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Gold’s volatility continues…as of 6:45 am Pacific, bullion is up $16 an ounce at $1,386…Silver is up 12 cents to $22.39…Copper is off 9 cents to $3.25 on weak data out of China, but a shutdown at one of the world’s biggest mines in Indonesia has capped losses…Crude Oil is off $1.52 a barrel to $93.76 while the U.S. Dollar Index has fallen half a point to 83.86…

China Factory Activity Contracts

Fresh signs of of a slowdown in the Chinese economy…the flash HSBC Purchasing Managers Index (PMI) for May that was released this morning slipped to 49.6, falling under the key 50 level, which divides expansion from contraction, for the first since October…last month, the final HSBC PMI stood at 50.4…most alarming in the PMI was the fact that declines in the gauges of new orders and employment appeared to be driven by a slump in domestic demand rather than external weakness…the question is, will Chinese authorities see the need to implement a more expansionary fiscal policy this summer or will they continue to focus on a “re-balancing” of the economy and structural reforms?…

Today’s Markets – Nikkei Plummets 7.3%

Investors discovered overnight that Japan’s Nikkei average can’t defy the laws of gravity after all…the Index rose another 2% in early trading, only to quickly and brutally retreat to finish 7.3% lower as it lost 1,143 points to close at 14484…a lower-than-expected PMI number out of China, confusion over Ben Bernanke’s comments yesterday in testimony before the Senate, surging Japanese bond yields and a strengthening yen all contributed to the sharp sell-off which everyone knew would come sooner or later after such strong gains so far this year…it was the biggest plunge in the Nikkei in over 2 years since the massive earthquake and tsunami in Japan in early March, 2011…this is what central bank intervention brings – volatility, and it can come in either direction…

We don’t see a collapse of the Nikkei anytime soon, however, with the Bank of Japan continuing to pursue an unprecedented expansionary monetary policy…below is a chart from John that shows strong support for the Nikkei around 14000…

China’s Shanghai Composite held up reasonably well overnight, falling just 27 points to 2276…European shares are down significantly in late trading overseas – most markets are off a little more than 2%…the euro zone is likely to remain in recession in the second quarter, a business survey showed today, with both France and Germany, the two biggest economies, still in contraction territory…the Dow is off 94 points at 15214 after the first 15 minutes of trading…U.S. manufacturing slowed for a second straight month in May as weak overseas demand and government belt-tightening at home led to the sector’s most sluggish rate of growth since October, a survey showed this morning…financial data firm Markit said its “flash,” or preliminary, U.S. Manufacturing Purchasing Managers Index fell to a 7-month low of 51.9 in May from 52.1 the previous month…a reading above 50 indicates expansion…meanwhile, initial claims for state unemployment benefits dropped 23,000 to a seasonally adjusted 340,000, the Labor Department announced earlier this morning, pushing back below the 350,000 mark that economists normally associate with a firming job market…the labor market of course is being watched closely by the Federal Reserve as debate over the future of its expansive monetary stimulus heats up…after yesterdays remarks from Bernanke, and the release of the minutes from the last FMOC meeting, many analysts believe Bernanke and other senior Fed members have enough influence to persuade the committee to wait at least through to September before deciding on tapering back QE3..as of 6:45 am Pacific, the TSX is down 117 points while the Venture has slipped 10 points to 932…

Gartman’s View

“Yesterday was a tectonic plate shift between the feet of the market…reversal day in the stock market, reversal day in the bond market, very strange movement in the foreign exchange markets…I think yesterday was an extremely important trading session and many, many things shifted and changed,” Dennis Gartman, the founder and editor of The Gartman Letter, told CNBC…

Iskut River Play

We’re continuing to work on a major piece that we expect to be able to post on Monday that will review all the key players in the Iskut River area, including some of the companies that have just recently staked ground or completed property option agreements…our favorites at the moment, besides Colorado Resources (CXO, TSX-V), are Victory Ventures (VVN, TSX-V) and West Cirque Resources (WCQ, TSX-V)…

First off, before we get to Victory and West Cirque, plus another company that has caught our attention, below is an updated chart for Colorado which pulled back 17 cents yesterday to close at $1.39…it was, however, CXO’s third-lowest volume day since the announcement of their discovery April 25…the 10 and 20-day moving averages have been providing very strong support so far, so it’s wise to continue to use those as a guide (approximately $1.30 and $1.10, respectively, at the moment)…John has a detailed chart below with Fibonacci levels…RSI(14) on the 6-month chart has unwound from a very overbought condition to 64%…as we’ve mentioned previously, there’s always a lot of volatility in these early-stage discoveries…understand the risks along with the potential rewards, and never invest money (in anything) that you can’t afford to lose…

Victory Ventures (VVN, TSX-V)

We’ve written a lot about Victory recently, and the stock is up more than 75% since we first introduced it to our readers 3 weeks ago…Victory will be first company other than Colorado to drill (starting in early June) in the general North ROK-Red Chris area since the North ROK discovery was announced April 25…VVN has several well-defined targets at its Copau Property based on a very revealing IP survey carried out last summer, and it’s also reasonable to speculate that the company is looking at how it can expand its footprint around Iskut River…Victory understands the region very well…VVN’s share structure is tight (21.6 million currently O/S) and the stock has undergone heavy accumulation for 19 straight trading days since Colorado announced its discovery…folks, this is smart money accumulating prior to the start of a drill program that is going to garner considerable attention and speculation given what’s unfolding at North ROK…it’s a major coup for Victory to be first on the scene with a drill program after Colorado, on a land package immediately to the west of North ROK and contiguous to Imperial Metals‘ Red Chris claims…Copau has never been previously drilled, so anything remotely encouraging in terms of results could send Victory much higher than its current $2.3 million market cap…at this point in our view, the upside potential far outweighs the downside risk…as always, perform your own due diligence…what we’re also impressed about with Victory is that they have been very good at preserving cash and there has also been strong demand for their private placements this month when many other companies can’t even raise a nickel…as the saying goes, follow the money…we see the potential for a significant near-term victory with VVN…

West Cirque Resources (WCQ, TSX-V)

One company with excellent prospects in the Iskut River area that has been overlooked by investors so far is West Cirque Resources (WCQ, TSX-V), but it hasn’t gone unnoticed by Freeport-McMoRan Canada which has cut a deal with West Cirque to explore the junior’s Castle, Tanzilla and Pliny properties…Freeport-McMoRan will finance cumulative exploration expenditures of $8 million over a 4-year period while West Cirque will remain the operator which, importantly, gives them a strong measure of control over the news flow…the Castle Property, in particular, holds excellent promise…it’s 15 km west of Colorado’s discovery and covers a 5.5-km long alteration zone associated with Gold-Silver-Copper mineralization…Teck did some work at Castle in the 1980’s and got some encouraging results…Freeport jumped into the picture this spring after reviewing historical data and results from West Cirque’s 6-hole drill program last summer (1,800 metres) that intersected broad zones of mineralization over a strike length of 1,000 metres, interpreted to be the outer pyritic shell to a porphyry system which remains open in all directions…it’s going to be a busy summer on the ground for West Cirque, and that’s what’s going to give investors such a great shot with this deal…the company has just 26.5 million shares outstanding, and much of that came from a May, 2011, financing at 40 cents ($4.2 million was raised)…WCQ still had $1.7 million in its treasury as of the end of December…2.3 million warrants are exercisable at 15 cents until March, 2014, while another 6.6 million warrants at 55 cents are set to expire next month…this is a fairly tight deal and management certainly has the confidence and respect of Freeport which is good enough for us…West Cirque has other properties in B.C. and Nevada…do yourself a favor and check this company out, we like this deal A LOT…

Ashburton Ventures Inc. (ABR, TSX-V)

We spoke with Ashburton’s Mike England recently, and we do believe he’s putting together more than just a “closeology” play with ABR as he continues to pick up ground in the area…first off, you’re obviously not in the game at all in the Iskut River if you don’t have claims, so England and his crew have been busy scooping up some parcels of land to get the ball rolling…he’s also determined to put boots on the ground up there as quickly as possible…so from a speculator’s standpoint, ABR has very good potential – lots of news flow – and should be quite active in terms of trading volume throughout the summer…the company needs to close a financing at a nickel, but other companies in this play have been able to pull that off…the stock gained a penny-and-a-half yesterday, closing at 5.5 cents on volume of 1.2 million shares…activity in ABR has picked up considerably ever since the company announced its foray into the Iskut River area May 2…ABR was rolled back 1-for-10 last summer…it currently has about 16 million shares outstanding, so the market cap is just under $1 million which makes this the least expensive deal in the area right now…you may recall that England got Geo Minerals into the Blackwater play and then it got taken out for about $20 million by New Gold Inc. (NGD, TSX-V) in late 2011…England brings plenty of energy and experience to Ashburton and he’s correct in sensing an opportunity in this other prolific part of British Columbia…

Below is a 2.5-year weekly ABR chart from John that shows increasing up momentum…

Note: John and Jon both hold share positions in VVN.  Jon also holds share positions in CXO, ABR and WCQ.

After a major intra-day reversal Monday, and a pullback yesterday, Gold is back in positive territory this morning with this week shaping up to be a possible important turning point – at least for the short-term…as of 7:30 am Pacific, bullion is up $17 an ounce at $1,393 – though it has quickly retreated from its high of $1,416 as it couldn’t hold the $1,400 level…Silver is 38 cents higher at $22.81…Crude Oil is off 37 cents a barrel to $95.81 while the U.S. Dollar Index has gained nearly one-fifth of a point to 83.97…the Dollar is at a critical point and must be watched closely…

Physical demand for Gold in key Asian nations remains strong, according to HSBC…strong physical buying, most notably from China and India, has been entering the market, the bank says…“Bullion’s price premium on the Shanghai Gold Exchange stood at U.S. $22/ozz, as it remained above $20/oz for a fourth consecutive trading day,” HSBC stated…the bank cites a report in the Economic Times of India saying buyers in Hong Kong and Singapore are currently paying a $5-per-ounce price premium, while buyers in India are paying a $40 premium…“Physical Gold buyers have significantly stepped into the market since bullion’s first price break below the $1,600/oz level earlier in the year…we expect this to continue with prices below 1,400/oz,” HSBC stated…

“End Of Commodities Supercycle”: Citi Bank

A slower-growing Chinese economy, lack of correlation between equities and commodities, and a stronger U.S. dollar are marking the “end of the commodities super-cycle,” according to Citi Bank in a research note released yesterday…but it’s not all doom and gloom from Citi…“Citi expects 2013 to be the year in which the death bells ring for the commodity supercycle after its duly noted sunset, ushering in a new decade of opportunities based on how individual commodities will perform against one another and against broader market indicators such as equities or currencies…it will be a period of focus on unique individual commodity cycles and new relations emerging between and among commodities and other asset classes from fixed income to foreign exchange to global equities,” they stated…the firm believes Gold has lost “investment glitter” as investors seek higher returns in other investments and inflation fears are further postponed…“As fears of inflation driven by global QE (quantitative easing) recede, for the time being, so should the Gold price…our current projections are for Gold price to average $1,555/oz in 2013 and $1,435/oz in 2014,” they said…

Is Gold Gearing Up For A Surprise?

Monday’s trading action in Gold was very bullish, and what’s also interesting is the chart below from John…the euro is finding support at the “neckline”, the Dollar Index faces stiff resistance around 84, while Gold for now appears to have put in a double bottom (lower prices later in the year are certainly possible, but for now Gold seems to have found important support in the low $1,300’s after successfully re-testing last month’s low)…these are volatile markets at the moment, so it’ll be interesting to see what unfolds in the coming days…

The HGD – TSX Gold Index In Reverse

Evidence for a potential rally in Gold stocks also comes from the HGD which is the double-reverse Gold Index ETF…it has more than tripled in value since last September but could be running out of steam for now…the RSI(14) overbought condition on the 2.5-year weekly chart will need to unwind, guaranteed, and the time for that may have arrived…the $25 level could prove to be a temporary top, followed by a retracement to one of the Fibonacci levels…

Will Fed Ramp Up Or Begin To Retreat?

Federal Reserve Chairman Ben Bernanke reiterated the central bank’s “intention to maintain highly accommodative monetary policy as long as needed” as he started his testimony before the Senate at 7:00 am Pacific…at 11:00 am Pacific, the Fed will also issue the minutes from its April 30/May 1 FMOC meeting…Federal Reserve Bank of New York President William C. Dudley said he has not decided whether the Fed’s next move should be to enlarge or shrink its bond buying program as he called for a fresh look at its eventual retreat from record asset purchases…“Because the outlook is uncertain, I cannot be sure which way –  up or down – the next change will be,” Dudley said in a speech yesterday in New York…Dudley adds his voice to a debate on the FOMC about what to do with its program of bond purchases, designed to lower the 7.5% unemployment rate…while many Fed officials have voiced support for shrinking purchases as the next step, Dudley, who is also vice chairman of the FOMC, signaled willingness to increase purchases…

Today’s Markets

Japan’s Nikkei average hit a 5.5-year high overnight, gaining 246 points to close at 15627…the Bank of Japan raised its assessment of the economy once again and stood pat on policy, showing confidence in its drastic easing program despite recent volatility in the bond market…China’s Shanghai Composite gave up 3 points to finish at 2302…European shares are mixed in late trading overseas…through the first hour of trading in New York, the Dow is up over 150 points…the TSX has gained 118 points while the Venture is up 9 points to 948…tomorrow we will be focusing again on the Iskut River play…

Solvista Gold Corp. (SVV, TSX-V)

Solvista Gold Corp. (SVV, TSX-V) closed 40% higher yesterday at 35 cents on the Venture Exchange after releasing impressive drill results from its Caramanta Project in Colombia, most notably 456.7 metres grading 1.40 g/t Au Gold equivalent…in a different market, this stock would have really exploded but we still see good upside potential for SVV as more investors become aware of the latest results and how this project is progressing…the 456.7-metre intercept from the El Reten target was the longest, continuous mineralization reported to date at Caramanta where there are 3 known centers (and possibly 2 more as revealed yesterday) of porphyry-related mineralization along a 3 km trend…the current surface footprint of this hydrothermal system measures 430 m x 360 m with a vertical extension of more than 400 metres…Solvista will need to widen the mineralized body, but the system remains open in all directions…results are pending from 2 other targets drilled on the property – El Corral and Ajiaco Sur…the company stated in yesterday’s news release that visual observations from drill core at El Corral and Ajiaco Sur suggest both systems are similar in alteration types and vein and fracture controlled mineralization as El Reten, but appear to be more Copper and Silver dominant…Solvista has strong insider ownership and completed a $5.6 financing in early February at 45 cents…the stock was as high as $1.29 last September and has 68 million shares outstanding…SVV gapped up yesterday morning on the news but closed on the Venture at its low of the day (35 cents), so how this behaves over the next couple of trading sessions is critical…to gain technical momentum and make a possible run this week, it needs a volume surge and must push through yesterday’s intra-day high of 46 cents – slightly above the still-declining 100-day moving average (SMA) where there is resistance…below is a 1-year weekly chart from John…as of 7:30 am Pacific, SVV is up a nickel on light volume at 40 cents…worth watching closely…

Madalena Ventures (MVN, TSX-V) Chart Update

We don’t follow too many Oil plays, but one that we do like and mentioned previously when it was trading in the 30’s continues to do very well – Madalena Ventures (MVN, TSX-V), an aggressive Calgary-based company with increasing production and reserves on 3 horizontal resource plays in Alberta…it also holds 135,000 net acres in the Neuquen Basin in Argentina where it’s focused on developing conventional sands and delineating shale resources…the chart has shown steady progression since late last year after the company made a strategic acquisition of Online Energy Inc., a move that came after a large drop in the MVN share price from an early 2012 high of $1.40…as always, perform your own due diligence, but this is certainly one to keep on your radar screen…

After coming within about $20 of its April low, Gold staged a dramatic late day rally yesterday on short covering and bargain hunting to finish up over $30 an ounce at $1,394…it has given up a good chunk of those gains so far today…as of 7:15 am Pacific, bullion is down $31 an ounce at $1,363…Silver, which opened significantly lower yesterday before also rebounded sharply, is off 73 cents at $22.19…strong support at $22 held on a closing basis yesterday…Copper is flat at $3.33…Crude Oil is off 23 cents at $96.48 while the U.S. Dollar Index has gained one-third of a point to 84.13…

Gold Exploration Takes Hit – IntierraRMG Has Numbers

IntierraRMG reports, not surprisingly, that based on drilling programs it’s monitoring around the globe, Gold exploration has been hit particularly hard with activity down 55% in March from the same period a year ago…the research firm reckons that figures for the next few months are unlikely to be any better – indeed they could even show a further decline following the dramatic drop in Gold and Silver prices in April and a continued drying up of exploration funding…long-term, the fall-off in Gold exploration is clearly bullish for the metal…less activity on the ground means fewer discoveries and that in turns will lead to less future supply…strong physical demand for Gold continues…India’s purchases of Gold and Silver, for example, shot up 138% in April to $7.5 billion…the World Gold Council reported last week that demand for Gold bars and coins was 10% higher in the first quarter of 2013 compared to a year earlier, while demand for jewellery increased 12%…similarly, central banks’ net purchases exceeded 100 tonnes for the 7th consecutive quarter…

Updated Silver Charts

Below is John’s updated 11-year weekly Silver chart based on Friday’s close of $22.25…the RSI(2) level was even slightly below the most extreme level reached during the Crash of 2008, and then yesterday Silver gapped down and traded around $21 (its lowest level in 2 years) before rallying to close back above support at $22…that type of action is typically a bullish sign, so we’ll see if Silver can follow-through and climb higher this week…there is very strong resistance at $26 which Silver may want to test…ultimately, at some point this year, the technicals suggest that Silver will fall into a support zone between $17.50 and $19.50 an ounce…

Long-Term Silver Chart (11-Year Weekly)

Short-Term Silver Chart (3-Year Weekly)

The short-term chart shows Silver continuing to build a base at the $22 level…yesterday’s action should help in that regard…RSI(2) has spent a lot of time in the extreme oversold area in the past year with the exception of the August-September period when the metal rallied strongly along with Gold…selling pressure remained strong through the end of last week…we’ll see if that changes this week…

Huldra Silver (HDA, TSX-V) Chart Update

The weakness in Silver has hurt all Silver producers, and Huldra (HDA, TSX-V) is no exception as it has plummeted from a high of nearly $1.40 in January to a low last week of 34 cents…commercial production started a couple of months ago at the company’s high-grade Treasure Mountain Property near Hope, B.C., and last Thursday Huldra reported impressive grades from the first 5 holes of an underground drill program…we’re curious to see HDA’s first quarter financials which are due soon…historically, this stock has been quite volatile and at some point we suspect there will be another incredible buying opportunity…John’s 3.-5 year weekly chart shows two important support zones – 28 to 31 cents, and around the 15-cent level…very oversold conditions are beginning to form on this weekly chart…HDA closed Friday at 35 cents…by sometime this summer, production at Treasure Mountain should be running at full tilt…grades are high there but the key of course will be the bottom line – with Silver in the low $20’s, and Zinc and Lead depressed, can HDA make Treasure Mountain a profitable operation?…the company is blessed with strong management who we believe can find ways to adapt to the current Silver price environment, but risks still exist…

Today’s Markets

Asian markets were mixed overnight but Japan’s Nikkei average and China’s Shanghai Composite both gained slightly…the Shanghai has advanced for 5 consecutive sessions and has finally broken above a downsloping channel that started to form in February…the breakout above 2250 is very bullish as John points out in the 6-month chart below…

European shares are mixed in late trading overseas, while the TSX is charging higher this morning…it’s up another 119 points as of 7:15 am Pacific after surging 105 points Friday prior to the long weekend…the Venture is relatively flat while the Dow has gained 25 points…

Iskut River Play

We’ll have much more this week on what’s unfolding in the Iskut River region as the market anxiously awaits more drill results from Colorado Resources‘ (CXO, TSX-V) North ROK Property…one important reason why there’s a pause in drilling at the moment is that approximately 1.5 km of the target strike has not been covered by soil geochemistry, ground magnetic and IP surveying…this is the Edon gossan zone (south of the Mabon zone and the discovery hole), and Colorado needs to look for magnetic and resistivity anomaly trends to determine precise drill hole targets…it’s going to be a very busy summer at North ROK and in the general vicinity of that discovery…at this point it’s obviously way too early to predict if they’re going to be able to outline a major deposit…the market will obviously be speculating on that in the days and weeks to come, but this is a geologically prolific region that has been under-explored despite the fact Imperial Metals (III, TSX) has a monster of a deposit scheduled to go into production sometime next year upon completion of the Northwest Transmission Line…the Iskut River story, we believe, has some serious legs to it and this is going to be a very exciting area to watch over the next few months…

Victory Ventures (VVN, TSX-V)

Victory Ventures (VVN, TSX-V) will be the first (or second) junior to drill in the Iskut River area since the discovery announced by Colorado nearly a month ago (Doubleview Capital Corp. – DBV, TSX-V – is also gearing up to drill its Hat Property and its market cap has zoomed to $3.8 million this morning)….we prefer VVN for various reasons…as we mentioned in our article yesterday, Victory will soon be drilling into some highly prospective IP targets that suggest there is  increasing sulphide content within a southwest-dipping body of syenite rock at the 5 sq. km Copau Property north of the Red Chris and east of North ROK…again, there are never any guarantees in this business when it comes to drilling even the best-looking targets…but there are many reasons to like this play at the moment including its tight share structure and very modest market cap, not to mention the fact that speculation should ramp up as drilling commences around month-end/early June…technically, Victory is looking strong – confirmed breakout Friday – with solid support as shown in John’s 1.5-year weekly chart (John’s Fibonacci levels with Colorado have proven to be very accurate)…

Cache Exploration (CAY, TSX-V)

A stock that caught our attention at the end of last week was Cache Exploration (CAY, TSX-V) given the sharp increase in volume accompanied by a price lift…not sure what to make of this, but the chart is interesting and rumors are circulating that Cache could be looking at picking up ground in the Iskut River area…as always, perform your own due diligence and of course don’t invest money you can’t afford to lose on these highly speculative juniors…

Note: Both John and Jon hold share positions in VVN.

Throughout the week, we’ll be focusing even more intensely on the prolific Iskut River region of northwest British Columbia where a significant Copper-Gold discovery by Colorado Resources (CXO, TSX-V) has sent geologists scurrying to the area.  Investors have seen just one drill result so far from Colorado – the entire length of the hole returned a whopping 333 metres grading 0.51% Cu and 0.67 g/t Au.  These grades compare very favorably to Imperial Metals‘ (III, TSX) Red Chris porphyry deposit immediately to the southeast which is expected to commence production next year upon completion of the Northwest Transmission Line.  Red Chris has robust economic viability over a projected 28.3-year mine life –  even with metal prices of $2.20 Copper, $900 Gold, $12 Silver and a 90-cent Canadian dollar, Red Chris shows a 15.7% after-tax IRR with a 4.6-year payback.  Reserves are in excess of 300 million tonnes and the planned open-pit is expected to be 1.8-km long and up to 1,000 metres wide.  It’s a monster.

As reported last Thursday, Colorado’s third hole at North ROK was collared nearly vertically from the same location as the first hole and was drilled to a depth of 594 metres.  It’s interesting to note that Imperial Metals in 2007 collared hole 07-335 vertically in the core of the East zone at Red Chris and it returned over 1 km (1,024 metres) grading 1.01% Cu and 1.26 g/t Au, extending mineralization in the this zone down another 270 metres from its previously known extent (the hole actually bottomed in strong mineralization).  A world-class porphyry deposit, indeed.  And as the saying goes, the best place to find a new mine is near an old one or an existing one.

What if Colorado finds another Red Chris?  Or another company makes a discovery?  All the necessary infrastructure is in place, and the geology of this area supports the belief that more deposits could be found.  So that helps to explain the excitement behind Colorado Resources, which has a strong technical team, and the attention other players in the area are receiving.  We’ll be reviewing all of the players in the days ahead.

Besides Colorado, the company investors should be watching most closely at the moment is Victory Ventures (VVN, TSX-V) which has a drill program commencing imminently (within the next couple of weeks) at its Copau Property, immediately to the north of Red Chris and to the east of North ROK.  Victory is not a Johnny-Come-Lately to the area.  They’ve had this drill program lined up since the beginning of the year, before Colorado announced its discovery.  What has us (and others) excited about Copau is what the IP survey revealed after it was carried out last year – more on that in a moment.  First, below is a map showing the exact location of Copau which has never been previously drilled.  What we did is that we took a map from the Colorado web site that specifically points out the “B31” showing – this was a discovery by the B.C. Geological Survey in 1994, and Victory’s claims cover this showing and the immediate area around it (the size of the property is approximately 5 sq. km).  The arrow that we inserted highlights the B31 showing.  According to a 2012 technical report from Imperial Metals, a NE trending fault is inferred to follow the trace of Coyote Creek and the Ealue Lake Valley (through what appears to be the southern edge of Victory’s claims, south of B31) and continues to the east for an additional 30 km.  The significance of this potential fault for Victory remains to be seen, but it’s an interesting point.

An IP survey carried out by Victory last summer located a strong chargeability response underlying the southwestern portion of the property.  The chargeability anomaly occurs from depths of approximately 200 metres with increasing response to 450 metres (similar to patterns at North ROK), which was the maximum reading depth of the IP.  The present known extent of the anomaly varies between approximately 300 and 400 metres wide (east-west) and over 1,200 metres long (north-south), appearing open to both the west and south and at depth.  The interpretation is that there is increasing sulphide content within a southwest-dipping body of syenite rock. Rock outcrop samples containing traces of pyrite, chalcopyrite and magnetite in syenite were found during the survey work, and their locations coincide with underlying IP chargeability responses.

There is easy access to the Copau Property.  The company will be drilling to depths of approximately 400 to 500 metres in a relatively flat area immediately off a logging road from Highway 37.  Water for drilling is readily available.  As we mentioned, this property has never been drill-tested before, so the potential upside with this is undeniably big.  All Victory needs to do is get a “sniff” of significant mineralization and the game is on.  Easier said than done, of course, but we like the odds.  Speculation should ramp up.  This is a company with a tight share structure (just 17 million shares outstanding prior to the current financings), and they’ll be armed with nearly $1 million as they begin to tackle Copau.  Given the fact Victory has spent two years in the area, we wouldn’t be surprised if they expand their footprint with the acquisition of additional claims.

As always, perform your own due diligence.  A very active summer of exploration is shaping up in the Iskut River area – it should be the hottest Copper-Gold exploration play in the country – and this enhances the chances for additional discoveries.

TSX Venture Exchange and Gold

The Venture was unable to climb through important resistance at 970 and fell 32 points last week to close at 935, while the Dow and S&P 500 both surged to new record highs.  Still, the Venture fared better than both Gold (down 5.9%) and the TSX Gold Index which plunged 10%.  The junior market is having a hard time but producers have fared even worse this year.  The TSX Gold Index is down 41% while the Venture is off 23%.  On Friday, the Venture actually gained a couple of points despite a $26 drop in Gold and a 3.2% fall in the Gold Index.

What’s important for investors to understand at the moment is that given the fact global equity markets have performed so well in recent months, there is money available and willing to go into speculative opportunities the Venture offers but on a very selective basis.  It’s like a market within a market.  Discoveries are still drawing the attention of speculators which is why the Iskut River play, led by Colorado Resources (CXO, TSX-V), continues to do so well while the Venture struggles.  Follow the money.  Investors who have given up entirely on the Venture at this point have made a huge mistake.  History has shown that even in the depths of the worst bear market, special situations and opportunities will still arise.  It’s still very possible to make a of money in the current Venture environment but this takes patience, discernment, focus and a sharp eye.  It’s a very different game now, of course, than it was a couple of years ago.  If you adjust accordingly, you can succeed.

Below is an updated 1-year weekly Venture chart from John.  The trading range on an intra-day basis since April 17 has been between 918 and 972.  Interestingly, we’ve seen weak but steady buying pressure this month – even in recent days despite Gold’s current slump and an $88 drop last week.  An important near-term test for the Venture will be whether or not it can hold support at or above last month’s low (918).  If not, the next major support area is around 860 as John has shown on previous charts.  Regardless, the Iskut River play should continue to out-perform as it behaves as a market within a market.  Obviously, always watch carefully for any important new discoveries – they don’t occur often but have a tendency to appear when overall market conditions look the bleakest.

Gold

Gold got hit hard last week and as John’s charts have shown, the primary trend is clearly negative.  Within the current primary trend – one that ultimately could drive Gold down to $1,100 an ounce – there will be rallies and sub-trends.  “As equities continue to rally and inflation data fails to show inflation, I don’t see any reason to own Gold, unless you like how it looks on the shelf,” said Adam Klopfenstein, senior market strategist in Chicago with brokerage firm Archer Financial Services (source: CNBC).

Gold is in the midst of its longest losing streak since the financial crisis with 7 consecutive losing sessions.  For the week, bullion was off $88 an ounce to close at $1,360.  The question now is, will it hold support over the coming days/weeks at the April low of $1,321?  That’s impossible to predict based on TA and will likely largely depend on the amount of physical buying that comes into the market from China and elsewhere.  As of Tuesday, large money managers and hedge funds held a record number of bets on lower Gold prices, according to weekly data from the Commodity Futures Trading Commission released Friday.

Below is a 6-month daily chart from John.

Over 380 metric tons of Gold has been sold by Gold-backed ETF’s so far this year, according to ETF Securities.  That decline is more than the combined annual Gold production of the U.S. and Canada. To compare, 279 tons of Gold flowed into ETF’s in 2012, according to the World Gold Council.

Speaking of the World Gold Council, it issued its first quarter 2013 Gold Demand Trends report last week.  The council showed that demand for Gold bars and coins was 10% higher in the first quarter compared to a year earlier, while demand for jewellery increased 12%.  Similarly, central banks’ net purchases exceeded 100 tonnes for the 7th consecutive quarter. It is worth mentioning that these numbers provide evidence of strong physical demand from all sectors, even prior to the widely disseminated news of the skyrocketing demand for physical Gold that followed the mid-April record sell-off.

Credit Suisse issued a report that said Gold will trade at $1,100 an ounce in a year (very possible in our view) and below $1,000 in five years (not sure about that), implying lower than expected inflation expectations and further weak sentiment for the commodity sector overall.

Silver fell 6.7% or $1.61 an ounce last week to close at $22.86.  Copper was off a nickel to $3.30.  Crude Oil was essentially unchanged at $96.02 while the U.S. Dollar Index continued to surge, putting pressure on Gold.  It gained more than a point to finish at 84.21.

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.  Despite its current weakness, the fundamental long-term case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders in general, an environment of historically low interest rates, a Fed balance sheet now in excess of $3 trillion and expanding at $85 billion a month, money supply growth around the globe, massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, emerging market growth, geopolitical unrest and conflicts…the list goes on.  However, deflation is prevailing over inflation in the world economy and this had a lot to do with Gold’s recent plunge below the technically and psychologically important $1,500 level, along with the strong performance of equities which are drawing money away from bullion.  Where and when Gold bottoms out in this cyclical correction is anyone’s guess, but we do expect new all-time highs later in the decade.  There are many reasons to believe that Gold’s long-term bull market is still intact despite a major correction from the 2011 all-time high of just above $1,900 an ounce.

Welcome to our site, or at least the initial version of it!  BMR has been online for more than three years and strictly through word-of-mouth we have built a loyal following. 

We’re continuing with our plans to ultimately build a very unique investment and money-management resource site that goes considerably beyond what we have now.  While we focus a great deal on the Gold and Silver markets and trends in the global economy, and of course the technical health of the TSX Venture Exchange (CDNX), an important component of this site will always be original research on undiscovered junior exploration companies or small producers, mostly in the Gold and Silver exploration space, that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity.  However, investors must understand that these are still highly speculative situations and entail considerable risk, volatility and unpredictability.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. Always perform your own due diligence and please read our disclaimer at the bottom.

We use a combination of fundamental and technical factors in determining the value and potential of a stock.  In terms of fundamentals we look for a company with a superb project supported by strong management.  Management must possess integrity, solid ethics and a determination to succeed and build shareholder value.

At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop. The Bible teaches so much about money and how to handle it and invest it –  there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.  By examining the life of Jesus and reading the Word of God, we can all become fully equipped to be successful investors and handle money wisely.  We have a God who thinks big – He created the universe – and He wants us to think big  in every area of our lives.  When we handle money from a Biblical perspective (His money that we have been given stewardship of), He will bless you.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com (BMR) is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company. We strongly recommend that you consult with a qualified investment adviser, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions. The stocks we cover, by definition, are highly speculative and potentially very volatile. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

Gold is trading lower for the 7th consecutive trading session as the greenback continues to climb…as of 7:15 am Pacific, bullion is down $16 an ounce at $1,370…Silver is 21 cents lower at $22.48…Copper is up 3 pennies at $3.30…Crude Oil has gained 84 cents to $96.00 while the U.S. Dollar Index has surged half a point to 84.22…

An RBC analyst, Geoerge Gero, said it best yesterday with regard to Gold in an interview with CNBC…”Investors around the globe can see a strong dollar, less inflation, weaker commodities … and famous money managers pulling out of the Gold market, so the headwinds are up for Gold,” he stated…

Strong equity markets around the globe are also pulling money away from Gold as investors search for better short-term returns…a successful re-test of the April low of $1,321 would likely bring some confidence back into the Gold market…we’ll see what happens…as John’s charts have shown, there is Fibonacci support for bullion at $1,385 – a close below that level would increase the likelihood of a near-term re-test of $1,321…

Total Silver fabrication demand in 2012 declined 1.8% from 2011’s level, pressured by drops in demand from the photography, jewelry, and photovoltaic sectors, along with lower demand from India, according to the CPM Group in its annual Silver Yearbook Report…India accounts for 10.4% of total Silver fabrication demand and 17.0% of jewelry and silverware demand…the reduction in those sectors and the lower Indian demand more than offset an increase in demand from the electronics, housing, and other sectors…Investment demand for Silver is expected to slip after a strong 2012 as investors are less willing to chase higher prices…the firm said data from the U.S. Commodity Futures Trading Commission suggests that investors are beginning to push away from Silver as the non-commercial trader gross short positions in the first quarter of 2013 are growing rapidly…“Gross shorts increased 95.6 million ounces between Dec. 25, 2012, and March 26, 2013…at 129.9 million ounces on March 26, 2013, the gross short position was larger than it has been, by a wide margin, at any time since 2005…this is indicative of a major shift in investors’ attitude toward Silver, in that fund managers appear to be shifting back toward increased willingness to build and hold large short positions designed to profit from declining silver prices,” they stated…CPM Group also noted at 69.3% reduction in net long positions by the end of the first quarter of 2013…

Today’s Markets

China’s Shanghai Composite out-performed the broader Asian market for a second straight session today as investors cheered moves by the government to ease restrictions on the refinancing process for firms with real estate investments…meanwhile, China’s vice premier said that national demand for commodities had weakened and urged industrial sectors to limit expansion…the Shanghai hit a 7-week high by closing up 31 points at 2283…Japan’s Nikkei average climbed 101 points to 15138…European shares are mildly higher in late trading overseas…as of 7:15 am Paciifc, the the Dow has gained 54 points on very positive consumer sentiment data…the TSX is up 51 points while the Venture, despite lower Gold prices, had added a point to 934…

Colorado Resources Ltd. (CXO, TSX-V)

As we stated yesterday, there’s no question there’s going to be continued volatility in Colorado Resources (CXO, TSX-V) as this is typical in the very early stages of a new discovery when the potential size of that discovery is still being evaluated, and investors react to every rumor and every word in a news release…Colorado came out with news late in yesterday’s trading and the stock quickly plummeted from the high $1.20’s to a closing price of $1.02…effective communication is critical in this business, especially when a company is in a “discovery” situation such as Colorado…in our view, management dropped the ball yesterday in how it explained what’s happening on the ground…2 new holes have been completed with assays pending, but here’s the line that spooked some investors that was absolutely unnecessary to include in the release:  “The archeologists are on site completing an initial archeological impact assessment survey that is required to allow for the expansion of the drill program”…this sounds like the language a geologist would come up with, not someone who understands the market and what investors expect to hear…there can be several very good (and positive) reasons for a pause in a drill program – this sentence also created fear among investors that the company could be facing native issues or problems in the area, and that’s simply not the case according to our sources…so we hope in the future that Colorado uses a little more wisdom and common sense in communicating progress at North ROK…of course it’s still very early in the game, but this has all the makings so far of a very important new Copper-Gold discovery in northern British Columbia…excellent drill results and other exploration news needs to be supported by proper messaging…

Today’s close will be important…from a technical standpoint, a very strong support band exists between the low 80’s and the low 90’s…below is another chart from John…CXO opened on a positive note this morning and through the first 45 minutes of trading is up 20 cents at $1.22…

The most attractive “area play” at the moment in our view continues to be Victory Ventures (VVN, TSX-V) which has a current market cap of just $1.9 million after yesterday’s close of 9 cents and the completion of a nickel financing…the company is all set and ready to fire up a drill program at its Copau Property (a few kilometres from Colorado’s discovery and 11 km north of Imperial Metals‘ Red Chris Mine) within the next 2 or 3 weeks…IP patterns at Copau resemble those at North ROK…

GoldQuest Mining (GQC, TSX-V)

GoldQuest Mining (GQC, TSX-V) came out the blue with a couple of decent holes yesterday north and south of Romero discovery hole LTP-90 including LTP-132 which returned 17 metres grading 6.21 g/t Au and 0.90% Cu within a broader interval of 130 metres of 1.22 g/t Au and 0.24% Cu…that hole was collared 400 metres south of LTP-90 and tested just a portion of the Romero south anomaly…the majority of that anomaly remains untested…meanwhile, drilling has started at the Guama showing to the west of Romero and this where things could get really interesting in the weeks ahead…GoldQuest Chairman Bill Fisher has agreed to an interview with BMR and the plan is to conduct that interview sometime next week…GoldQuest climbed as high as 43 cents intra-day yesterday before closing at 37.5 cents for a gain of 7.5 cents or 25%…the technical picture has improved after yesterday’s move but there’s still a major band of resistance in the 40’s that the stock will need to overcome in order to clear the path for potentially significantly higher prices…below is a 2.5-year weekly chart from John…GQC is off slightly in early trading this morning…its 10 and 20-day SMA’s are now moving higher together for the first time this year…

Global Met Coal (GMZ, TSX-V)

Global Met Coal (GMZ, TSX-V) continues to show support at its 20-day moving average (SMA) while the 50-day SMA has flattened out after being in decline since late 2011, a very positive sign…the company expects to close its previously announced financing in the very near future while it continues with the final stages of securing a permit for its Black Creek Project in Alabama…putting turnkey projects like Black Creek into production is what this management team, led by George Heard, specializes in…they understand mining technique and how the met coal market operates, so we like this situation a lot given the current market cap of only about $3 million (following the financing)…at a conservative start-up production rate of 10,000 tons, this would produce monthly revenue of approximately $1.5 million…the mining will be contracted out, keeping costs fixed, while the company has suggested publicly that it already has a buyer for its product…while there are always risks in this business, we have every reason to believe that Black Creek will not only be a “cash cow” for GMZ but a profitable company-building project as well…what’s also exciting is that when they’re able to get Black Creek off the ground, they have another very interesting met coal project in Mongolia to sink their teeth into…management is the key, and insiders are strongly invested in this company…

Bellhaven Copper & Gold Inc. (BHV, TSX-V)

Put Bellhaven (BHV, TSX-V) on your radar screen if it’s not already…this stock, like many others in the junior exploration space, has taken a beating over the past year…it was as high as 55 cents in early 2012 and closed yesterday at 6.5 cents…where we see possible opportunity in Bellhaven is that drilling has just started at the company’s La Garrucha Gold-Copper target at its La Mina concession in Colombia which already has an inferred resource of 1.6 million ounces of Gold and 419 million pounds of Copper…La Garrucha is near the eastern edge of the property and is a strong target…in fact, the company right now is drilling right into the heart of a large magnetic anomaly (previous drilling at La Garrucha was restricted to the western fringe of the anomaly because of ownership issues)…4 of the 6 holes that were drilled at La Garrucha in late 2011 encountered significant mineralization including 64 m of 0.8 g/t Au Eq and 24 m of 0.85 g/t Au Eq…grade and thickness of the intercepts increased down hole and to the east, so the system is expected to strengthen in that direction…

Bellhaven has been trading in a downsloping channel since last fall…as we stated yesterday, we’re in the type of market when one can be patient and wait for results because few investors are paying attention to the junior resource market at the moment…in the meantime, a bid around the bottom of the downsloping channel (approximately 6 cents) may make sense for speculative traders…as always, perform your own due diligence…

Gold is down for a 6th consecutive day as traders eye a possible re-test of the April 16 intra-day low of $1,321 in the near future…as of 6:45 am Pacific, bullion is off $13 an ounce at $1,379 after dipping as low as $1,369…Silver is also off its lows, down 8 cents at $22.51…Copper has lost 3 pennies to $3.21…Crude Oil has reversed to the upside, now up 32 cents to $94.63, while the U.S. Dollar Index is down slightly at 83.70…

Lower Gold prices in recent days have apparently attracted physical buying in China…the world’s second-largest consumer after India reportedly bought a “large” amount of Gold today…premiums for Gold bars rallied to record highs up to $5 an ounce over spot London prices in Hong Kong, China’s main source for Gold imports…

Large outflows from Gold ETF’s led to a 13% year-on-year decline in global Gold demand during the first quarter to 963 metric tons, the World Gold Council said today…however, most of the other major forms of demand – such as jewelry, bars and coins – increased according to the just-released WGC quarterly report on demand trends…Gold buying in the two key markets of India and China grew by more than 20% and central bank demand remained above 100 metric tons for the 7th straight quarter…again, what we’re seeing is a disconnect between the paper market and the physical market (two very different types of buyers)…

“Despite the retrenchment in the Gold price during the quarter, there was a dramatic increase in demand for jewelry, bars and coins,” said Jason Toussaint, chief executive officer of World Gold Trust Services, a subsidiary of the WGC and sponsor of the SPDR Gold Trust…“That is a testament to the fact that demand for the physical asset is robust”…data for the report was compiled independently by the consultancy Thomson Reuters GFMS…in value terms, total Gold demand in the first quarter was $50.5 billion, down 16% from the year before…total investment demand was 200.8 metric tons in the first quarter, down 49% from the same period a year ago, the WGC said… “The year-on-year decline in investment was solely attributable to the net outflows from the ETF’s, which obscured the strong rise in investment for Gold bars and coins at the retail level,” the WGC stated…

Japanese Q1 GDP Growth Surges

Japan’s economic growth accelerated swiftly at the beginning of this year, the most concrete sign yet that new stimulus policies sparking euphoria in financial markets in that country are starting to lift companies and consumers as well…Japan’s GDP grew at an annualized pace of 3.5% in the first 3 months of the year, as consumers loosened their purse strings and exports to the U.S. picked up, lifted by a weaker yen…the figures reported by the government today marked a sharp improvement from the tepid 1% growth rate at the end of last year, which followed 6 months of contraction…it was also considerably stronger than the 2.8% forecast by economists polled in advance by The Wall Street Journal…

Today’s Markets

Japan’s Nikkei average, which has gained a whopping 44% already this year, gave up 59 points on some mild profit-taking overnight…it closed at 15037…while Japan’s annualized first quarter growth topped forecasts, some analysts noted that a drop in capital expenditure showed the economy is still dogged by deflation…China’s Shanghai Composite put in a strong performance overnight, gaining 27 points to finish at 2252…a strong move past the 2250 level would certainly be bullish for the Shanghai from a technical perspective…European shares are mixed in late trading overseas…some analysts believe that the prolonged recession in the euro zone leaves the ECB with no choice choice but to look into its toolbox to employ additional stimulus measures, ranging from further rate cuts, negative deposit rates and buying asset backed securities…economic news out of the U.S. was mostly mildly negative this morning with housing starts dropping more than expected and jobless claims rising…inflation remained tame…newly issued building permits, however (an excellent gauge of future construction) rose 14.3% from a month earlier to an annual rate of 1.017 million, the highest level since June, 2008…the Dow is off 12 points through the first 15 minutes of trading…the TSX is down 6 points while the Venture has slipped 2 points to 935…

Venture Chart

As we’ve been stating, a key resistance area for the Venture is 970 and the inability of the Index to break above that level in recent days – followed by a drop below the 10 and 20-day moving averages – has not been a positive development…it’s also a clue that there’s likely going to be additional weakness in Gold, though as John’s chart showed yesterday there is Fibonacci support at the $1,385 level which needs to hold on a closing basis…astute traders/investors should view any additional weakness in the Venture or Gold stocks in general as a potential buying opportunity, however, in select quality situations…not many investors are even paying attention to the junior resource market at the moment, and that’s unfortunate for them because they’re missing opportunities like we’re seeing in the Iskut River region with Colorado Resources‘ (CXO, TSX-V) discovery…it’s also a great time to be on the look-out for other discoveries…one huge advantage investors have in a market like this is the generally slow reaction time to really good news, the opposite of course to what occurs during a rip-roaring bull market…let’s just use GoldQuest Mining (GQC, TSX-V) as an example…they could announce a fabulous hole from the DR and because of slow investor reaction times at the moment you’ll have an opportunity to jump in after the news at a great price…in a different market environment, you’d have a huge gap-up and you may miss much of the advance…be patient and look for unique news…history has shown that often in times like this, important discoveries are made, which could be unfolding before our eyes in the Iskut River region…

Below is a long-term CDNX chart from John…as we’ve stated in recent weeks, there is strong support around the 860 level…in fact, the next MAJOR support levels (if the April 17 low of 918 doesn’t hold) are 860, 800 and 675…don’t panic, be patient, and look for opportunities because there WILL be opportunities…

Colorado Resources (CXO, TSX-V)

The overall market may go in one direction, but a discovery play can easily go in the other…that’s what has been happening with Colorado Resources (CXO, TSX-V) and we believe other players in the area will also ignite, including Victory Ventures (VVN, TSX-V) which is drawing close to the start of a drill program at a property within 5 km of Colorado’s discovery…we’re working on some special coverage of this northern B.C.. discovery which has the potential to draw investor interest from far and wide in the coming months…this play in our view was also given a big boost when the NDP’s anti-development platform was given the big boot by wise B.C. voters Tuesday night…this will improve the investment tone, for sure…

Below is an updated 6-month daily chart for CXO after it gained another 6 cents yesterday to close at $1.41…investors are anxiously awaiting more drill results which will obviously guide the stock price…for the short term, the Fib. level John has identified appears to be very realistic, though volatility and profit-taking can be expected along the way…the Fib. level is not meant to be a price target, just a theoretical level based on technical and Fibonacci analysis…

Sunrise Resources Ltd. (SHI, TSX-V)

Colorado is currently drilling the Eldorado Property (very close to Victory Ventures‘ Copau Property by the way) which it optioned from Sunrise Resources (SHI, TSX-V) in early April – interestingly, just a few weeks before the announced discovery at North ROK…Sunrise is certainly worth keeping an eye on and is also in the process of finalizing a 15-cent private placement for $400,000…it currently has only 18 million shares outstanding and closed yesterday at 16 cents…we’re not able to provide a chart just yet as it’s not currently in the StockCharts.com system (readers, please help us with this)…

Firesteel Resources Inc. (FTR, TSX-V)

It’s disappointing to us in a way that Firesteel has elected to joint venture its Iskut River properties, including one of them to an Australian major, but that’s the business strategy they have chosen in this current market environment…it gives them little control over news flow and will make it more difficult for the stock to gain traction in the short term at least, but over the long haul this strategy could prove to be successful…technically, FTR faces a strong resistance band between 15 and 18 cents as shown in John’s chart below…

It’s best to stick with the plays in the Iskut River area that will actually be carrying out drilling between now and the end of the summer, and be very careful with those companies that are just picking up some ground for promotional purposes…stick with the serious players, one of which is also Peter Bernier’s Prosper Gold (PGX.H, TSX-V) which remains halted as the Exchange reviews the company’s qualifying transaction with Firesteel…