IKN

The Friday OT: Pink Floyd; Shine on you crazy diamond (live)

2012-01-27T15:10:00.000-05:00

Nop, it's not the 29 minutes of the full suite. It is, however, a cracking, pristine ten minute pearl of a live set from the 1990 Knebworth festival.

The first five minutes are the iconic sounds. Then Gilmour (still with hair) does a good job with the lyrics. Then the veritable cherry on the cake as Candy Dulfer (remember 'Lily was here' with Dave Stewart?) walks on and nails the sax ending. Magical stuff, start to finish.

Rock In Peace, Richard and Sid

IKN Recommends: Memory In Latin America

2012-01-27T11:26:00.000-05:00

The blog Memory in Latin America covers social and political issues, with a lot of the matters that have arisen from the repressions and political wars of the 1970-1990 period. Blogster Lilly Langtry does a particualrly good job of keeping up with the events in Argentina and Peru, with the recent coverage of Peru's Shining Path terrorists and their move to try and establish a formal political platform in Peru getting great coverage.

For those of you interested in what makes LatAm tick and want sharp analysis in the English language, Memory in Latin America is a must-read. Go see.

Scotia on Minefinders (MFN) (MFL.to) and the Pan American Silver (PAA.to) (PAAS) deal

2012-01-27T11:14:00.000-05:00

The short story is that Trevor Turnbull of Scotia likes the deal and has reaffirmed his $20 target price on MFN. But you're better off reading exactly what he wrote, so here's the link to his analysis note out yesterday lunchtime.

Meanwhile it's nice to see the stock back over $14, basically thanks to the rally in PAAS.

disclosure: long MFN

Heads of State Popularity in The Americas

2012-01-27T10:12:00.001-05:00

Your humble scribe has written a guest post over at Tuerto all about the current situation in the popularity stakes of all Heads of State in The Americas, based on the numbers from reliable pollster Mitofsky. It's over at Tuerto because I'd really like you to get used to going over there, and that's because the site is going to be a massive success (plans are afoot) so you may as well get used to the idea and be able to say to your grandchildren one day that you were there when Tuerto was just days old.

Anyway, go check out who's most loved, who gets a pass, who people get grumpy about and who are the continent's biggest Presidential failures, with charts and tables and all, over at Tuerto right here. Go on, click it.

PS: Also featuring Rafael Correa and Justin Bieber, of course.

A fascinating interview

2012-01-27T08:54:00.001-05:00

Reader M sends over this link and here below is part one of the three part interview with reformed environmentalist Patrick Moore who talks about what drew him into the life of an environmentalist and to become a Greenpeace co-founder.

And why he left Greenpeace.

And why Greenpeace in its modern form is basically full of shit

It's fascinating stuff and once you're done with this part one, go see the 2nd and 3rd parts here.

Thanks for the headsup, M

UPDATE: Oh, so apparently I'm only allowed to shit-stir when the target is the right wing, not the left wing. Bah, don't watch it if you don't want to learn anything new.

Chart of the day is...

2012-01-27T08:14:00.000-05:00

...the Euro, dailies:

When it broke 1.30 to the downside, them there technical anal ysts swore blind that it was a direct road to dollar parity. Oh look, we're over 1.30 again.

TA, gotta love it.

Vanguard adds Minefinders (MFN) (MFL.to)

2012-01-26T16:22:00.001-05:00

The last time we had a 13G from Vanguard*on its position in Minefinders (MFN) (MFL.to) was back in March 2011 when it declared a holding of 9,266,907, representing 11.62% of shares out at that time.

Today Vanguard filed an update to tell us that it now holds 12,200,000 shares of MFN, representing 14.70% of S/O.

Interesting timing, what with the Pan American (PAA.to) (PAAS) buyout move, dontcha think?

* Specifically, "VANGUARD SPECIALIZED FUNDS - VANGUARD PRECIOUS METALS AND MINING FUND"

A simple equation

2012-01-26T14:44:00.000-05:00

Watch fish slapping dance > Not watch fish slapping dance.

So watch it.

Betcha you still laugh the third time of watching, too. For the record, one of Cleese's favourite sketches. Hasta mañana, damas y caballeros

So what does Brian Quast of CIBC think of the Fortuna Silver (FVI.to) (FSM) 4q11 numbers and 2012 guidance?

2012-01-26T13:28:00.000-05:00

You heard it from IKN before the bell today, but eventually even those slow, creaking web 1.0 machines known as Canadian brokerages get round to the facts (they got legal depts to get past, y'see). Here's the CIBC update report PDF on Fortuna Silver (FVI.to) (FSM) and here below are the top page bullets. Click through for more and the house price target (which I'm down with personally):

Fortuna Silver Mines Inc.

Things Just Keep Getting Better

Fortuna Silver announced production results for Q4/11 that were ahead of our expectations on all fronts. Production of 913k oz. silver, 3.5k oz. gold, 4.4MM lbs. lead and 5.7MM lbs. zinc was well ahead of our estimates of 794k oz. silver, 3.1k oz. gold, 4.4MM lbs. lead, and 5.7MM lbs. zinc.

Cash costs were also well ahead of our estimates, coming in at $5.11/oz., against our estimate of $2.86/oz., mostly due to cost inflation at the Caylloma mine in Peru. We expect this to be a theme with Latin American silver producers that will play out throughout 2012.

2012 guidance was also very strong, and well above our expectations. Guidance of 3.7MM oz. silver, 17k oz. gold, 18MM lbs. lead and 21MM lbs. zinc exceeded our 2012 estimate of 3.4MM oz. silver, 14k oz. gold, 14MM lbs. lead and 23MM lbs. zinc.

When we adjust our model for increased production and increased costs, our cash flow estimates move very little. Therefore, our price target of $9 and Sector Outperformer rating are maintained. Fortuna continues to operate well and should continue to be rewarded.

CONTINUES HERE

A word on Twitter

2012-01-26T12:11:00.000-05:00

This Twitter thing has got under my skin and i've realized 1) it's a lot of fun but much more importantly 2) it's a really great way of being on the edge of newsflow. FWIW* I've found the best way of using it is to keep the number of people you follow down to those who bring on interesting stuff and not to go much above 300 people followed. That way the news is fresh and also you also have a manageable number of people on your stream (e.g. follow 5000 people and there's just too much passing your face to be useful..you'll get bored).

Anyway, it's high time you took advantage of Twitter too, if you're not there already, that is. And what better way than to follow the IKN stream, right? :-)

*not much

Minas Conga Peru: It takes a real environmentalist...

2012-01-26T10:59:00.001-05:00

...to tell the fakey, agenda-pushing idiots to STFU.

This morning Peru's ex-Minister of the Environment Antonio Brack Egg (crazy name, crazy guy) appeared on TV and showed the difference between a real environmentalist and the extremist tree-hugging dumbasses who have voices with a decibel count much higher than their IQs. Here's a translation of this report on Brack's appearance on Peru's top morning show:

The ex-Minister of the Environment Antionio Brack Egg said this morning that the Conga mining project in Cajamarca is an issue that "has been politicized" too much when in fact it is a purely technical matter. "It's a purely technical issue that's been politicized. The people of Cajamarca prefer to keep quiet. There are only about 6,000 people at the (protest) marches", he said,

Brack also said that that will always be fundamentalist groups who will question everything, but the main worry to be addressed is, "Is there enough water, or not?".

"Mining only uses about 2% of the water (available in Cajamarca). If there are supply problems in Cajamarca it's because the population has grown and there are no reservoirs", he explained in an interview in the morning Tv program "Abre los Ojos".

News roundup (we never foot fault)

2012-01-26T08:13:00.002-05:00

1) Rafa Nadal..........HELL YEAH! 6-7, 6-2, 7-6, 6-4

2) In other non-sporting news, muchas gracias to reader J for writing in with this headsup:

Hi Otto
So Thurs. morning we have Brent Cook on BNN.

11:30 AM - Commodities with Andrew Bell

Finding undervalued mining projects: Brent Cook, Editor, Exploration Insights

Regards
J

Make sure you're in front of a screen for that one.

UPDATE: Here's the link to go watch the 5 minutes BNN segment with Cook.

3) Alan Twobreakfasts Garcia knows his people and knows which buttons to push, so he does Ollanta Humala and Yanacocha a big favour by explaining that it must be them there Chileans behind all the anti-mining protests in Cajamarca. Seriously, he may be a total HDP but he's by far the best politico in Peru and possibly the best one on the whole continent....freakin animal.

4) Copper, zinc, lead, you name it....they're all quite a sight for sore eyes. Year of the Dragon go-go.

5) A building collapses in Rio de Janeiro and kills ~~two~~ five (and 14 missing sadly) occupants.

Fortuna Silver's (FVI.to) (FSM) 4q11 rocked

2012-01-26T08:01:00.001-05:00

I've been happy about Fortuna Silver's (FVI.to) (FSM) 15.7% rally this week, what with it being the biggest holding round these parts, and this morning's 4q11 production NR plus 2012 guidance underscores the rally well.

The highlight for me is the 377k oz Ag production in the first real quarter at San José....that's a great performance from a brand new mine (and on top of that comes the 3562 oz Au, which works too). The other big positive that catches the eye is FVI's decision to move to 1500tpd there during 2012. Another very likeable line item is the record quarter just put in by the Caylloma mine in Peru (and that it finished the year with over 2m oz Ag production), though that was tempered slightly by a higher than expected cash cost number for 4q11.

The bottom line is that FVI kicked ass in the last quarter and looks on rails for 2012. But hey, no need to take my word for it, go see the numbers yourself and dyodd, dude.

disclosure: Yeah I'm long....like duh, dude

Wise after the event

2012-01-26T07:39:00.000-05:00

So the whole commods complex gets a boost from a dovish Fed that's no-so-subtlety hinting about another round of QE and...Hey Presto!....all the junior mining soothsayers and anal ysts suddenly look smart after six months of looking stupid. Good for the bank balance of course, if you were positioned beforehand (rather than chasing it now).

We were positioned. Here's how IKN139, dated Jan 1st, started:

Optimistic
Yes, I’m optimistic about 2012 and I’m actively looking forward to the month of January and a rebound in the tax-loss battered IKN junior portfolio.

And here's a larger chunk of the opening to IKN140, dated Jan 8th, entitled "Keep Dancing":

",,,[the] market out there is known for the way it can stay irrational longer than its participants can remain solvent, so for the moment I think this short-term rally is one to ride on, not to hide from. The beating taken by juniors, especially the smallfry juniors we tend to feature on these pages, was overly severe in the last six weeks of 2011 and there’s still plenty of room from them to make recoveries without any sort of technical analysis chatter about ceilings and tests to endure as yet. In the world of the brokerage a fund manager is almost contractually obliged to keep dancing until the music stops, else be accused of the one thing that can really put the dampener on their promising career; cowardice. The bottom line is ...... that week one of January is unlikely to be the last week of this relief rally, so there’s every reason to stay bought this market.

Annoying chunk of horn-tooting complete, have a nice day.

Chart of the day is...

2012-01-26T07:29:00.000-05:00

....the price of gold since 2003, because...

....if you look very very closely, you may be able to see a trend.

x

Guest blogging on Tuerto

2012-01-25T15:26:00.000-05:00

Your humble scribe has made his second appearance as a guest blogger on Tuerto today so if you haven't had enough of the normal inane babble here on IKN, we meekly suggest you click through and check it out.

And yes, before you ask, guesting on Tuerto is likely to become a regular thing.... for at least as long as the guys over there can stand it.

Felix Salmon at Davos

2012-01-25T11:14:00.001-05:00

It's that Davos time of year again and if you want to follow what them there hoity-toity are doing and saying during this edition, there's no better place to do it than via Felix Salmon's blog. As in previous years he's again eyewitness at the bunfest and his Davos posts started up today. Every year he does a great and insightful job on the proceedings and for me at least, it's just about the year's best series of posts you get from just about the best financial blogger in the world.

So go read him, and stop hanging round this backwater.

The whole of the 'Regional Politics' section of IKN142, out last week

2012-01-25T10:43:00.002-05:00

There were three parts to 'Regional Politics' this week (usually there are more) and this time around we covered Ecuador, Argentina and we did a short piece on one of the candidates in this year's Mexico election (as the other two main players have already had a bit of light shone upon them in previous editions).

Anyway, here it is and it gives an idea of what we do in one of the five main sections of The IKN Weekly every week (the others go by the names "Fundamental Analysis of Mining Stocks", "Stocks to Follow", The Copper Basket" and "Market Watching" and are more directly related to junior mining stock, mostly in LatAm):

Regional politics

Ecuador: Groundhog Day
Let’s keep this short, yes? This came out of Reuters (13) on Friday January 20^th, late last week (author’s translation):

Quito (Reuters) – Ecuador expects to sign the definitive contracts for the mining of multimillion dollar gold and copper projects with the mining companies Ecuacorriente and Kinross during January and February, the Minister for Non-Renewable Natural Resources Wilson Pastor told Reuters on Friday.

The minister said that the Andean nation would receive investment of U$2.8Bn from these two projects and said that the country would sign the agreement with Ecuacorriente at the end of January and with Kinross in February.

Meanwhile we quote from IKN134, dated November 27^th 2011:

Vice Minister of Mines Fernando Auquilla said that the contracts between The State and both Kinross (Fruta del Norte) and Ecuacorriente (Mirador) (translated by your author), “..are practically negotiated, we’re in the phase of construction of the definitive document”.

The same IKN134 quoted President Rafael Correa: “In the next few days they will be signed. We are negotiating these contracts very hard..we are also negotiating the forward payment of royalties and with those we will do a series of projects.”

And Federico Auquilla again: “The mining companies have accepted the conditions of the Ecuadorian State and we are completely satisfied.”

All that was followed in early December by Wilson Pastor saying that Kinross would officially sign by the end of that month. Oh well.

As for your author’s opinion on developments and the viability of Ecuador as an investment destination, those haven’t changed one single iota from the opinions expressed in IKN134 and a couple of times after that piece, too. Feel free to check back but they can be summed up with one word, AVOID. They also differ from a silly piece out of Canaccord last week that tried its very hardest to pump the country to its readership after being invited to look at the excellent rocks Salazar Resources (SRL.v) has to offer in the country (and they are excellent, just a pity they’re in Ecuador). People, the fact is that strong and viable projects are selling at considerable discounts in many places, in countries with good mining acceptance and traditions too (xxxxxxxxxxxxxxxxxxxxxxxx just one prime example that springs to mind) so there’s no reason at all to tack on extra risk by exposing yourself to Ecuador. Avoid, avoid and avoid once again, because that’s what all exploration companies that aren’t already up to their necks in Ecuador are going to do in the years ahead, signatures with Ecuacorriente and Kinross forthcoming or not. Even if these elusive deals are signed, the situation in Ecuador remains far worse than the brokerages pumping their stories to the ignorant would have you believe.

Argentina: Yamana (AUY) (YRI.to) at Esquel/Suyai, Osisko at Famantina
The last couple of weeks have seen a ramping up of happy feely good news stories out of Argentina about the political risk environment for miners, with the news of the Rio Negro ban on mining (using cyanide, mercury etc) the central one on which much optimism has been hung. However, northern media channels have neglected (it must have simply slipped their minds, oops deary me) to mention anything about the worsening risk profile of the La Rioja province and the Famantina project of Osisko mining, a project slated for open pit mining currently being opposed by roadblocks and getting national headline attention...in Argentina at least. Your author hasn’t mentioned much of it so far, but it’s one to keep an eye upon because the protests seem to be spread a little to other areas and last week the big La Alumbrera mine got attention via selective roadblocks in the normally pro-mining province of Catamarca (14) that barred progress of supply trucks to the mine.

In other Argentina news, we go a little further into Chubut province and its issues. As mentioned last week much speculation is now turning towards this province and its mooted plans to allow mining operations by overturning existing laws. Your author remains sceptical about the “from 2q12” timeline promoted by Argentina’s mining minister Jorge Mayoral regarding Navidad, but at least in the case of the Pan American Silver (PAA.to) (PAAS) Navidad project in the centre of the province, there’s a fighting chance that eventually (best guess 2013) it’ll get the necessary green lights. However, we continue to scoff at the silliness that was and still is being promoted by interested third parties in Canada about Yanama Gold’s (AUY) (YRI.to) chances of a green light at Esquel/Suyai in the West of the province. To give a little background into how the company has been operating its community relations program there, here’s a story you’re unlikely to read about in the Globe & Mail or your morning brokerage update mailer. According to reports out of the small town of Esquel, last week a couple of thousand protesters gathered to reaffirm their opposition to the mining project in question. They also called out the town’s Yamana community rep in the following way (translated) (15):

“On the corner of Rivadavia and 25 de Mayo streets the locals declared Richard Bustos, community relations manager of Yamana Gold, a persona non grata in the town. A long text with extensive proofs was read out to the crowd about the role of Bustos who, as well as being employed by the mining company, is also a reporter with the local FM Del Lago radio station in the city, in clear incompatibility of the two roles. Bustos declared to the press that he had been working as community relations manager for Yamana for two years, a fact he had hidden from the community and from his audience of listeners until the (anti-mining) assembly had unmasked the facts.”

This cute way of going about community relations business looks, to your author at least, like a throwback to the sneaky, back-handed ways of doing things we saw perhaps 20 years ago from the industry. The very style of this creeping-in-the-background Yamana is doing (along with one of the major giveaways of problems in the mining industry, that of the project/company name change) should be enough of a clue here, so don’t get fooled into lumping all Chubut projects into one bag; Navidad might not be on the type of optimum timeline getting mention by bigwigs right now, but it does have a fair crack of eventual approval (I’m guessing 2013, but a later date than that wouldn’t surprise me either). However Esquel/Suyai is a no-way-José project and it matters not how much optimism is thrown its way by those with hidden agenda.

Mexico: A quick profile of PAN candidate Josefina Vázquez Mota as relates to mining
Last week we ran a short piece of current frontrunner for the Mexico Presidential elections, Enrique Peña Nieto, and as we’d earlier run a note on perhaps his main rival AMLO in IKN139 (dated Jan 1^st) we said that it was only fair to run a rapid-fire overview of the other current main candidate for the job, the PAN party’s Josefina Vázquez Mota. So here it is.

Vázquez Mota, (51 years old, born and raised in Mexico City, married, three children, career economist and party activist) is the likely candidate for the centre-right PAN party (Partido de Accion Nacional, for which I don’t think you need a translation), the political party that has supplied the country’s last two Presidents in Vicente Fox (until 2006) and the current Felipe Calderón (until now). Therefore it shouldn’t come as much surprise to find out that if elected, we’d fully expect the same type of pro-mining administration from Vásquez Mota as we’ve seen from the previous two PAN governments in the last 12 years. This is reinforced by the fact that Vázquez Mota has been an active servant of the last two administrations with periods as Education Minister and Social Development Minister, carrying out party policy handed down from the Presidents basically to the letter. She deserves her crack at the big job and would represent the continuation of the status quo in Mexico policy towards mining, but the general feeling is that after two terms the PAN party is feeling the fatigue of government, has lost general popularity with its citizenry (particularly on non-mining related issues such as the acceleration of the so-called “drug wars”) and is unlikely to get a third President from its ranks, for this time at least. Some current polls put her in a technical dead heat for second place along with AMLO, but that same street level general feeling is that Vázquez and PAN are lying third and behind the left wing candidate, with Peña Nieto out front at around 40% voter intention at this early stage.

Minefinders (MFN) (MFL.to): What if they announced a takeover and nobody came?

2012-01-25T10:20:00.002-05:00

Well, so far I've seen a full US Dollar erased from my Minefinders (MFN) (MFL.to) paper gains thanks to Monday morning's buyout deal with Pan American Silver (PAA.to) (PAAS):

Which is slightly annoying, but I'm going to hold through on this because there's a distinct feeling this is act one in the opera, not the bit where the fat lady comes out and hits a high C or two.

The underlying reason for the MFN weakness is this, of course:

So I might be slightly miffed about the reduced gains since Monday, but I'm unlikely to feel the same way towards MFN as large holders of PAAS are feeling towards Geoff Burns right now. DYODD, dude.

UPDATE: Wowsers, this reversal is strong enough to put MFN green on the day. Huzzahs all round.

Chart of the day is...

2012-01-25T08:30:00.000-05:00

...the change in global steel production by region, 2009 thru 2011

From Reuters

Zinc kickin' tush

2012-01-24T21:02:00.000-05:00

So is lead (Pb) for that matter, as the heavy stuff just crossed $1/lb today. But I have this sad but admitted obsession for Zn, so here's that chart:

We also have two very small but interesting Zn exposed companies featured on the IKN Stocks to Follow list (and hey, there are only 15 of them at any one time) so there's moolah riding on this base metals rebound, too. DYODD, but think zinc while you're doing it, dude.

Whither goest thou America in thy shiny car at night?

2012-01-24T18:15:00.000-05:00

Let it be declared that IKN has some wonderful but wonderful readers. And one of them has the initial 'R' to his first name and took this photo (click on it for full size, it gets enormous) at a Jack Kerouac exhibition in New York mere hours ago. He then sent it to me, knowing as he does of my soft spot for Jack Kerouac along with his comment of "I was so taken by it when I read it again in original. Gave me goosebumps." Mr. R, you totally rule.

click to enlarge (gets very big)

What you're looking at is a page of Kerouac's original 1949 diary, the scribbles that formed much of the meat for On The Road, and that page contains a couple of all-time fave lines in "...haunted by something I have yet to remember..." and "Whither goest thou America in thy shiny car at night?", as well as a reference to Otto's lunch diner, of all places.

So labour of love that it is, here's the page above copied out for easier reading. Enjoy:

"RAIN AND RIVERS"

The Saga of the Mist -

Trip from New York to San Francisco, 1949. N.Y across the tunnel to New Jersey - the "Jersey night" of Allen Ginsberg. We in the car jublilant, beating on the dashboard of the '49 Hudson coupe...headed West. And I haunted by something I have yet to remember. And a rainy, road-glistening, misty night again. Big white sign saying "West---> "South <--- our gleeful choices. Neal and I and Louanne talking of the value of life as we speed along, in such thoughts as "Whither goes thou America in thy shiny car at night?" and in the mere fact that we're together under such rainy circumstances talking heart to heart. Seldom had I been so glad of life. We stopped for gas at the very spot where Neal and I had stopped on th No Carolina trip 3 weeks before, near Otto's lunch diner.* Then we drove on playing bebop music on the radio. But what was I haunted by? It was sweet to sit near Louanne. In the backseat Al and Rhoda made love. And Neal drove with the music, huzzaing.
We talked like this through Philadelphia and beyond. And occasionally some of us dozed. Neal got lost outside of Baltimore and wound up in

(*And remembered the funny strange events there.)

IKN Recommends: Tuerto

2012-01-24T11:12:00.002-05:00

Here's the link to Tuerto, a brand new English language site/magazine that covers all sorts of interesting issues about Latin America, South America and what-have you. It's run by two pro journalists who have decided to do something about the lack of depth in English language reporting of the region, so expect intelligence and insight all the way through (apart from your humble scribe's very recent guest post, that is).

Anyway, go read Tuerto, it's right here and while you're at it, leave them a comment or join their twitter account or send them a mail...or all three. The site is still getting its design act together and the guys say that layout will improve (feel free to offer suggestions on that too before it's too late) but it's more than acceptable already. However the real thing is the content; Content is king and they have that down pat all right.

Joyous News! Ross Beaty on Alterra Power (AXY.to): "My company will be here for a thousand years."

2012-01-24T09:55:00.000-05:00

And the good news about that is....wait for it.....roll on the drums....USING THAT TIMESCALE THERE'S A FAIR CHANCE THE STOCK GETS BACK OVER A LOONIE!

(ta-dah! I'm here all week, try the veal).

Anyway, that quote-of-the-week isn't some made-up nonsense and actually came from the lips of the Beaty man himself during this interview shot at the Cambridge House bash currently going on in Vancouver. You'd best watch it cos it's only had 40 views so far and maaaan, Beaty needs more people watching him than that, surely?

Enjoy, and thanks to reader 'MR' for the headsup.

Mo`Fortuna (FVI.to) (FSM) at San José, Mexico

2012-01-24T08:49:00.002-05:00

After putting up this post yesterday your humble scribe received a call from the honchos at Fortuna Silver (FVI.to) (FSM). It turns out that there was a protest and a dispute about a water pipeline and the police were called in and heads were banged together, BUT it wasn't Fortuna's pipeline! Absolutely nothing to do with the company in fact, as the disputed pipe was on the other side of town to the supply line for the San José mine. And to cover all bases, FVI explained that they had full permission AND community approval for said line, with agreements that went over and above national laws with the people who might have eventually thought they were affected.

What's most interesting is that the NGO shit-stirrers who wrote the report connecting FVI with the protest knew it wasn't the mine's water supply line that was the centre of the rumble....but just went ahead and wrote their piece connecting the mine to the protest anyway. Just goes to show, eh...