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12/12/17

The Daniel Ameduri pump job on Zinc One (A.v) starts tomorrow

Thr long lost drill permits have finally shown up. Expect a company NR tomorrow lunchtime and don't say you weren't warned.

Keith, that's one leaky boat you got there. Why you trust Ameduri is beyond me.

Good to see Rye Patch Gold (RPM.v) confident it can get to commercial production in 1q18...

...as per its update yesterday, what with the way it was working cap negative to the tune of CAD$23m at the end of 3q17 (which means even worse now)...

...it owed $38.65m in current liabilities, most of that financial debt accruing interest of between 16% and 36% (yup, that says thirty-six percent, it's not a typo)...

...as well as the long-term lumps of course, and its cash position is dwindling rapidly again

By the way, my fave bit of yesterday's NR was when CEO Howald said after the 3,491 oz Au produced in November means (and we quote), "At this point mining operations now begin to contribute positive cash flows to the Company", which is one impressive piece of verbal gymnastics. It translates as "we fractured more cash in October and November and mining ops cash flow still don't cover corporate costs." Natch.

So let's take bets on the size and price of the next round of equity financing: I say they sell 100m units at 15c apiece for $15m and get that shares out count to 527m in one shot. Any counters?

And you know it's Peak Blockchain when...

...Henk van Alphen and Cesar Lopez join forces to IPO a blockchain company onto the TSXV. This is going to be a hoot.

The big question about Mineros SA

Will it backdoor into the TSX by buying Atacama Pacific (ATM.v), or will it try to go it alone via an IPO? The guys at ATM seem to think it's a done deal that they'll get bought out by the Colombians, but the longer they dick them around the higher the chances that the Colombians walk.


Chart of the day is...

...copper, month of December:




Back at three. That didn't last long.

12/11/17

Eric Sprott and Garibaldi (GGI.v)

So there I was, watching the market today, with the radar screen open and the action in that current day hotstock Garibaldi (GGI.v) clearly catching the attention as it plummeted after the Friday afternoon BS news release that didn't fool anyone with a brain (i.e. the population of CEO.ca is forgiven, they know not what they do) when it dawned on me that Eric Sprott was in there buying once again. Not content with splashing his cash into the stock the way he's done recently...


...there were more blocks going out from time to time in exactly the same way. And that puzzled me because this GGI thing is a hyped-up souped-up vehicle with way more sizzle than steak, a story that the company will be able to spin out for as long as there are gullible idiots prepared to flush their cash down the toilet (in other words, indefinitely), so what's a successful and smart player like Eric Sprott doing in the marketplace, doesn't he have enough shares already? Doesn't he have a home to go to? Got a better hobby, Eric? The thought kept scratching at me so, rather than keep it at an intuitive level, it was time to go and get some real data. What follows is accurate (I believe) as at the end of last week, December 8th as per SEDI and GGI Reg Fs, so it doesn't include any purchases Eris Sprott made today (doubtless a few hundred thousand more) but has enough information for our purposes.

Here we go:

As far as I can make out GGI.v today has 97.81m shares out (feel free to correct me if I'm a few out either side, but it's going to be close anyway) and of those, Eric Sprott owns 11.59m. That's 11.85% of S/O and once you add in the un-exercised warrants (3.873m of those, with 2.286m or them well in the money and 1.587m out the money at $4.50 strike) his F/D stake goes up. So he's obviously keen on GGI and his continued incursions show he's hungry for more, but it's when you start examining just how he built position that the strategy becomes clear.

The key is the first move in, when he spotted the upcoming hype early and bought 7.816m shares at 82c and 92c. Along with those, a couple of weeks ago he exercised 833k options at a 20c strike, so there on those three he has 8.65m or so shares in his pile. Total price paid? That's $6.77m or so.

Which brings us to the second part of his strategy, as since then Mr. Sprott has been a constant buyer at market prices. Go check the SEDI filing yourself but once you do you'll see the same as I and, if you can be bothered to do the same sums, you'll see that his market purchases aside from the cheap entries described above come to 2.939m shares (as at the weekend just gone remember, add in today Monday yourself later if you want) and cost him the pretty total of $9.36m so far. So, add together the early cheapies and the market priceys bought by Sprott and you get a man that's paid $16.13m for 11.59m shares. Your average price: $1.39 per share (not including the warrants).

The point---> People, he can hardly lose. No matter how many shares he adds from here (presumably the ultimate stop for open market purchases is 19.99%), thanks to the early purchases he's going to stay under the market price for the indefinite future. What's more by continuing the buying spree he controls the bid/ask, as if it goes too low he just whacks in and the momo crowd follow suit (after all this is Eric Sprott right? Never made a bad call in his life yaknowz...). The key to this all is, of course, his balls of steel to buy large and early when the rest of the market were just cottoning on to the opportunity. That's the sign of a master at work and I truly take my hat off to him for the way he trades into a position, it's as close to real genius as you see in the Canadian capital market, but almost as impressive is the way in which he's played the open price at the new high levels (and in doing so kept them high, all to his own benefit). And ultimately, Sprott is likely to keep on driving to the very end of this road because thanks to his market craft his own odds are stacked well in his favour. Here's his risk/reward equation these days:
1) If the whole GGI edifice turns out to be a mirage, it's not going to return to zero cents (these things never do). Let's say for argument's sake it dumps to a long term 50c. Eric loses $10m maximum (and it wouldn't take much market nous for him to being his cost basis down to zero quickly).

2) However if GGI does turn out to be the next Voisey's Bay or whatever, he's holding 12% or 15% or 20% of a multi-billion dollar asset. That moves the dial of anybody.

3) So a billionaire gets given betting odds of at-worst $10m to the the downside and (let's say) $1Bn to the upside. This one is not difficult, count the zeros, but as an added bonus he gets to do what he loves to do the most and play serious in the market, limelight and kudos and ego-stoke, the whole nine yards.

Bottom line: GGI's future matters more to you than it does to Eric Sprott. The man in charge of this ticker is allowed to be an idiot with $10m because his  world class early perception of the market move. Add that to his out-sized stones and you have a man in what he believes to be a highly advantageous position in GGI. So be clear, you are not him, you aren't as rich, you aren't as powerful, you aren't as good as spotting an early market opportunity. On the other hand you haven't been duped into believing (first by the story, then by bias confirmation twaddle from the company and its True Believers) that the shysters in charge of this BS show really might have the next VB. You see the big and stupid mistake he's making by throwing good money after bad and recognize that now is the time to short this utter POS, laugh deeply at the idiots on CEO.ca making fools of themselves and take a minor piece of Eric's wealth away from him. He won't miss it and you'll enjoy it.

Catching up with Auryn Resources (AUG.v)

Regulars to this humble corner of cyberspace may remember this October 19th post on Auryn Resources (AUG.v) that noted the initial collapse of its bloated share price away from the $3 level and ended this way:
"When (not if) AUG.v breaks $2 to the downside, the wholesale margin calls that Haywood will deliver are going to push this over-hyped vehicle even lower."
Cut to today and...


...yup, exactly as predicted. And Haywood were the sellers last week too...hoodathunkit eh?

So. well done to Goldcopse for buying into this Daniel Ameduri pump job. Winning.

12/10/17

The IKN Weekly, out now




IKN447 has just been sent to subscribers. Words, numbers, charts and photos of rocks and people.

The Guatemalan Margarita

I've just been sent this photo from a pal sitting in Guatemala today:


Certainly different.

12/9/17

Angry Geologist does Garibaldi (GGI.v) again

I've stated my position clearly enough, but this is a detailed and careful analysis of the latest drill hole that came out this week and worth your eyetime. Stop wasting your time at IKN and read something interesting instead on this link right here.

12/8/17

The Friday OT: Pulp; Common People

There's this advert on TV for Canada Dry this end of the world that uses the Pulp song 'Disco 2000' as the backing music, which gave me a dose of nostalgia and had me running to Youtube to check it out as a possible Friday OT. Which isn't going to happen because 'Common People' is a better track altogether. And the video might look clunky these days, but it was quite the zeitgeist thing at the time.



And "I took her to a supermarket" is still one of the best pop song lines ever.

Youtube here.

12/7/17

Totally OT: “I Made My Shed the Top-Rated Restaurant on TripAdvisor”

Busy person doing busy things today and this has nothing to do with anything normal to IKN but no matter, it simply must be shared.



Wonderful on so many levels, do your funnybone a big favour and read this. The woman sat next to me on the plane this morning started giving me funny looks and shuffling to the other side of her seat I was laughing so much. Deeply indebted to reader T for the heads-up.