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6/17/17

Norm Levine on Cannabis Wheaton (CBW.v)

Norman Levine, managing director at Portfolio Management Corp, did BNN's Market Call yesterday Friday (along with the dulcet tones of Andrew Bell). Here's the link to the video and here's what he had to say when asked about Cannabis Wheaton (CBW.v) (at minute 41 onwards when talking about the cannabis growers sector in Canada):
"...to me this Cannabis Wheaton is just the culmination of everything wrong in the industry. That stock shouldn't even exist."


Any further questions?

The top three most visited IKN posts this week are...

...in reverse order:

Third Place: "The basic numbers at Cannabis Wheaton (CBW.v)". This is the type of thing equities anal ysts don't need any prompting about, they get this at a near-osmosis level. But this type of scam is being vomited at greenhorns, people that get the world beating idea pumped at them while the real motives are hidden from view. Therefore a necessary post on this disgusting Canadian rip-off.

Second Place: "The Flash update sent last night to subscribers regarding the Cordoba Minerals (CDB.v) news yesterday". An example of what happens when your humble scribe is less of a loudmouth.
 
First Place: "Another, more succinct and visual way of explaining the Cordoba Minerals (CDB.v) deal...". Amusing that this one got more views than the post in second place. Just goes to show that the blog audience isn't the same as the Weekly audience (and let's leave it at that).

6/16/17

The Friday OT: Compay Segundo; Chan Chan

How to open Cuba.



Youtube here.

Dalradian (DNA.to) has been swimming against the tide recently

It's also cancelled appearances at shows in the last few weeks.



I don't own and don't plan to soon either, but its strength certainly catches the eye.

Ugly day for miners...

...out there, I'll be glad when all this GDXJ crazy is done with and we can get back to something approaching normal. Not that I'm saying 'normal' is particularly sane in this wild sector, but you know what I mean.

Chart of the day is...

...the ten year US TIPS yield:



All you need to know about the price of gold, right there. It's been like clockwork all year.

IKN doffs its cap to Brian Quast of BMO...

...for the best title of a research note this year. Quast published on the new B2Gold (BTO.to) (BTG) resource zone near its Fekola project in Mali. It's called Anaconda and includes individual structures known Anaconda, Adder, Cobra, Cascabel, Mamba and Boomslang.

Quast called his note "Snakes on a Plain". Well played, sir.


6/15/17

Angry Geologist updates on Tinka (TK.v)...

...tonight, right here.

For what it's worth, I think his resource guess of 2.15Bn lbs Zn at 5.3% is reasonable for what we know right now, but the chances are now high that South is connected to Central and if that works out, there's a lot more to add to the pie. Then there's Zone 3...(etc).




A Flash update...

...has just been sent to subscribers, Thursday 11:40am or so. Another trade, we live in strange days.

Marin Katusa and the short sellers

If I were Marin Katusa, I'd be crapping myself about the future. It's one thing to pump bullshit companies to idiots on a small scale, but when you try to scale up and pump larger-scale pieces of crap to the world, especially ones that trade on the NYSE...



...you suddenly come under the scrutiny of bigger fish that swim in bigger pools. So far this year we've seen two Katusa pump jobs, Northern Dynasty and Asanko, get headline-making short sale attacks and due to the way Katusa pumps several other companies of their ilk, I'd bet a dollar to a donut that the shorties are poring over the other companies he stuffs down the throat of his hapless clients in exchange for their money. 

They're stealing your lunch and reverting you to the mean, Marin. The game isn't up yet, but the signals are there.

Peru FinMin Thorne to resign, his Vice Minister Claudia Cooper to take over

She's one of PPK's faves.

6/14/17

Deciding on whether Eldorado (EGO) overpaid for Integra

Yes, they did.


Another, more succinct and visual way of explaining the Cordoba Minerals (CDB.v) deal...

...with HPX as announced last night.



I'm ready for you, Mr Friedland.

The Flash update sent last night to subscribers regarding the Cordoba Minerals (CDB.v) news yesterday

It was on Cordoba Minerals (CDB.v), it went out at 8pm local time, it got nothing but positive feedback from subbers, it said this (typos repaired, rest is-as). As this is published, the conference call has already happened, CDB is still under halt and the bid/ask is stacking at 75c, but I still see no reason to take any price under the upcoming 81c placement and won't be desperate to sell at 75c today.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx


People on the Tinka Resources (TK.v) site visit that's happening right now

The analyst from Industrial Alliance Securities.
The analyst from Boswell Capital.
A couple of guys from Red Cloud.

That last line is a double-edged sword if ever there were one, but this week's roster shows the big hitters aren't just sniffing around TK, they're actively interested.

The Cannabis Wheaton (CBW.v) chart

Now I'm not a big proponent of charting, but...




...that really doesn't look so good. But hey, it can turn around, right?

Chart of the day is...

...the palladium/platinum ratio over the last five years:



Remarkable. Can Wollaston's discovery make parity with the metal that is occasionally more expensive than gold? This can't be just about catalytic converters can it? This is a spec thing too, surely...

6/13/17

A Flash update...

...has just been sent to subscribers, 8pm Tuesday evening. A trade.

The basic numbers at Cannabis Wheaton (CBW.v)

I've had a few inquiries as to why I'm so sure Cannabis Wheaton (CBW.v) is a scam. Well folks, apart from the fact that it is and drips with all the self-serving, underhanded, insider, undisclosed, retail rape moves you can possibly imagine, even if we assume the people who set it up really want to build something of worth and long-lasting value, its numbers simply do not add up. And to understand that, you need to take a trip to the wonderful world of balance sheets. So consider this a CBW balance 101 primer, it's simplified for sure but it's based on solid math (rather than unicorn sprinkly stardust that Rifici is palming off as a wonder opportunity). We start with basics:

Right now, CBW has 146.7m shares outstanding. It also has 133.1m warrants which are all enormously in the money. There are also other things playing against people stupid enough to buy in at $1 in the current placement, such as the right to emit up to 20% of share count as incentive options for insiders and management (normally, even the self-serving and greedy Canadian junior miner companies limit themselves to 10%), but we'll try hard to ignore that corner of the scam and keep things simple.

Now for the current placement effort, being brokered by Mackie, that's a sale of 50m units (unit = 1 share + a full warrant with a $1.50 strike) at $1 per unit. Assuming the current placement closes without the overallotment facility, that means they sell another 50m shares, 50m warrants and adds $50m to treasury. Then the share count goes to 196.7m S/O and 183.1m warrants respectively.

Today, the current share price $1.02, which means this company is being valued at $200.6m market cap. But as those original 133.1m warrants are so far in the money now, we are obliged to assume they'll be exercised and turned into fully paid-up shares. So the real world market cap as stands today is $336.4m. That's the math, that's the way it is, so what do you get for your money?

  • 14 deals that CBW put together for less them $1m in cash total (in other words, very minor deals)
  • Around $1.5m in cash before the current placement.
  • $50m in cash assuming the current placement closes.
  • A proposed deal to spend $30m of that money on a streaming deal (with people that you can hardly call arms-length, either).
  • Errr...that's it.

And so let's play balance sheet and put that in simplified balance sheet terms:
  • Current Assets: $51.5m
  • Fixed Assets: $5m (the $1m in deals and then i assume they have an office, some computers, coffee machine etc)
  • Goodwill: ??????
  • Current liabilities: $0.2m (normal run of company number)
  • Long-term liabilities: $0 (Best to assume the best case, looks likely too
  • Equity: $56.3m
  • Equity per share out: $0.286
  • Equity per "real world" share out: $0.171
You'll notice I put the line item "goodwill" in, and gave it a row of underpants gnomes type question marks. That's because in order to square this circle, the goodwill or "intangibles" in this company would have to come to around $280m in order to justify its current share price even if they manage to add the upcoming $50m into treasury (because without that, there's straight plain peanuts in CBW).

Now I'm not saying goodwill is at zero, but what it amounts to here is the business model, the "bright idea" and the different, new, market-changing plan CBW has come up with. The story, in other words. So even if you are a fan of this idea, I ask you to consider whether coming up with a company structure that gives cash to small companies (all but three of them without any sort of permit to enter the cannabis market yet) in return for a share of their future cash flow if/when they get into operation some years down the line is worth $280m? And even if we assume CBW meets with some early success, its first-foot advantage is going to be fleeting as its hardly a model that can't be quickly replicated by other start-ups (no moat, as Warren Buffett would say).

Feel free to pick a number on that goodwill value; $20m, $50m perhaps? Want to be ultra generous and believe this is the next Uber? Okay, $100m as stands today but please don't tell me it's $280m. However, that 280m number is exactly what the sales desks at Mackie has been telling the poor saps they're trying to get into this deal. It's madness. Utter madness.

Even if this scam works and the people behind have the best interests of retail shareholders at heart (which they most certainly do not), it's wildly overvalued. My best guess right now? It's worth 15c to 30c, tops. A true believer could self-justify a case for 50c if they're stupid enough not to understand the true intentions of the sharks behind CBW. But personally, I think it's worth zero cents. A Loonie? Gimme a freakin' break!

The Sandstorm (SAND) (SSL.to) rally continues

Sandstorm ignoring the weakness in the gold price this morning and pushing higher again. Oversold on the GDXJ rebalance fiasco, SAND is starting to return to a more reasonable level. First stop U$4-handle, but there's plenty left in the tank on its fundies. This chart compares SAND to the gold and silver index (XAU) to underscore the recent alpha-


Credit to those who ignored that blithering idiot Doody, anyone who's visited Hot Maden knows Watson has got the bargain of a lifetime.

It's Federal Mining Agreement day in Argentina

This piece is from IKN421 last Sunday and is the latest in our coverage of the ongoing clownshow going on in the mining sector in Argentina. Today we get the signing ceremony of the Federal Mining Agreement in Argentina, the piece explains why it's a worthless piece of theatre.

Argentina: The Federal Mining Agreement to be signed this week
Last week we noted that Governor Urtubey of Salta said he would not sign the Federal Mining Agreement (FMA) and join the other main dissenter, Mario das Neves of Chubut. This week saw an emergency meeting between several provincial governors, led by the pro-mining Sergio Uñac of San Juan province, which changed the wording on a couple of the items and got Urtubey on board. With this, the government has decided to press ahead with the FMA without Chubut and will hold a fancy-dancy signing ceremony this Tuesday June 13th in Buenos Aires (10), with the main points of the agreement being that the nation will not impose a planned 1% royalty, that the provinces would limit regional royalties to 3% maximum, and provinces could impose a second tax to fund mining infrastructure of not more than 1.5%. In return the Macri government gets the “level playing field” with all provinces reading from the same rulebook, which will allow Argentina as a nation to attract more FDI, so they say. One the FMA is signed, it then goes to the national Congress in order to be made into law.

However, we once again stress that the fact Chubut has not signed on makes the initiative stillborn. For one thing, Argentina cannot claim “same playing field” when Chubut will not recognize the new law. For another and more practical reason, Chubut is the location of over $1Bn of the total $1.7Bn in projects now on the Argentina pipeline to production.

Expect a lot of trumpets and fanfares next week when the FMA is signed and when you hear them, remember this FMA is a DOA paper tiger of an agreement, it’s practically worthless and changes nothing of substance. Even outside of Chubut and in signee provinces such as Mendoza, Rio Negro and Salta with leery attitudes towards the industry, the anti-mining sectors will be able to block projects using the provinces’ constitutions and laws and the national government will not be able to push through a thing against the will of the regional governor. In short, the archetype Style-Over-Substance country gets the mining agreement it deserves.


The latest Odebrecht shoe to drop: Ex-President Martinelli of Panama arrested

To the surprise of absolutely nobody, the highly corrupt ex-President of Panama Ricardo Martinelli was tonight arrested by authorities in Miami USA for the ostensible reason of illegal wire tapping of political enemies, but most in Panama know it to be mainly in connection with receiving bribes from Odebrecht. He's up before the beak tomorrow. There will be more. Lots more.

Zinc One (Z.v): The latest Keith Neumeyer/Daniel Ameduri BS pump is...

...withering on the vine. Good.


Keith Neumeyer paid Daniel Ameduri $250,000 to pump this sack of crud to the end of May and he tried hard, sending out several hyped up lumps of verbal diarrhea, but it would seem that even the fools on Ameduri's mailing list seem to have got tired of their BS. Here's how Ameduri kicked off his original pump letter on May 17th:
 Dear Reader,

We are so certain that this extremely undervalued company is a strong buy here, we are staking our entire careers on this single stock pick.
 
I, Daniel Ameduri, fully expect this company to lead the rally for zinc stocks, to the point that if my recommendation to you here today at CAD$0.65 doesn’t at least double over the next year, I will officially close down my letter.
 
In fact, I see this stock as a coiled spring, and I believe that I may be proven right over the next 30 days, with 11 months to spare!

Are we nearly at $1.30 yet, Daniel?

There are so many things wrong with this D.O.A. dog that I don't know where to start, but the mai problem is flashy headline grades or not, that the Bongará zinc oxide project they're trying to fob off truly is a piece of crap, picked over and rejected by a whole bunch of serious companies before Neumeyer decided he could sucker a new bunch of idiots with it. The key is in the word "oxide", by the way.

6/12/17

Alfredo Thorne to be fired as Peru's FinMin this week...

...for being a lying tosser and being found out. Both you and his best pal Jaime Pinto heard it here first.


Cannabis Wheaton (CBW.v) and the amended placement: The real dope

Your humble scribe had a few minutes full of yoks and guffaws this morning, thanks to this hilarious FP interview and report on Cannabis Wheaton's (CBW.v) BSser in chief Chuck Rifici. There are so many chunks of wonderful contained it's difficult to know where to start. Maybe by noting that Rifici loves to use lawyers to shut truth tellers up and that IKN hasn't received so much as a whiff of a paper yet, because everything IKN has written about this joke scam of a company has so far come to pass. Anyway, check out the link yourself and have fun, but the first lines of the piece are the subject of interest in this post today:
"Cannabis Wheaton Income Corp.’s chief executive and marijuana industry pioneer Chuck Rifici admits the intricacies of large private placement deals are not his forte."
As my good friend Owly would say...

...so let's help out Chuckyboy with the design of the latest $50m placement, put together in a big hurry (by Chuck himself!!!!) when the previous $80m conflicted scam fell apart. It's not an easy deal to decipher at first just by reading the NR, which is almost certainly deliberate. These people tried to sucker in greenhorns the last time and they're aiming for the same dumbasses this time, but when you get a handle on what's going on, it works like this:

1) Mackie Research Capital commits to selling $25m of units (one share and a full warrant at $1.50) at $1 apiece.
2) If they sell all $25m worth, a separate insto will commit to an extra $25m of units.
3) But if Mackie fails to fill the book, the insto walks away.
4) But if Mackie fills the book, the insto in question gets a lend on 20m shares which it can short and hedge its exposure, thereby reducing its risk to zero.

Bottom line: Mackie cannot lose on this deal, it just runs the book and pockets the commish. The insto willing to put up the other $25m cannot lose on this deal, it hedges the risk, clips the warrant, picks up the 6% interest. The risk is fully and squarely on the shoulders of the dumbos that Mackie's sales desks are ringing right now in order to fill that book. And that's you sucker, when you agree to exchange your money for their paper (and lock it up for four months, begad!) you're buying into a massive shell game with a big heap of nothing in the middle of it. They put this company together for $1m, they raised $2.5m in sweetheart share deals, they buy $1.5m worth of worthless streaming deals, they tell you the company is now worth $200m or so. Retail, the crop that never fails.


Brexit is falling apart

I've had too much fun watching the clownfest UK election and its fall-out over the last few days, but we're now getting to the real stuff. This column today in the UK's most Tory newspaper of them all is written by the person who heads up Theresa May's government policy committee, so every word counts. And here's the pay dirt:
"As the Parliamentary Conservative Party convenes this week we need to show fast that we have listened to the British public, that Parliamentary democracy is alive and well, and that we trust the people and their elected representatives.
That is, after all, what Brexit was supposed to be about. So let’s commit to an ‘Open Brexit’ based on much greater Parliamentary scrutiny, debate, and democratic mandate ..."

The key here: The phrase "Hard Brexit" has gone, we're now on "Open Brexit". For those of you new to the show, that means the British posturing about telling the EU "if we don't get a good deal we'll just leave anyway and screw everyone" has changed to "if we don't get a good deal we have no choice but to stay in until we do". And that means the EU has just been handed a tremendous negotiating advantage by a woefully poor Prime Minister and her government. So here's some advice for any world citizens thinking of taking advantage of that cheap British Pound Sterling forex and checking out some castles this summer; book and pay for your hotels right now, because when the world starts seeing the light the GBPwill return from whence it came.


6/11/17

The IKN Weekly, out now



Reader WW will never forgive me otherwise


IKN421 has just been sent to subscribers. There are many photographs.

The top three most visited IKN posts this week are...

...in reverse order during a quiet week for the blog (travels and all that):

Third Place: "People seem to think IRL is going to lose Ollachea", but there ain't no way José. On the other hand, heads are about to roll in the public sector there.

Second Place: "This is how Cannabis Wheaton (CBW.v) lies to you". Expect more CBW next week.
 
First Place: "Cannabis Wheaton (CBW.v): From Stockhouse with love". A glimpse of the fetid and nauseous underbelly of Canadian capital markets, warts and all. And It's always funny until someone gets hurt. Then...