Insiders: If you can't beat 'em, don't join 'em

A few minutes ago I got a mail concerning the previous post on Plexmar Resources (PLE.v) which asked (paraphrasing), "So how can we play these junior miners like PLE.v?".

Two possible answers:

1) Spot the trend and get on before the pump happens
2) Just don't go there.

Regarding point 1), I actually pointed out a stock in this week's first edition of The IKN Weekly that is showing all the hallmarks of a pump'n'dump, with an insider buying very large quantities of stock at the same time as a brand new resource calculation and drilling program is taking place. That stock is LAT.v and I've mentioned the situation on site before in this post (since the post was published on March 31 Sheldon has bought more stock, by the way).

However, as I mentioned in The IKN Weekly this kind of second-guessing activities are über-high risk and shouldn't concern more than a tiny fraction of your portfolio. So really and truly, the best thing to do with the Plexmars of this world is 2) Just don't go there.

Check out this chart below. It shows how insiders Bedard and Contreras sold into a large, high volume movement in January this year, but what it doesn't mention is that the movement was caused by this BS press release on Jan 16th that turned out, yet again, to be a flash in the pan.


We covered this scam back in these two posts at the time, by the way. The point is, how the hell can you anticipate these guys? When are they going to release another PR like today's lump of hot air? They know...they know EXACTLY, but you don't. And whil we're at it, how can they sell themselves 5c stock in February with 10c warrants attached when the lowest closing price all that month was 7c?

So why worry your head about it, why go there? You can't beat 'em, so don't join 'em. Why try and second guess BS pumps and scammy, self-serving management, especially at a time when there are so many decent junior explorers and miners with largely honest people in charge that are selling for great discounts? For sure the 40% pop that PLE.v has put in today looks sexy, but it won't look very sexy if you buy at the top and wait indefinitely for the PPS to return after holding a heavy bag all summer.

As Nancy Reagan put it "Just say no to drugs, suckaz*". Get yourself a few decent prospects in your portfolio and forget about the crap like PLE.v once and for all.

*ok, she didn't say 'suckaz'

Mining PRs and the Ottotrans™: Part 7

About time we ran another of these "explain what it really says" things, I think. Today's victi..SORRY!...example is from Plexmar Resources (PLE.v), a company whose board of directors makes a good living from issuing themselves cheap options, pumping the stock and selling the new paper to saps that then get all upset with blogs like this one for telling them the truth. So without further ado....

This it what it says:

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QUEBEC CITY, QUEBEC--(Marketwire - May 4, 2009) - Plexmar Resources Inc. (TSX VENTURE:PLE - News) is pleased to report on Ucucha's progress in the Bolsa del Diablo project area. Plexmar has been notified by Ucucha that exploration can resume in May. Plexmar has its technical team ready for an imminent return on the project. Ucucha will notify Plexmar as soon as the communities' permission to bring equipment such as the geophysical contractor's equipment and small diamond drilling rigs is obtained. However, geologists will be back in the field this month. They will pursue the on-going sampling program and get ready for the continuation of the ground geophysical program.

Ucucha reported to Plexmar that, since January, a lot of progress was made towards the commercialization of ore and obtaining the acceptation to start the drilling program. Ucucha has purchased a 300 hectare piece of land, north of Piura, to accommodate its future processing plant. The land was chosen for its proximity to the gold producing areas and accommodations while located in a desert environment away from agricultural areas. In order to process the ore until the local plant is ready, an increase in milling capacity was required at Ucucha's plant located near Nazca, in southern Peru. Capacity was increased from 150 tpd to approximately 400 tpd, two 20 ft. diameter leaching tanks were built and a ball mill circuit was installed.

Following plant modifications, Ucucha reported the purchases of gold bearing material from Plexmar's and adjoining concessions at a steadier rate. In the past two weeks, over 125 tons of waste material was bought from miners stockpiles grading 0,8 ounces per ton. Over 75 tons of hard rock material was also bought with an average of 4,5 ounces of gold per ton. In the coming weeks, gold bearing material purchases will ramp up to an average of 70 tons per day.

On the contractual side, Ucucha remains within the 90 day period imposed by the contracts, (See Jan.17, 2009 release). The days are working days and the 90th working day falls May 19th 2009. Also, under the Peruvian mining law, mining contracts, such as the ones between Ucucha and Plexmar's subsidiary, need to be registered in the national public registry and with the Ministry of Mines before having full legal force. Due to extended delays in the legal system, those contracts have been fully registered and in full legal force only since this week. Notwithstanding this fact, Ucucha has made significant progress towards fulfilling their obligations.

Pictures of Ucucha's plant modifications have been posted on www.plexmar.com

In Ecuador, Plexmar is in steady contact with representatives from the Ecuador Ministry of Mines. Following the passing of the new Law's regulations in the coming months, management expects to have better clarity on the status and future of its concessions. The Company's activities have been limited to administrative and legal matters due to the Mining Mandate issued by the Ecuador Constituent Assembly on April 18, 2008, which, among other provisions, provided for the suspension of exploration activities in Ecuador for a period of 180 days. Ecuador recently passed a new Mines Law, which replaces the Mining Mandate, and is working on developing regulations and finalizing terms and conditions of future mining operations. The Company looks forward to working with government officials to this end.

This press release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions.

160 M shares outstanding.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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And this is what it means:

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QUEBEC CITY, QUEBEC--(Marketwire - May 4, 2009) - Plexmar Resources Inc. (TSX VENTURE:PLE - News) is pleased to manipulate Ucucha's total lack of progress in the Bolsa del Diablo project area and make things sound wonderful. Plexmar has been notified by Ucucha that exploration can resume in May but notice the word "can" instead of the word "will". Plexmar has its two employees ready for an imminent return on the project because they have nothing to do anyway except hang round downtown Quebec. Ucucha will notify Plexmar as soon as the communities' permission to bring equipment such as the geophysical contractor's equipment and small diamond drilling rigs is obtained, which could take all year. However, geologists will be back in the Quebec coffee houses this month. They will issue themselves more stock options after selling the ones they own in the next 48 hours.

Ucucha reported to Plexmar that, since January, a tiny bit of progress was made towards the commercialization of ore and obtaining the acceptation to start the drilling program. Ucucha has purchased a 300 hectare piece of land, north of Piura, because nobody else wanted it and it cost the price of a Frapucchino per football field. The land was chosen for its proximity to the gold producing areas and accommodations while located in a desert environment away from anything resembling civilization.

In order to process the ore until the local plant is ready, which will be never, an increase in milling capacity was required at Ucucha's plant located near Nazca, in southern Peru. Capacity was increased from 150 tpd to approximately 400 tpd, two 20 ft. diameter leaching tanks were built and a ball mill circuit was installed. What we forget to mention is the 1,000 mile travel distance between Piura to Nazca which will make the whole enterprise stupidly expensive.

Following plant modifications, Ucucha reported the purchases of gold bearing material from Plexmar's and adjoining concessions at a steadier rate. In the past two weeks, Ucucha has been buying up all the artisanal production in the area, but this has nothing to do with us so don't expect any earnings.

On the contractual side, we are liars. We told the world in November that Ucucha has 60 days to get the ball rolling. Then we finally signed with the Peru dudes in January and said "60 days" on Jan 16th. Now we're slipping in the minor detail that we're talking "90 working days", so in our pretzel math world even though 175 days have passed since we started pumping this crappy deal, 10th November to 4th May = less than 90 days. Also, we conveniently forgot to mention at the time that under the Peruvian mining law, mining contracts, such as the ones between Ucucha and Plexmar's subsidiary, need to be registered in the national public registry and with the Ministry of Mines before having full legal force. Due to the company not having a clue about how to operate in Peru, those contracts have been fully registered and in full legal force only since this week and so the next time we release a bullshit pump PR we'll say the 90 days started from the end of April. Because of this fact, Ucucha has done bog all.

Now some BS delaying tactics about Ecuador and the pathetic excuses as to why we've done nothing there, either.

160 M shares outstanding that we'd love to sell to you, sucker.

The TSX Venture Exchange is in no way stupid enough to accept responsibility for the adequacy or accuracy of this release.

More Ottotrans™ examples here

Canada's OSC: The toothless, lazy and impotent watchdogs strut their stuff

Hey there Canadian readers, remember back on January 27th when I posted this on the blatant insider trading at Alamos Gold (AGI.to) and Plexmar Resources (PLE.v)? Well I'm not just mouthy here y'know, I actually sent the thing in to Canada's OSC. For those unaware, the OSC is the Canadian version of the SEC, i.e. the people that are supposed to regulate the securities industry up there. The OSC's track record is nothing short of abysmal, having (for example) managed to convict just two people in the last nine years. Not bad for one of the world's most corrupt and crony-ridden capital markets, yeah?

So anyway, I'd all but forgotten that I had put in a complaint to the OSC when suddenly, today, five weeks later (!) I get a reply. Here it is below, but you can sum up Allan Krystie's attitude in just one sentence:

"I don't care, I'm doing nothing, stop bugging me."

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Dear XXXXX: Thank you for your inquiry to the Ontario Securities Commission (OSC) concerning Plexmar Resources Inc. and Alamos Gold. We have forwarded your complaint to the enforcement branch of the OSC for further review. This may or may not result in an investigation; however, Commission staff do not generally comment on the existence, status, or nature of an investigation. The purposes of this practice are to protect the integrity of investigations, to ensure the complaint process is not used to affect the market and to provide fairness towards those who are the subject of investigations, but against whom proceedings may never be taken. If additional information is required from you, staff will contact you; however, you may hear nothing further.
Sincerely,

Allan Krystie
Senior Inquiries Officer
Ontario Securities Commission
inquiries@osc.gov.on.ca
416-593-8314
1-877-785-1555

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Canada's OSC = A Disgrace To Its Nation.

LatAm miners: Legalized theft update (Plexmar and Alamos Gold)

The chart from yesterday's post is now doubly true

I actually got a couple of pretty cool hatemails for this note yesterday (though one was rather over-fixated on all things anal) in which your fed-up-with-Canadian-scamsters Otto pointed out how Plexmar (PLE.v) management was treating its own shareholders by insider selling on the same day it announced (seemingly) positive news. As part of the note I also wrote, "You can't help but wonder how many more insiders are left to file their trades, eh M. Bedard?"

Well wonder of wonders, we didn't have long to wait. Sure enough, head honcho Bedard filed his latest insider trades today. And sure enough, Bedard sold hundreds of thousands of shares on January 16th, too.

Jan 26/09	Jan 16/09	Bédard, Guy	Indirect Ownership	Common Shares	10 - Disposition in the public market	-50,000	$0.085
Jan 26/09	Jan 16/09	Bédard, Guy	Indirect Ownership	Common Shares	10 - Disposition in the public market	-45,000	$0.086
Jan 26/09	Jan 16/09	Bédard, Guy	Indirect Ownership	Common Shares	10 - Disposition in the public market	-350,000	$0.096

Four hundred and forty-five thousand, to be exact. Now how on earth did I guess that was going to happen..............?

Now for part two, Alamos Gold (AGI.to)

John McCluskey: You know you can trust him
because he's smiling at you

And here's another company for the rogues' gallery of scam-laden management. Check out Alamos Gold's (AGI.to) Prez&CEO John McCluskey's inside sales in January.

Jan 26/09	Jan 23/09	McCluskey, John	Direct Ownership	Common Shares	10 - Disposition in the public market	-4,900	$8.510
Jan 26/09	Jan 22/09	McCluskey, John	Direct Ownership	Common Shares	10 - Disposition in the public market	-100	$8.540
Jan 26/09	Jan 20/09	McCluskey, John	Direct Ownership	Common Shares	10 - Disposition in the public market	-2,500	$8.600
Jan 26/09	Jan 19/09	McCluskey, John	Direct Ownership	Common Shares	10 - Disposition in the public market	-2,500	$8.450
Jan 26/09	Jan 16/09	McCluskey, John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$8.300
Jan 26/09	Jan 15/09	McCluskey, John	Direct Ownership	Common Shares	10 - Disposition in the public market	-4,900	$8.112
Jan 26/09	Jan 15/09	McCluskey, John	Direct Ownership	Common Shares	10 - Disposition in the public market	-100	$8.102
Jan 26/09	Jan 09/09	McCluskey, John	Direct Ownership	Common Shares	10 - Disposition in the public market	-8,600	$7.923
Jan 26/09	Jan 08/09	McCluskey, John	Direct Ownership	Common Shares	10 - Disposition in the public market	-1,400	$7.850
Jan 26/09	Jan 06/09	McCluskey, John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$7.438

That little lot adds up to 35,000 shares and a gross cash total of $283,554....and eighty cents. And amazingly, astoundingly, coincidentally enough, all these sales came just before AGI.to announced a bought deal placement for 9.4m share at $8 that intends to raise $75m for working cap for its Mexico operations.

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1/26/09: Alamos Gold Inc. (the "Company")(TSX:AGI) has announced today that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets under which the underwriters have agreed to buy on bought deal basis by way of a short form prospectus, 9,400,000 Common Shares (the "Common Shares") at a price of $8.00 per Common Share for gross proceeds of $75,200,000. The Company has granted the underwriters an option, for a period of 30 days following the closing of the offering, to purchase up to an additional 15% of the Offering to cover over-allotments, if any. The net proceeds of the offering will be used for working capital and general corporate purposes. The offering is expected to close on or about February 17, 2009 and is subject to yada yada continues here

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So let's see how that news has affected AGI.to's stock price today:

Oh Mr. McCluskey! What lucky timing you have with your sales! So mark AGI.to down as another bunch that will screw shareholders without a moment's thought. By their deeds shall ye know them.

Plexmar (PLE.v): Another miner to avoid like the plague

How this for an example of self-serving management that will screw shareholders at the first possible opportunity? Plexmar (PLE.v) is a junior miner in Ecuador and Peru with a very poor track record of promising much and delivering little. So when it recently announced its deal with local Peru miner Ucucha to go JV on its 'Bolsa del Diablo' project in northern Peru I had to wonder where the catch would be.

It didn't take long. On January 16th, the very day that PLE.v issued a PR to say that the contract was signed, company insider Juan Contreras (a local landowner brought in to help with communications) sold 279,000 shares into a market that peaked that day at $0.12 on very heavy volume. Here we are six trading days later at $0.075. You can't help but wonder how many more insiders are left to file their trades, eh M. Bedard? As for Contreras, what kind of message do you think he's "communicating" with his actions?

Companies like PLE.v (and there are many others) will screw you into the ground and skim money off your back for years on end if you give them the chance. So don't give them the chance. just avoid these scam ridden management teams and keep your eyes peeled for the people that care about all that come on board their companies, not just themselves.

PS: I've had an e-mail conversation with somebody I repect greatly about another company with directors caught screwing its shareholders recently. The only reason I'm not mentioning its name here is that it doens't operate in Latin America, but that company is just another example of how a decent and trustworthy management team is more important than a good project. Self-serving management teams will continue to be called out on this blog, and they can go f themselves...I'm sick to death of the scammers. Conversely the good ones will be named as good.