
PS: Oh nearly forgot! See you down there too, Daryl!
UPDATE: A reader writes:
"I drop in to your site from time to time and was greeted with your take (via another site reader) on CKG. I am disappointed on the IRR but had thought that at $1600.US+ Au the project was possible. I always trusted Randy Reifel and thought that he did a good job and was honest. Kept cash in the bank and a low float. Anyway I sold 1/3 of my position because I value your comments."
IKN back. My question is why did he only sell a third?
- We wantz to be teh mining country yes.
- We like miners.
- We have teh good community relationz.
- We likes teh business peoples.
Talk of a "curse" returned in late August 2013 when Ramsey scored twice in Arsenal's 2–0 victory in the Champions League against Fenerbahçe; interviewer Sir David Frost and Irish poet Seamus Heaney died three and four days later, respectively. Other celebrities whose deaths have been linked to the Ramsey effect are actor Paul Walker, actor/comedian Robin Williams, and actor/filmmaker Richard Attenborough. David Bowie died the day after Ramsey scored in Arsenal's 3–1 league win over Sunderland, and actor Alan Rickman died on 14 January 2016; Ramsey had scored in a 3–3 draw with Liverpool the night before. On March 6th, 2016 Ramsey scored against Tottenham Hotspurs, and the following day former First Lady, Nancy Reagan passed away.