Tuesday 14th August 2018

Resource Clips


All posts by Greg Klein - Resource Clips

August 13th, 2018

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And the mania continues

August 10th, 2018

How gold rushes helped make the modern world

by Benjamin Wilson Mountford/La Trobe University and Stephen Tuffnell/University of Oxford | posted with permission of The Conversation

How gold rushes helped make the modern world

Detail from an 1871 lithograph by Currier & Ives portraying the Californian goldfields in 1849.

 

This year is the 170th anniversary of one of the most significant events in world history: the discovery of gold at Sutter’s Mill in Coloma, California. On January 24, 1848, while inspecting a mill race for his employer John Sutter, James Marshall glimpsed something glimmering in the cold winter water. “Boys,” he announced, brandishing a nugget to his fellow workers, “I believe I have found a gold mine!”

Marshall had pulled the starting trigger on a global rush that set the world in motion. The impact was sudden—and dramatic. In 1848 California’s non-Indian population was around 14,000; it soared to almost 100,000 by the end of 1849, and to 300,000 by the end of 1853. Some of these people now stare back at us enigmatically through daguerreotypes and tintypes. From Mexico and the Hawaiian Islands; from South and Central America; from Australia and New Zealand; from Southeastern China; from Western and Eastern Europe, arrivals made their way to the golden state.

How gold rushes helped make the modern world

JCF Johnson’s Euchre in the Bush, circa 1867, depicts a card game
in a hut on the Victorian goldfields in the 1860s. (Oil on canvas
mounted on board, courtesy of the Art Gallery of Ballarat)

Looking back later, Mark Twain famously described those who rushed for gold as

a driving, vigorous restless population … an assemblage of two hundred thousand young men—not simpering, dainty, kid-gloved weaklings, but stalwart, muscular, dauntless young braves…

“The only population of the kind that the world has ever seen gathered together,” Twain reflected, it was “not likely that the world will ever see its like again.”

Arriving at Ballarat in 1895, Twain saw first-hand the incredible economic, political and social legacies of the Australian gold rushes, which had begun in 1851 and triggered a second global scramble in pursuit of the precious yellow mineral.

“The smaller discoveries made in the colony of New South Wales three months before,” he observed, “had already started emigrants towards Australia; they had been coming as a stream.” But with the discovery of Victoria’s fabulous gold reserves, which were literally Californian in scale, “they came as a flood.”

Between Sutter’s Mill in January 1848, and the Klondike in the late 1890s, the 19th century was regularly subject to such flooding. Across Australasia, Russia, North America and Southern Africa, 19th century gold discoveries triggered great tidal waves of human, material and financial movement. New goldfields were inundated by fresh arrivals from around the globe: miners and merchants, bankers and builders, engineers and entrepreneurs, farmers and fossickers, priests and prostitutes, saints and sinners.

How gold rushes helped make the modern world

A nugget believed to be the first piece of gold
discovered in 1848 at Sutter’s Mill in California.
(Smithsonian National Museum of American History)

As the force of the initial wave began to recede, many drifted back to more settled lives in the lands from which they hailed. Others found themselves marooned, and so put down roots in the golden states. Others still, having managed to ride the momentum of the gold wave further inland, toiled on new mineral fields, new farm and pastoral lands, and built settlements, towns and cities. Others again, little attracted to the idea of settling, caught the backwash out across the ocean—and simply kept rushing.

From 1851, for instance, as the golden tide swept towards NSW and Victoria, some 10,000 fortune seekers left North America and bobbed around in the wash to be deposited in Britain’s Antipodean colonies alongside fellow diggers from all over the world.

Gold and global history

The discovery of the precious metal at Sutter’s Mill in January 1848 was a turning point in global history. The rush for gold redirected the technologies of communication and transportation, and accelerated and expanded the reach of the American and British Empires.

Telegraph wires, steamships and railroads followed in their wake; minor ports became major international metropolises for goods and migrants (such as Melbourne and San Francisco) and interior towns and camps became instant cities (think Johannesburg, Denver and Boise). This development was accompanied by accelerated mobility—of goods, people, credit—and anxieties over the erosion of middle class mores around respectability and domesticity.

But gold’s new global connections also brought new forms of destruction and exclusion. The human, economic and cultural waves that swept through the gold regions could be profoundly destructive to Indigenous and other settled communities, and to the natural environment upon which their material, cultural and social lives depended. Many of the world’s environments are gold rush landscapes, violently transformed by excavation, piles of tailings and the reconfiguration of rivers.

How gold rushes helped make the modern world

The Earth, at the End of the Diggings.
(Courtesy, Ballaarat Mechanics’ Institute)

As early as 1849, Punch magazine depicted the spectacle of the earth being hollowed out by gold mining. In the “jaundice regions of California,” the great London journal satirised: “The crust of the earth is already nearly gone … those who wish to pick up the crumbs must proceed at once to California.” As a result, the world appeared to be tipping off its axis.

In the U.S. and beyond, scholars, museum curators and many family historians have shown us that despite the overwhelmingly male populations of the gold regions, we cannot understand their history as simply “pale and male.” Chinese miners alone constituted more than 25% of the world’s goldseekers, and they now jostle with white miners alongside women, Indigenous and other minority communities in our understanding of the rushes—just as they did on the diggings themselves.

Rushes in the present

The gold rushes are not mere historic footnotes—they continue to influence the world in which we live today. Short-term profits have yielded long-term loss. Gold rush pollution has been just as enduring as the gold rushes’ cultural legacy. Historic pollution has had long-range impacts that environmental agencies and businesses alike continue to grapple with.

At the abandoned Berkley pit mine in Butte, Montana, the water is so saturated with heavy metals that copper can be extracted directly from it. Illegal mining in the Amazon is adding to the pressures on delicate ecosystems and fragile communities struggling to adapt to climate change.

The phenomenon of rushing is hardly alien to the modern world either—shale gas fracking is an industry of rushes. In the U.S., the industry has transformed Williston, North Dakota, a city of high rents, ad hoc urban development and an overwhelmingly young male population—quintessential features of the gold rush city.

In September last year, the Wall Street Journal reported that a new gold rush was underway in Texas: for sand, the vital ingredient in the compound of chemicals and water that is blasted underground to open energy-bearing rock. A rush of community action against fracking’s contamination of groundwater has followed.

The world of the gold rushes, then, is not a distant era of interest only to historians. For better or worse, the rushes are a foundation of many of the patterns of economic, industrial and environmental change central to our modern-day world of movement.

Benjamin Mountford and Stephen Tuffnell’s forthcoming edited collection A Global History of Gold Rushes will be published by University of California Press in October 2018. A sample of their work can also be found in the forthcoming volume Pay Dirt! New Discoveries on the Victorian Goldfields (Ballarat Heritage Services, 2018).

Benjamin Wilson Mountford, David Myers Research Fellow in History, La Trobe University and Stephen Tuffnell, Associate Professor of Modern U.S. History, University of Oxford

This article was originally published on The Conversation. Read the original article.

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Visual Capitalist: Warren Buffett’s biggest wins and fails

August 9th, 2018

Part 4 of the Warren Buffett series

by Jeff Desjardins | posted with permission of Visual Capitalist | August 9, 2018

Warren Buffett’s investing track record is nearly impeccable.

Over his lifetime, Buffett has built Berkshire Hathaway into one of the biggest companies in American history, amassed a personal fortune of over $80 billion and earned acclaim as one of the world’s foremost philanthropists.

But in a 75-year career, it’s no surprise that even Buffett has made the odd blunder—and there’s one that he claims has ultimately cost him an estimated $200 billion!

This infographic highlights Buffett’s investing strokes of genius, as well as a few decisions he would take back.

It’s the fourth part of the Warren Buffett series, which Visual Capitalist has done in partnership with finder.com, a personal finance site that helps people make better decisions—whether they want to dabble in cryptocurrencies or become the next famous value investor.

Warren Buffett’s biggest wins and fails

Note: New series parts will be released intermittently. Stay tuned for future parts with Visual Capitalist’s free mailing list.

 

How did Buffett go from local paperboy to the world’s most iconic investor?

Here are the backstories behind five of Warren’s biggest acts of genius. These are the events and decisions that will propel his name into investing folklore for centuries to come.

Buffett’s biggest wins

From making shrewd value investing calls to taking advantage of misfortune in the salad oil market, here are some of the stories that are Buffett classics:

1. GEICO (1951)

At 20 years old, Buffett was attending Columbia Business School and was a student of Benjamin Graham. When young Buffett learned that Graham was on the board of the Government Employees Insurance Company (GEICO), he immediately took a train to Washington, D.C., to visit the company’s headquarters.

On a Saturday, Buffett banged on the door of the building until a janitor let him in, and Buffett met Lorimer Davidson—the future CEO of GEICO. Ultimately, Davidson spent four hours talking to this “highly unusual young man.”

He answered my questions, taught me the insurance business and explained to me the competitive advantage that GEICO had. That afternoon changed my life.—Warren Buffett

By Monday, Buffett was “more excited about GEICO than any other stock in [his] life” and started buying it on the open market. He put 65% of his small fortune of $20,000 into GEICO and the money he earned from the deal would provide a solid foundation for Buffett’s future fortune.

Although Buffett sold GEICO after locking in solid gains, the stock would rise as much as 100-fold over time. Buffett bought his favorite stock again a few years later, loaded up further during the 1970s and eventually bought the whole company in the 1990s.

2. Sanborn Maps (1960)

This early deal may not be Buffett’s biggest—but it’s the clearest case of Graham’s influence on his style.

Sanborn Maps had a lucrative business around making city maps for insurers, but eventually its mapping business started dying and the falling stock price reflected this trend. Buffett, after diving deep into the company’s financials, realized that Sanborn had a large investment portfolio that was built up over the company’s stronger years. Sanborn’s stock was worth $45 per share, but the value of the company’s investments tallied to $65 per share.

In other words, these investments held by the company were alone worth more than the stock—and that didn’t include the actual value of the map business itself!

Buffett accumulated the stock in 1958 and 1959, eventually putting 35% of his partnership assets in it. Then he became a director and convinced other shareholders to use the investment portfolio to buy out stockholders. He walked away with a 50% profit.

3. The salad oil swindle (1963)

For a value investor like Buffett, every mishap is a potential opportunity.

And in 1963, a con artist named Anthony “Tino” De Angelis inadvertently set Buffett up for a massive home run. After De Angelis attempted to corner the soybean oil market using false inventories and loans, the market subsequently collapsed. American Express, the world’s largest credit card company at the time, got caught up in the disaster and its stock price halved as investors thought the company would fail.

Although everyone else panicked, Buffett knew the scandal wouldn’t affect the overall value of the business. He was right, and bought 5% of American Express for $20 million. By 1973, Buffett’s investment increased 10 times in value.

4. Capital Cities/ABC (1985)

In the 1980s, corporate raiders and takeover madness reigned supreme.

The massive TV network ABC found itself vulnerable and sold itself to a company that promised to keep its legacy intact. Capital Cities, a relative unknown and a fraction of the size, had somehow managed to buy ABC. The CEO of Cap Cities, Tom Murphy, one of Buffett’s favourite managers in the world, gave Warren a call:

“Pal, you’re not going to believe this. I’ve just bought ABC. You’ve got to come and tell me how I’m going to pay for it.”

Berkshire dropped $500 million to finance the deal. This turned Buffett into Murphy’s much-needed “900-pound gorilla”—a loyal shareholder who would hold onto shares regardless of price, as Murphy figured out how to turn the company around.

It turned out to be a fantastic gamble for Buffett, as Capital Cities/ABC sold to Disney for $19 billion in 1995.

5. Freddie Mac (1988)

Buffett started loading up on shares of Freddie Mac in 1988 for $4 per share.

By 2000, Buffett noticed the company was taking unnecessary risks to deliver double-digit growth. This risk, and its short-term focus, turned Buffett off of the company. As a result, at a share price close to $70, he sold virtually all of his holdings, enjoying a return of more than 1,500%.

I figure if you see just one cockroach, there’s probably a lot.—Warren Buffett

Later on, Freddie Mac’s business would collapse in the housing crisis, only to be taken over by the U.S. federal government. Today, its stock sells for a mere $1.50 per share.

Buffett’s blunders

Over the course of 75 years, it’s not surprising that even Buffett has made some serious mistakes. Here are his costliest ones:

1. Berkshire Hathaway (1962)

When Buffett first invested in Berkshire Hathaway, it was a fledgling textile company.

Buffett eventually tried to pull out, but the company changed the terms of the deal at the last minute. Buffett was spiteful and loaded up with enough stock to fire the CEO who deceived him. The textiles business was terrible and sucked up capital, and Berkshire unintentionally would become Buffett’s holding company for other deals. This mistake, he estimates, cost him an estimated $200 billion.

To date, Dexter is the worst deal that I’ve made. But I’ll make more mistakes in the future—you can bet on that.—Warren Buffett

2. Dexter Shoes (1993)

Dexter Shoe Co had a long, profitable history, an enduring franchise and superb management. In other words, it was the exact kind of company Buffett liked.

Buffett dropped $433 million in 1993 to buy the company, but the company’s competitive advantage soon waned. To make matters worse, Buffett financed the deal with Berkshire’s own stock, compounding the mistake hugely. It ended up costing the company $3.5 billion.

Later on, Buffett would say that this deal deserved a spot in the Guinness Book of World Records as a top financial disaster.

I did not think [founder Jeff Bezos] could succeed on the scale he has. [I] underestimated the brilliance of the execution.—Warren Buffett

3. Amazon.com (2000s)

Buffett says not buying Amazon was one of his biggest mistakes.

Given that Amazon has shot up in value to become one of the most valuable companies in the world, and that Jeff Bezos is now by far the richest person globally, it’s fair to say this continues to haunt Buffett to this day.

Posted with permission of Visual Capitalist.

August 9th, 2018

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Saville Resources discovers new zinc-silver-nickel zone at surface in Quebec

August 8th, 2018

by Greg Klein | August 8, 2018

A property with limited exploration but encouraging geophysics shows further promise following a recent field program. Of eight surface samples collected by Saville Resources TSXV:SRE on its 3,370-hectare Covette project in Quebec’s James Bay region, one returned 1.2% zinc and 68.7 g/t silver, while three others assayed between 0.13% and 0.19% nickel.

Saville Resources discovers new zinc-silver-nickel zone at surface in Quebec

Saville Resources now plans trenching and channel
sampling to follow Covette’s grab sample assays.

Sampling took place along a visible strike of about 200 metres directly above an area of high conductivity found by a 2016 VTEM program that spotted several EM conductors coinciding with strong magnetic anomalies.

Underlying the region is a greenstone belt “comprised of various mafic to ultramafic rock units considered prospective for base and precious metals (nickel-copper-cobalt-platinum group elements-gold-silver), as well as pegmatite-hosted rare metals (lithium-tantalum),” Saville reported. “Komatiites have also been described in the region with such rock types known to host significant nickel-copper massive sulphide deposits at other localities globally, adding further to the prospective nature of the region.”

A sampling program in 2017 brought 0.18% nickel, 0.09% copper and 87 ppm cobalt. One historic, non-43-101 grab sample returned 4.7% molybdenum, 0.73% bismuth, 0.09% lead and 6 g/t silver. Another historic sample showed 1.2 g/t silver and 0.18% copper.

Further plans include follow-up trenching and channel sampling. Saville filed a 43-101 technical report on the property and closed its 100% acquisition in June.

Covette sits about 190 kilometres east of the town of Radisson and 10 kilometres north of the all-weather Trans-Taiga road and the adjacent hydro-electricity transmission line.

In another northern Quebec project, Saville has a 43-101 technical report underway for the Miranna claims situated on the Eldor property that hosts Commerce Resources’ (TSXV:CCE) advanced-stage Ashram rare earths deposit. Saville would acquire a 75% earn-in subject to exchange approval. In April the companies released niobium-tantalum boulder sample grades as high as 4.3% Nb2O5 and 700 ppm Ta2O5.

Last month Saville offered two private placements totalling up to $2 million.

Read more about Saville Resources.

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Fraser River rush revisited

August 3rd, 2018

A new book reveals how gold fever brought American warfare north of the border

by Greg Klein

Is this the price of gold—the murder of defenceless people followed by retaliatory beheadings as a private American army threatens genocidal war in the future Canada? There’s more to British Columbia’s first great gold rush than has been acknowledged and, 160 years after the fact, a newly published book casts harsh light on the Fraser River mania and its accompanying Fraser River War.

When gold fever brought American warfare north of the border

Natives mined and traded gold for about
two years prior to being overrun by newcomers.
(Photo: Royal British Columbia Museum)

That the war even happened will take many people by surprise. Downplayed or ignored in Canadian research, its significance gets special emphasis in Claiming the Land: British Columbia and the Making of a New El Dorado. The war constitutes one of a number of surprises in what author Daniel Marshall, a University of Victoria professor and descendant of 1858 arrivals from Cornwall, calls a “substantial revisionist history.”

Officially, the rush began with the sudden arrival of some 450 “dregs” of the California goldfields, unloaded by steamboat in April 1858 at the Hudson’s Bay Company fort in Victoria. But HBC officials including chief factor and Vancouver Island colonial governor James Douglas had been anticipating such an event for two years, all the while buying gold from native placer miners. That ongoing trade, of course, belies stories of a dramatic discovery that sparked the rush.

Douglas even tried to discourage such an event by posting pre-rush ads in American newspapers asserting British authority over the mainland of present-day B.C. (then under HBC jurisdiction) and warning that the natives “are decidedly dangerous and that they have forcibly expelled all the whites who have attempted to work Gold in their country.” Hedging his bets, he also ordered the company to manufacture California-style mining gear that the HBC could flog to new arrivals via roving teams of travelling salesmen.

Natives had already fended off gold miners at the aborted Queen Charlottes rush of 1851, when they expelled an HBC crew and fought off American boats. Haida Gwaii aboriginals had devised a way of extracting sub-surface gold by heating rock with fire, then cooling the expanded rock with water to break it up. They reportedly made bullets of gold, an ironic choice of ammo to use on rival miners. But on the mainland, HBC traders worked amicably with native miners, who added yellow metal to the furs and salmon that they provided the company for export.

When gold fever brought American warfare north of the border

No stronger contrast could be imagined with circumstances south of the border. All-out war raged between the U.S. Army and massed tribes of eastern Washington territory. In one battle, 1,200 natives delivered a monumental defeat to their adversaries just as the rush was gaining momentum.

As for California’s ’49ers, some of them considered “Indian fighting” an integral part of gold mining. Between 1848 and 1870, an estimated 50,000 California natives died of disease, starvation or murder. When placer mining played out and news arrived of gold on the Fraser, “much of the cultural mentality that informed the genocidal attitudes of the California mining frontier was baggage carried north with the requisite pick, pan, and shovel.”

Among those joining the rush were Chinese veterans of California, Cornish and Welsh miners with experience in a number of camps, hundreds of blacks and some “violently” republican former French soldiers encouraged to emigrate by Paris police after their country’s 1848 revolution.

But, with British military presence ending at the Fraser’s mouth, it was the white Americans—sometimes egalitarian and racist at the same time—who proved the biggest threat to colonial authority and aboriginal security.

Among them were not only Indian fighters but filibusters, Americans who had joined privately organized militias in attempted conquests of foreign territory. Some targets included Sonora, Baja California, Cuba and Nicaragua, where in the latter case a short-lived filibuster regime gained official recognition from the U.S.

Dreams of American Manifest Destiny and loose talk of 54-40 or Fight extended in time and space past the international boundary set at the 49th Parallel in 1846. With at least 30,000 newcomers, maybe many more, pouring into the yet-to-be-proclaimed colony of B.C., Americans flouted the almost non-existent British authority to establish their own California-style laws and customs.

The old Californian miners and Indian-fighters were the worst, [believing that] they could travel in small parties and clean out all the Indians in the land.—A gold rush prospector

Miners who fought their way through the dangerous overland routes from Washington territory brought the Indian Wars with them, as they took revenge on defenceless targets north of the border. As one witness recounted, “The old Californian miners and Indian-fighters were the worst, [believing that] they could travel in small parties and clean out all the Indians in the land.”

Both rumours and credible reports circulated of increasing harassment and shootings on both sides, with dozens dead and headless corpses floating downriver, nine past Fort Yale, another six at Union Bar and stories of many more. Thousands of natives were said to have united, pushing newcomers back to Yale, where hundreds of miners formed five mounted militias. “Some were for exterminating all Native peoples encountered,” Marshall writes, “while others offered to broker a peace settlement supported by a large demonstration of armed force.”

The latter sentiment prevailed, as Captain Henry Snyder of the 250-strong Pike Guards, supported by a French militia, overshadowed the much smaller Whatcom Guards, who advocated wholesale slaughter. Pushing north, Snyder’s group held a dramatic meeting with Spintlum, described as the war chief for the Fraser region. He convinced 10 other Nlaka’pamux chiefs to pursue peace. An American army, supported by a French army, and the massed aboriginal bands ended their war in the nominally British region.

Within Canadian historical study “it is usually assumed that there is no parallel incident in Canada to the kinds of Native-newcomer violence that occurred in the American mining West,” Marshall points out. “There was, however, a most notable and neglected exception.”

Read more about B.C. mining history.