What's going on at Kinross (K.to) (KGC)?

Check the comparative chart of Kinross (K.to) (KGC) for yourself:

So what is it, Fruta del Norte problems? The fact that the market has finally recognized that Cerro Casale is an uneconomic dog of an asset? Paid too much for Underworld? Or perhaps something murky at Kupol? Whatever it is, N.Am's 4th biggest gold producer is seriously lagging its field. Inquiring minds, etc.........

More lucky inside sales in Canadian mining companies

part one: Kinross (KGC) (K.to)

Question: If you're the CEO of a gold miner, when do you get to know about the quarter just finished? Perhaps as it finishes, right?

Kinross Gold Corporation (K)						As of November 4th, 2009
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
Oct 06/09	Sep 30/09	Burt, Tye Winston	Direct Ownership	Common Shares	10 - Disposition in the public market	-15,000	$23.500
Oct 06/09	Sep 29/09	Burt, Tye Winston	Direct Ownership	Common Shares	10 - Disposition in the public market	-10,000	$23.440
Oct 06/09	Sep 29/09	Burt, Tye Winston	Direct Ownership	Common Shares	10 - Disposition in the public market	-10,000	$23.000

Wow tye...that's....ONE.....MILLION...DOLLARS!!!


part two: Andina Minerals (ADM.v)
did George Bee have the same sort of colleagues at South Crofty? I kinda doubt it. On November 3rd a $25m bought deal financing, too.....darned lucky timing, guys.

Andina Minerals Inc. (ADM)						As of November 4th, 2009
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
Nov 04/09	Nov 03/09	Rosselot, Juan Eduardo	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$2.000
Oct 28/09	Oct 23/09	Rosselot, Juan Eduardo	Direct Ownership	Common Shares	10 - Disposition in the public market	-100	$2.000
Oct 28/09	Oct 22/09	Rosselot, Juan Eduardo	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$2.000
Oct 22/09	Oct 21/09	Harvey, T. Sean	Direct Ownership	Common Shares	10 - Disposition in the public market	-500	$2.060
Oct 22/09	Oct 21/09	Harvey, T. Sean	Direct Ownership	Common Shares	10 - Disposition in the public market	-2,900	$2.050
Oct 22/09	Oct 21/09	Harvey, T. Sean	Direct Ownership	Common Shares	10 - Disposition in the public market	-300	$2.020
Oct 22/09	Oct 21/09	Harvey, T. Sean	Direct Ownership	Common Shares	10 - Disposition in the public market	-40,000	$2.000
Oct 22/09	Oct 21/09	Harvey, T. Sean	Direct Ownership	Common Shares	10 - Disposition in the public market	-6,300	$1.960

Newsy things

Question: If thirty-five billion dollars fell in the middle of the forest, would anyone hear one hand clapping? (Answer: There is no spoon).

Report on Kinross results and Tye Burt's comments about Chile being "key". Photos of Yale Simpson drooling and raving on request.

Report on Yamana (AUY) earnings. They were ok..nothing special...not bad.

Peru FinMin and dumbass Carranza tells world that Peru has touched bottom and will bounce back in 2q09. Fool me eight times, shame on my grandchildren?

Bolivia: the UN says that the reports of slave labour (it's called 'forced work' these days) on Santa Cruz farms are true.

All gold resource ounces are not the same

Cerro Casale: Mucho altitude, mucho prettiness

So on with the show, mineheads. From time to time , normally via mail (but sometimes it's addressed on blog), the subject of in situ gold ounces comes up chez Otto. This is fresh in my memory because a couple of days ago I had an exchange with one reader who questioned the amount of in situ gold ounces held by Troy Resources (TRY.to) compared to its share price valuation and my recommendation and price call (this person had bought the NOBS report and follow-up questions, which is always good to see).

Now this is a big subject, but the general statement that "all gold resource ounces are not the same" is something that holds up in all discussions on the subject. As an example, let's look at this report on Kinross and CEO Tye Burt's Conference Call today, specifically about the Cerro Casale gold project in Chile.

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"........In the previous resource and reserve estimate, the reserves stood at 23-million ounces of gold and six-billion pounds of copper. However, based on "re-engineering and optimisation decisions", the proven and probable gold reserves have been reduced by 800 000 oz, Burt said. The updated reserves were calculated at a $725/oz gold price and $2/lb copper price. "Obviously that is above today's spot copper price, but I would say, based on the prefeasibility work that we have done with Barrick, and the current technical view, that it does have positive economics at those numbers," he said. Optimisation work under way for the full feasibility study would also likely improve the economics, "and of course we are looking at ways that we can lock in some of the commodity prices", Burt said....."

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So, history and technicalities of Cerro Casale aside, note that Tye Burt is saying that there's 23 million ounces of gold there but they're having to re-do, re-think and get all smart and busy on the engineering just to make the project feasible with gold at $725/oz and cu at $2/lb. That's twenty-three million ounces, folks! If you have to get the smartest mining engineers in the world together and bang their heads together for years on end until finally they work out a way they might....MIGHT... be able to build a profitable mine there's a lesson to be learned by us mortals, no? An ounce of gold up there clearly isn't the same as an ounce of gold in one of those Mexican heap-leachers.

To repeat and be totally boring: Does that sound easy mining like, say, Yanacocha to you? Does that sound like a low cash cost per ounce project? Does that sound like low capex in the pipeline? Nope, me neither. That's because all gold resource ounces are not the same.

To return to the heights of Chile for one more paragraph, that's my problem with places like ADM.v at Volcan and that dreaded XRC.v thing called Caspiche. For example, pumpers of ADM.v will tell you "it has 10m oz, dude". Sometimes they'll even tell you something more accurate and tell you it has under 5m of recoverable ounces so far outlined. But what they won't tell you is the enormous engineering, logistical and price barriers between Miner X and the possibility of getting those ounces (mostly very deep, too) out of the ground and into a bank vault in Switzerland. And when I say "they", that most definitely includes some of the better-known newsletter writers and also people sitting in offices in Canada with CFA after their name that write touchyfeely client reports promoting these companies.

Finally, believe it or not but this isn't just my little pet peeve; due to the nature of the game I speak to geologists on a regular basis and one highly respected professional in the field who knows the Chilean heights very well has told me on more than one occasion that in his opinion Cerro Casale will never be a mine. He's not bearing a grudge or with skin in the game or similar; he just says it as a rockdude wearing his hardhat.

OK, rant over. Thank you for bearing with me.

Chart of the day is........

....Kinross (KGC) 12 month price chart.......

.......because its 4q08 results sucked.

Yeah they did. Sorry. Even backing out the big charge Kinross took against the Bema acquisition the EPS of $0.09 missed by three cents. Here's the company PR if you fel like getting the sanitized version, but unless gold rockets today Kinross is going South.