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And that's no joke, this one really is farewell as this Ottawa Citizen report explains. It starts like this:
It’s the storybook ending no one wanted written.They may hail from Kingston, where on Saturday the band will close the final chapter of a tale carved out of Canadiana, but The Tragically Hip are every Canadian’s hometown band.And so, emotions were raw at Canadian Tire Centre on Thursday as fans congregated one last time to bid farewell to their favourite band in a way befitting The Hip — by rocking out to the bitter end and singing along to every last lyric, or swaying along with a shoulder to cry on.
Full story here.
"Randgold's exemplary health and safety record, which continues to improve over time, secures the productivity of our very important asset, the workforce. And it's genuinely meaningful outreach initiatives, such as Mark's most recent charity motorbike safari from east to west of equatorial Africa, reinforces the hard-earned social licence which is so vital to the company's success and our sustainability."
A nice scoopette out of Reuters last night. Link here, first lines here:
Canada's Kinross Gold Corp is looking to retreat from Chile and has put its main assets in that country up for sale, according to people familiar with the process.
The move comes at a time Toronto-based Kinross has suspended operations at Maricunga, its major mine in Chile, because of environmental concerns raised by the Chilean regulator. continues here
The IKN Weekly recommends Atico Mining (ATY.v) as a buy and sets a six (not 12) month share price target of C$0.70 on the stock, representing a 59% upside from this weekend’s CAD$0.44. The price target is predicated on the main catalyst, which is that ATY will indeed be able to cover its debt repayment schedule during 2016 and once it has got to the end of the year, the market will re-rate the stock on its stronger fundamentals and proven capacity to make profits even at the current modest prices levels for copper. I’m going for a target based on a reasonable 1.2X price/book ratio once people see the balance sheet clean up, which may turn out to be a staging post for greater things. An eventual stock price in the mid-80s wouldn’t surprise me in the least.
What ATY offers today is a trading advantage, it’s clear to me after running the numbers that ATY isn’t in the type of uncertain financial position that most people assume. It’s going to file a weak looking set of 2q16 financials with sales and a bottom line loss that those who aren’t looking may consider a reason to sell or avoid, but the key to understanding this stock isn’t in the P+L, it’s the balance sheet (“it’s the economy, stupid”). If copper prices improve then so does this stock, that’s a given but even if they don’t, ATY‘s going to be just fine and that makes for a very low downside risk attached to an entry either today or when the 2q16 financials come out in mid-August. Low risk balanced against high potential reward is my kind of equation. I will buy some ATY.v in the week ahead and it will become part of the ‘Stocks to Follow’ list as from next weekend.
UPDATE: Here's a free offer that comes after receiving a suggestion from a reader. If anyone would like a free copy of the full 12 page report on Atico Mining (ATY.v) from IKN376, just send a mail into the usual address...
...and put "Atico Report Yes Please" in your title line. I'll send you over a PDF copy of the whole analysis by return (and unlike the scamsters at Stansberry Research or Casey Research you won't get a whole barrage of marketing mails from me afterwards, it'll just be that one and that's a promise).
"... At first sight San Diego’s silver resource has some eye-popping numbers, something like 180m oz in indicated and inferred categories. But look closer and you’ll see it’s a joke, a bad joke at that, based on $28/oz silver and 2oz to 3oz per tonne inferred category silver rock that’s very deep (500m+ down) and would be mined via block caving methods. The stock was mentioned by A. Mailer as “optionality on silver” but it’s not going to happen folks, you might get “optionality on complete idiots” but that’s about it."
...you can read it by clicking on this link right here. Top story an interview with Paul Gait, "the biggest brain in mining". And look what happens if you click on the aeroplane.
It's like owning a restaurant and hiring Hannibal Lecter as head chef.
You think he's going to get more director jobs soon?
"At any given time there exists an inventory of undiscovered embezzlement in — or more precisely not in — the country’s businesses and banks. This inventory — it should perhaps be called the bezzle — amounts at any moment to many millions of dollars. It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks."
...massive (and failed) copper target in Chile (JDL also brings in a marginal second string copper thing in Ecuador, too)
...tiny toll mill in Peru running at a loss
...early stage gold thing in Canada that will go nowhere recent used by Katusa and Rick Rule as a pump job.
Why they should stick these three together, aside from the fact they share the same office space and might get sponsorship from Sandstorm (SAND) just down the corridor, is beyond me. Apart from the obvious potential of pumping another piece of crap to retail saps. Marcel de Groot, David De Witt and all those Pathway guys trying to save something from this collective mess, I suppose.
I don't normally excerpt the weekend's edition of The IKN Weekly twice, but in this case I'll make an exception as this piece has been requested on the open blog by A. Mailer for their own reasons (that are fair enough). So here you go.
Argentina: Beware inflation (again)
The message about Argentina here at The IKN Weekly has been consistent: Yes there is new interest about the country since Macri took over, but fools rush in where angels fear to tread and the reforms he wants to push through have no guarantee of success.
We’ve also been pointing at the key datapoint you need to follow for almost a year, long before it got popular in the trade press. Macri needs to lower inflation and he and his team have always set “the second half of 2016” as their target for this. The reason is simple enough: Under Cristina Fernández de Kirchner inflation was always high, but large percentage pay increases saw the purchasing power of the average Argentine keep pace with prices. This isn’t a sustainable situation in the long-term and leads to real hyperinflation problems (see Venezuela), but it can keep things stable in the medium-term and nearly always longer than orthodox economists claim. But under Macri salary rises have been largely crimped, so inflation needs to come down quickly because if not, Argentina suddenly becomes poor in Peso terms (which is what counts when you’re in the supermarket).
That’s the VERY basic outline, now for the rub because doubts are now arising about this fight against inflation, here are a couple of links for your consideration.
Here in this Reuters report (14) last week, the local bigwig for JP Morgan, Facundo Gómez Minujin, said the following (translated):
“For this year we see inflation at 42% and then for next year 21%. And it’s difficult to change that trend. It’s difficult to lower inflation by much, especially next year when there are elections”.
By that, he’s referring to the round of Congressional mid-term elections when a lot of the seats in the national parliament are up for grabs. This will be the first big test of the results of the Macri government policies. The assumption is that the hardline macro/fiscal policy will have to be softened for a period and more populist policies offered to give the Macri government a chance of doing well. I needn’t tell this audience of the potential dangers being baked into the pie. As a sidebar, it’s also easy to argue that “21% for 2017” is rather optimistic as well, rose-tinted specs from someone who wants Macri to do well.
Meanwhile this article in The Economist (15) last week suggested that the Macri honeymoon period is coming to an end and also focussed on the price inflation/salary see-saw as key. Here’s an excerpt from the piece, plus one of its visuals:
Mr Macri has reservoirs of political strength and popular goodwill to draw on. Though Argentines are angry, most still blame the Kirchners for their hardship. Allegations of corruption have enfeebled Ms Fernández as a political force. A new generation of politicians is competing to become the next presidential candidate of her Peronist party, weakening its ability to provide opposition to the government.
But Mr Macri’s honeymoon is coming to an end (see chart). With legislative elections due in October 2017, “the government needs to show some economic results in the first quarter of next year,” argues Juan Cruz Díaz of Cefeidas Group, an advisory firm. The IMF thinks the economy will rebound in 2017; it forecasts growth of 2.8%.
My only argument with the above is this line, “Though Argentines are angry, most still blame the Kirchners for their hardship”, because “most” is way too strong and “some” is a more accurate image (please recall the decade-long hatred The Economist showed for the Kirchnerist governments, they’re anything but unbiased). It’s also notable how political commentators (largely sympathetic to the Macri cause) are starting to shift the time window to “the first quarter of 2017”, even though Macri ran and won his election of “second half of 2016” as the critical period when the sacrifices he demanded of Argentines would start to bear fruits. Add in this CEOP poll that shows 7 out of10 Argentines unhappy with their personal economy and opposition popularity at 47% versus Macri government popularity down to 33% (15a) and the scene is set for the big fight to come. Argentina the political beast has always been sensitive to its economic well-being, so if Macri does turn things around in the next two quarters we may be witnessing the low point of his acceptance ratings. If he doesn’t I can guarantee this audience, as day follows night, they’re going to get a lot worse.
The bottom line: The song remains the same, be very careful of Argentina exposure, ladies and gentlemen. Yes there are opportunities there, in our focus sector of mining and others, but the risks are much higher than the promoters of the country and its concession land would have you believe. Take for example one scenario in which we see large-scale protests building in the first and second quarters of 2017, then the CFK end of the political spectrum doing well in the 2017 mid-terms and wresting control (total or partial) away from Macri in congress. Attitudes towards the country would quickly return to “Ah well, they’ve been FUBAR forever anyway, at least we serious people tried...” and the FDI that Macri needs to complete his economic turnaround won’t happen and that statement very much includes those mining projects we all like to talk about.
As I put it to one person last week, a historic window of opportunity tends to come around in Argentina mining from cycle to cycle and that window is right now...for people wanting to sell. Be it land, projects or concessions, you get interest from opportunistic buyers and that grows into a fully-fledged seller’s market. People owning mining assets in Argentina have the chance to book safe profits on previous investments right here right now in 2016. But the issue is 2017, because if they hold on to their land assets for a while longer those profits might be even higher next year, Macri starts turning Argentina around meaningfully and the buying interest becomes a feeding frenzy. But if things go wrong next year, the window will suddenly slam shut as it’s done so many times before. Risk/reward is favourable today, but could go badly out of balance in the near future.
You heard it first here, of course. IKN had this $4m placement bailout news in your face in July.
Though I did get one thing wrong in that July 28th post, Vertex does indeed have liens on the mill.
...an eye kept on the gold/silver ratio:
The electronic I Ching calculator was badly made. It had probably been manufactured in whichever of the South-East Asian countries was busy tooling up to do to South Korea what South Korea was busy doing to Japan. Glue technology had obviously not progressed in that country to the point where things could be successfully held together with it. Already the back had half fallen off and needed to be stuck back on with Sellotape.
It was much like an ordinary pocket calculator, except that the LCD screen was a little larger than usual, in order to accommodate the abridged judgments of King Wen on each of the sixty-four hexagrams, and also the commentaries of his son, the Duke of Chou, on each of the lines of the hexagram. These were unusual texts to see marching across the display of a pocket calculator, particularly as they had been translated from the Chinese via the Japanese and seemed to have enjoyed many adventures on the way.
The device also functioned as an ordinary calculator, but only to a limited degree. It could handle any calculation which returned an answer of anything up to "4".'
'"1 + 1" it could manage ("2"), and "1 + 2" ("3") and "2 + 2" ("4") or "tan 74" ("3.4874145"), but anything above "4" it represented merely as "A Suffusion of Yellow". Dirk was not certain if this was a programming error or an insight beyond his ability to fathom, but he was crazy about it anyway, enough to hand over £20 of ready cash for the thing.
Here's one of the reports in the 'Regional Politics' section of The IKN Weekly, out yesterday evening.
Guatemala: Mining royalty payments set to increaseLast week in the politics section we noted the slight mystery of a new Vice-minister of Mining in Guatemala. This week the reasons behind the change may have become clear, as the country’s President Jimmy Morales announced (10) a whole range of tax increase proposals that include a bump of duty on fuel from Thee Quetzals (GTQ) to Five Quetzals (1 Quetzal = U$0.133) per US gallon, additions to VAT (sales tax) and corporate income tax back up to 29% (from 25%).All those will affect mining costs in Guatemala indirectly, but the one that really matters is the Jimmy Morales proposal to raise royalties on extractive industries (i.e. O&G and mining) from 1% to 10%. At the moment, several mining companies in Guatemala are paying more than the legally stipulated 1%, with “voluntary payments” topping up royalties to between 5% and 5.5% (the highest profile cases are Goldcorp at Marlin and Tahoe Resources at Escobal). But the royalty initiative is only one of a total of 47 changes proposed by parliamentarians the current Mining Law, there will be a lot to talk about next week including one of the other main events a clause to give official prior consultancy rights to locals directly affected by any mining project. Theoretically this law already exists as part of the OIT169 international rule book to which Guatemala is a signee, but the country now wants prior consultancy in its own organic law.The law projects will be debated and voted on in parliament next week and once passed, they’re most likely to come into effect on January 1st 2017 (the usual date in Guatemala for fiscal changes, but that’s only an assumption at this stage and there’s nothing to stop them from effecting them immediately). The package is likely to pass largely to the government’s liking too, with influential people such as the US Ambassador to Guatemala making off-record noises of approval for the reforms and the anti-corruption body CICIG approving (and set to receive more State funding as a result). We should also note that the 10% mining royalty isn’t the most extreme proposal out there, as the centre-left TODOS party, an umbrella political coalition made up of several smaller groups typically connected with indigenous rights and rural communities that controls just 18 of the 158 parliament seats in Congress, counter-proposed on Friday a law that raised royalties on mining operations to 25% (11). The 25% level is unlikely to pass however, it has the look of the radical outlier that lets the government proposed 10% pass more easily.
At the Compañía Guatemalteca de Níquel (CGN) nickel mine, owned by the Russian capitals Solway Group. Initial Spanish language report here.
- From now until November, the race between Clinton and Trump is going to get louder by the week.
- You can get any amount of information on the election from millions of other places.
- Even though the US Presidential election is arguably the most important democratic vote in the world and its outcome indirectly affects most of the planet, your author is not a citizen of the United States of America and as such has no valid, direct opinion.
- I'm stupid enough about most of the things on which I rant, there's no need to add an extra layer of ignorance to the blog.
- The whole charade is beginning to bore me and although I do care to a certain extent about its outcome, I'm forced to admit that I really don't care as much as I should.
*the small minority of people who don't visit IKN using a cellphone