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The Resource Sector & Equity Markets
 

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April 24, 2015

BMR Morning Market Musings…

Gold has traded between $1,175 and $1,197 so far today, hitting a 6-week low on technical selling…Gold stocks, however, are holding up quite well which is a positive sign…as of 9:15 am Pacific, bullion is off $16 an ounce at $1,177…Silver has retreated 15 cents at $15.70…Copper had added 4 pennies to $2.74…Crude Oil is off 71 cents at $57.03 while the U.S. Dollar Index has fallen half a point to 96.90

Physical Gold demand saw considerable pick up in March, according to commodity analysts at UBS, quoting trade statistics from Switzerland…this likely helps explains the turnaround in Gold that started around the middle of last month…according to the Swiss data, 223.3 tonnes of Gold was exported out of the country, the highest since November…

“This was largely driven by strong growth in flows headed for China and India, which looks broadly consistent with anecdotal evidence,” UBS stated…they added that China imported 46.4 tonnes of Gold from Switzerland while India imported 72.5 tonnes…Chinese demand was stronger in March as business restocked their supplies after the Lunar New Year celebrations, UBS contends, while Indian demand was aided by the Akshaya Tritiya festival…

China’s Gold Reserves:  When Will The Cloak Of Secrecy Be Lifted?

There’s growing speculation that at some point this year, perhaps even as early as next month, China will update its Gold reserves…according to data from the IMF, China’s official Gold reserves have not changed since 2009 when they were reported to be 1,054 tonnes…next month, China will be meeting with the International Monetary Fund (IMF) to make a case for including the yuan in the IMF’s Special Drawing Rights (SDR), a basket of currencies made of U.S. dollars, Japanese yen, pound sterling and euros…it’s quite possible, some analysts are speculating, that the cloak of secrecy over China’s Gold reserves may be lifted if the country wants to bolster its case for being included in the SDR…

Sprott Makes Hostile Bid For Two Competing Funds

Sprott Asset Management has announced an $898 million hostile bid for 2 competing funds backed by Gold and Silver…in a news release yesterday, Sprott announced its intention to acquire the Central Gold Trust (GTU) and Silver Bullion Trust (SBT), two funds similar to its own physical Gold and Silver funds…the offer would entail GTU and SBT unitholders to trade their units for units into Sprott’s funds…

“Through our Physical Trusts, Sprott is committed to providing unitholders with access to a secure, convenient and exchange-traded way to hold physical Gold and Silver. We have the proven track record and the best-in-class platform needed to address the persistent trading discounts experienced by GTU and SBT unitholders,” said John Wilson, CEO of Sprott Asset Management LP. Sprott is offering GTU and SBT unitholders an opportunity to move into investment vehicles that have consistently outperformed GTU and SBT, while also benefiting from increased liquidity, physical redemption features and significantly larger asset bases.”

Today’s Equity Markets

Asia

China’s Shanghai Composite cooled off slightly overnight, falling 20 points to close at 4394…the “greed” phase is definitely gaining momentum in China…margin lending has more than tripled in the past year to a record 1.7 trillion yuan ($274.6 billion U.S.), according to WIND Information Co., a provider of financial data…the upsurge echoes past investment crazes among Chinese speculators, who have long shown a penchant for rushing into whatever is yielding the highest returns, from real-estate and wealth-management products, to bitcoin and online money-market funds…

Japan’s Nikkei average closed the week just above 20000

Europe

European markets were modestly higher today…

North America

The Dow is up 26 points as of 9:15 am Pacific…this morning’s U.S. durable goods report beat on the headline number but showed a disappointing decline in the core figure…stripping out the volatile transportation sector, demand for manufactured goods fell 0.2% to $159.9 billion last month, following February’s revised decrease of 1.1%…ahead of the report, consensus forecasts were calling for a 0.2% rise…

Nasdaq Updated Chart

It took just over 15 years but the Nasdaq finally eclipsed its 2000 high yesterday as it closed at 5056…in the past 6 years, the Nasdaq has nearly quadrupled – a rapid rise, for sure, but the index covered the same ground in less than half the time from 1997 through early 2000…and it looks far less speculative than it did in 2000 as many of its most prominent companies have matured into global behemoths grounded in real products, sales and profits…

The new all-time high for the Nasdaq is no big surprise – John’s 1-year weekly chart has shown a consistent bullish bias with important Fib. resistance just above 5100 at 5134…ultimately, the index could propel significantly higher (we’ll look at those possibilities next week) but for now let’s see how it handles this next Fib. level…

NASDAQ2

In Toronto, the TSX is up 16 points while the Venture is off a point at 698 as of 9:15 am PacificMega Precious  (MGP, TSX-V), which has been developing the Monument Bay Gold-Tungsten Project in Manitoba, has doubled this morning on a friendly takeover by Yamana Gold (YRI, TSX)…

NexGen Energy Ltd. (NXE, TSX-V) Update

Interest in NexGen Energy (NXE, TSX-V) continues to build after the release of more high-grade results yesterday from the company’s promising Rook 1 Project in the Athabasca Basin…

Below is an updated 2-year weekly chart from John…what’s significant here is the breakout above the ascending triangle, and how the RSI(14) has also pushed above its downtrend line in place since last year…in a market with a narrow focus on important new discoveries, momentum is definitely in NXE’s favor…

NXE is up 2 pennies at 63 cents on total volume (all exchanges) of more than 11 million shares as of 9:15 am Pacific

NXE4

North Arrow Minerals Inc. (NAR, TSX-V) Update

North Arrow Minerals (NAR, TSX-V) has backed off modestly from this week’s multi-year high of $1.34 which came on news that the yellow diamonds in the company’s Q14 kimberlite in Nanavut contain “unaggregated nitrogen”, a defining characteristic of exceptionally rare, natural Type 1b diamonds with fancy canary yellow colors…with such a proven management team, we’ve maintained all along that North Arrow could emerge as a huge winner in 2015, no matter how the markets behave…a critical moment will come later this spring or early summer when a formal valuation of the Q-14 diamond parcel is expected…in the lead-up to that, speculation could certainly intensify…

An unconfirmed breakout occurred yesterday above Fib. resistance at $1.18 – that’s an important level to watch today as shown in this 8-year monthly chart…

NAR is off 3 pennies at $1.20 as of 9:15 am Pacific

NAR8(2)

Doubleview Capital Corp. (DBV, TSX-V) Update

Monday, we’ll have Part 3 of our segment with Doubleview Capital (DBV, TSX-V) chief geoscientist Dr. Abdul Razique who sees a growing likelihood of discovering a much larger mineralized system at the Hat Project than what has already been outlined in the Lisle Zone, just 1 of 6 key areas that are generally trending NW-SE along a 4-km corridor…

After some intensive study, and with a fresh drill program almost ready to commence to test new theories, Razique believes the Lisle Zone is “just hitting the southeastern edge of a bigger system”.   A couple of key indicators are the alteration footprint throughout the project, he says, and the sulphide distribution evident in drill core.  “We have chalcopyrite in the Lisle Zone, chalcopyrite in Anomaly A, and we got bornite in hole 6 which is in between.  So this sulphide distribution, from pyrite in the margin into chalcopyrite into bornite – that gives you a very good indication, it’s in fact one of the vectors to target the core of mineralization.”

Final assays are pending for hole 23 which has the potential to deliver the longest, highest-grade interval yet reported in the Sheslay district…

Dr Razique with Hat Drill Core

Copper Fox Minerals Inc. (CUU, TSX-V) Update

Copper Fox (CUU, TSX-V) has retraced as expected after nearly doubling last month…it posted a March gain of 86%,  fueled by Teck Resources’ (TCK.B, TSX) announced increase in program expenditures this year ($4.8 million vs. $2.2 million in 2014) at the Schaft Creek Cu-Au-Mo-Ag Project (proven and probable reserves are 940.8 million tonnes grading 0.27% Cu, 0.19 g/t Au, 0.018% Mo and 1.72 g/t Ag), 100 km south of the Sheslay district…

Technically, temporarily overbought conditions have unwound in CUU with the stock pulling back, not surprisingly, to its 200-day moving average (SMA) at 18 cents where it broke out from so dramatically…this should be a favorable accumulation area given the overall chart pattern…

The Schaft Creek JV is focusing on geotechnical/geometallurgical modelling and domain definition, evaluation of key economic drivers, and exploration of the LaCasse Zone – a new zone of Copper and Gold mineralization discovered in field work last year north of the main discovery area…

CUU6

CMC Metals Ltd. (CMB, TSX-V)

Some of our readers have shown an interest in CMC Metals (CMB, TSX-V) which is finally beginning to gain some traction with the high-grade Radcliff mine in California…we’ll expand on that next week…in the meantime, this 3-year weekly chart does show potential as CMB is now threatening to overcome a downtrend line as well as chart resistance…

CMB1(1)

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

7 Comments

  1. BMR – The part 3 segment with Dr. Razeque will definitely shed more light on the geological structure for many who don’t fully understand or comprehend the system . For that I say thank you as I’m not a geologist but an investor who must make decisions on the information available .
    Your comment section is also a breath of fresh air compared to some other corrupted boards.

    Comment by Les — April 24, 2015 @ 10:13 am

  2. I second what Les said. As Jon & John know, I have publicly and privately thanked both of them for their hard work and dedication on BMR. They spend a lot of time and their own money maintaining this site, doing site visits and what ever it takes to DD companies. As far I am concerned they are the only ones covering the Sheslay Valley but not for too much longer imo.

    This site is the best one out there for quality and being able to exchange ideas without the mess on all the other sites. In the end, we all have different investment strategies, different risk tolerances, different opinions, etc but in the end we are all here for one simply reason…..to make money! We may agree, disagree or agree to disagree but we are all one big family and respect each other.

    Now if the juniors sector can come back to life again and the Sheslay Valley can deliver as we expect it will, we will be able to start a Sheslay Valley Millionaires Club but until then we wait in anticipation of that day……..

    Thanks Jon and John and everyone here that make this site great.

    Comment by D4 — April 24, 2015 @ 12:44 pm

  3. D4 – Ditto!

    Comment by dave — April 24, 2015 @ 3:27 pm

  4. IMHO – That is a MASSIVE CU hit by CNX. News after market. Obviously, a leak in the morning. Be interesting to see where this one is headed on Monday

    Comment by dave — April 24, 2015 @ 3:31 pm

  5. NAR closed at $1.23 – unchanged from yesterday. The volume is very low and it means, no one is in a rush to sell or buy. Only a few small investors are buying a couple of thousand shares… This will seesaw for a while before it heats up again. Keep an eye on this one.

    Comment by Theodore — April 24, 2015 @ 5:05 pm

  6. Dave- nice grades but bad timing for the PR!

    Comment by D4 — April 25, 2015 @ 12:03 pm

  7. Jon
    do you know anything about this:
    Malhi’s new company. Drug and disease breath detection.

    Malhi is the president and director of Breathtec biomedical. Attariwalla is the lead engineer. They seem to be also developing a drug breathalyzer along with disease detection.

    BREATHTECH

    INVESTMENT OPPORTUNITY

    § Current offering is 5 million shares at $0.20 per share.

    § Goal would be to get matching government grants and develop hand held devices to breath test for drug impairment as well as certain diseases.

    § Once devices are developed BreathTec would seek a Stock Market listing in North America via an IPO or Reverse Take Over.

    Read more at StockHouse site (Cannabix Technologies Inc.)…

    Comment by Greg — April 25, 2015 @ 3:40 pm

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