Canadian Mining: physician, heal thyself

A private member's bill is up for debate in Canada's parliament next week that seeks to regulate Canadian mining companies when doing business abroad. It has absolutely no chance of getting anywhere (due to the powerful mining lobby) but all the same may throw a little light on the subject. Here's the story and here below is a little phun phactz and phigures list culled from the page. Enjoy.

CANADA'S MINING INDUSTRY

• 1,373: Number of mining companies listed on the TSX (2007)

• 79 billion (valued at $482 billion): Number of mining shares traded on the TSX (2007)

• 43%: Percentage of total world mining exploration attributed to Canadian mining companies

• 60%: Percentage of world's mining companies registered in Canada

• $21 billion (U.S.): Total value of Canadian mining companies' assets in Africa

• 20%: Percentage of the total Canadian-owned African mining assets located in the war-ravaged Democratic Republic of the Congo.

• 193: Number of registered mining lobbyists in Canada as of Nov. 3, 2009

• 30: Number of countries where Canadian mining companies have allegedly violated human rights

• 0: Number of Canadian laws that regulate mining companies abroad

Report here

Alan von Altendorf on oil companies and the SEC (update)

Good news from yesterday's post.

Felix Salmon picked up on the story and wrote an article here. Then SinkingAlpha jumped on first Felix's post and then decided to run the AvA article on site (as a three parter). It's currently on the front page main headline, has been chosen as an editor's pick and is getting some smart comments from pretty knowledgeable oilheads.

It's also found its way to The Business Insider, where Joe W completely misses the point (he's usually better than this). Probably didn't bother to read the article. If you haven't read AvA's most excellent exposé of the oil industry, get your copy right here (in PDF from the author's website).

Fact of the day

FACT: There is a presidential election coming soon in Colombia.

BOGOTA — Colombia warned its forces were on "maximum alert" and were prepared to defend against any attack, amid rising tensions with neighboring Venezuela.

Colombian Defense Minister Gabriel Silva issued the warning after a meeting of the country's national security council in Arauca, a city on the eastern border with Venezuela.

He said President Alvaro Uribe and the military forces of Colombia were intent on remaining calm "because they know there are provocative forces on the border that must be avoided at all cost."

But this "does not mean that we are not prepared or are not on maximum alert to prevent any aggression against Colombia, against Colombians or against our territory."

Uribe's national security council met for five hours in Arauca with military and police commanders in the border area a day after Bogota charged that Venezuelan troops had blown up two footbridges across the border in northeastern Colombia.

Silva said the destruction of the bridges was an aggression against yada yada continues here

Keith Barron interview

Jim Puplava interviewed Keith Barron (of Aurelian fame) this week in the first 20 minutes of Puplava's radio show. Well worth listening to and thanks to reader MP for passing on the link this morning. I wonder what mining company he was thinking about at minute 10? (Hint)

Here's the link to the show.

The Friday OT: The Cure; Friday I'm In Love

Friday never hesitates.

With a doff of the cap to RickB over at TenPercent, this song is dedicated to my youngest daughter. She knows why. The rest of you can enjoy one of the greatest pop songs ever made. Canned joy.

Trading Post (jump to conclusions edition)

For the record, I do not post on any message or bullboard anywhere ever. If somebody's pretending to be me it's a reflection on their sad-assed life....so no more mails, please?



ECU Silver (ECU.to) down 2.4% at $0.80. How's your long position doing, Wistar?

Lumina (LCC.v) up 7.5% at $1.29. Low volumes for sure, but has had that Elmer Fudd "sssh be wevy qwiet 'am huntin' wabbit" look about it for a couple of weeks. i own, so DYODD.

Minera Andes (MAI.to) UNCH at $0.72 and just can't change its funk. I used to own, so DYODD.

MAG Silver (MAG.to) down 1.4% at $5.82 and betcha a dollar that if you hang out at the San Francisco mining show this weekend you hear great things about this stock.

Must read on oil

If you only read one article about the oil industry this year, the report linked right here has to be it. Utterly, totally, completely and absolutely unmissable. Not only is it intelligent and über-insightful, but it's a highly entertaining read, too.

Alan von Altendorf is a smart guy when it comes to the oil industry. He runs an independent oil consultancy out of Houston called CWSX and knows his patch. Several moons ago, I got lucky and hooked up with AvA while covering the subject of Petrobras (PBR). At the time of the mega pre-salt hype PBR was plainly getting way expensive and I said so. When the idiot sheep screamed their denials, AvA stepped up with solid science and arguments that agreed with the overbought call. He was proved very very right.

Anyway, to the point. He's written a new, free access paper that blows the lid off the new SEC rules and eviscerates the oil industry, version 2009. I cannot praise this paper highly enough and have already learned a whole bucketload about the scams going on in the oil biz during my first couple of scans at the piece. I'll be sitting back and absorbing every word later. You should too.

Here's the intro section to AvA's note. Here's the link again, so go get your own copy.

This is a long article on the subject of oil & gas reserves and due diligence.

My purpose is to alert you to revision of SEC Regulation S-K and Regulation S-X effective January 1, 2010. Concealed in a handful of benign new regs is a financial truck bomb that's going to blow away "proved reserves" as a meaningful metric of oil company assets.

Old definition: Proved Reserves are those quantities which can be estimated with reasonable certainty to be commercially recoverable from known reservoirs under defined economic conditions. Proved quantities arelimited by the lowest known hydrocarbon as seen in a well penetration unless otherwise indicated by definitive geoscience, engineering, or performance data. Seismic data alone is not sufficient to define fluid contacts. Undeveloped locations may be classified as Proved in undrilled areas of a reservoir that can be judged with reasonable certainty to be commercially productive.

New definition: Industry is no longer constrained by the criterion of certainty. An operator can book incremental proved reserves from planned enhanced recovery projects (gas injection, acid fracturing) based on a pilot project. Coal seam gas, bitumen, oil shale and other unconventional resources can be booked as Proved Reserves. Estimated reservoir properties in the aggregate is a departure from the old rules. The new SEC definition does not require that an analogous reservoir has to be in the immediate area or in pressure communication. Seismic analysis and reservoir models are sufficient to book Proved Reserves.

Hold on to your shorts, it gets worse.

Under the new SEC rules you don't have to drill a well and actually produce oil. An operator can establish levels of lowest known hydrocarbons and highest known oil through "reliable technology" other than well penetrations. It doesn't have to be 90% reliable or widely accepted by industry peers... [more]

x

Burning bridges

ka-boom?

Well...dynamiting them, actually.

Another taste of bizarre today as the hypocrisy of US foreign policy towards Venezuela shows up once again. Several newswires are running the story about how Venezuelan troops blew up two pedestrian bridges that connect Venezuela with LittleUSA (a.k.a. Colombia) in the Norte de Santander region this week. Anyone who knows anything about that spot on the planet knows that those bridges are used for two main purposes:

• carrying cheap fuel from Venezuela to Colombia illegally
• carrying cocaine from Colombia to Venezuela (need I mention that's illegal?)

But sure enough, LittleUSA is going to make a protest about the fact that Venezuela wants to protect its borders from Colombia's main source of dollars. Apparently, fucking up your neighbours via a long term and very large cocaine habit is socially acceptable while watching them protect themselves from you is aggressive behaviour.

This comes on the same day that The USA declares it wants to see Venezuela make more effort against drug runners. The arrogantly entitled 'Voice of America' (hint, 'America' is not a country, it's a double continent) starts off its report thusly:

U.S. anti-drug officials are calling for greater efforts by Venezuela to combat drug traffickers who are using the country to make illegal shipments.

So Venezuela has to make more effort to combat druggies, but when it does there's hell to pay. Go figure.