Yes indeed, it's Star Wars Day

Mexico does Argentine politics and Popes

This is a recommended read, RG over at The Mex Files takes on Argentina politics and Pope Francis in a note that covers plenty of ground. Aside from the main thrust of the piece, the thing that resonated with me is his definition of Peronism, which is a normally difficult for a world used to left/right political splits. Peronism doesn't fit into the normal political pigeonholes and is therefore tough to explain to those less versed in the ways of South America, but RG does a good job of definition in just a few, easy to swallow lines. I'm not totally sure about the "indigenism" he puts forward, but it's the thought behind the label that matters more than the word. 

Is the new Pope Peronist? Well, ermm...maybe...but not really. He (like all Argentines of 20th century upbringing) has at least the cultural baggage of an 80 year old movement, but Bergoglio was never an overt political figure pre-Pope (unlike, say, Cipriani in Peru) and neither is he a banner carrier for any political party today. He's a Franciscan Catholic, and that's the end of it as far as labelling of the man can ever go. He's also turning into a good Pope in my view, but that's for another day methinks.

Anyway, do your neurons a favour and give them something worthwile to do this morning. Have a read of The Mex Files' post, it's top stuff.

Dutch Disease in Peru?

Jurgen Schuldt of the Pacific University, Lima, writes on how the problems that the so-called Dutch Disease brings to a country's economy have started showing up in Peru. Read all about it here.

The Friday OT: Led Zeppelin; The song remains the same

Studio version.



Jimmy Page is a very good guitar player. Indeed.

A Flash update...

...has just been sent to subscribers, Friday morning an hour or so after the opening bell. A trade.

Three years of Uranium

What you need to know:

Happy World Press Freedom Day!

Today, 2013 World Press Freedom Day, is proudly brought to you by:

Rupert Murdoch

The Government of Venezuela

The Coca-Cola Company

The Government of The United States of America

Nestlé Corp.

The Board of the New York Times 

Barrick Gold Corp

etc etc etc ad infinitum

Chart of the day is...

...copper again:

Which liked the jobs report.

Gran Colombia Gold (GCM.to) goes for a 25:1 rollback

My thanks to Twitterpal StockZoo for the headsup on this, the Gran Colombia Gold (GCM.to) 2013 Management Information Circular (MIC) (available on SEDAR as of yesterday) that tells us what Serafino Fino-fino-oh-so-fino Iacono wants to squeeze past an unsuspecting audience at the AGM later this month (IKN highlights):

Consolidation of Shares

The Corporation has an authorized capital consisting of an unlimited number of common shares without par value and an unlimited number of Preferred Shares without par value, of which 381,984,916 common shares are currently issued and outstanding. This large number of issued and outstanding common shares acts as a damper on the Corporation’s stock price and could restrict the ability of the Corporation to raise equity in the future to fund its business activities, particularly if the Corporation looks for new business acquisitions and the funding of the exploration and development of its properties in Colombia. Accordingly, the Corporation is proposing to consolidate its issued and outstanding common shares on a twenty-five-for-one basis (25:1) (the “Consolidation”), subject to the approval of the TSX and approval of Shareholders by way of special resolution. Management believes that the benefits of the Consolidation include, among other things, that the anticipated higher share price resulting from the Consolidation may meet investing guidelines for certain institutional investors and investment funds that are prevented under such guidelines from investing in the common shares at current price levels. Also, a smaller number of common shares trading at a higher price makes the Corporation more attractive to potential investors, and could further enhance the value of the common shares held by current Shareholders. The name of the Corporation will not be changed in conjunction with the Consolidation. 

Yup, a mere 25:1 share rollback, which will bring that bloated S/O number down to 15.28m. All eyes now on Frank Holmes, who was daft enough to fall for Serafino's spiel wise enough to gauge as positive GCM's chances all those years ago as his fund owns 12.3% of GCM, which is a chunky voting block. Waddya say Frankie? Up for a rollback? 

PS: While you're over at the 2013 MIC. have a look at the cash salaries GCM's directorate have been pulling down. Considering the share price "performance", you have to wonder whether that much in monthly payroll to such a small bunch of people was....nah, forget it, it's a Canadian junior, after all.

Brazil. Energy.

Your author's love/hate relationship with The Economist continues, as after weeks (nay months) of filtering through the biased trudge and nonsense of a publication that seems all too often to be preaching to its choir, we get this absolute gem of an article on the Belo Monte Dam and the wider story of energy in Brazil. Highly recommended reading (unlike the usual stuff that TE produces on LatAm).

IKN: Reading The Economist Americas so that you don't have to.

Peru construction indicator

Slowing down?

Maybe. Next couple of months will be watched very carefully. Data from here.

Guatemala government declares State of Emergency around Tahoe Resources (THO.to) (TAHO) mine location

This just in. The government of Otto Pérez Molina has declared a 30 day State of Emergency in the area around the Tahoe Resources (THO.to) (TAHO) Escobal mine in San Rafael Las Flores, Guatemala. The executive decision comes after the weeklong disturbances that have left one police officer dead, one protester dead, many people injured and dozens of arrests.

UPDATE Thursday AM: Although expected under the circumstances, it's worth mentioning here that Guatemala local radio is now reporting a big influx of forces of order into the Jalapa region, home to San Rafael las Flores and the THO mine. Army and police personnel amongst those seen arriving.

UPDATE 2: A brief English language report from AP here.

UPDATE 3: Here's a link to photos of the region under army watch today. Mainly grunts patrolling and sitting around. Looks pretty subdued.

Chart of the day is...

...a week of copper:

I wish the Doctor would make up her mind.

Barrick Pueblo Viejo (ABX) (GG) versus Dominican Republic: The government plays hardball

As of today, gold and silver produced at the Barrick Pueblo Viejo mine (ownership 60% Barrick (ABX), 40% Goldcorp (GG)) is prohibited from leaving the country. The government says that this situation will remain in place until a new agreement is reached between mine and company. Negotiations are continuing on that. 

Meanwhile, government officials have said off record that the mine owes the State the mere trifling of $992m in fines and penalties. Hilarity will ensue.

This is a pretty good gold/metals/miners Q&A

I read these things way more often than I comment on them because the vast majority of interviewer-asks-market-analyst-about-market-gets-answers things are either instantly forgettable, total dross, hackneyed bullshit or just an excuse for book-talking from paid pumpers. But this one, with Tekoa Da Silva asking the questions and Jon Case of Sentry Investments giving the answers, is better and more insightful than the pack so gets mention here at IKN. Decent opinion, measured and reasoned. Recommended reading.

"How low can you go?" Part Deux: Step forward and take a bow, Altan Mehmet

Following yesterday's post on the "innovative" ways in which Canadian juniors are being promo'd these days, several IKN readers got busy with detectiverating (e.g. in the words of reader T, "The sweet sweet magic of 411.ca reverse lookup") and sent in what they found about the author of this innovation. Here are two of the images sent in:

We'd all like to thank you, Altan Mehmet. For the laughs.

Bolivia throws out USAID

Here's Bolivia's State News Agency, ABI, with the short note (translated):

La Paz 1 May (ABI): President Evo Morales on Wednesday expelled from Bolivia the United States Agency for International Development (USAID), accusing it of alleged political meddling in rural organizations as well as other social organization and conspiring against its left wing government. 

"We have decided to expel USAID from Bolivia, USIAD is leaving Bolivia, I ask the chancellor (David Choquehuanca) to communicate immediately with the United States Embassy", he announced during his speech in homage of the Day of the Worker."

Longer reports will be available everywhere soon. You'll be able to find an opinion that suits your own taste on the matter too, for sure.

Peru mining: Reuters nails a scoop

Good stuff in this scoop from Reuters' Mitra Taj and Teresa Cespedes this morning. Here's how the note kicks off, make sure you click through for more

LIMA (Reuters) - Peru's mining minister is winning a crucial cabinet battle by swaying President Ollanta Humala to water down a law that gives indigenous groups more say over new mines and oil projects - and a deputy minister will likely resign in protest.

According to half a dozen people with direct knowledge of the internal tug-of-war, Mines and Energy Minister Jorge Merino has prevailed in excluding Quechua-speaking communities in the mineral-rich Andes from being covered by the law.

Sources said he fears applying the law throughout the highlands - as the government once said it planned to do - would delay a pipeline of mining investments worth $50 billion.

Several people in Merino's office declined repeated requests by phone and email for comment. Continues here

How low can you go, junior miners?

How about this low, as seen on Twitter tonight:

According to the twittermachine this was seen "Stuck to the wall outside Tim Hortons". Oh yes.

UPDATE: There's a Part Deux to the story here

Hochschild's (HOC.L) man in Gold Resource Corp (GORO) has decided not to stand for re-election

Here's the link, here's the chunk:

The following information summarizes the business experience for at least the last five years of the director who is not standing for re-election:

Isac Burstein.    Isac Burstein was appointed to the Board of Directors on April 1, 2009. He has served as a member of our Audit Committee and our Compensation Committee since his initial appointment to our Board of Directors. Mr. Burstein is the Vice President of Business Development for Hochschild Mining Plc. (LSE: HOC), a leading underground precious metals producer operating in the Americas and a significant shareholder of our Company. Prior to his current position, Mr. Burstein served Hochschild in various capacities, including as Manager for Project Evaluation, Exploration Manager for Mexico from July 2000 to May 2009 and Exploration Geologist from January 1996 to July 2000. He holds a BS in Geological Engineering from the Universidad Nacional de Ingenieria in Lima, Peru, an MS in Geology from the University of Missouri and an MBA from Krannert School of Management, Purdue University. Mr. Burstein was nominated as a Director by Hochschild and appointed to the Board pursuant to the terms of our strategic alliance agreement with Hochschild. Mr. Burstein has not served on the Board of Directors of any other public companies or registered investment companies during the past five years.

Now, why might that be?

Mining PRs and the Ottotrans™, part 70

Today we get to do one of the"big into little" examples of our ongoing occasional series, as the 1,722 words contained in this NR from South American Silver (SAC.to) and are taken, considered and then condensed down into just four via the now world-famous Ottotrans™.

This is what they wrote:

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Apr 30, 2013) - South American Silver Corp. (SAC.TO)(SOHAF) announced today that its wholly-owned subsidiary, South American Silver Limited ("South American Silver"), has commenced international arbitration proceedings against the government of Bolivia ("Bolivia" or the "Government") under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) pursuant to the Agreement between the Government of the United Kingdom and the Government of Bolivia for the Promotion and Protection of Investments (the "Treaty").The arbitration has been commenced as a result of acts and omissions of the Government including the issuance of Supreme Decree No.1308 on August 1, 2012 (the "Decree"). The Decree revoked mining concessions covering the Malku Khota Mining Project (the "Project") held by Compañia Minera Malku Khota S.A. (CMMK), a wholly-owned subsidiary of South American Silver Limited. These measures resulted in the complete expropriation of the Project without compensation. The arbitration claim is for Bolivia's breach of the Treaty and international law. Bolivia has breached the Treaty's requirement to provide full protection and security to foreign investors and their investments, as well as the Treaty's protections against, among other things, expropriation without just and effective compensation, unfair and inequitable treatment, and less favorable treatment than afforded to Bolivian nationals or nationals of third states.Since the Decree, the company has made numerous attempts to open a dialogue with the Government with the aim of reaching an amicable resolution of the dispute, including receiving fair-value compensation. In late February 2013, the company was invited to attend a meeting set for 17th April, 2013 in La Paz, Bolivia. Attorneys representing South American Silver attended the April meeting but no resolution was reached and no compensation offered. The Decree stated clearly that the Bolivian state mining company, Corporación Minera de Bolivia (COMIBOL), would hire an independent firm to carry out a valuation of the investments made by CMMK within a period not to exceed one hundred and twenty (120) business days. However, no such valuation has been carried out, nor has an independent firm been hired to undertake the valuation.Exploration commenced at Malku Khota in 2003 and work on the Project continued through the expropriation in August 2012. After completing a total of 42,700 meters of drilling in 121 diamond core holes, and undertaking metallurgical testwork, process development and engineering design, a Preliminary Economic Assessment (PEA) Update was filed on SEDAR on 13th May, 2011 in a NI 43-101 technical report (News Release NR 11-06 dated 16th May, 2011). The May 2011 PEA Update included economic modeling that indicated pre-tax net present value (NPV) at a 5% discount rate of:

• $704 million at metal prices of $18.00/oz silver and $500/kg indium

• $1.482 billion at $25.00/oz silver and $570/kg indium

• $2.571 billion at the $35.00/oz silver and $650/kg indium.⁽¹⁾

After the 2011 PEA Update, the pre-feasibility study (PFS) phase was started in June 2011. The ongoing work program, which was designed to expand mineral resources and enhance project economics, included the development of social and community programs to benefit indigenous communities, baseline studies for the environmental review and assessment program, exploration, metallurgical testwork, flowsheet development, engineering design and preparations to construct a modern 150 person exploration camp near the exploration site. The planned work programs including the PFS were not completed due to the expropriation.Phillip Brodie-Hall, President and CEO of South American Silver said, "It is regrettable that we are forced to resort to international arbitration to resolve this matter. Bolivia chose to expropriate our mining concessions; it must now meet its legal obligations and compensate us for this significant loss. International arbitration gives us the means to pursue our case and we are very confident that it will deliver fair value compensation. We have a first-class team working on the case and, while we are open to dialogue with the Government, we are prepared to go the full distance in arbitration if that's what it will take to get fair value compensation. Our loyal shareholders deserve nothing less."Now that the arbitration has been commenced, the Bolivian Government has thirty days to respond and an arbitration tribunal will be empanelled in the coming months. Thereafter, the tribunal will set a provisional timetable for the arbitration itself including a schedule for submission of a Statement of Claim, Statement of Defense and oral hearings. Unless there is a negotiated settlement of the dispute, it is expected that the arbitration could take up to 2-3 years from commencement of proceedings until rendering of a final award.Bolivia has been involved in over fifteen "nationalizations", the majority of which have taken place after President Morales came to office. A number of the cases have reached negotiated settlements and at least five others are pending. Bolivia's reserves of cash and gold were estimated at $13.62 billion as of December 31, 2012, up from US$3 billion when Morales came to office in 2006. Bolivia's credit rating was upgraded by all three major rating agencies in 2012, the most recent being Fitch Ratings upgrade from B+ to BB- in October 2012. Bolivia has demonstrated that it has ready access to international funding, having had a $500 million 10-year bond offering significantly oversubscribed in August 2012 at an interest rate of only 4.875%. The IMF recently forecast that Bolivia will be one of the fastest growing economies in South America with an expected GDP growth rate in 2013 of 4.8%.Mr. Brodie-Hall went on to say, "It is not a question of whether Bolivia is capable of meeting its obligation to compensate the company for the expropriation; it clearly has the financial capacity."About South American Silver Corp.South American Silver Corp. (the "Company") is a growth focused mineral exploration company creating value through the exploration and development of the large scale Escalones copper-gold project in Chile, the realization of value from the Malku Khota project in Bolivia and the pursuit of new opportunities. South American Silver Limited is a company incorporated in the Bermuda Islands, an overseas territory of the United Kingdom, which through its wholly owned Bahaman subsidiaries: Malku Khota Ltd, G.M. Campana Ltd. and Productora Limited., owns one hundred per cent of the outstanding shares of Compañía Minera Malku Khota S.A., a Bolivian company, holder of the Malku-Khota mining concessions until their nationalization by the Bolivian Government. The Company's approach to business combines the team's track record of discovery and advancement of large projects, key operational and process expertise, and a focus on community relations and sustainable development. Management has extensive experience in the global exploration and mining industry. The Company's shares are listed on the Toronto Stock Exchange under the symbol "SAC" and on the OTCQX as "SOHAF". Information related to South American Silver Corp. is available at www.soamsilver.com and on SEDAR at www.sedar.com.Further information regarding South American Silver's arbitration claim can be found on the company's website at www.soamsilver.com.Forward-looking statementsForward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as "will","pursue", "expect", "creating", "realization" and similar expressions. This release contains forward-looking statements. These forward-looking statements are based on current expectations and various estimates, factors and assumptions and involve known and unknown risks, uncertainties and other factors.Readers are cautioned not to place undue reliance on these statements as the Company's actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements if known or unknown risks, uncertainties or other factors affect the Company's business, or if the Company's estimates or assumptions prove inaccurate. Therefore, the Company cannot provide any assurance that forward-looking statements will materialize. Information from the 2011 PEA Update may also be considered forward-looking information. The 2011 PEA Update was prepared to broadly quantify the Malku Khota Project's capital and operating cost parameters and to provide guidance on the type and scale of future Project engineering and development work that would be needed to ultimately define the Project's likelihood of a positive feasibility determination and optimal production rate. It was not prepared to be used as a valuation of the Project nor should it be considered to be a final feasibility study on which a commercial production decision could be made.The criteria, methods and estimates were preliminary and involved a high level of subjective judgment. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking statements, include, but are not limited to risks of the mineral exploration industry which may affect the advancement of the Escalones project; availability of sufficient financing to fund further required work in a timely manner and on acceptable terms; the political and economic climate in Bolivia including the attitudes and actions of the Bolivian government related to foreign investment in Bolivia and the response of the Bolivian government to the filing of the Notice of Arbitration; the advancement of the international arbitration process in a customary manner; the outcome of the international arbitration process; and other risks more fully described in the Company's Annual Information Form filed and publicly available on SEDAR at www.sedar.com. The assumptions made in developing the forward-looking statements include: execution of the Company's existing plans and further exploration and development programs for Escalones, which may change due to changes in the views of the Company or if new information arises which makes it prudent to change such plans or programs, the ability of the Company to realize value from its investments in Bolivia pursuant to the international arbitration process; the advancement of the international arbitration process in the customary manner; and the availability of new attractive exploration targets at a cost acceptable to the Company. Subject to applicable laws, the Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason. Unless otherwise indicated, forward-looking statements in this release describe the Company's expectations as of April 30, 2013.

And this is what it means:

Wait years, get nothing.

x

Breaking: Tahoe Resources (THO.to) (TAHO) Head of Security arrested

According to the latest repots out of Guatemala, the Head of Security at Tahoe Resources' (THO.to) (TAHO) and the man directly responsible for the brutal repression over the weekend that used live rounds on local protesters was arrested by Guatemalan police as he tried to leave the country earlier this morning. Here's a link to keep up with developments (Spanish language)

UPDATE: A decent report on the whole shebang here, translation below: Seriously, you have to wonder about THO.to human resources department, hiring people like this:

Guatemala, April 30: Guatemalan security forces today detained Italian national Alberto Rotonda, the head of security at the mine where protests since last Sunday have left one police officer dead and a dozen people injured.
Guatemala's Interior Minister, Mauricio López Bonilla, told reporters that Rotonda had been arrested at the La Aurora International Airport, the main airport in the country, while attempting to escape after a local courtroom had issued an arrest warrant against him.
Rotonda is the head of security at the San Rafael mine, subsidiary of the Canadian Mining Company Tahoe Resources, located in the San Rafael las Flores area of the western department of Santa Rosa.
He is accused by members of the local population of having ordered the guards under his command to fire on a group of neighbours who were walking in front of the mine.
As a result of the attack last Sunday, at least seven people suffered bullet wounds in different parts of their body.
Rotonda is accused of attempted homicide and physical aggression, and was remanded into custody at the 'El Boquerón" prison in Santa Rosa.
continues here

Mo' Allied Nevada (ANV.to)

Oh this is fun: Some quotes from the (update: link was broken, now fixed to other source) Allied Nevada 1q13 Conference Call, dated April 9th 2013:

Stephen Jones, CFO: "So I know there’s been a lot of discussion about where we are in terms of funding, and I guess I just wanted to make that clear. We have adequate funding in place. We would like to build ourselves some cushion. We’re in no hurry to build that cushion. We have ample time to do so, and we will do that with non-equity funding sources."

Then in the Q&A afterwards:

Analyst Question: "Is there a size that you have sort of in the back of your mind as to that buffer? Is it still the $100 million of liquidity? Or is it bigger, smaller, kind of where do you stand on that?"
Stephen Jones, CFO: "Yes. I think it’s — we’re still working our way through that. We definitely want to give ourselves some buffer. We don’t — we’re pretty comfortable with the numbers we’re working with. So we’re not looking to make that buffer too large."
Bob Buchan, Big Head Honcho: "The number is going to be small. It’s not going to be a big number."

And then a little later...

Bob Buchan, Big Head Honcho: "There’s absolutely no need — there will not be an equity issue."

And 21 days later, we get a $150m equity financing. 

Big silver

The world's top three silver producing nations in 2012, according to the Silver Institute:

Mexico added 6% to its production last year and sits comfortably on top at 162m oz ag in 2012. China took the number two spot from Peru last year. Peru was number one in 2011 and continues to slip behind. Data here (Spanish).

Face facts: It was always going to be Dundee running this book

The single most telegraphed big bot deal of 2013 (so far) in the canucky mining scene is now official. Allied Nevada (ANV.to), now back under the beady eye of Bob "No Nonsense" Buchan, is raising $150m or so in the manner explained in this NR. Proceeds to be used to cure the total freakin' snafu that the previous bunch in charge made of its star mine.

Political happenings in South America that I should care about but don't

Chile: The main rival to 'Chelle in the 2013 Presidential Elections has thrown in the towel. AP does the story well enough with this note, "Chile's Golborne Quits President Race Amid Scandal". I get the feeling that Larry G, a smart politico, has already worked out he was on a hiding to nothing and has taken the opportunity to back out, keeping his powder dry for the next time around when 'Chelle can't run.

Bolivia: The Constitutional Court says that Evo Morales can run for President again in 2014. It kind of goes like this: Evo was re-elected, but only after the change in country constitution that turned plain old Bolivia into the Plurinational Republic Federal Wonder Country State of Bolivia. And as that's a new country y'see, it means that this is Evo's first time as Prez, not his second time. So he can run for re-election, because last time he ran for re-election it turns out he was running for mere election, not re-election. Simple, isn't it.

Venezuela/Ecuador. Sore loser STFU Henrique "AMLO" Capriles says that President Rafael Correa of Ecuador is "irresponsible" for reminding the world that Capriles supported the 2002 coup against Hugo Chávez. Even though he did.

Peru/Ecuador: Ecuador's Ambassador needs to eat more Ferrero Rocher and get that calm, suave, international statesman thing back on his side. He should stop slapping Peruvian women around and calling them nasty racist things too, especially when in Peru. However, you kind of get the feeling that he won't be in Peru much longer.

Argentina: Cristina now relegated to 4th most famous living Argentine. 

Violence and protests increasing around Tahoe Resources (TAHO) (THO.to) Escobal project in Guatemala

But you won't hear about it, because Canadian mining companies never do anything wrong in Latin America.

No live rounds fired on peaceful protesters.

No brutality and excess violence shown by its security detail.

No taking hostage of 25 police officers by a local mob, stripping them of their guns.

No protest march of 2,000 local people yesterday in San Rafael las Flores.

None of those things have happened since Saturday. In the English language, anyway.

UPDATE And the dead policeman from the violence in the small hours of today. 

UPDATE 2: It took 12 hours to get to the Globe & Mail. IKN brings you the news before the open, they bring it after the close.

Colombian Tuna Fish: Now with added mercury!

mmmmmm...mercury in your tuna/mayo on rye....mmmmmm

So what happened is that this pesky student decided to do his Toxicology master's thesis by going down to his local supermarket, buying 4 different brands of canned Tuna fish and testing them all for mercury content in 41 different tests. The result? 34% of the tests showed levels above the Colombian legal maximum (1.0 part per million), which in itself is double the 0.5 part per million standard recommended by the World Health Organization. Hilarity then ensued when Colombian authorities tried to reassure the public that the levels found were "normal" and there was no risk. 

In totally unrelated news, Colombia is South America's biggest user of mercury and is estimated to get through 180 tonnes of the stuff (more than double the number two user, Peru) and mostly in gold mining. Via dredging. Of riverbeds. That run into. The sea. Where tuna fish live.

Far too busy...

...listening to this to care about the market today.



Priorities. Right.

A Flash update...

...was sent to subscribers about half an hour ago, pre-opening bell Monday. Potentially actionable, but let's see how the day unfolds first.

Chart of the day is...

...gold versus silver, two years, using GLD and SLV as the proxies:

So tell me silverbugs, how's...nah, forget it

The IKN Weekly, out now

IKN208 has just been sent to subscribers. All aboard!