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February 26, 2015

BMR Morning Market Musings…

Gold has traded between $1,207 and $1,221 so far today…as of 8:30 am Pacific, bullion has backed off modestly from its morning high and is currently up $7 an ounce at $1,211…Silver is up 3 pennies at $16.56…Copper has climbed a nickel to $2.67 after surging as high as $2.70…Crude Oil is off more than $1.50 a barrel to $49.38 while the U.S. Dollar Index has shot up nearly a full point to 95.12

According to the numbers compiled by the IMF, euro zone Gold reserves increased by 7.437 tonnes in January to 10,791.885 tonnes…however, the data does not show which central banks actually bought Gold as the data groups together all the central bank purchases including the ECB…

Demand for Crude Oil is growing, Saudi Arabia’s top Oil official said yesterday, amid new data showing the world is getting hungry again for petroleum products (low Oil prices must drive the environmentalists crazy) and potentially bolstering OPEC’s decision to maintain production in the face of a price collapse…Saudi Arabia Oil Minister Ali al-Naimi used his first public comments since December to note that the Oil market had become “calm” and chided anyone who would “rock the markets”

In an interview with The Mining Report (www.aureport.com), Lawrence Roulston, respected industry writer and President of Quintana Resources Capital ULC, had these interesting comments regarding fresh money starting to come into the junior exploration sector:

“Certainly, in spite of all the complaining about moribund financial markets, a truly enormous amount of new money is coming into the junior mining industry. From Oct. 1, 2014, to Feb. 6, 2015, junior mining and exploration companies raised $3.5 billion.  About two-thirds of that money was raised in Canada. The balance was raised in Australia, the U.S., the United Kingdom and Hong Kong.  Breaking that down, $1.7 billion was new equity, which went into about 130 companies. Another 40 companies raised $1.8 billion in debt. Keep in mind, this was just the juniors. The larger companies, the likes of Capstone Mining Corp. and Lundin Mining Corp., raised several billion as well. There is no shortage of money for companies with good management teams that can win the confidence of the smart money investors. And there are billions of dollars sitting on the table waiting for the right deals.”

CRB Index Updated Chart

The CRB Index is well-positioned for a potential rally out of oversold conditions highlighted by the huge gap that exists between the current Index value and its long-term downtrend line, by far the largest gap seen since the bear market began in 2011

The support band between 200 and 220 has held through the collapse of Oil prices as WTIC is such a significant component of the CRB…if Oil can start to gain traction above $50 a barrel, a rally will indeed kick in on the CRB which would also be bullish news for the Venture

RSI(14) levels hit a long-term low in late December/early January, though the Index did manage to stay within its support band and held 5% above its 2009 low…one cannot rule out the possibility of a test of the 200 area or even a drop below that, but for now the Index could get into rally mode…

CRB1(2)

Today’s Equity Markets

Asia

Japan’s Nikkei hit a new 15-year high overnight, climbing 201 points to close at 18786…China’s Shanghai Composite was also hot, propelled by the financial and property sectors…the Shanghai surged 2.2% or 70 points to finish at a 4-week high of 3299

Europe

European markets finished mostly moderately higher today…on the data front, the latest GDP numbers from Spain confirmed that the country grew 2% year-on-year in the last quarter…in the U.K., year-on-year GDP was confirmed at 2.7% while the German unemployment rate also stayed at a record low in February…

North America

The Dow is unchanged through the first hours of trading this morning…

U.S. consumer prices in January posted their biggest drop since 2008 as gasoline prices continued to tumble, which could give a cautious Federal Reserve ammunition to keep interest rates low a bit longer…the Labor Department said its CPI fell 0.7% last month, the largest decline since December 2008, after slipping 0.3% in December…it was the third straight monthly decline in the index…in the 12 months through January, the CPI increased fell 0.1%, the first decline since October 2009

Meanwhile, durable goods orders figures for January increased a more-than-expected 2.8%, after a 3.4% decline in the prior month, and this is what has given the greenback a lift this morning…

In Toronto, the TSX is up 59 points while the Venture has edged 2 points higher to 702 – just 5 points below critical resistance…

Doubleview Capital Corp. (DBV, TSX-V) has announced a financing this morning to raise up to $1.5 million (flow-through at 20 cents and non-flow-through at 15 cents) which we interpret as a very positive sign that there is increased confidence as to how the Hat Project is developing…

Venture Updated Chart

The Venture is taking a run at critical resistance (Fib. and chart) at 707…if that level is overcome, which certainly appears possible given the posture of John’s 2-month daily chart this morning, then a push up to the 750 area becomes increasingly likely…as always, confirmation of any breakout is required…

RSI(14) at 59% has momentum and plenty of room to move higher…throughout this month, the Venture has been supported by its rising 20-day moving average (SMA) and now the 50-day SMA is reversing to the upside which should give the Index some help…

CDNX11(1)

Pretium Resources Inc. (PVG, TSX) Update

One of our favorite plays in British Columbia remains Pretium Resources (PVG, TSX) which continues to make progress advancing its high-grade Brucejack Project near Stewart to production…PVG has a partner with deep pockets in Zijin Mining Group Co. Ltd., China’s largest Gold producer…that is hugely significant…

Technically, Pretium is trading within an upsloping channel – TA shows that this is an ideal entry point as PVG is now coming off the bottom of the upsloping channel and RSI(14) appears to have found support at 50%…what’s also interesting is that PVG has been trading above its 500-day SMA since the beginning of the year, and this important long-term moving average has flattened out and could soon be ready to move higher…quality company with a fabulous project…

PVG is up 12 cents at $7.61 as of 8:30 am Pacific

PVG1(2)

Garibaldi Resources Corp. (GGI, TSX-V) Update

Garibaldi Resources‘ (GGI, TSX-V) acquisition of the La Patilla Gold Property nearly 2 years ago was a strategic attempt to create a cash flow scenario, and the company has put those wheels in motion with yesterday’s news that an agreement has been reached to send mineralized material (mill feed) to a gravimetric/flotation processing center just 40 miles to the southeast…last year’s drill results showed why artisanal miners have been active at this property for decades, to the present day, and the company was smart to negotiate a long-term exploitation agreement for La Patilla with the local community prior to commencing any work at the property…La Patilla is surrounded by excellent infrastructure, also enhanced just recently with the construction of a major dam project in the area…

It’s also quite apparent that La Patilla may contain some impressive high-grade Gold “shoots” as the company stated in yesterday’s news…the last hole drilled at the property, LP-14, returned an 82 g/t Au intercept over 1 m within a much broader interval of 3.1 g/t Au over 30 m…we’re confident that Dr. Craig Gibson, who found this property for GGI and believes passionately in it, will have been better success on the upcoming second phase of drilling…

Meanwhile, Garibaldi appears ready to fire some important bullets next week during PDAC with an update on its Mexican flagship Rodadero Project as referenced yesterday…should be interesting…

Technically, GGI has formed a classic triple bottom on declining volume during that consolidation…RSI(14) on this 3-year weekly chart has found support and is trending higher, another encouraging sign…

GGI is up half a penny at 17.5 cents as of 8:30 am Pacific

GGI11

Castle Mountain Mining Corp. (CMM, TSX-V) Update

We alerted our readers to Castle Mining Mining (CMM, TSX-V) on the morning of January 19 when the company reported some impressive high-grade drill results from its Castle Mountain Project in southern California…CMM took off from the upper 30’s and climbed as high as 55 cents that day – the 200-day SMA at the time – before consolidating at slightly lower levels…

Four weeks ago the company announced the start of a 9-hole follow-up drill program with 6 holes targeting the mineralization identified in CMM060…that hole intersected 74 m of 9.1 g/t Au, including 35 m of 18.97 g/t, beginning at depths of approximately 280 m…this mineralization is deeper, higher grade over thicker widths than previous high-grade sections and bottomed in 2+ gram material…the company intends to test the extent of this mineralization laterally and at depth…

Technically, CMM is showing encouraging signs that may very well lead to a breakout above resistance, identified previously and again in this chart, in the 50’s which includes the 200-day SMA and 2 Fib. levels…

CMM is up 3.5 cents at 49 cents as of 8:30 am Pacific

CMM1(3)

Xmet Inc. (XME, TSX-V) Update

Xmet Inc. (XME, TSX-V) has been gaining momentum, thanks to news on a couple of fronts over the last week…yesterday, the company announced the start of a 2,200-m drill program at its 100%-owned Grasset Project located along the Detour Sunday Lake deformation zone…importantly, it’s adjacent to Balmoral Resources‘ (BAR, TSX) Grasset Project…

Last Thursday, Xmet reported that “heavy and widespread sulphide mineralization was encountered over the majority of the lengths of all 4 holes” drilled at the company’s Blackflake West Property…no graphite was hit, but perhaps a VMS-style system…this has given the market something to speculate on…complete assays are pending, but keep in mind that a small batch of test assays consisting of 10 1-m sections from holes 1 and 2 returned low values of Zinc and Copper…doesn’t of course rule out the possibility of some sort of discovery but don’t mortgage the house…

Technically, XME pushed above resistance at 6 cents yesterday but this potential breakout requires confirmation today…it’s off half a penny at 6 cents through the first 2 hours of trading…

XME1(3)

Note:  John and Jon both hold share positions in GGI and DBV.

20 Comments

  1. Sure John don’t mention Gainey Capital at all pffff lol Let us see who wins this race.

    Comment by Jimgain — February 26, 2015 @ 8:57 am

  2. GGI – I think that she is going to come back to .17 and rest a day, let the rsi point down, and then she will make a move up. The telling sign is when the asks at .185 start getting hit.

    Comment by dave — February 26, 2015 @ 9:52 am

  3. WRR – it appears the market is content closing the PP while she trades at .04 – every time they get swooped up and it closes showing the .035 on the bid, she opens the next morning with a big bid again at .04. The chart, TA, and fundementals working good on this one. If she does see some of the .035 trade, it means the PP will close at end of market day. But we may not see them trade. I tout this one more than any other including ones that Jon doesn’t cover. A measely 1 million market cap will be changing soon. VGD was .03 last March, and I can’t compare them to what we believe WRR is sitting on. I missed the run on BLO, but did catch some of the run on JNX – although late getting in. To those who have a position in WRR, sit tight.

    Comment by dave — February 26, 2015 @ 10:04 am

  4. NAR – I’m hearing late April on this one. If they come in at $200 carat this stock can go to 2 or 3 dollars. The chart shows that it might possibly come down to .57 or .58, but no guarentee. Ok, I’m done for now. Have a good day gang.

    Comment by dave — February 26, 2015 @ 10:50 am

  5. Thanks Dave, I appreciate your updates, keeping them coming especially on WRR, I hope to make some money on that one.

    Comment by Greg — February 26, 2015 @ 11:55 am

  6. NAR halted late this morning….do they have an early hit at Pikoo in this new round of drilling? Pick up in volume in neighbor ASC…

    Comment by Jon - BMR — February 26, 2015 @ 12:46 pm

  7. Ditto to #5.. Thanks Dave..

    Comment by Greg J. — February 26, 2015 @ 1:47 pm

  8. NAR…initial results and they’re very good (nice yellows) from the Qilalugaq diamond bulk sample (while drilling continues at Pikoo)…

    Comment by Jon - BMR — February 26, 2015 @ 2:38 pm

  9. Nar – good results. The end of thier news release talks about the valuation, hopefully by end of April. This is what can propell this stock.

    Comment by dave — February 26, 2015 @ 5:04 pm

  10. Of interest

    Bloomberg to launch Canadian business TV channel this year

    Comment by Bert — February 26, 2015 @ 5:25 pm

  11. NAR – only resistance is .76

    WRR – you heard it hear first. She just went very bullish intermediate term.

    WRR lineup – Short term (bullish 5 to 13 days), intermediate term (very bullish 13 to 20 days), long term (bullish 20 to 50 days). The
    stars are lining up on this one.

    Comment by dave — February 26, 2015 @ 5:29 pm

  12. GGI – ooooohhhhh what will she do tomorrow. She has turned bullish short term, 2 solid white candles in a row, price moved above upper bollinger bar, 20 sma at .17. After failing on 2 inverted hammers with confirmation, she dropped to .15, the final support price point. She has gotten up off the floor and said “I’m not taking this chit no more”.

    Sorry Jon, just a little humor. Lets see what she does on Friday.

    Comment by dave — February 26, 2015 @ 5:50 pm

  13. FWIW- GGI insider selling today. Go to TMX money website…

    Comment by d4 — February 26, 2015 @ 5:57 pm

  14. Insiders do not sell before the sp explodes as some here believe it will. Just doesn’t happen.

    Comment by Franky g — February 26, 2015 @ 6:11 pm

  15. Same as what first appeared in late December, d4, according to TMX daily reports, with occasional sales since, but not connected with management. Oddly, on days in which we’ve seen this, it has appeared at times to be like pre-arranged trades or crosses in the market. Could be a fund shuffling paper around. If there’s volume and the price is going up, can’t complain.

    Comment by Jon - BMR — February 26, 2015 @ 6:16 pm

  16. As of 11:59pm ET February 25th, 2015
    Filing
    Date Transaction
    Date Insider Name Ownership
    Type Securities Nature of transaction # or value acquired or disposed of Price

    Feb 25/15 Feb 25/15 Regoci, Steve James Direct Ownership Common Shares 47 – Disposition by gift -100,000

    Feb 25/15 Feb 20/15 Regoci, Steve James Direct Ownership Common Shares 11 – Disposition carried out privately -159,375

    Comment by Bert — February 26, 2015 @ 6:21 pm

  17. Franky, wrong again. You’ve had a bad day. The occasional TMX daily “insider” sales since late December—–none of them have involved “insiders” as investors normally think of them (management or directors of the company), and that has been proven by the official Canadian insider trading reports on GGI. The last public transaction by a GGI insider was a buy at 29 cents last August.

    Bert posted an insider trading report tonight from CanadianInsider.com which shows Regoci with a PRIVATE disposition of 100,000 shares as a GIFT, and a PRIVATE sale of 159,375 shares. This occurred with Regoci each of the last few years and is related to estate-planning – RRSP/TFSA contributions. You often see this kind of thing at this time of the year with various company insider reports. It’s not him dumping stock. He’s just parking some of his large percentage into a better spot for the long term. That’s good. Unaware investors can get fooled by bashers with this kind of stuff (not referring to Bert, in this case he was being helpful in posting the info). Regoci has held on to every single share he’s accumulated with GGI.

    Anyway, the best explanation for the TMX daily sales that have been reported – it’s not a large amount of shares – is fund paper shuffling as mentioned earlier, which is also adding to volume. These aren’t “insiders” who have any knowledge of any material information, so your suggestion (conclusion) is simply untrue – facts are important, Franky.

    Comment by Jon - BMR — February 26, 2015 @ 7:20 pm

  18. I’ll wait for the GGI NR but sure am disappointed in their last NR.
    Their caution set me back, as they emphasized each & every thing
    that they have not completed, no 43101, no resource estimate, no
    reserve estimate, no pea, no prefeas, no feasibility. Maybe they
    had to do that, but there’s a way & there’s a way. Even if they
    had stated that the locals have been taking gold from the area
    for years. I disagree that it takes days for the market to
    evaluate the news. Also, may i add, folks have purchased this
    stock at much higher prices.

    Comment by Bert — February 27, 2015 @ 7:12 am

  19. Bert, as someone else mentioned yesterday, you have to understand that the qualifying statement in GGI’s news is a mandatory requirement from the regulatory authorities…you see it in every such instance…no company can report what GGI did yesterday without that cautionary statement…as an investor, it’s important to know that…it’s also a sensible regulation…

    Comment by Jon - BMR — February 27, 2015 @ 7:28 am

  20. Re: GGI news

    It was actually mentioned about the activity of the miners,
    “Artisanal miners have been active at La Patilla for decades”,

    If it was a mandatory requirement or not, it goes to show
    how much is stacked against lowly investors, even the
    regulatory authorities are… Have you ever noticed how
    they step in if a stock goes up too fast, whereas they
    never seem to care if it goes down. I don’t see the
    necessity for a long detailed caution, instead investors
    should be permitted to do their thing, while waiting to
    determine if they are going to profit or not. That’s my
    way of thinking & any rebuttal will not change that..

    Comment by Bert — February 27, 2015 @ 8:53 am

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