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Firestone Ventures (FV.v): IKN explains

Want to know why Firestone (FV.v) has gone vertical? The IKN Weekly explained it to its subscribers two weekends ago in IKN430, dated August 13th:

Firestone Resources (FV.v): A significant corporate development
Some people worship at the altar of Keith Barron, I think he’s a smart bizguy but the way he tilts the playing field massively in his favour when setting up a company leaves me feeling nauseous. He’s done it recently with that silly “El Dorado Search” company Aurania (ARU.v) in Ecuador (and hey, he found backers, who am I to judge?) and he’s now doing it again with the other company he controls tightly, Firestone (FV.v). This Friday NR (14) has all the details, here’s a couple of segments

As part of the Debt Settlement, the Company has agreed to issue to Bambazonke Holdings Ltd., (the "Lender"), a company controlled by Dr. Keith Barron, Chairman and director of Firestone, a total of 9,096,800 Shares, making the beneficial holding of Dr. Barron approximately 19.85% on a fully diluted basis of 50,872,791 Shares that are expected to be issued and outstanding following the Debt Settlement. Prior to the Debt Settlement, Dr. Barron owned directly or indirectly no Shares of Firestone. In July 2016, Dr. Barron was granted 1,000,000 five-year stock options to purchase 1,000,000 common shares at $0.05 per Share.
The Company proposes to complete a subsequent share for debt transaction whereby an additional $370,000 of indebtedness owed to the Lender and Dr. Barron will be settled through the issuance of Shares, also at the deemed price of $0.05 per Share (the "Proposed Debt Settlement"). It is expected that the issuance of Shares to the Lender and to Dr. Barron pursuant to the Proposed Debt Settlement will increase Dr. Barron's beneficial holdings in the Company to over 20% of the then issued and outstanding Shares on a fully diluted basis, thus making him a new Control Person, as defined in the policies of the TSX Venture Exchange. Accordingly, the issuance of shares for debt that results in the creation of a Control Person requires the approval by the "disinterested vote" of the shareholders which the Company will seek at the upcoming meeting of shareholders. The Proposed Debt Settlement is also subject to the approval of the TSX Venture Exchange.

It’s classic TSXV bullshit: The head man gets a salary, the tinyco has no money and can’t pay it, the debt is accrued month by month on the liabilities, the head man takes it in a debt-for-shares deal (when anyone truly caring for shareholders would have waived their salary years ago), then the company does a rollback, suddenly gets a new project, a new launch and a pump from The Usual Suspects. It turns my stomach frankly and people like Barron are not the solution, they’re the problem. But the set-up is obvious so if you’re looking for a pennycrapper dice roll for 2018, FV.v may interest you.

Disclosure: No position in FV.v and not planning to take one either. IKN is part of the solution, not part of the problem.

Panoro Minerals (PML.v) up 30% today: Your multiple choice quiz question

Answer at the bottom of the page.

1) Ignorance is bliss
2) You gringos truly will buy anything
3) Ignore the litany of fatal flaws, this is the TSXV after all.
4) Since when has uneconomic grade been important?
5) All of the above.

Answer: 5.

Think zinc (part X + 1), from IKN431

About a page and a half of yesterday's IKN Weekly IKN431 was dedicated to an update on the zinc market. Here's that piece, the only change being the last section in which we discuss the state of play in the three stocks chosen to ride the Zn upwave, plus the new one I'm thinking of buying soon(ish).


Think zinc (part X+1)
There have been several pieces in ‘Market Watching’ this year with ‘think zinc’ in the title this year, so it’s pleasant to report that the macro thoughts behind the trade idea are panning out pretty much the way imagined. The basic idea has been one that we first identified back in early/mid-2016, but its sense of urgency is now increasing. It’s all about dwindling supply in the face of demand growth, the way that will push prices higher and the tell on all this would be a sharp drop in world inventory levels at the major metals exchanges. That’s worked out just right and I believe we’re now approaching the tipping point.

To recap slightly, in IKN419 (one of the better examples of ‘think zinc’) dated May 28th 2017 we highlighted how overall world zinc stocks had dropped to 524kt, down 30% in 2017 to that date. Here’s a chunk of script from IKN419 by way of reminder:

“…the real news is the London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE) date. LME zinc inventories have been dropping for quite a while and went under (what is understood to be) the key 400k tonnes level at the beginning of the year. But the new news is the sudden acceleration of SHFE inventory destocking. Last week alone SHFE stocks dropped 14.7% to 78,300mt and according to Metal Bulletin last week, premiums for zinc delivery in China are at three year highs. Overall world Zn inventories are now 524k, down 30% in 2017 alone and put this weekend’s inventories at 11.75 days of consumption (i.e. there’s less than 12 days’ world zinc supply in the storage rooms of this world). That was 19 days at the start of 2017 and it’s closing in rapidly on what most Zn market-watchers consider the pinch point of 10 days. The way in which stocks have dropped like a stone in May means the crunch moment may now come more quickly than most people (including myself) were expecting. Up to now I’d mentally pencilled in Q3 or Q4 of 2017 for the time the Zn hype machine starts, instead it may come as soon as June.”

Cut to today and though the crunch moment didn’t arrive so quickly, the trend has continued and we’re now at 447kt, 41.1% down YTD. That puts stocks at 11.4 days of world consumption and that suggests there’s more upside to come from Zn, we haven’t reached the mania phase yet because as noted in IKN419 the classic trigger point for (something akin to) panic buying is when days of consumption drops under 10. When (not if) that line in the sand is crossed it might not faze real users so much but I’ll bet dollars to donuts the mining sector hype machine will crank it up and draw newcomers/latecomers in.

With that in mind and to ring the changes slightly (perhaps matching with the longer-term thoughts on gold in this week’s intro) I thought I’d look up a very-long-term chart of the metal today. After a quick Google rummage this elegant one at (20), Trading Economics (interactive too, I will return there) turned up that takes us all the way back to 1960:

Though the 60s were another country for base metals trading and flat, as from the mid-70s and for disparate reasons, one thing we can note about zinc is the way it will rally on a spike. The most notable and famous being the mid-2000s run that took it to U$2/lb briefly, but even the 1989 run made for a bottom-to-top run of +150%, anyone buying low and selling high then would have done just fine.

Will we reach $2/lb this time? I doubt it, the period before the financial crisis was weird in many ways and bubblemania spreading out from the house price boom was infecting many secondary markets. On the other hand, after last week’s breakout over U$1.40/lb (U$3,100+/tonne now) I see no reason why the rally should grind to a halt. And as mentioned above, the trade media hasn’t even clicked into “Supply Crunch!!!” hype mode yet.

Personally I’ve been playing the run with three trades up to this week but with....


And the rest is for subbers.

Chart of the day is...

...the US Dollar, monthlies:

People who drone on and on and on about the imminent demise of the USD should read a freakin' history book or two. And STFU. There's life in the old dog yet.


The IKN Weekly, out now

IKN431 has just been sent to subscribers. Regulating Regulus.

Jerry Lewis

Anyone who hasn't seen Scorsese's 'The King of Comedy' should do so. One of his most under-rated movies, Lewis was a magnificent foil for De Niro and showcased his talent to a whole new generation.


Good news on Atico Mining (ATY.v)

IKN Nerve Centre hears that Atico Mining (ATY.v) has been thoroughly audited by Colombia's Environment people, all tests were passed with flying colours and the mine will re-open for business this very weekend, no problems at all. It had the feel of a minor issue at the time last week, but it's good to see confirmation. Smart money bought the dip.

The top three most visited IKN posts this week are... reverse order:

Third Place: "DanO does Alset (ION.v)". DanO has done such a great job covering this blatant scam deisgned specifically to rip off greenhorns and as this should be the last in his series, we should doff our collective caps and thank him. Although utterly unimportant in the great scheme of things, Alset (ION.v) is a most useful case study for newcomers to the sector as we've seen the whole cycle in a short period: A mouthy, arrogant, unqualified blowhard company head suckers in greenhorns with smooth talk and then fails to deliver on the grand promises, hardly a surprise because the whole thing was a zero-content scam from start to finish. But moose/llama/camel/chinchilla pasture doesn't stop people running a scam from making money, the insiders trade the stock and get rich while the newbies get played from start to finish and don't see what's happened until it's all too late. Welcome to the TSXV, scamsters like the despicable whore Allan Barry abound and will be waiting for you with open arms forever. Want a friend? They'll be your friend.

Second Place: "Atico (ATY.v): The mine is closed by Colombia's Environment Ministry". Now old news, but this one got plenty of hits because IKN broke the story. It happens like that.
First Place: "Regulus Resources (REG.v)". A short and unimportant post, but it got love because the world loves to read about winners. Plenty on REG in IKN431 tomorrow too subbers, your author had the chance to sit down with the team and get the latest juice.


Bruce Forsyth

Good game.

The Friday OT: Freddie Mercury and Montserrat Caballé; Barcelona

For obvious reasons. Beauty, celebration and love win every time.

Youtube here. The shining jewel that is Caballé's voice. And as Freddie says at the very end, viva Barcelona. Freddie was right.

It would seem...

...that a few people read this humble corner of cyberspace.

Who knew? Just sayin'.

Gold pings U$1,300/oz for the third time since April...

...and the obvious question is now, will it hold the level this time?

Time will tell.