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12/14/17

Asanko Gold (AKG) and K2 Associates: The most impressive trade of the last 18 months

Wednesday December 13th marked the moment when Asanko Gold (AKG) broke through U$0.47 to the downside, which was the original price target posited by K2 Associates in its short report on the company dated June 27th 2016. We at IKN have followed this trade quite closely over the near 18 months between then and now starting the day after the K2 publication (here) and today we are obliged to pay tribute.

This was the most impressive trade I've witnessed in the last two years. I, along with many others I talked to at the time, was doubtful of the trade (one friend said it was "impressive" and "brave", trader code for reckless), but we knew nothing: Not only has the K2 thesis played out, it's done so almost to the letter and on a near-exact timeline too. This was an example of (nothing short of) brilliant DD outwitting and showing the lies peddled by a company for exactly what they were (and are), a large barrowful of BS that went completely undetected by the hapless and gullible fools in the Canadian sellside. Yes indeed, we should also make clear K2's thesis flew directly in the face of every single brokerage with AKG coverage, to a person they had buy ratings and very fancy price targets on the stock. We also need state that even as the AKG story began to unravel and it became clear K2 had got it right the brokerages insisted on their long calls and often doubled down, so it's unknown how much client money was incinerated by their collective idiocy.  K2 took all their money and, with their target now hit, we can only assume they've taken theit profits. Another house that cashed in of course was Muddy Waters, which made a more public splash when announcing short early this year. By then AKG was a $2-and-bits stock, but K2 was shorting this since U$4.15...credit where due, ladies and gentlemen.

Cut to today and from this point until the end of its life, AKG management will try to blame bad luck, or inaccurate third party reports, or gold price, or whatever else. The truth of AKG, as revealed by the most efficient capitalist measure known to man (short selling for profit), is far more nefarious. The people at the helm of AKG are shameful liars who, if the sector wishes to improve itself, should never grace the boardroom of another mining company again. Or as somebody who has also followed this woeful tale of deceit put it to me earlier this very week;

"If you start with no gold, and you salt the assays, that’s fraud. But if you start with a little bit of gold and then use a computer to add multiples more, well that’s just poor judgment. Bre-X were a bunch of amateurs compared to AKG."

12/13/17

Checking in on how well Pascua Lama is going

Last year Barrick (ABX) auctioned off the trucks it had bought for its Pascua Lama project in Chile (we understand Antofagasta bought them and they're now doing the rounds at Antucoya). This week ABX auctioned off even more of its Pascua Lama infrastructure, including lifting gear, storage facilities and box containers.According to Barrick Chile this is because, they, "...are not necessary for this phase of the project. We are temporarily paralyzed until September 2019."

So now you know.

Seriously people, this Zinc One (Z.v) Ameduri pump is going to push the thing a lot higher

That corrupt crudball Daniel Ameduri has been given $700k cash by Neumeyer and his sycophants to spend on pumping this company, as well as all the options he personally owns and the shares recently bought at lows. All upfront, too. He's going to spread that cash around to all the usual suspects, Germany, USA, Canada, James West, that slimy Schaefer guy, Casey's Louis James obviously, the two-faced ratbags at CEO a who will suddenly take a coincidental interest in this stock...all those and more on the payroll.

So get these low 40s numbers before the braindead pile in. Eat some of his lunch.

Eric Sprott and Garibaldi (GGI.v) Part Deux: How Eric reduces his cost average

Once the game-changing move into a stock like Garibaldi Resources (GGI.v) gets made and a guy like Eric Sprott holds all the cards...
  • Control position in the market and active purchases continuing
  • BS-spouting company run by people with a track record of hype-and-fail
  • Hoards of True Believers on one side who will stake their grandmother on the BSsers being right about it being next Voisey's Bay
  • Another hoard of people on the counterbid, i.e. those people who see GGI for what it really is and know the chances are stacked high on it being a long-term failure.
...what do you do if you're Eric Sprott and you want to play the company like a cat with a mouse? Well, you do two things:

1) For a start, you make sure the volatility continues. In order to stay in control, you want to whip the stock price around as much as possible and deter those who think they're smart. So when bad news comes out, you whack on the asks and run the stock up 10%. On (what passes for) good news, dump into the bids get it to dive 20%. Nobody in their right minds will step in and daytrade something with no set direction and with price action that defies newsflow. After a couple of rounds of burnt fingers the rest of the world stays away and Eric has his toy all to himself.

2) You lend out stock to shorters and/or you trade short yourself. The most obvious play of all, as you get to hedge your own position and once in control of the price swings, in the enviable position of being able to reduce one's cost average by flipping several times a day (which also accounts for the multiple block-type ticker action I'm seeing most days, whether or not Mr. Sprott files new aggregate insider purchases). This is again the type of smart marketcraft you'd except from a guy like Eric Sprott and as he's better at this than you, his cost average will quickly ratchet down over time.

As long as Eris Sprott is active and GGI can spin out its BS story (i.e. at least until the Canadian Spring when they'll be obliged to drill again...then count eight to ten weeks as they drag heels on first results....then another eight as the project-killer holes finally show up...man this can go on til this time next year) the people who are short are in for a rough ride on GGI, they'll be screaming and wailing and telling us it's not fair. Which is fine, because there are ignorant greedy dumbasses on both sides of this story* and the only smart ones are 1) the officers of GGI who have raised the cash to guarantee their paychecks for years and 2) the person playing you all like a toy trumpet. His name is Eric and he's richer than you for a good reason.


*The arrogant conceit of the shortside is just as annoying as the plugdumb ignorance of the greenhorn longs who have been sold a vision of Scrooge McDuck diving into a pool of money. The only people worse are those running the scam, pretending to be long and cheerleading the stupid into holding...they have a special place in hell waiting for them.

PS: Dear retail holder of GGI: When you hear people referring to this post as nonsense and made-up rubbish (and you will, I promise), take a note of that person's name. Because they are either 1) utterly stupid in the ways of the market or 2) lying to you. Now you have a nice day there, yeah?

Doing business with Canaccord

This is a great read, but it's also standard practice at Canaccord. Check out the link which shows how a couple of grubby directors at Cannimed and the grubbiest of investment banks can scupper your pot business, go behind your back, take the info protected under CA and give it straight to your competition (which, coincidentally, has a long and fruitful relationship with Canaccord) who then launch a hostile bid on your butt. An excerpt:

CanniMed is also questioning the actions of investment bank Canaccord Genuity, which it says had access to its confidential financial and operating data as an adviser to Newstrike before being engaged by Aurora for its hostile bid.
"Canaccord was subject to non-disclosure obligations with respect to CanniMed's confidential information and a breach of these obligations has significant administrative law consequences. Aurora knew or should have known of this inappropriate conduct and the consequences of such actions," it said in its application, one in a flurry of announcements Monday related to the takeover scrap.
A Canaccord Genuity official declined to comment, citing a policy not to talk about any current mandates. It is not known whether the bank, which has a long-term relationship with Aurora, destroyed any paperwork and deployed a different team for the hostile bidder after severing its contract with Newstrike, as is standard practice.

And here's the whole Cannimed vs Aurora deposition, which includes this point (and the ones after 79 are well worth a read, too):


Kermit, your thoughts on hiring Canaccord as your dealmaker?


My thanks to A. Reader for the heads-up.

Pan American Silver (PAAS) and its tailings spill in Peru

Today news comes of a tailings spillage at the Huaron mine run by Pan American Silver (PAAS) in Peru.

As this is obviously a material event, we can be 100% certain that this company will give us more information later today. Right guys?

12/12/17

A Flash update....

...has just been sent to subscribers, 10pm local time Monday Tuesday evening. A couple of things to report.

PS: And like a foolI managed to label the update 'Monday, too. I live in the past. Sorry, should have said Tuesday.

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.