Hedgies, Moody’s and GSR

The big hedge fund guys are placing long bets on commodities. [Mining.com]   It’s one thing to tweet hype from the sidelines and another to pony up with your own (substantial) money.  Soros, Icahn and Druckenmiller see an opportunity and Frank Holmes has noticed.

Jaws

Snack time


Moody’s lowers their ratings on commodities, citing “extraordinarily adverse” conditions.  [Mining Weekly]  From the same folks who predicted Enron, the sub-prime crash and Lehman Brothers … after they happened.  If you’re relying on Moody’s for your investment decisions, you’re already too late.


Rio Tinto back in production. [Lawrieongold.com]  The next time you’re in the bar and some gluten-free, cider sipping greenie in granny glasses harasses you about how mining is a transitory boom-and-bust sunset industry just sit back and say, “Yeah – well what about Rio Tinto – they’ve been mining there since 500 BC.  Can Lululemon beat that?”.

You needn’t mention that it got “lost” for about 1300 years between the Dark Ages and the 1800’s; let them do the research.

Roman miners

Under new management


CEO.ca’s Chat forum is sort of a digital “Jolly Taxpayer” sans smoke and (alas) beer.  If you want to know what the Howe Street in crowd and wanna-be in-crowders are pushing, it’s worth checking into.  While solid news is sometimes reported and discussed , it is also being used to launch trial balloons and promotions with no (obvious) legs.   Some of these might turn out to be real and most will go flat but it is nonetheless interesting to see what they’re up to.   So .. with sincere apologies to IKN from whom I have shamelessly stolen the perfect tag line – it’s time for the first in an occasional series:

Man the pumps

  • Ashburton Ventures (ABR):  Last seen in the Yukon and then northern BC, Michael England’s vehicle is now picking up lithium prospects in BC and Nevada. A steal at $0.015 with 54M shares out there for the taking.  No solid news and a financing in the works.

A contrary sign amidst the gloom:  Major Drilling’s revenues are up by 24% YoY.[Junior Mining Network]  Profits are up too despite big restructuring charges as they closed operations in Namibia and South Africa.


Stockwatch on Goldstrike:

Terrence King’s Goldstrike Resources Ltd. (GSR), up one-half cent to 13 cents on 990,000 shares, has received assays of up to 13.25 grams of gold per tonne over 17.5 metres, including a 5.7-metre zone that averaged 35.28 grams per tonne, at Goldstack on its Plateau property in central Yukon. Assays from two other Goldstack holes and eight from Gold Dome, 17 kilometres to the east, were also encouraging. Trevor Bremner, director, says Plateau hosts “a significant original discovery with district-scale potential.”

Mr. King, president and chief executive officer, went further. He has long said that Plateau has “tremendous potential for a major high-grade gold discovery.” He now says the results “exceeded our expectations and suggest we could be seeing just the tip of the iceberg.” The tip of the iceberg had the chill of the Titanic on Wednesday as Goldstrike’s stock sank eight cents to just 12.5 cents on 4.2 million shares following the news. The market had been expecting considerably better results after Mr. King and his crew posted to the company’s website several pictures of grab samples from Plateau with visible gold present — rocks that yielded bonanza grades of hundreds of grams per tonne.

Mr. King and his crew do not draw salaries, but they are remunerated for other services. Mr. King is a lawyer, and his firm received over $80,000 for “legal services” provided to Goldstrike. William Chornobay, chief operating officer, was paid $300,000 last year for geological consulting services. Goldstrike’s slump on what would usually be considered encouraging assays suggests the company could use the help of a promotional consultant.

Really? From the website :

Bill is a business man with over 20 years experience in negotiations, identifying and acquiring undervalued assets, corporate finance, corporate development, team building, and managing exploration programs in the Americas.

Hype is like salt.  A little, judiciously applied, adds zest to food; too much makes you gag.

Goldcorp, copper and uranium

Geology matters.  Goldcorp cuts production estimates at its Eleonore Mine due to dilution. [Bloomberg]   Seems there was higher than anticipated folding on their deep (ie. expensive to develop) Horizon 4.   With a real “sunk cost” on their hands, they must forge ahead with dilution rising from 10% to 30%.   Geologists around the water cooler will doubtless remind engineers of this one for a while.

Computer models

But it was way easier to use a simple tabular ore shell…


We want a closed shop.  Australian Institute of Geoscientists calls on the government to tighten visa requirements for foreign geologists and geophysicists. [Mining Weekly]

“The latest data released from the AIG found that more than 75% of Australia’s geoscientists work in the exploration and mining sectors and are currently experiencing a national unemployment rate exceeding 15%. An additional 20% of geoscientists are unable to secure their desired level of employment.”

Scabs


Another El Nino victim.  Freeport-McMoRan cuts its 2015 copper production forecast by 3% (11kt) due to a lack of process water. [Reuters]  Another buttress to support sagging copper prices; between this and Glencore shutdown this could put copper supply / demand in balance next year.


The World Nuclear Association thinks things look longterm rosy for uranium miners. [Reuters]  They forecast a 66% increase in uranium consumption by 2035 but state that the market is well supplied until 2025.   This should be enough to keep the uranium bulls snorting; I’m sure someone over at Resource Clips is sweating on a rehash of this right now.  Besides, uranium seems to be the only commodity out there that isn’t heading down – if you think spot uranium in any way reflects market (as opposed to speculator) sentiment.

Uranium


James Kwantes stands by his pick on North Arrow.  [CEO.ca]   A quick phone call to NAR provides some soothing background after the Pikoo results.  They actually weren’t that bad, essentially in line with the initial estimates and justifying further work.  Howe Street might feel a little burned however (a very bad thing) after ploughing $4M into NAR in May.  This was quickly followed by….

“The low point came on June 9 when the company reported disappointing diamond values from its Qilalugaq coloured diamond project, touted as a repository of rare high-value yellow fancies. Shares lost half their value that day, dropping from 95 cents to 42 cents, and the stock hasn’t moved much since.”

Some investors may have had more than just buyers remorse (“They had to have known.. etc.).   Pikoo was Plan B and it still looks interesting if not promising.   Management has provided the talking points:

“Instead, the drill unexpectedly hit more kimberlite, which contained diamonds but also had a weaker magnetic signature as well as a texture suggestive of a kimberlite pipe rather than a dyke, according to Armstrong. That increases the chances the kimberlite is a bigger body, he said.

“You can visually see chrome diopsides, which is very rare,” he said. Chrome diopsides are one of the least abundant kimberlite indicator minerals and form deep within the Earth’s mantle, within the “diamond stability field” that produces the valued stones.”

KDI at Kelvin showed the market the importance of recognizing texture and hunting it down.  The market for chrome diopside is poor however.


Golden Predator in the news. [Resource clips]  Characterizing this as a “reverse overthrow” is a bit much; careful choreography might be more apt.  When you’re in the news because of board room gymnastics instead of happy success news it’s not good.  Hopefully they can get the wheels back on the wagon and do something but it will be hard with Till’s big note hanging out there.

Kabuki


Pollution control is cutting into Chinese iron & steel production. [China Mining]  This was a theme John Kaiser stressed in May at Cambridge House; the Chinese authorities, ever vigilant for signs of unrest, recognize that industrial pollution is pissing off the masses.  In Tangshan, Hebei Province, “the city has shut down 2,382 companies involved in the iron, steel, cement and coking industries.”   Looks like Mao’s smelter-in-everybody’s-back-yard campaign is finally over.

Pollution


Financing news.  


Pacific Ridge gets cash from Fyre Lake and plans 750m drill program at Mariposa. [Pacific Ridge]


Brazil Resources releases Whistler Resource. [Stockwatch]  79Mt of indicated @ 0.51 g/t Au, 1.97 g/t Ag and 0.17% Cu.  In the heart of the Alaska Range… but close to the Iditarod Trail.


Delisted watch.   Mill City Gold (MC) is off the board.  They did a lot of placer exploration in the Yukon in days of yore and were looking for hardrock gold near Mt. Hinton in the Mayo area more recently.  They will be missed.

Dirty deeds in Alaska

Skulduggery at the EPA. [Petroleum News of Alaska]  If a mining company executive secretly colluded with locals to screw a competitor and then vanished into the jungles of South America when regulators got on his trail, this would be big news – maybe even a movie.   But it’s no big deal when some self-appointed eco-warrior uses his position in the Federal Government to screw a mine proponent and pulls the same vanishing act.  Seems like Mr. Big in the “stop Pebble at all costs” movement is a recently departed biologist working for the EPA who has flown the coop – much to the displeasure of an American judge.


No uranium mining in Quebec! [CTVnews.ca]  There isn’t any; there won’t be any; and the explorecos that spent money are SOL.    … because “there is no “social acceptability” for uranium mining to proceed at this time. After a year of study, a three-person panel said that it would be premature to authorize development of Quebec’s uranium industry.”   Instead of science, we get mob rule.

Copper, Capstone and Goldstrike

Copper’s up after Glencore and some positive Chinese news.  [Mining.com]  Price jumped from $2.31 to $2.44 / lb.  Those guys at Sanford Bernstein are at it again forecasting:

“This is close to the bottom of the cycle for commodities; it certainly feels like that from my perspective, signs today are indicative of that,” Gait said.”

When the last drop of hope has been wrung out of this market, we’ll be ready for a turnaround.  Sounds like we’re not there yet.

So... where do you think the copper price will go?

So… where do you think the copper price will go?


Half of South African gold mines are in the red. [Bloomberg]   A perfect storm; declining grade and unions that want to simultaneously get a pay raise and preserve jobs.  There appears to be no way out of this impasse despite government jaw-boning.  You just can’t repeal laws of economics.


Oreinc Index steady (but still in the tank). [Oreinc.com]

Oreinc


Grief in the retail diamond world. [Diamonds.net]

  • Macy’s to close 35-40 stores (out of 770)  “…as the company works to optimize its omnichannel approach to customers across America, according to a company announcement. ”   Nothing beats the romance of buying diamonds on the internet.
  • Tiffany is going after Costco (!) to get earnings from jewelry they sold, branded as “Tiffany engagement rings” .  “According to the company, for nearly 130 years, the Tiffany setting has been sourced and manufactured to strict specifications, backed by a lifetime guarantee. Tiffany maintains an aggressive and rigorous intellectual property program, and regularly takes actions against counterfeiters and infringers, the email noted.”
She'll never know...

I love you but I’m cheap.


Benjamin Cox on why investors are like ants. [CEO.ca]   They aren’t very smart – unlike the investors on CEO.ca.

Engineers

[xkcd.com /CEO.ca-chat]


Capstone announces capital spending cuts. [Junior Mining Network]  Santo Domingo gets chopped.  Here’s a number Yukon politicians, regulators and suppliers should note: cash costs for copper  at Minto are $2.55-$2.60 per pound.


Peregrine update on Chidliak. [Junior Mining Network]  DMS processing of the 558 t bulk sample from CH-7 begins next week with results in Q1 2016.


In the “You’ve got to be kidding” department:  A Stealth Bull Market Coming for a Particular Metal and One Way to Play It. [CEO.ca]  Nicely buried well down in the article we find that this metal is …. zinc.   And the way to play it is to bet on an undeveloped play in a rugged area of northern BC well away from any infrastructure.   Really?

zinc


North Arrow’s Pikoo results are a bit of a wet blanket.  Stockwatch’s Will Purcell digests the news:

Grenville Thomas and Ken Armstrong’s North Arrow Minerals Inc. (NAR) lost five cents to 40 cents on 44,000 shares on new diamond counts from PK-150, a small pipe east of La Ronge in Saskatchewan. PK-150 excited investors two years ago when 210 kilograms of kimberlite yielded 23 diamonds larger than a 0.85 millimetre cut-off, with a calculated grade of 1.34 carats per tonne. North Arrow’s stock jumped to 84 cents, up from 34 cents, on that result. The new counts, obtained from 323 kilograms of kimberlite, produced only nine diamonds at the same cut-off and their combined weight, 0.185 carat, is just 0.57 carat per tonne.

Investors were clearly disappointed with the lower grade, as North Arrow’s stock slumped to an intraday low of 34 cents early today. The response was expected, but it may be an overreaction. While the latest test yielded a grade less than half the first result, the size distribution pattern of the new parcel provides some confidence that PK-150 has a solid grade. In 2013, only two of the 23 diamonds sat on a 1.18-millimetre sieve, leaving a grade of roughly 0.5 carat per tonne using the larger cut-off. Two diamonds also remained on the 1.18-millimetre sieve again this year, pointing to a grade of just over one-third of a carat per tonne. Combined, the 533 kilograms of rock averaged 0.87 carat per tonne, and about 0.41 carat per tonne using the larger cut-off.

Mr. Armstrong, chief executive officer, spun the results as “consistent” with those from 2013 and they arguably were, given the tiny sample sizes. He added that the counts confirmed PK-150 as a significantly diamondiferous pipe with “increasing size potential.” In other words it is still small, but North Arrow thinks it will grow with further drilling, which will occur this winter. Meanwhile, the company’s next chance for promotable diamond counts should come within a month, from PK-314.

They were also quietly working in the NWT this summer, perhaps near Redemption.


Banyan Gold winds up work at the Hyland Gold Project near Watson Lake. [Junior Mining Network]  Drilled 3 holes / 740 m and trenched.

 Analytical results remain pending, but highlights of the 2015 drilling include massive sulphide, pervasive aresenopytie and native copper with galena mineralization intersections from the Camp Zone.


Redstar Gold raises $750K. [Junior Mining Network]  Proceeds have been dedicated to their Unga Project in Alaska.


Goldstrike Plateau results.   [Marketwired]   Three holes hit at Goldstack.   There’s some interesting reporting going on here using telescoped intervals and grade smearing.  Brent Cook’s  Drill Hole Interval Calculator is just the tool for this.

The headline interval from Hole PSGS15-01 is 17.5m @ 13.25 g/t Au but this appears to be two high grade intersections (3.0m @ 62.6 g/t Au & 2.0 m @ 11.53 g/t Au) within an intervening interval of 12.5 m  @ 1.68 g/t Au.   The second hole PSGS returned 40.50 m @  2.35 g/t Au but this includes 2.70 m @ 25.8 g/t Au leaving a residual interval of  37.8 m @ 0.675 g/t Au.   These two holes were drilled from a single setup, 30 m away from the discovery outcrop.  Taking no chances, the third hole, PSGS15-03, was collared on the discovery outcrop and drilled down-dip.  It appears to have intersected an 8.0 m wide shoot averaging 11.26 g/t Au (the high grade showing) and two longer lower grade intersections beneath.

They also hit at Gold Dome and treated the data the same way.  The highest grade results  there appear to be 0.5 m @ 12.65 g/t Au and 1.0 m @ 6.45 g/t Au.

The assays are uncut and VG is reported in core; what were the maximum uncut values?  Reporting like this makes one curious to see the actual sample results.  Presumably they are not sampling  core in 2.0 to 3.0 m intervals.   Let’s see what Mr. Market thinks of the results…

GSR

 

Glencore, Venture financings and staking

On Friday, Glencore’s shares dropped 10%, capping a 60% YTD decline. [Bloomberg]  In crisis mode,  On Monday, CEO Ivan Glasenberg bit the bullet. [WSJ]:  Scrapping the dividend, issuing more stock and putting assets on the block.   Glencore started as traders  and they still have a huge operation.  What’s going on here smells a little Lehman-like…

Glencore executives are scrambling to protect the company’s credit rating, a battle that comes down to reducing debt faster than earnings erode… Lower commodities prices have battered earnings, making it tougher to hit key targets tracked by analysts, such as debt relative to earnings and cash flow. Credit agencies use those measures to gauge creditworthiness.  The two big ratings firms, Standard & Poor’s and Moody’s Investors Service, now rank Glencore two notches above non-investment-grade debt. If Glencore falls into “junk” territory, the company’s costs of funding its massive trading operation could spiral, exacerbating the earnings squeeze. Some trading counterparties could also get spooked, pulling out of trades altogether.

..The debt-related worries are centered on Glencore’s trading operation, which had revenue of $35 billion in 2014. Glencore executives have said their trading or “marketing” business, in which traders buy and sell commodities, can rack up profits no matter which direction the market goes.

After Monday’s announcement, Ben Davis, an analyst at Liberum Capital, said Glencore is “going into full battle mode, which the market certainly appreciates.” Despite Monday’s stock-price rise, Glencore shares are down about 75% from the company’s initial public offering.  Glencore said it would issue new equity to raise $2.5 billion and suspend future dividends to save an additional $2.4 billion.

Behind this all the big worry….

“If this doesn’t do the trick,” Mr. Glasenberg said about the moves, “we’d have a very difficult environment in the world.”

Part of their plan involves shutting down two African mines and removing 300Kt of copper from the market; currently there is a forecast surplus of 350 kt for 2016. [Reuters]

The only project they have in our little corner of heaven is Hackett River in Nunavut (Xstrata).  They pulled out last year and there was lots of cheap fuel for sale at the strip this summer.

Hackett River


The Venture Exchange in the dumps.   Financings hit a new low (worse than 2009) in August. [TMX.com]  Had to double check the numbers.  $108M.  This is little more than a good Goldman Sachs Christmas bonus; how are you going to feed 1200 zombie juniors on a diet like this?

TSX-V financings


De Beers bows to market forces. [Bloomberg]  A good mainstream press summary of what’s going on in the diamond biz.  They take a short term (one year) view of things so it looks worse than it is.   Rough prices might be down 14% YoY but that’s better than almost all other commodities….


… like say iron and nickel.   First Point buys back Decar. [Junior Mining Network]  With a little help from a true believer shareholder, they are paying US$4.75M for this unusual Ni-Fe deposit.  All the rage when Ni and Fe were looking better, this is now a bet on the two worst performing commodities out there.  It seems unlikely there will be any more work on the Mich Project in Yukon for a while.

Lemonade


Franco-Nevada licks its chops. [Mineweb]  Sensing a market bottom, they’re on the hunt for new assets and happy to telegraph that.

“There are so many opportunities out there, we might have to dip into our credit lines,” Chief Executive Officer David Harquail said in an interview last week from his Toronto offices. “The ideal is you lever yourself up at the very bottom of the bear market and hopefully, if you’ve called it right, then you really benefit as the market turns around.”

One ray of hope for the little guys:

….he’ll continue to do small deals — in order to bag the “one-in-twenty” contract that will “make a future CEO of Franco-Nevada look very good” — and choose its big targets carefully.


TerraX discovers a new zone; 6.0m @ 10.26 g/t Au in a channel sample. [Junior Mining Network]  This from the “Hebert-Brent Shear”.   It would be really helpful to see exactly where these new zones all are but that’s quite a challenge. This appears to be the renamed “new zone on the Barney Lake Deformation Corridor” reported in August.  There are two sub-zones!  Hebert-Brent East and Hebert-Brent South.

And guess what… Stockhouse posted a pump piece on them by Danny Deadlock just hours ago!   The summary of the structure and financial engineering is good but this takes flight when considering the upside:

Where do you see the company 3 to 5 years from now?
Acquired by a major gold producer and project construction underway; environmental baseline studies are already underway.

Aside from the small problem of finding a deposit, this sounds great!


A drum-roll from Northquest. [Junior Mining Network]  … wherein they whet our appetite for drill results to come from 31 drill holes (6,500 m).  Here’s the only news in this release:

Northquest has started to receive the first assays from this year’s drilling program and it is anticipated that the first drilling results will be announced within the next two or three weeks.

A guess: They like what they see and just can’t keep still.


Copper North drill results from Carmacks Copper. [Marketwired]  Eight of an eventual 22 holes are in.  These are in-fill holes from 2000S to upgrade the resource: Six of 8 holes hit 0.2-0.8% oxide Cu over 2 to 26 m; the other two hit <0.1% soluble Cu in sulphides (although 37 m @ 1% Cu isn’t too bad).


Another drum roll … Goldstrike is halted. [Marketwired]   Hope there’s no un-assayable VG this time.


Signs of hope out there:  Staking in the North rebounded this summer to a new post 2011 high with activity in eastern Nunavut.  Large blocks picked up by Auryn (near Committee Bay), Agnico Eagle (near Meliadine) and Northquest (at Pistol Bay).  All gold projects.

Staking

Fission, nickel and Aussies

Fission’s PEA is out. [Mining.com]  It looks pretty good but is based on an assumed long term contract price of $65 / lb.  Spot is $36.70.  What is uranium really worth?  The surest indicator of value at PLS would have been what a major was ready to pay for the deposit.  The proposed paper merger with Dennison may just muddy the waters and leave shareholders waiting longer to see a real return on their investment.


Nickel in the dumps. [Reuters]  Nickel’s in worse shape than copper these days, hitting lows not seen since 2008.  The reason(s)?  On the supply side, there’s a huge overhang of inventory (in October 2008 – 57,000 / now – 450,000 t).  Part of this came from Chinese speculators using it (until June!) in the repo trade to recycle dollars; they’ve dumped a lot of stock back into the market.  In addition, production surged ahead of supply, not even counting the Chinese nickel-pig iron business.  Meanwhile, demand has slumped in China – down 1.4% in Q1.  This was exacerbated by an EU dumping ban on Chinese stainless steel.   Longer term however, things look better.  The author points out that nickel peaked in 2007, well before other metals during the “commodity supercycle”.  If history rhymes, it might be first out of the gate next cycle.

Nickel


It has been interesting to note the return of the Australians to the Yukon.  During the late 1990’s slowdown, it was Barrmundi Gold; this year it is Minquest looking for base metals.  Some prospectors got calls from Australians last year, looking for cheap base metals deposits.   One big driver might be exchange rates: The loonie is a petrocurrency and looks relatively worse than the Australian dollar.

AUD

We all live under the shadow of the US$ however and the relatively weak AUD$ is helping their gold producers. [The Gold Report]  Gold Road (great name!), Evolution and Crusader are cited in the Gold Report article.  Maybe these or some like-funded compatriots will start looking east for opportunities soon?


IKN smells a rat as Corvus “monetizes” royalties on their Alaskan assets.  [IKN]


A buck’s a buck:  Tahltan First Nation invests in Imperial Metals. [Mining & Exploration]

The negotiating team will now stand down.

The negotiating team will now stand down.


More good numbers from Ascot at Premier Mine. [Junior Mining Network]  Two holes drilled near (& eventually into) an old stope and were spectacular.  The third also hit.   They have drilled 25,000 m into this and it will be interesting to see how it comes together as a resource.

Deflation, Yukon Zinc and GPY

Deflation wave just keeps on rolling…  Central bankers can’t hit their inflation targets and not for lack of effort. [Bloomberg]  Academics at Jackson Hole sound off:

At Jackson Hole, academics delivered a beating to central banks’ confidence in their ability to predict and manage inflation by pointing out wide gaps in knowledge about how inflation works. Boston University’s Simon Gilchrist said strict inflation targeting doesn’t pay enough attention to financial shocks, which can disrupt economic output. Trying to influence inflation while not understanding it is a “recipe for disaster,” MIT Sloan School of Management professor Athanasios Orphanides, a former ECB Governing Council member, said as a panelist.

It’s not like there aren’t local outbreaks of inflation; take the case of recent onion price riots in India. [Hindustan Times]  These seem to be local events, driven by weather, politics and in some cases by currency devaluation – a favourite tactic to fight deflation elsewhere.

Commodity prices might be a bellwhether for what might be really going on: deflation prowling around the world economy, driven by fear that all those nationalized bad debts might not have completely gone away.  Even Zimbabwe is now deflating after runaway inflation a few years ago. [Bloomberg]

Until shortly after the Civil War, medicine did more harm than good and it was only during the last century that it finally became really respectable.  Economics might not be there yet.

Inflation


  Dr. Copper and the weather.  Up north (climate change aside) the weather is always the same:  8 months of winter and 4 months of bad sledding.  Not so in equatorial climes where the current El Nino is likely going to affect the copper market.  Ok Tedi in Papua New Guinea has been shut down until 2016 because of low water (= no power) while a European smelter is publicly worried that winter storms will have a like effect in Chile and Peru. [Reuters]


Currency devaluation no salvation for miners.  [CEO.ca] Interesting piece by Benjamin Cox on the current windfall enjoyed by Canadian miners in the wake of our currency devaluation.   Nice to see somebody noticing Yellowknife’s eye-watering prices but not all of his observations about global-prices-feeding-back-locally hold water.  Take beer for example; the local swill comes from either Alberta or the Yukon – only well heeled folk are buying the high priced import stuff.  The central premise of the article seems to treat the CDN$ decline as a one-of isolated event but really all that’s happening is the US$ is going up and everybody else is declining relatively, and at different rates.  If you want a true measure of how things are going, ask a placer miner.  Many are smiling this year; while fuel is up a bit, gold is up a lot in northern pesos – and that is what they buy good local beer with.


Here’ a thought experiment.  Suppose there was a market in which the richest and poorest people in the world bought and sold the same commodity.   Only a few rich ones but lots of poor ones.  Suppose the rich ones just played at the game, holding the stuff on paper, and were always looking for a quick buck when the opportunity presented itself.  The poor folk bought it to have and hold in an uncertain world.   What might happen when more poor folk dollars than rich folk dollars wanted the same commodity?

Seems like the cost of borrowing physical gold is rising “sharply”….. [Cafe Americain]

As Jesse says, “Never be the last one out of the pool.”


Canterra starts till sampling west of Gahcho Kue / Kennady Lake. [Junior Mining Network]  They’re also getting ready for an OhmMapper survey at Hilltop.


Stockwatch on Rockhaven:

Matthew Turner’s Rockhaven Resources Ltd. (RK: $0.16) has wrapped up its field program at Klaza, a gold project in southern Yukon. It completed nearly 14,000 metres of drilling in a 56-hole program. Rockhaven now has assays from eight tests, including one that averaged 4.1 grams of gold and 63.5 grams of silver per tonne over 2.41 metres. The veins in the southeastern part of Klaza are “relatively closely spaced, which suggests potential for bulk-tonnage mining,” says Mr. Turner. (The thick cover of qualifiers and fudge allows the less promotable chance that they are not, but Mr. Turner says the 2015 drilling should allow the company to bring this new mineralization into its resource estimate. Klaza already hosts seven million tonnes inferred at 4.19 grams of gold and 96 grams of silver per tonne, with modest amounts of base metals. Mr. Turner, CEO, does not draw a salary from Rockhaven but he received over $112,000 last year in “other compensation” — usually a euphemism for consulting fees. (There is a difference, but it is subtle.)

This is Matt’s only pony; what do they expect him to live on?   Food stamps?


Wolverine Mine creditors vote to accept Yukon Zinc’s offer. [CBC.ca]  A small group owed about 30% of the total dissented.  So… the Minquest offer is off the table.   Too bad; they have Fyre Lake nearby and some ambitions to do something.  The best way to work off a bad debt might be with fresh work.  Hard to say what Yukon Zinc plans to do at Wolverine with 3 years of reserves left.


When Bill Sheriff and Bill Lupien put together Till Capital last year, it was more complicated than a Goldman Sachs synthetic CDO.   Bermuda domiciled, jumping into the re-insurance business, all fully described in a press release only a corporate lawyer might understand (on retainer).   Part of the deal involved wrapping Golden Predator (GPY)and its various other partners in the group into Till.  Then, this summer, surprise:  Parent Till Capital appears to fire Bill Sheriff from Golden Predator, along with the rest of the board (including two ex-Yukon Premiers) and his wife, stating that it wants out of the resource biz.  Expressions of shock and surprise are recorded in the local media.

In August however, Bill joins Bill on the board of Silver Predator – another Till dependent.  [Silver Predator Resources]

Well, the Kabuki play continues.   Now Bill is also out of Till and Bill and Bill have agreed to part with no ill will. [Till Capital] In lieu of cash, Bill Sheriff gets 22% of Golden Predator back from Till plus an option on their remaining shares.  If fully exercised, Bill would own 68% of the company (undiluted).  Also, Till agrees to withdraw its slate of geriatric financial directors in favour of the old Board at the September 4 GPY AGM.   Golden Predator would remain on the hook to Till for $500K (cash please – no shares).

What this all means for Bill and GPY is hard to say.   The fact that the Board won’t change suggests this isn’t an attempt by Till to position the company to play hardball with the Yukon over how it handled Brewery Creek.   It could be just what it appears to be: a call option for Bill on GPY and the Yukon.

Bill Sheriff

But only Bill knows for sure…

Green stuff

Diavik & Rio Tinto choked about the Ekati Jay Pipe expansion. [CBC North]  They’re afraid they’ll get blamed if the caribou scamper elsewhere and lose their $159M security deposit.

caribou


Big visit to Alaska by BC politicians.   Southeast Alaskans on the whole are not tremendously mining friendly and some certainly don’t like mining (try SEACC for starters).  They used to have a logging industry but nowadays it’s government, fishing, tourism, a tincture of forestry … and mining at Greens Creek and Kensington.   A lot of the greenies and some fisherfolk are concerned about goings on upstream in BC where their salmon spawn.  Leaky mine portals and tailings on the Taku are a sore spot and alarmists are of course very  concerned about every big mine happening anywhere water drains west.   Mount Polley’s spill was music to their ears.

So – the recent visit by BC politicians to Juneau was a big deal and might have accomplished something.


Another day – another election promise.  Here’s today’s tally [CBC]:

  • Harper promises more support for northern mining and development.
  • Trudeau promise more green energy subsidies and jobs.
  • Mulcair promises more funding for sports programs for all kids except white boys born in Canada.

The red neck vote may be sewn up.


President Obama visits Alaska. [Anchorage Daily News]  Dispensing cash and re-announcing programs at every stop, the administration is going to make a big difference helping Alaskans deal with the climate:  They’re going to appoint a “Climate Resilience Coordinator”!

Bring a parka

Bring a parka

QT, diamonds and Pitchblack

Deutche Bank coins the buzz word de jour: Quantitative Tightening. [Bloomberg]  Jim Rickards would probably call it another installment in currency wars but what it might be is just rolling deflation.  Anyway, in this month’s episode, governments are divesting themselves of foreign exchange reserves at record rates to prop up local economies staggering under the effects of the commotion in China and the collapse of commodity prices.


Collapse of the Fanya Metal Exchange in China will put more downward pressure on REE and boutique metal prices. [Financial Post]  And Chinese investors don’t fool around: They were so choked about this they kidnapped the boss and turned him into the police.  ~$4.6B of investor funds are frozen in this debacle.

I need some Excedrin

I need some Tylenol


Slow motion price war breaking out in the diamond world:  Alrosa may cut prices again as orders decline. [Rappaport]

Sumo wrestling


Alaskan miners slog through the downturn. [Petroleum News of Alaska]  Curt Freeman’s excellent summer wrap-up of mining and exploration in Alaska.  Producers are buckling down in the face of lower metal prices and taking advantage of lower energy costs.   Teck, Kinross and Hecla actually improved their bottom line largely through operational efficiencies.   Things aren’t so rosy for the explorers…


Andrew Nelson’s final Yukon Gold Tour article:  Victoria Gold at Dublin Gulch. [CEO.ca]   All the facts are there for the discerning investor.


Canada Zinc reports drill results from Akie. [Canada Zinc Metals Corp.]  Hole grades are reported “Zn+Pb” with silver squirreled away somewhere.   Sort of like “copper equivalent”.


Stockwatch’s Will  Purcell on the latest Kelvin results:

Patrick Evans’s Kennady Diamonds Inc. (KDI), down nine cents to $3.42 on 27,000 shares, has wrapped up infill drilling on a positive note, hitting 150 metres of kimberlite in its last hole on the Kelvin pipe at Kennady North kimberlite, 250 kilometres northeast of Yellowknife. This is not the end of the 2015 drill program on Kennady North: geotechnical drilling continue for two weeks and delineation drilling at the northern lobe of Kelvin will run until the end of the season.

The latest long drill hit and several other lengthy intersections on Kelvin allowed Mr. Evans, CEO, to call the program “very successful,” adding that he expects the results of the Kelvin infill drilling “to add to our previous tonnage estimate.” He presumably is referring to the last updated tonnage estimate, in which Kennady said it expected to delineate between 12 million and 15 million tonnes at Kelvin and the nearby Faraday kimberlite. Mr. Evans promises a resource statement for the project before the end of the year. He calls it a “maiden” estimate because it will be the first formal calculation, but Kelvin and Faraday have been around the promotional block in rather unmaidenlike fashion since the two pipes were discovered in the early 2000s. Just two years ago Mr. Evans was promoted a target of five million tonnes for Kelvin and Faraday but he has repeatedly increased his target since then, through several drill programs and progressively larger mini-bulk tests.

Kennady should have a steady stream of news through the winter as a result of its drilling this year, leading to a promotional push early next year ahead of a planned bulk sample next year at the northern lobe of Kelvin. A test there is likely to yield a grade near 2.5 carats per tonne, unlike the southeastern lobe where country rock dilution cut the grade of a recently completed 442.5-tonne test to 2.02 carats per tonne. Still, either value supports Mr. Evans’s contention that Kennady North’s grade compares well with those at Gahcho Kue. He should know by mid-fall how the Kelvin diamond values compare with the Gahcho Kue gems, but the initial results are encouraging.

Wow!  He’s almost cheery for a change.


Rumblings in the basement:  The latest news from Pitchblack Resources. [Marketwired]   After making quite a splash ten years ago in the Wernecke Mountains (in the precious Peel Watershed ), they collapsed into dust and debt, ending with a transfer to NEX.   But there may be developments afoot.  They’ve settled $650K in (?) remaining debts with paper and have a new CEO.   He’s got a Forbes and Manhattan email address.   Yukon readers of a certain vintage may recall that back in 1991, Falconbridge unloaded United Keno  Hill Mines (and the environmental liability) to Stan Bharti, then one of their keen subcontractors.   It didn’t end well.