TSX Venture Exchange and Gold
The Venture failed to capitalize on a huge week in Gold and even the first weekly advance in Crude Oil in 2 months, as the Index slipped 20 points to close at 667 despite today’s 8-point rebound. The Dow and TSX were also negative for this turmoil-filled week but weren’t down as much in percentage terms.
While it’s encouraging to finally see Gold moving in the Venture’s favor, the Index still needs a stabilization in Oil prices and a few company success stories to gain serious traction and snap back vigorously from a nearly 40% collapse between the beginning of September and the middle of last month.
There is hope, if for no other reason than the fact that highly extreme/unusual levels of bearishness and negativity were witnessed in December while the Venture sank to an all-time low of 637. This may have represented the mirror image of the period of peak bullishness in early 2011.
Venture 2-Month Daily Chart
There are several positives in John’s short-term chart despite this week’s 20-point drop:
1. RSI(14) is on the upswing at 40%;
2. The Index held above 2 key Fib. support levels this week;
3. Buy pressure is remaining steady;
4. The 20-day moving average (SMA) continues to rise.
The Venture will need to build on today’s fresh momentum and push higher during the coming week.
Venture 9-Month Daily Chart
To quickly recapture momentum after a poor week, the Venture must finally break out above its downtrend line that goes back to September. The Index closed at this resistance on the first trading day of the year and then immediately retraced. The downtrend line is now just above 675.
Gold Bullion Development Corp. (GBB, TSX-V) Update
On Venture stocks that traded more than 1 million shares today, Gold Bullion Development Corp. (GBB, TSX-V) was the fourth biggest percentage gainer as it surged 33.3% on news late in the trading session that puts GBB a step closer to production at the Granada Gold Property near Rouyn-Noranda, Quebec. Iamgold Corp. (IMG, TSX) has received approval on an amendment to its Certificate of Authorization for processing GBB’s ore at its Westwood mill approximately 40 km away. That’s an important development and gives us added confidence that the long-awaited final mining permit for Granada will be granted in the near future.
Several weeks ago we alerted our readers to the potential of a major turnaround in the fortunes of Gold Bullion as it draws closer to finally becoming a producer. Keep in mind, as well, that no more than 20% of the LONG Bars Zone has been systematically drilled, so the exploration upside remains huge while the company gears up for a high-grade “rolling start” on the production side.
Canadian Gold producers, and near-term producers like Gold Bullion, are beginning to benefit from 2 major new advantages – plunging Oil prices and a weak Canadian dollar.
Look what Gold has done in Canadian dollar terms since late last year. In the case of GBB, fuel costs are currently 30% below assumptions in the Preliminary Feasibility Study (PFS) for the “rolling start” while Gold is now above $1,500 CDN vs. $1,400 CDN in the PFS. Both Crude and the loonie are likely to remain weak for an extended period, and that would be a major boost for all Canadian producers.
The Seeds Have Been Planted (And Continue To Be Planted) For The Next Big Run In Gold Stocks
There’s no better cure for low prices than low prices. The great benefit of the collapse in Gold prices in 2013 is that it forced producers (at least most of them) to start to become much more lean in terms of their cost structures. Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their their overall operations. Exploration budgets among both producers and juniors have also been cut sharply. In addition, government policies across much of the globe are making it more difficult (sometimes impossible) for mining companies to carry out exploration or put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists (technology has made it easier for groups opposing mining projects to organize and disseminate information, even in remote areas around the globe). Ultimately, all of these factors are going to eventually create a supply problem and therefore great opportunities in Gold and quality Gold stocks. Think about it, where are the next major Gold deposits going to come from? On top of that, grades have fallen significantly just over the past decade.
Gold
The Swiss National Bank did Gold a big favor as it shocked the markets yesterday (damaging its credibility) by abandoning the franc’s cap 3.5-year cap against the euro currency.
Gold followed up last week’s strong performance by surging $57 to close at $1,280. That included a $17 gain today when the U.S. Dollar Index rose significantly. Indeed, the fact that Gold has performed as well as it has over the past 2 months (a 13% gain from the early November low of $1,130) despite a strong move in the Dollar Index is a very encouraging sign. Physical buying out of China, leading up to the Lunar New Year February 19, is providing significant support as well. Bullion is also attracting a safe haven bid with Islamist terrorism creating more global chaos, while weak Oil prices are fanning deflation and creating destabilizing effects in the world economy.
Gold 6-Month Daily Chart
Gold’s breakout above the critical $1,240 mark has been confirmed and by high volume which is very bullish. RSI(14) is showing strong up momentum, suggesting bullion is likely to challenge stiff resistance at $1,300 during the coming week.
Holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, surged the most in nearly 5 years today. Assets in the SPDR fund, which counts billionaire John Paulson as its largest investor, jumped 1.9% to 730.89 metric tons. That’s the biggest gain since May 25, 2010. For the week, holdings climbed 3.3%.
Silver surged 7.6% this week, closing up $1.26 an ounce at $17.78 (updated charts Monday morning). Copper remains under pressure as it lost another 18 cents this week to finish at $2.61. Crude Oil (WTIC) snapped a 7-week losing skid, closing at $48.69 for a gain of 33 cents, while the U.S. Dollar Index gained half a point to close at 92.64.
The “Big Picture” View Of Gold
As Frank Holmes so effectively illustrates at www.usfunds.com, the long-term bull market in Gold has been driven by both the Fear Trade and the Love Trade. The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, has had a huge impact on bullion and will continue to support prices. Despite Gold’s largest annual drop in three decades in 2013, the fundamental long-term case for the metal remains solidly intact based on the following factors:
- Growing geopolitical tensions, fueled in part by the ISIS and al Qaeda, and a highly dangerous and expansionist Russia under Vladimir Putin, have put world security in the most precarious state since World War II;
- Weak leadership in the United States and Europe is emboldening enemies of the West;
- Currency instability and an overall lack of confidence in fiat currencies;
- Historically low interest rates;
- Continued strong accumulation of Gold by China which intends to back up its currency with bullion;
- Massive government debt from the United States to Europe – a “day of reckoning” will come;
- Continued net buying of Gold by central banks around the world;
- Mine closings, a sharp reduction in exploration and a lack of major new discoveries – this these factors should contribute to a noticeable tightening of supply over the next couple of years.
Gbb at 6 cents (after a 33% gain Friday) still has a market cap of 17 million. If and when they get the C of A, a market cap of 50 million would still be very cheap.
Comment by mike — January 17, 2015 @ 12:06 pm
A name I haven’t seen any coverage on here your readers might want to look at is VGD.v
Weekly TA shows nice healthy action on the weekly (+21%), breaking out on double the 60wk average volume, strong underlying trend in place…fyi… z
Check at Stockcharts Website
Comment by zippy — January 17, 2015 @ 12:09 pm
BMR, when will you report on your site visit?
Comment by Dan — January 18, 2015 @ 5:18 pm
Soon, Dan. We’re back to our regular am postings today – likely around 7 o’clock Pacific this morning. U.S. markets are closed today for Martin Luther King Day. Keep an eye on GGI this week, my gut tells me there are things afoot there; a few weeks ago we speculated this could be the day for news from DBV on hole 23 – ironically, it was exactly 1 year ago that they reported the 2 discovery holes HAT-08 and HAT-011. The visuals on hole 23 look fantastic based on the web site photos. We’ll see if this translates into numbers, I’m guessing that it will. BLO finished strong Friday, breaking out above 16, and GBB had a powerful day as well on important news, so both should be interesting to watch this week along with Gold and Silver of course.
Comment by Jon - BMR — January 19, 2015 @ 2:39 am
Doubleview drills 29.6 m of 0.82% CuEq at Hat
Doubleview drills 29.6 m of 0.82% CuEq at Hat
2015-01-19 09:06 ET – News Release
Mr. Farshad Shirvani reports
DOUBLEVIEW DRILLS INTO STRONG GOLD-COPPER MINERALIZATION IN HAT H-23 AND EXTENDS LISLE ZONE
Doubleview Capital Corp. has provided strong copper-gold mineralization and has discovered a further extension of the Lisle zone from partial assay results from deep drill hole HAT H-23 at company’s Hat project in northwest B.C.’s Sheslay district.
Doubleview has received assays for only the first 220.2 metres of hole H-23 which had reached 650 metres depth when both drilling and sampling work were suspended on Dec. 20, 2014. Lisle zone gold-copper mineralization was encountered almost from the collar and appeared to continue with increasing strength well beyond the part for which analytical data have been received.
Available analytical data show that hole H-23 includes sections with gold and copper values that are significantly greater than those obtained from earlier drilling, including a 29.6-metre interval from 190.6 to 220.2 metres with 0.63 gram per tonne gold and 0.36 per cent copper (0.82 per cent copper equivalent (CuEq)). Additionally, the 152.28-metre section from 63.0 to 220.2 metres returned 0.24 g/t gold and 0.25 per cent copper (0.42 per cent CuEq).
HAT H-23 extends the northern boundary of the Lisle zone by 110 metres. The Lisle zone now has been partially defined with dimensions one kilometre east-west and one-half km north-south, and is open to extension in all directions.
Note: CuEq is estimated based on Au at $1,280 per ounce, Cu at $2.61 per pound and Ag at $17.78 per ounce.
Based on reports of preliminary visual inspection by non-qualified persons of all core from hole H-23, mineralization appears to increase with depth.
Farshad Shirvani, Doubleview president and chief executive officer, states: “Each round of drilling at the Hat continues to produce even better results. This particular hole, H-23, further demonstrates the potential of this growing alkali porphyry discovery to host exceptional gold grades in addition to copper values similar to those of all other porphyry mines in the province. We are eagerly anticipating receipt of the remaining analytical data from HAT H-23 as well as to resumption of drilling to better define the Lisle zone. The company’s Hat project is possibly B.C.’s most exciting new mineral discovery since the millennium and may lead to definition of a world-class mining district.”
Quality assurance/quality control
Doubleview observes industry-standard quality assurance and quality control protocols. All drill cores are sampled on site by sawing the core length-wise and placing one-half securely in a bag for transfer to the prep lab; one-half is retained on site for future reference. All core samples are submitted to an independent fully accredited ISO 9001:2008 certified analytical laboratory where gold is determined by fire assay and atomic absorption (AA) methods, and for 45 other elements, by four-acid digestion followed by induced coupled plasma/emission spectrometry (ICP-ES) determination. Samples with copper content greater than the ICP upper detection limit (more than 10,000 parts per million) are analyzed by atomic absorption. QA/QC protocols are observed at all stages of core processing, including security in transit of samples with “chain of custody” documentation, preparation of duplicate samples from pulps, insertion of standard samples into the sample stream, replicate analyses of samples, and performance of check assaying by a second independent laboratory. In the recent past data were reviewed by an independent consultant who found all analytical data to be fully acceptable in terms of reproducibility.
Qualified person
Erik A. Ostensoe, PGeo, a consulting geologist and Doubleview’s qualified person with respect to the Hat project as defined by National Instrument 43-101 standards of disclosure for mineral projects, has reviewed and approved the technical contents of this news release. He is not independent of Doubleview as he is both a shareholder and a co-optionor of the Hat project.
We seek Safe Harbor.
© 2015 Canjex Publishing Ltd. All rights reserved.
Comment by zippy — January 19, 2015 @ 6:22 am