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And a proxy fight at Gold Reserve (GRZ.v)

Could be a lot of fun. Steelhead has run out of patience with Belanger.

Yet another crappy quarter from Dynacor Gold (

Net earnings of $0.212m, or a penny per share:

Add the serial failure to deliver on promised profitability to the warning on production fro 1q17 and the undisclosed legal problems that DNG covered up. This is Louis Lobito Little Wolf's idea of a Top Pick, the naive fool.


Angry Geologist does Arizona Mining (

Far better than reading the IKN take on earlier today, go over to Angry Geologist and read as TAG's succinct and pithy take on "One-Of-The-World's-Largest-Manganese-Zinc-Deposits", with particular emphasis on the numbers out of AZ's 'Epitaph Zone' this morning.

The silverbugs are quiet this year

A motley crew of deluded fools even more annoying than IKN, it's been a pleasure to hear the roaring silence from the silverbugs, that group of diehards who actually think silver mining companies are smart investments. But why should these knucklescrapers be so quiet this year?
  • Fortuna Silver ( (FSM) down 19% in 2017 year to date.
  • Tahoe Resources ( (TAHO) down 19% in 2017 year to date.
  • Endeavour Silver ( (EXK) down 17% in 2017 year to date.
  • First Majestic Silver ( (AG) down 1% in 2017 year to date
  • Great Panther Silver ( (GPL) down 5% in 2017 year to date.
  • IMPACT Silver (IPT.v) down 6% in 2017 year to date.
  • Silver One Resources (SVE.v) down 38% in 2017 year to date.
Ah yeah, that'd be it.

Gold stocks are nicely up YTD, by the way. So much so that the XAU "gold and silver miners" index can shrug off the negative influence of the silver dogs and be in positive territory so far.

Arizona Mining ( still has a serious manganese issue

Here at IKN Nerve Centre, your humble scribe notes with interest the Arizona Mining ( news release of this morning. It does of course shout loudest about the things the company  wants you to read, such as the improved recovery percentages for zinc and lead and silver at its Taylor project. But as always, it's what they have to slip in quietly that's most important and interesting. Here's that bit:
"The projected manganese (“Mn”) content of the final zinc concentrate is 1.32%, in line with the preliminary metallurgical test work."

And that is most interesting, because in it's December 14th 2016 NR, told us this (IKN underlines and bold-types):

As previously disclosed, Arizona Mining has done initial bench-scale metallurgical work on the various types of ore found at the Taylor deposit which does not yet reflect cleaner stages, regrinds or any optimization, which may reduce the manganese levels. The same initial results show very low iron and cadmium contents and negligible mercury and arsenic, which are other common undesirable elements.
Initial work indicates a manganese content of approximately 0.1% in the lead concentrate and approximately 1.3% in the zinc concentrate. As previously noted, the penalties for a zinc concentrate containing 1.3% manganese are estimated to be $12 per dry metric tonne versus the zinc concentrate value of over $1,100 per dry metric tonne at a $1.00 per pound zinc price. This equates to approximately 1% of the estimated concentrate value and is therefore immaterial.
Indeed, in its rebuttal NR to the light shone upon the manganese problem at Taylor by Global Mining Observer back in December, tried to get us to believe that the initial stage met work was one thing but once the bigger science was rolled out they'd be able to get the Mn content down. Today we get the reality: It's not 1.3% any longer, it's 1.32%. Cue 70's sitcom style canned laughter.

Not only that, but Oskar Lewnowski of Orion Mine Finance doesn't sound like a very smart businessman to me. When wheeled in to give support to  he said this:
“We would be prepared to purchase as much of the zinc concentrates, at market, without penalty, as we could.”
In other words, he's be prepared to buy this Mn-heavy conc with no penalty, when he could easily pay less if he wanted. Yup, that's capitalism for you. Or maybe, just maybe, Lewnowski was asked to BS the market by Richard Warke and say anything that sounded good in a desperate attempt to cover up the project's fatal flaw before it totally tanked the share price. Hell...I dunno. But what I do know for sure, a stone-cold fact, is that Richard Warke decided to hire a company of spies to find out all about an alleged short-selling conspiracy against his company once the Mn scandal had been revealed and that spy company were stupid enough to start snooping on me, your humble scribe at IKN, as part of their investigation. Unsurprisingly Warke's sneaky attempt at espionage has uncovered nothing at all, because there never was a short conspiracy against, it was all in his paranoid brain. But I'm glad you know where my kids go to school now, Richard, certainly hope that information helps you in your future business endeavours.

Anyway, we await the PEA from, which they promised for end 1q17. They have two days to deliver, so presumably that's coming out very very soon.

Things that happen in The IKN Weekly, Graña y Montero (GRAM) edition

For most of the the third and fourth quarters of 2016 Graña y Montero, trading on the NYSE as GRAM, was a U$8 stock. Then came news of its involvement in the Odebrecht corruption and bribery scandal and the company went into free-fall, a drop we watched carefully at The IKN Weekly for the political angles in Peru.

But to last Sunday and the piece you see below the chart here, which wasn't an outright reco on the stock but was a rare non-mining long idea for subscribers. Since then...

...the stock's up 30% in two and a half days. Just sayin'. Here's the piece, as it appeared in IKN410 on Sunday evening.

Graña y Montero (GRAM): A heads up
It’s not really the normal remit of The IKN Weekly so it’s not going to be a long note, but I think it’s worth a few lines by way of a heads-up and perhaps a starting point for your own DD, so here goes.

As noted on several occasions in the last few weeks on these pages, particularly in the ‘Regional Politics’ sections, the big Peruvian construction and civil works company Graña y Montero (GRAM) has bit hit very hard by its connections to the Lava Jato/Odebrecht corruption scandal that’s been making waves all over South America. Just one look at its 12 month share price (it trades as GRAM on the NYSE) is enough to see the effect of being dragged into the corruption mess and being actively connected with the bribes paid by Odebrecht to high ranking individuals in Peru, up to and including ex-President Alejandro Toledo.

However, there’s now reason to believe GyM is going to survive this mess and as such, it may be a decent “blood on the streets” buy for consideration. The combination of factors:

1)      The El Niño weather crisis currently hitting Peru hard will need clean-up and plenty of reconstruction later. There is no better placed company to do that work than GyM.
2)      The corruption scandal is beginning to be yesterday’s news in Peru and the sensation that GyM isn’t going to collapse (the country’s own private “too big to fail”) is growing. The 10% rise in the stock on Friday bears testimony to that.
3)      The latest word, being reported in Peru this weekend (17), is that as well as the recent change at the very top of the company and the resignation of the three main company leaders, we’re about to get a complete change at the board of director level with new (and we assume uncontaminated) blood coming in to lead the company out of the hole it’s created for itself.

Up until this scandal hit, GyM was one of the most highly regarded companies of any type in Peru. With a direct employment roster of up to 40,000 people, as well as untold numbers of indirect jobs depending on it, it’s one of the biggest employers in the country too. The way in which the tide is turning, plus the “fortunate” arrival of the most severe and damaging storm period for the last two decades in Peru, may make the stock an interesting trade. You need to do your own DD on this one though and check the company numbers carefully, consider this a place to start, not a reco to buy.


We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.
Through the unknown, unremembered gate
When the last of earth left to discover
Is that which was the beginning;
At the source of the longest river
The voice of the hidden waterfall
And the children in the apple-tree

Little Gidding, T. S. Eliot

I no longer recognize England*, it's as unknown and mysterious a place to me as Mongolia, South Korea, Albania or Sudan.

PS: T S Eliot is an anagram of toilets.

*Not Britain or The UK, England.


Argentina: Lipsticking the pig (from IKN410)

Here's one of the 'Regional Politics' pieces from IKN410, out last Sunday evening. A sample of what goes on when I'm not goofing off on the blog and doing the real stuff.

Argentina: Lipsticking the pig
Last week in London, Argentina’s Finance Minister Nicolás Dujovne appeared at a conference organized by the Argentina/UK chamber of commerce and the Argentina Embassy called “Plan Minero 2017”, at which those assembled extolled the virtues of the country’s mining sector and the opportunities it affords today (8).

 “I urge you to find the motivation to invest in Argentina. You will be welcomed”, said Dujovne to the representatives from the world level mining companies at his presentation and he backed up this wish with his ten main points on what has improved in recent times. Here they are:

  • Macri has “normalized” the Argentine economy
  • There is now one normal, free floating exchange rate
  • The bond holdout court case is now resolved, which has allowed Argentina access to the world debt market again.
  • Its INDEC stats office now produces reliable data.
  • The tax haven forgiveness program which has seen dollar savings held in quasi-illegal offshore accounts come back into the country and bolster reserves.
  • The process of “disinflation”, which according to Dujovne has brought inflation back down to 18% annual.
  • Economic recovery, which according to Dujovne has seen Argentina move out of recession in 4q16.
  • Job creation which, again according to Dujovne, has seen jobs created at a rate of 25,000 per month recently.
  • The improvement in public sector accounting (a cute way of saying “less corruption”).
  • Lower overall taxes, estimated by Dujovne to be 1.5% less than in 2015.

He also told them that the Macri government’s plan was to see Argentina GDP grow in the long-term at between 3% or 4% per annum, a rate that could be sustained over many years.

Now some of those points are valid, such as the improvements made to the exchange rate mechanism and the dropping of the 5% export tax for mining products. Others are rather cherry-picked, for example the claim that inflation is down to 18% annualized when that’s just one study from a range that put 2017 inflation forecasts at between 18% and 22% (and there’s a lot of evidence to say it’s at the upper end at the moment, including the latest inflation measurements just out). Others still are rose-tinted specs stuff, such as claiming unemployment is dropping (highly massaged figures there, the truth is that in the 2016 recession plenty of jobs were lost or became lower-paid) or there is less corruption in Argentina today, a bit like saying a standard nuclear bomb is less dangerous than an H-bomb. And in ironic timing, his claim that the INDEC stats office came on the very same day a court of law ruled that the INDEC data during the CFK government was totally reliable (in a case brought against the country by index-linked bonds holders who claimed they were due more money because INDEC rigged inflation data). What’s more, the new INDEC is now at the centre of a small scandal when it was discovered the people collecting price data weren’t bothering to go to the full range of shops and supermarkets and just using numbers they saw in shop windows next to their subway stations on the way to the office. So much for the new capitalist work ethic.

But what really amused your author was the total lack of mention of the “Federal Mining Agreement”, the grand plan of the Macri government to bring a level playing field to the whole of the country and by-pass the provincial problems that companies have had forever in the country. That’s because the whole plan, pushed hard all through 2016, has been quietly dropped by the Macri government because it cannot get the “anti-mining” provinces on board. The whole plan (as predicted on these pages) was a total waste of time/money, the ineffectiveness of the country’s Mining Ministry is writ large against this failure and it points once again to the most basic of truths about mining there; whatever national-level advantages Argentina thinks it has, any mining company worth its salt knows that without a welcome and agreements at provincial level you cannot do mining business in the country, period. In real terms, that means Navidad (Pan American), Agua Rica (Yamana), Suyai (Yamana), San Jorge (ex-Coro, now those Russian guys) and a whole host of other projects located in anti-mining areas will never happen.

And all this is aside the problems faced by an increasingly unpopular Macri government coming up against the mid-term elections (starts August, big votes in October), because all this good will and future projection of a rosy future would all be for naught if Macri’s party is beaten at the polls later this year, we would be in immediate dead-duck presidency world. In short, IF Macri does well at the polls in October and IF the country shows real signals of macro-economic improvement, you may see big mining companies start to commit to Argentina. Until then all these conference talks and optimistic presentations are an exercise in lipsticking a pig. Argentina is still a basket case country like no other, I care not if you prefer the policies of the current President to the previous one.

Anglo American now accepting bids for its 3% NSR on Caspiche

Nolan? Pierre? Randy? You guys like these things, form an orderly queue now.

Goldcorp (GG) bets on Chile


Just when you thought optionality plays were going out of fashion...

PS: The worst thing about this deal is that on the back of the XRC end of this GG move, we now have to suffer the noisy idiots at the pump end of this sordid sector giving us another round of buy talk on the worst companies and projects out there, all those optionality things that will never ever work but are simply used as currency transference vehicles (from the pockets of dumbasses to their, via share transactions). International Tower Hill (, Chesapeake Gold (CGK.v), Vista Gold (VGZ), NadaGold (NG), TwatMining (GOLD.v) and, of course, that godawful Scamsberry/Katusa pump up at Pebble.


Cobalt juniors are for suckers

Your humble scribe notes with interest the way the sell side community is going full-court press on cobalt juniors, urging you "to consider" a whole bunch of junior miners with cobalt deposits that will provide a hungry world with the Co it needs for a new generation of batteries. Because science. Unsurprisingly, one of the main sources of this pumpage are the minions that scurry around under Arthur Richards Rule IV (you might know him as self-made man Rick) over at Sprott and the chief mouthpiece at the moment is one Sam Broom, recently imported from Oz to tell us (and we quote), "Why Cobalt (Not Lithium) Could Be The Battery Boom's Big Commodity Winner" as well as his most recent pump piece, "The Cobalt Thesis" ('s a academic).

It's all bullshit. Two reasons:
1) Anyone who has investigated the sector carefully (e.g your humble scribe a few years back, the last time this silly sub-sector was pumped to the mouthbreather end of the market) will know that the producers have no sway at all over the supply side of the Co equation. That's something tightly controlled by the refiners and, the China black box aside, that means Freeport and Glencore. The big players have a good thing going with cobalt and they're not going to let anything as radical as free market economics ruin that for them.

2) There are a few dedicated cobalt mines around the world, but the lion's share of the stuff is produced as a by-product, not a product. In that way it's similar to silver, a metal with a price these days driven by the ultra-low costs of being a by-product (we've discussed this before, in August 2016 to be exact). But it's even worse for Co because it's a purely industrial metal, it doesn't even have the rabid guns'n'freedom idiots to back it up. The upshot is that 99.9% of these "cobalt opportunities" that Spott and others will "suggest" to you don't have a snowball's in hell of prospering because they'll never be able to compete on price when the big boys slam the door.

So just forget about this latest pump, it's silly, but Sam Broom does at least have one sensible thing to say in his pump pieces to the unknowing. He writes:
"It’s thus extremely important to speak with a qualified investment professional before jumping into the sector."
 Very true, but if you do and that qualified investment professional does not immediately shout "RUN AWAY! RUN AWAY!" when you ask him for a good Co trade, he's not an investment professional. He's a bullshit speculator professional. Thus endeth the IKN cobalt rant.

Toachi Mining (TIM.v): Probably just concidence

Please cast your mind back to this, kind reader:

Now consider this:

Toachi Mining (TIM.v) is already 24.5% down since that paragon of marketing prowess appeared at the world's biggest mining bunfest and the trend just ain't its friend. Company CEOs, don't think for a second that it's all about your precious geologists because your IR department can screw you just as quick as the things you think are important.