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11/22/17

Dear LATAM Airlines

Dear LATAM Airlines,

I used to be a fan of yours. I've been a frequent flyer member for close to a decade, made innumerable trips on your planes, racked up many hundreds of thousands of miles with you flying all over the continent. Once upon a time you were the most reliable and punctual airline company in South America but all that changed late last year and your decision to go "Low Cost" (between inverted commas because there's precious little difference in the prices you charge). Since that fateful decision your company has gone from being the best in South/Latin America and directly to the worst.
  • Constant delays. Getting to destination on time has become the exception rather than the rule
  • Flights re-scheduled because you can't fill the plane at the time allotted. For the record, you've done it to me on my morning flight five times in the last three months.
  • Flights cancelled, sometimes quite literally at the last minute (my stars I hated you for what you did to me in October) for the same reason, made worse when you lie to our faces and tell us something like "unscheduled plane maintenance".
  • Seat legroom that shrinks by the month (we are human beings, most of us have two legs, apologies if that interferes with your profit maximization plans)
  • The public fight you're in with Lima (Jorge Chavez) airport, Peru over costs that has resulted in even poorer service for us passengers there.
  • Demoralized staff in all areas (far too obvious to be denied) and mediocre in-flight service from cabin crews who may try their best (sometimes, others have just stopped caring) but when you drop the cabin headcount by 50% there's only so much they can do to help.
  • And though common to just about every airline company out there, the draconian changes you've made to your frequent flyer program (seven squillion points for a free one-way trip...oh thank you) mean you're not even bothering to court customer loyalty any longer.
Last night's flight with you, once again crammed like a sardine into an unkempt plane for three hours and forced to stew because running the aircon costs fuel, was the last straw. I'm at the end of my tether with LATAM Airlines and when my current batch of pre-booked flights ends next month (then after I think I have one final segment in early January) I will bid you farewell forever, donate my air miles held with you to charity and gladly walk past your check-in desks on the way to those of other, better or cheaper (often both) companies. You may think you can get away with your policy of treating people like cattle and pretending you're "Low Cost" when you are most obviously not. Hey, you'll probably get away with it for while too, thanks to your market penetration. But the path you set upon this year leads to failure and it is very easy to predict your demise.

Yours, Otto (LATAM Pass frequent flyer 6074__7__5)

Spelling: It matters

Remember Toachi Mining (TIM.v), the junior in Ecuador that can't spell the name of the country?

That was the TIM.v booth at PDAC 2017 as seen in this post from the time in March. Here we are, eight months later and...

...it's a 19.5c stock, down 63% As noted in that March post, if you can't get the basics right don't even bother.

11/21/17

The Colombia Gold Symposium 2017 presentations are now available for download

On this link. For people serious about the mining sector.

Rick Rule at The Colombia Gold Symposium (from IKN444)

The intro to Sunday's edition of The IKN Weekly, IKN444:

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Rick Rule at The Colombia Gold Symposium
As I write up the Weekly in a hotel room in Medellín, having decided to stay on here to put the weekly together before flying back home (more time, less clock stress), I get to reflect on the success of the Second Colombia Gold Symposium and thoughts turn back to the very start of the week. As the keynote speaker at the and first up on the first day, it was fun to watch Rick Rule stand up and give 45 minutes of monologue to the attentive audience of over 300 people. He covered a lot of ground, as well as coming up with the wise saws and modern instances of the experienced and ultra-smooth mining raconteur. However it wasn’t all fluff, there was plenty of substance and three main themes espoused by Rule caught my ears:

1)     Volatility? Get used to it. More of a reminder than a revelation, all the same a timely one that we’re in one of the most volatile and near-term unpredictable sectors of the whole market. Stocks move down and up by 20% for no reason and in no time at all, they can double or be cut in half rapidly just because sentiment changes, then there’s the way the price of gold (and any other metal you might care to mention) can pull the rug from under our feet at any given moment; that’s when the best stockpicker in the world goes down the same tube as the worst. The message was simple, the way of our sector isn’t about to change soon, so if you cannot stomach taking a 50% loss on a stock before it turns into your envisaged 200% winner, (junior) mining isn’t for you.

2)     The gold price looks promising for 2018. Rule was careful to hedge his bets on timing and it might not turn at the precise moment in 2018 he prefers, but his view is that the cycle is now turning favourably towards gold (and the others) and next year will be better than this year for the metal(s). Now for sure he has a vested interest in calling gold higher and as a self-confessed goldbug, wears his heart on his sleeve at moments of speeches such as this. But there are reasonable grounds for being bullish gold today and they’re mostly from North America. For a long time we’ve tracked the close relationship between the gold price and the real rate of interest in The USA using the ten year TIPS yield chart (see below) and it’s still working like clockwork. It’s interesting to note that even though the Fed is jawboning higher base rates now, what really matters isn’t the nominal but the real rate of interest so if inflation starts to notch up in what is still in historic terms a very low interest rate environment (even after the hikes that started last December), TIPS will trend to and perhaps even below zero. And yes it’s happened before and yes, when it does it’s about the best bull signal for gold in the whole armoury.

3)     Own quality stocks. According to Rule, now is not the time for optionality. His sense is that the miners are now lagging the metals and the bets way to play the year ahead is via quality mining stocks, be they profitable producers or explorecos/developers (his preference) with strong projects. This of course was music to my ears as the vast majority of my personal exposure to the market, as well as the preferred investment policy of The IKN Weekly, is to go for the quality end and let the dogs wag their tails in their own time. Rule spent quite a bit of time expanding on this point and one of the drivers according to him is the combo of reserve depletion in majors and supply destruction. The majors have tried to ignore the fact that their reserve assets have depleted to current low levels and at some point need to address that. This is of course the same point made sans cesse by Brent Cook and many others, but that doesn’t make it false either. So for Rule’s taste, it’s time to buy and own the stocks that the majors will find attractive down the line because as day follows night, the largest miners are going to time the market as badly as ever and will be forced to pay up for assets they could get at their current discounted levels of today.


It was an entertaining 45 minutes for sure and as a bonus ball I had the chance to pick Rule’s brains a bit over the following couple of days, one of advantages of a small but well-attended conference like the one Paul Harris hosted last week. I’ll be here again next year for CGS3 and it would be great if more IKN subscribers could make it in 2018, the coffee/beer is on me if you do. As for Rick Rule, does this suddenly make me one of his fanboys? Not yet, but I can say he’s interesting and stimulating company. He’s probably less fun to be around and to talk with if you owe him money, though.


Good and bad news for Alexco (AXU) (AXR.to)

The good news: It's up strongly today on good volumes.

The bad news: It's due to a reco by that dumbass Doody, so when he pulls the plug a few months down the line the opposite occurs.

11/20/17

More on the Torex (TXG) mess

This English language release from the USW does a correct job in outlining the scenario that led to the deaths of two striking workers at the Torex Media Luna / ELG mine in Guerrero province, Mexico, yesterday. It also lays bare the BS that Stanford is trying to peddle about the company being an innocent victim stuck in an inter-union war. Well worth a read. An excerpt:
Like many foreign companies operating in Mexico, Torex reached a deal with one of Mexico’s notorious “protection unions” that don’t legitimately represent workers.
It is common for foreign companies to sign agreements with Mexican protection unions – even before the company begins operating – without the input or knowledge of affected workers. Even long after they’ve been hired, workers often have no idea they actually belong to a union. Such employer protection contracts are illegal in Canada and the U.S. because they violate the most basic rights of citizens. But they remain common in Mexico despite a recent reform of the Mexican Constitution that is supposed to outlaw such corrupt practices.

In the case of Torex Gold’s Media Luna mine, the company struck a deal with Mexico’s largest confederation of protection unions, the Confederación de Trabajadores de México (CTM).

However, in early November workers at the mine went on strike to demand their rights to join a legitimate, democratic union that will defend their interests.

Garibaldi (GGI.v) and New Nadina (NNA.v)

It didn't go unnoticed the way Garibaldi bamboozled the market.

1) Quietly talk up drilling results as they happen. "Hey there, I've heard that..."
2) Get the dumbass end of the mining world vomiting in chatrooms about the "next Voisey's" or whatever other phrase to get the circlejerk underway
3) Release a cherrypicked photo or two. Fapfest
4) Stoke up the tension for weeks. Fappity fappity
5) Run a placement and fill coffers. Ka-Ching!
6) Finally release an assay that doesn't live up to the hype. Oh.


1) Check
2) Check
3) Check
4) In progress
5) In progress
6) Coming soon
7) Coming soon

And what about that price chart?



Yup they're raising $2m at $3.80 as well, check it all out here including the wonderful "Treasure Box" talk. It's 2017 folks, the GGI Model is now all the rage, us old-timers just don't understand and with a whole new bunch of dumbasses with more money than sense telling us how this time is different. Hey there newbies, do yourself a favour before falling in love with your stocks, look up the phrase "cui bono" and think about what it means.

Retail, the crop that never fails.

New lows for Asanko (AKG)

Fully deserved. Will go lower.


UPDATE: Because Canaccord cut its rating, the last of the whorehouses to do so. Remember last year when they were all panning the short argument and telling their flocks to load up? Yup, me too. Shameless bunch of hussies.

Garibaldi Resources (GGI.v): So let me get this straight

A market cap of C$450m+ for "We think we can find the feeder next year". Is that right?

Only in Canada.

UPDATE: Ah, it seems to be worth less than $450m now. Shocker.

Keith Neumeyer should stop masturbating in public

It's embarrassing and eventually it'll get him arrested. My thanks to reader and pal G, who took time out during his flight to the SF show to send over this link. Headline?


Nuff said.

Now there are two of the Torex (TXG) striking miners dead

Shot dead by "community police" in their homes as some sort of warning about the strike action. And if you read the rest of that report, you get a real idea of the clusterfark TXG has on its hands (and how it's of the company's own doing).

A surprise in Chile

Drain The Santiago Swamp.
“The immense majority of analysts were sure Pinera would win in the second round; now we are not taking that for granted,” said Cristobal Bellolio, professor at the Universidad Adolfo Ibanez School of Government. “What appeared to be a done deal is now 50/50.”