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June 19, 2015

BMR Morning Market Musings…

Gold has traded between $1,198 and $1,205 so far today…as of 8:00 am Pacific, bullion is off $2 an ounce at $1,200 but is headed for its 2nd straight weekly advance after hitting a 1-month high yesterday…Silver has retreated 9 cents to $16.07…Copper is off 2 pennies at $2.57…Crude Oil has fallen $1.10 a barrel to $59.35 while the U.S. Dollar Index has recovered one-fifth of a point to 94.26

Due to the “DNA of its volatility”, it would be normal for Gold to move plus or minus 15% from its lows, Frank Holmes, CEO and chief investment officer of U.S. Global Investors, told MarketWatch in an interview…Holmes is not 100% certain that prices have hit a bottom but he’s leaning more toward the bullish side for Gold, saying it would be reasonable to see the metal finish the year around $1,350 an ounce…

The 2nd half of the year tends to see events that have a bigger impact on the consumption of Gold in the form of gift-giving, such as the holy festival of Ramadan, the wedding season in India and Christmas, he said…looking a bit further ahead, Holmes believes the big surprise for the Gold market this year could come from China…

“China is positioning itself to be the price maker for Gold,” said Holmes. “The physical market has moved to Shanghai and to attract the banks, (China) has created a tax-free financial zone.”

Gold, Euro Ignoring Greece Situation

Gold’s jump yesterday had more to do with Wednesday’s Fed statement and comments from Janet Yellen during her news conference that followed, as opposed to events in Greece which markets appear to be taking in stride…

The European Central Bank told a meeting of euro zone finance ministers yesterday that it was not sure if Greek banks, which have been suffering large daily deposit outflows, would be able to open on Monday…so it’s no surprise that this morning the ECB raised the funding cap on its Emergency Liquidity Assistance (ELA) for Greece’s banks, as reported bay Reuters…Greek savers have withdrawn about 2 billion euros from banks over the past 3 days, with outflows accelerating rapidly since talks between the government and its creditors collapsed last weekend, banking sources told Reuters…an emergency summit of euro zone leaders is to be held on Monday to deal with the Greece situation…

Meanwhile, Greek Prime Minister Alexis Tsipras is looking for love from Russia and may have found it…he addressed Russia’s showcase economic forum today…before that event, Russia’s deputy Prime Minister said his country would consider financial aid to Greece…in an interview on Russia’s RT television, which was reported by Associated Press, Arkady Dvorkovich said,  “The most important things for us are investment projects and trade with Greece. If financial support is needed, we will consider this question.”

The euro has climbed 4% against the dollar this month which basically says the currency at this point is essentially shrugging off the situation in Greece, or has already priced in any potential negative fallout…yields on government bonds in the euro zone have also risen, making the euro more attractive relative to the dollar…

TSX Gold Index Update

The TSX Gold Index is showing a very favorable technical pattern entering the 2nd half of 2015…note the rounding bottom consolidation base on this 5-year weekly chart, and the steady accumulation (CMF) throughout this year…

Based on this chart, there are two things we should expect in the coming months – 1) a breakout above the long-term downtrend line; and 2) a challenge of critical resistance at the 210 level…investors dismissing quality Gold stocks at the moment are making a huge mistake…

The Gold Index is unchanged at 158 as of 8:00 am Pacific

SPTGD1(4)

Today’s Equity Markets

Asia

China shares have suffered their worst week in more than 7 years, as both the Shanghai and Shenzhen markets fell into correction territory today amid rising fears of a bubble in China’s volatile equity markets…

The Shanghai Composite finished down 6.4% at 4481 today and lost 13.3% for the week, marking the second time this year it has fallen into correction territory…it dropped more than 10% from a recent high in late May, before rebounding to hit its highest level since January 2008 earlier this month…as John’s chart showed Tuesday, the Shanghai hit Fib. resistance at 5132 as well as the top of an upsloping channel, so a significant pullback isn’t surprising as this market digests a 2000-point advance since March…

Europe

European markets were mixed today…

North America

The Dow is down 25 points as of 8:00 am Pacific…in Toronto, the TSX is off 63 points while the Venture is flat at 683

NASDAQ 1-Year Weekly Chart

The NASDAQ finally eclipsed its March 2000 all-time high yesterday, surging 68 points to finish at Fib. resistance at 5133 (this Fib. level has been in place since the end of last year)…RSI(14) certainly has room to move considerably higher on this 1-year weekly chart, so expect the NASDAQ to continue its advance once this Fib. level has been successfully cleared…

COMP1(2)

UrtheCast Corp. (UR) – Flying High

The power of cool video…if you haven’t visited this site yet, check it out – Urthecast.com

More news this morning from UrtheCast (UR, TSX) which plans to build, launch and operate the world’s first fully integrated, multi-spectral optical and synthetic-aperture-radar commercial constellation of Earth observation satellites, to be deployed over multiple launches expected in 2019 and 2020…the Constellation will provide what the company anticipates to be unmatched space-imaging capabilities, including high collection capacity, optical and SAR data fusion, weather-independent high-resolution imaging using the SAR, target revisit, and imaging latency…

The masses are definitely chasing this one at the moment (which always gets dangerous)…UR is up another 36 cents this morning at $4.20…the herd may continue to push UR higher to the next Fib. resistance level…

UR1

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

Garibaldi Resources (GGI, TSX-V) enjoyed its biggest volume day in nearly 5 years yesterday as 1.6 million shares changed hands…the increasing volume throughout the week has soaked up all or almost all of the flow-through paper (6 million shares) that became free-trading near the end of April, a bullish development as the company prepares for a busy summer including first-ever drilling at its B.C. flagship Grizzly Property…

Technically, GGI is turning the corner – the chart below from John May 22 was bang-on in terms of the support band and the likelihood of a near-term bottom as oversold conditions intensified…

What can be anticipated going forward is a breakout above the downtrend line and then a challenge of resistance in the mid-teens, just below the declining 200-day moving average (SMA)…the increased liquidity should generate additional interest in GGI as events at promising projects in Mexico and B.C. unfold quickly…

GGI is off half a penny at 8.5 cents as of 8:00 am Pacific…Sheslay district neighbor Doubleview Capital (DBV, TSX-V) is more active this morning, pushing as high as 17 cents in early trading…a major fireworks show up north is likely just around the corner…more on that very shortly…

GGI18

Integra Gold Corp. (ICG, TSX) Update

Integra Gold (ICG, TSX-V) climbed another 3 pennies yesterday on strong volume as the company released a compilation of historical data related to its Sigma and Lamaque mines acquired late last year…they are immediately adjacent to the company’s Lamaque South Project where drilling is ongoing…

The Lamaque mine was the largest Gold producer in Quebec for 30 years, from 1955 until it shut down in 1985…the historic data compiled by the company provide compelling evidence for a downdip extension of the Gold-bearing system at Lamaque with the main plug continuing to depth…

Integra President and CEO Stephen de Jong stated yesterday, “Lamaque Deep is a world-class, royalty-free Gold exploration target in a prime jurisdiction with a permitted mill on site. Integra is well capitalized with $15-million in working capital and, aside from ongoing compilation and target generation work on this deep zone, we remain disciplined in executing on our exploration strategy for Lamaque South, including the resource expansion program under way at Triangle zone. We anticipate the second and third phase of compilation and target generation work on Lamaque Deep to take until the end of 2015.  We will continue to assess opportunities to create value for our shareholders and the unveiling of the Lamaque Deep target is another example of the potential resource upside at Integra, as well as further evidence of the value created by the company’s acquisition of the Sigma/Lamaque mine and mill.”

Technically, John noted the recent breakout above important resistance at 30 cents…this 2-year weekly chart suggests ICG is poised for a strong summer…

ICG is unchanged at 35 cents through the first 2-and-a-half hours of trading…

ICG2(5)

PyroGenesis Canada Inc. (PYR, TSX-V) Update 

We suggest readers perform their due diligence on PyroGenesis Canada (PYR, TSX-V) has come out with some interesting news in recent weeks, including June 8 when it announced something that could be quite revolutionary…PYR has been engaged by an unnamed junior mining and metals company (??) to evaluate the feasibility of using plasma for the purpose of refining ore into pure metal, in this case converting quartz into pure silicon metal…

“The world market for silicon metal is about 1.8 million tonnes per year and ore refining represents an interesting application of our plasma capabilities,” said Pierre Carabin, PyroGenesis’s director of engineering…

PyroGenesis is the world leader in the design, development, manufacturing and commercialization of advanced plasma processes, and its Plasma Atomization Process (PAP) is an enabling technology for 3D Printing…

Technically, PYR is gaining momentum with an RSI(14) bullish “W” and steady accumulation (CMF) since March…it has traded within a downsloping flag since late 2013 and could be gearing up for a test of resistance at the top of that flag…

PYR is off 2 pennies at 37 cents as of 8:00 am Pacific

PYR2

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

21 Comments

  1. Hi Jon, really appreciate and enjoy your daily musings and John’s technical analysis. On Monday this week you mentioned “We’ll have more on the Sheslay district later this week and how this is shaping up to be an extraordinary summer on the exploration front in this important region of northwest British Columbia”
    When do you plan on rolling that out? The excitement is too much at such pivotal point! With your Sheslay report, DBV meeting rumored yesterday, Dr R’s interview due Monday, immanent news from DBV….. Lot’s to look forward to. Thanks in advance.

    Comment by vepper — June 19, 2015 @ 7:30 am

  2. Stay tuned, Vepper, as we referenced in today’s Morning Musings…DBV is firming up, big volume in GGI…the Sheslay district is about to liven up what many would call a boring overall junior resource market…

    Comment by Jon - BMR — June 19, 2015 @ 7:36 am

  3. looks like ggi may surpass yesterdays volume so far,i take it this is just purely positioning for the most part?next week the games begin,looking foward to it..

    Comment by tombc — June 19, 2015 @ 8:07 am

  4. DBV – buyers this morning took the price to 17 before being sold back to .13 . Anticipation that Farshad and the Tahltan have kissed and made up ? They need to make a news release to clarify the situation . IMHO

    Comment by Les — June 19, 2015 @ 8:19 am

  5. Les, DBV action is looking extremely good, and the volume and positioning in GGI…very telling signs. I can guarantee you, the Tahltan wouldn’t be stirring if something of major value wasn’t at stake here…Farshad and Regoci have to show their cards soon…my take is that the Hat is bigger than anyone has imagined up to this point, and there are also arrows pointing right at the heart of Grizzly Central…in a challenging junior resource market, it’s situations like this that can suddenly emerge and provide that much-needed spark…

    Comment by Jon - BMR — June 19, 2015 @ 9:05 am

  6. DBV is looking like we see news soon
    First deal with Tahltan drilling and drilling results

    DBV is the leader in the Sheslay play so we need to see the rest of hole 23 and get some good grades for an explosion of the Sheslay area companies

    Comment by anon — June 19, 2015 @ 9:06 am

  7. Seems like a few FT shares still left in GGI. High volume and lower price.

    Comment by Dan — June 19, 2015 @ 9:14 am

  8. WRR news, drill permit obtained. Richard l

    Comment by richard l — June 19, 2015 @ 10:09 am

  9. Any new updates on Ascot Resources (AOT)? stock is up 17%+ so far today..

    Comment by CP — June 19, 2015 @ 10:27 am

  10. Jon do you have news about the meeting yesterday with Governement,Tahltan and a Junior (probably DBV)

    Comment by Guy Delisle — June 19, 2015 @ 12:46 pm

  11. WRR heating up now. Bids have really built up today. Get in to a stock that has yet to have its big run. Great chance of early success on this high grade gold property. Samples that are being reported in ounces per ton and not grams per ton. Drill pads are ready to go. Drills to start turning soon.

    Comment by Ed — June 19, 2015 @ 12:55 pm

  12. Sheslay made a couple calls today all silent

    Comment by anon — June 19, 2015 @ 2:13 pm

  13. Looks like we aren’t quite done with the selling for the flow through shares for GGI but we have to be getting real close.

    Comment by Danny — June 19, 2015 @ 3:07 pm

  14. Yes, let’s hope the sky lights up the Venture next week with the Shesleay…..also, WRR news? i don’t see it on stockwatch??? anybody? looks alot firmer and ready to take off ‘up’!

    Comment by STEVEN1 — June 19, 2015 @ 4:29 pm

  15. Didn’t see any WRR news today, Steven. But some firming up in the stock which isn’t surprising. Time to get drilling at that one, too.

    Comment by Jon - BMR — June 19, 2015 @ 4:43 pm

  16. DBV , looking gcod today but with people still selling into the bids , when will they catch on to as to what’s in the ground at the Hat ? Most likely after it’s been proven in which case the stock will not be trading at 17 but multiples. I’m hearing green light for drilling with the Tahltan on side. The drill turns pdq.

    Comment by Les — June 19, 2015 @ 6:29 pm

  17. WRR – Amen

    GGI – Maybe I get my 5 cents yet. Hope so.

    Comment by dave — June 19, 2015 @ 7:15 pm

  18. On the non resource front – ones to watch/trade are YFI, CRS, VID (for a bottom).

    And yes, I still have my 2 centers on WRR. I would LOVE to get 5 centers on GGI.

    Comment by dave — June 19, 2015 @ 7:17 pm

  19. Interesting article in to-days Vancouver sun newspaper entitled, Red Chris Mine gets nod despite critics objections. It is in the business section of the newspaper and is on page D2. It shows of the coming to an agreement between govt. (B.C.) the Tahltan central council (pres. Chad Day) and the mining company. It can be viewed on-line. Richard l

    Comment by richard l — June 20, 2015 @ 11:03 am

  20. dave, I hope GGI doesn’t get to .05 but I will keep some powder dry just in case. I think a lot of people are expecting news on GGI/Sheslay next week. If it doesn’t happen I expect a further sell off and you may just get your .05 We will see what happens, I would be a big buyer at .05

    Comment by Danny — June 20, 2015 @ 11:50 am

  21. Thanks, Richard…below is the link to today’s Vancouver Sun article. Economics wins out again.

    B.C. issues permit for new gold, copper mine south of Dease Lake (June 20, 2015)

    Comment by Jon - BMR — June 20, 2015 @ 12:48 pm

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