2019 – Be a Pig, But Don’t Get Slaughtered

By Rob Bruggeman

t’s cliche, but what a difference a year makes.  We started 2018 with a very bullish market for metals and mining stocks.  The euphoria, however, was short lived with the market starting to roll over in February with another leg down starting in July and a horrendous December.  In fact, the major US indices recorded their worst December since the Great Depression.  The Chinese Zodiac calendar had 2018 as the year of the Dog.  In hindsight, I’d say that was pretty apt.  RIP 2018!

Since we’re on the topic of the Chinese Zodiac calendar, 2019 is the year of the Pig (starting Feb. 5).  I don’t believe in zodiac signs or horoscopes but, interestingly, analyzing S&P 500 returns over the past 90 years indicates:

Continue reading 2019 – Be a Pig, But Don’t Get Slaughtered

Compare and Contrast: Reuters on Mexico in Late December Versus IKN on Mexico Late November

By Otto Rock

I’m a little late to this December 20th report (travelling and Christmas and all that), but a kind soul put it in front of my eyes on Twitter this morning and here’s the header:

Mexico plans no drastic changes to mining sector: official

Have a read of that, then feel free to compare that to the IKN take on the whole Mexico mining political risk AMLO hoo-hah as published back in November (when the whole thing was kicking off and caused mining stocks to drop). You can find that right here and there are several angles examined, but here’s how the piece concluded:

Continue reading Compare and Contrast: Reuters on Mexico in Late December Versus IKN on Mexico Late November

It is Wise to Listen to Billionaires – Part 1

By Rob Bruggeman

When a person in the mining sector has built multiple successful companies and made over a billion dollars doing so, listening to their advice is a no brainer.  Ross Beaty is such a guy, having built Pan American Silver when he saw an opportunity in silver and Lumina Copper when he later saw an opportunity in copper.

Rick Rule recently did a great interview with billionaire Ross Beaty.  The interview is worth a read given Ross’ success in the mining sector.  Here are the key statements I want to highlight for investors and managers in the mining sector:

  1. “This business is all about high risk and high reward…In public markets, given the fact of outsized risk, you want to be looking for things with outsized returns like 100% or 1000%.”
  2. “If you’re going to be building a public company, go for size. Don’t waste your time on little things.”
  3. “You can have a deposit that has 100 million ounces like Pebble (Northern Dynasty). It’s almost a goose egg of value if you can’t permit it and if you can’t make it work….I’d rather have 1 million ounces of high-grade gold than 100 million ounces of really, really low grade that you can’t make money on because that’s worth nothing.”
  4. “This is a cyclical business. I know it’s going to change. How could I be even more exposed to the turn? How could I build value that’s going to come when the markets turn, when the bear market turns into a bull market? I don’t know when it’s going to happen but I know it’s going to happen.”

Continue reading It is Wise to Listen to Billionaires – Part 1

Today’s junior mining quiz question for a maximum of 17 points

By Otto Rock

What three things do these three junior exploreco companies have in common?

  • Evrim Resources (EVM.v)
  • Silver Bull Resources (SVBL)
  • Azucar Minerals (AMZ.v)

If you answered “All in Mexico”, score two points.

If you also answered “All did deals this year to let major mining companies into their flagship assets”, score 5 points.

If you added to your answer, “All did those deals with majors at way higher prices than today’s market because the major just waded in and then a whole bunch of retail fools who were cocksure the major “knew something special” also bought at the same time only to have their asses handed back to them on a silver platter as well”, score ten points.

This thing about major mining companies knowing more than the rest of us, can we bin it now, please? Geologists are crappy at corp dev decisions.

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Mexico: The New Mining Law and the Changing Scenario Around Mining (from IKN496)

By Otto Rock

You can rant or giggle at this blog’s contents as much as you like, it’s not where the real work goes on round these parts. This from The IKN Weekly IKN496, out on Sunday evening. I’ve been asked by a couple of subscribers to put it on the open blog and yeah, why not. Here you go.

Mexico: The new mining law and the changing scenario around mining

The main political risk news story out of the region last week is the very same we previewed last Sunday, a closer look into what we can expect from the new AMLO government for the Mexico mining sector. At the time last Sunday I expected to preview some of the potential negatives in the pipeline, but events overtook me and last week we saw a range of Mexico exposed mining stocks take steep dives on the political newsflow. Examples:

  • Fresnillo (FRES.L) down 15%
  • Torex Gold (TXG) down 15%
  • Southern Copper (SCCO) down 15%
  • MAG Silver (MVG) (MAG.to) down 8%

However, not all Mexico exposed miners were whacked hard, or even at all, compared to the benchmarks. More examples:

Continue reading Mexico: The New Mining Law and the Changing Scenario Around Mining (from IKN496)

Here’s Hoping the BCSC Goes After TSX Companies as Well, Not Just the CSE

By Otto Rock

Because there’s plenty of grist for that particular mill, too.

I’ve been sent the link and/or the PDF of the BCSC announcement about the so-called “BridgeMark Group” around two dozen times since it came out yesterday. And a good thing too, thanks to all who cared enough to think of this humble corner of cyberspace, it’s greatly appreciated. There’s been plenty of real reporting on the development done by real reporters, you hardly needed a pissant blogger throwing in his dos centavitos yesterday, but there are a couple of interesting angles to the allegations brought by the BCSC Executive Director.

1) All the companies are CSE-listed. Now that’s fine, if all the named issuers have been doing naughty things they should be called out but there’s no way on God’s green earth you can tell me these nefarious peddlers of scams are confined to that exchange. Sleight of hand as outlined in the report has been going on forever on the TSX and especially the TSXV, therefore we wait to see whether BCSC has actually grown a real pair. Is it after the bad guys, or is it just trying to shut down the TSX competition which has grown from insignificant to a thorn in the side of the main exchange these last couple of years?

Continue reading Here’s Hoping the BCSC Goes After TSX Companies as Well, Not Just the CSE

McEwen Mining (MUX): Why so quiet about your news, Rob?

By Otto Rock

[biiwii comment: thanks Mark, I was just reviewing this one for the possibility of a future buy and this is surely a consideration]

I mean, normally Rob McEwen is bouncing off the rooftops and shouting to the world about McEwen Mining (MUX) any time it has news to offer the market, but for some strange reason he seems to want to keep this one quiet.

  • MUX filed the news late on Friday evening to SEDAR
  • There was no news release to accompany the Reg Fs
  • And today, still nothing from the company

Why would that be? Hmmm…perhaps if we look at the news it might help:

Continue reading McEwen Mining (MUX): Why so quiet about your news, Rob?

Novo Resources (NVO.v): A NR, a Chart and a No Comment

By Otto Rock

A NR Here.

A chart here:

As for comment, this humble corner of cyberspace has nothing further to add to this post and message of late November 2017. Here’s how that ended:

4. The issue: how to prove QH is right. And it’s here where I have my major issue with NVO as an investment today because for the life of me, I don’t know how anyone can prove what’s there under the sand without digging it all up first. We’ve already seen drill assays are going to be a non-starter to get to an accurate resource because of quite literally the nugget effect (x100). We’re about to get results from one small area and they’ll be talked up/down by both sides of the argument no matter what they contain, they will not provide any sort of resolution. So, Large Scale Bulk sampling? Yup, take 500kg from here there there and here. Process it. Then tell me all the areas between the samples are the same. Okay. Time for that? Expense? F___ dude, suddenly you’re just mining!

5. Now I know you like the play geologically. All good, but where’s the investment? Honestly, I see this stock trading where it is for years (or diluted as new paper becomes treasury) because it simply doesn’t have any way of proving anything. It’s ultimately risk management and the de-risking of the NVO equity is going to be very difficult.

Bottom line: I have no issue with the geological arguments, no matter which side is eventually proven right. But the key word is “eventually”, I see years of price inertia as the most probable near, medium and long-term future for NVO.

And nothing has changed since, either. Neutral NVO, staying that way, not falling for the BS hype being slathered all over the unwitting fools by people with hidden agendas over at CEO dot CA, either.

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Mining PRs and the Ottotrans™, Part 103

By Otto Rock

Our occasional series is back, as the attempt is again made to turn mining company news releases into something approaching the English language. The example today comes from Wealth Minerals (WML.v), that bag of special things out of the Henk van Alphen camp.

 

This is what they wrote:

May 16, 2018

Wealth Announces Engagement of Investor Relations Consultant and Comments on Promotional Activities

FOR IMMEDIATE RELEASE….Vancouver, British Columbia: Wealth Minerals Ltd. (the “Company” or “Wealth”) – (TSXV: WML; OTCQX: WMLLF; SSE: WMLCL; Frankfurt: EJZN) announces that it has entered into an agreement dated May 15, 2018 (the “FMT Marketing Agreement”), whereby it has engaged Future Money Trends, LLC (“FMT”) for a period of one year at the aggregate cost of $250,000 to provide financial publishing and digital marketing services to the Company.  Pursuant to the FMT Marketing Agreement, FMT will raise public awareness of the Company (including its social media presence) and will promote the Company’s business.

Continue reading Mining PRs and the Ottotrans™, Part 103

The Tightening Lead (Pb) Market (from IKN459)

By Otto Rock

This was part of last weekend’s edition of The IKN Weekly. Just one small edit, the name of a company at the end.

More on Lead (Pb)

It was hectic and a bit of a squeeze to get the edition out on time last week, since then I’ve had time to fill in some blank spaces and none more so than the intriguing situation in the lead market. What I’ve found by checking the data is that there’s every reason to suppose an acceleration in the demand for lead that justifies the current voracious appetite of smelters for product.

The place to go for reliable supply demand data is the International Lead and Zinc Study Group (ILZSG), based out of Portugal and comprised of a selection of industry experts from all corners of the sector. We’ve made use of their database (22) on these pages previously for the zinc exercise which showed in 2016 the rise in demand (that’s worked out very nicely thank you) and it’s now time for its ugly sister, known in Latin as plumbum and the reason we call out the plumber who’ll often bring his plumb line. This chart derived from the data shows the supply make-up of Pb and the first thing to note is the high percentage of end user supply that comes from the re-cycling business. There are well-established firms that do this and as much as 97% of the lead used in car batteries is scavenged and sent back to battery makers to use again. However, mined supply is also on the rise and with 11 months of data for 2017 already published, our estimated as seen in the charts is likely to be within a tight margin of error and shows supply expanding again after a couple of stagnant years.

Continue reading The Tightening Lead (Pb) Market (from IKN459)

KPMG Reports on Risks Faced by Top Mining Executives

By Otto Rock

TORONTO, March 1, 2018 /CNW/ – Overbooking at quality lunch establishments is the top risk facing mining and metals companies this year, finds an annual survey of Canadian mining executives by KPMG in Canada.  As volatility re-emerges in reservations markets, shifting prices will be a key theme as mining industry participants from around the world gather in Toronto next week for the 86th annual Prospectors & Developers Association of Canada convention to get absolutely lathered.

The latest issue of Insights into Mining shows a relatively consistent risk landscape compared to previous years as Canadian and global mining businesses continue to navigate Michelin three star restaurants in a highly competitive industry. Booking risk and the average price for Dom Perignon returned to the Top 10 this year, while access to private rooms, AMEX rhodium cards, controlling bowels and trying to drive Ferraris while drunk, maintaining an antisocial right to talk loudly and managing walking instability also figure high on the list of top risks.

“Restaurant booking risk is once again the leading challenge facing mining executives as they consider the downside of the recent upswing in prices,” says Heather Cheeseman, GTA Mining Leader and Partner, Audit and Risk Consulting, KPMG in Canada. “With weed and crypto stocks making gains, the competition for the best tables at lunch is now fierce and PAs are under pressure to secure the best lunch spots without going on long waiting lists, else incur the wrath of the utter pieces of shit who pay their monthly salaries.”

Below are the Top 10 risks facing Canadian mining and metals companies in 2018:

1. Restaurant lunch reservation risk
2. AMEX rhodium availability (includes risk of embarrassment in using a  mere Platinum or Black card in front of peers)
3. Access to best tables
4. Having to be pleasant to “the staff” else face discrimination lawsuits
5. Dom Perignon price risk
6. Private room availability
7. PDAC hangover risk
8. Ability to drive back to office without DUI arrest
9. Controlling bowels
10. Capital allocation of lunch on expense account without anyone noticing the line item

Each year, KPMG in Canada updates the market with critical insights into the risks, challenges and multi-year trends that are top of mind for Canadian miners. Learn more by accessing the Insights into Mining report.