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Iskut, British Columbia – 7:20 am Pacific

Greetings again from Iskut, British Columbia, home of one of Canada’s newest mines (the massive Red Chris Copper-Gold deposit) set to begin production next year upon completion of the very important Northwest Transmission Line which will have a profound economic impact on this region…
The 287 kV NTL from Skeena substation to Bob Quinn is under construction by BC Hydro with a planned completion date of May, 2014…a subsidiary of Imperial Metals (III, TSX) will construct the 93 km extension (NTL Extension) from Bob Quinn to Tatogga…

Mining at the Red Chris will begin with 2 separate open-pits that will ultimately merge into one huge pit.

We have extended our visit to this incredible region due to important developments on the ground from the Telegraph Creek area (west of Iskut) to Colorado’s exciting North ROK discovery – quite possibly the next Red Chris – where drilling commences again next week and takes aim at a continuous magnetic high 300 to 400 metres wide and 1200 metres long, trending southeast from holes #1 and #4…the prospective area for mineralization continues to expand thanks to geophysical surveys and other techniques Colorado is employing – the mapped Mabon-Edon porphyry body strike is now at least 3 km long and greater than 1 km wide, similar in size to Red Chris but different in trend direction…both sub volcanic intrusives are of the same Jurrasic age and occur within the same general volcanic rock host assemblages…so far, grades and widths at North ROK are very comparable to those at Red Chris…

Helicopters continue to buzz overhead and locals are preparing for an extremely busy summer…Colorado is clearly aiming to stay in mineralization – not always easy when figuring out a porphyry deposit – as they focus on this continuous and strong magnetic high core…where they have intersected the magnetic high feature in 3 drill holes, the average grade over 694 metres of cumulative length is 0.40% Cu and 0.60 g/t Au…keep in mind that the economics for Red Chris are very robust with reserves of over 300 million tonnes grading 0.36% Cu and 0.27 g/t Ag, providing for a 28-year project life at a milling rate of 30,000 tonnes per day…

Doubleview Capital Corp. (DBV, TSX-V)

Northwest of Telegraph Creek, which is about 100 km west of the North ROK discovery, is another area that’s going to receive a lot of attention this summer…this is where Peter Bernier and his former Richfield Ventures‘ team at Prosper Gold (PGX.H, TSX-V) believe they have an excellent shot at another major discovery, and these guys have as much credibility in the business as anyone after finding perhaps the biggest Gold deposit west of Ontario in Canadian history (Blackwater)…Prosper Gold remains halted until its qualifying transaction with Firesteel Resources (FTR, TSX-V) is approved by the Exchange, perhaps within the next few weeks….as soon as approval is received, drilling is ready to go according to Bernier…

In the meantime, Doubleview is drilling on ground contiguous to Prosper Gold’s proposed Copper Creek acquisition…yesterday, following the close, Doubleview interestingly announced that Hole #6 intersected “sulphide mineralization comprising pyrite and chalcopyrite…from near-surface to current depth of 230 metres“…the hole is still in progress and looks promising…it’s the initial test of a geophysical target 800 metres south of the first 5 holes that ntersected altered andesitic volcanic rocks and dioritic intrusive rocks with short intercepts of weak to strong pyrite and chalcopyrite mineralization…

According to publicly available technical reports we’ve reviewed on Copper Creek (adjacent to where DBV is drilling), widespread Copper oxides near-surface are underlain by significantly higher grade Copper-Gold values in sulphide mineralization at depth, and the zones there remain open to depth…so the deeper DBV goes at its Hat Property, the better…DBV closed yesterday at 9.5 cents and its trading activity will be interesting to watch today…speculation could easily ramp up in the coming days…DBV opened at a dime this morning and quickly climbed as high as 13 cents…as of 7:20 am Pacific, it’s up 2.5 cents at 12 cents on total volume (all exchanges) of just over 1 million shares…

Victory Ventures (VVN, TSX-V) Update

Meanwhile, Victory Ventures (VVN, TSX-V), which importantly has a tighter share structure than DBV, has been drilling into a strong IP anomaly on its highly prospective Copau Property where two major regional faults intersect…

BMR photo from VVN drilling site: A well-maintained logging road conveniently cuts right through the southern portion of Victory's Copau Property, allowing for easy drilling access. Two major regional faults intersect at Copau, creating a major zone of potential weakness which may have created a unique geological recipe here.

During our site visit, we of course weren’t able to view drill core and company officials were extremely tight-lipped – but the “body language” was revealing, and that’s something we always look for…we’ve been to numerous drill sites over the years but this one has an unusual aura of excitement around it…in speaking with independent geologists not connected with Victory, the fact the Copau property lies at the intersection of two major regional faults has quite possibly cooked up a very special geological recipe in this under-explored area about 10 km north of the Red Chris deposit…until now, Copau had never been previously drilled despite an initial B.C. Geological Survey discovery (Cu and magnetite at surface) during a 1990’s regional mapping program…it’s reasonable to conclude that speculation will build significantly in VVN in anticipation of initial news on drilling progress, so watch for signs of increased volume…VVN gained 2 cents or 20% yesterday, and the chart is showing potential for a strong immediate move…

Updated Charts – VVN, DBV and CXO

Fundamentals are critical but when they’re combined with sound technical analysis, you get a much better feel for where a stock might be headed…John has updates this morning on Victory, Doubleview and Colorado…

Victory Ventures (VVN, TSX-V)

An impressive upsloping channel remains firmly intact, RSI(14) found support at 50 and the initial Fib. level now looks more certain…the bullish trend remains strong and appears to be getting stronger…next week could herald a major breakout for VVN…

Doubleview Capital Corp. (DBV, TSX-V)

Wednesday and Thursday candles were bullish, and RSI(14) is now showing increased momentum…strong action so far this morning…

Colorado Resources (CXO, TSX-V)

Strong support in the upper 60’s has held for Colorado, and we just can’t see that support failing given the powerful fundamentals at this point as the North ROK project is looking better than ever despite the market’s silly panic attack last week…

Gold traded as low as $1,377 overnight and is now up $3 an ounce at $1,388 as of 7:20 am Pacific…Silver is back above $22, up 21 cents at $22.06…Copper is up a penny at $3.20…Crude Oil is $1.22 higher at $97.91 while the U.S. Dollar Index is flat at 80.80…

Gold traders turned bearish for the first time in a month as investors reduced holdings in exchange-traded products for an unprecedented 17th consecutive week while India, the biggest buyer, announced curbs on imports…18 analysts surveyed by Bloomberg expect prices to fall next week, with 14 bullish and four neutral, the largest proportion of bears since May 17…investors sold 497.2 metric tons valued at about $22 billion through ETP’s since early February 8 and the 2,117.96 tons left is the least they have held since March, 2011, data compiled by Bloomberg show…

Steps taken by the Indian government on Gold, combined with a lower rupee,  have started yielding results, with imports of the precious commodity plunging in India, the world’s biggest gold consumer…net Gold imports averaged $135 million a day in the first 13 business days in May until May 20…however, in the subsequent 14 business days, it averaged only $36 million, coming down sharply…moreover, the demand for foreign exchange for Gold purchase also appears to have gone down significantly in the past 5 to 7 days (source: www.MineWeb.com)…

U.S. “Core” Prices Remain Tame Despite PPP Rise In May

The prices that U.S. companies pay for finished goods rose for the first time in 3 months in May, reflecting rising energy prices that could trickle down to consumers…the producer price index rose a seasonally adjusted 0.5% from April (higher than expected), the Labor Department said this morning…the increase was driven by energy prices which climbed 1.3% mainly on higher gasoline prices…overall prices were up 1.7% from a year ago, suggesting that inflation at the wholesale level remains subdued…”core” prices, which exclude volatile food and energy costs, also were tame…that index rose a tepid 0.1% in May, matching the prior month’s pace…this morning’s report is the latest sign that underlying inflation remains low in the U.S., as it does in most of the world, amid high unemployment and weak demand, limiting how much businesses can raise prices…

Today’s Markets

Japan’s Nikkei average stabilized after Thursday’s rout…it gained 241 points overnight to close at 12687…China’s Shanghai Composite gained 14 points to close at 2162, 26 points below its 200-day moving average (SMA)…European shares are up modestly in late trading overseas…in North American, meanwhile, the Dow is up 12 points through the first 50 minutes of trading…the TSX is down 23 points while the Venture has climbed 4 points at 934…

What’s interesting technically about the Venture recently is the gradual increase in buying pressure as shown in John’s 9-month daily chart below…

GoldQuest Mining (GQC, TSX-V) Chart Update

GoldQuest Mining (GQC, TSX-V) came out with impressive infill drilling results from La Escandalosa yesterday…this will be helpful in producing an updated NI-43-101 resource estimate for the property, though we suspect GQC may release a combined resource for La Escandalosa and Romero this fall as the two systems potentially could be linked…GQC has been on fire recently and we expect this will continue in anticipation of initial results from the very promising Guama trend where drilling continues…below is an updated chart from John…

Note: John and Jon both hold share positions in VVN.  Jon also holds share positions in CXO and DBV.

Due to fresh developments on the ground, with Colorado Resources, Victory Ventures and now Doubleview Capital Corp. the focus of attention, BMR has extended its Iskut River area visit…Morning Musings will be posted at approximately 8:45 am Pacific today.

Iskut, British Columbia – 4:40 am Pacific

A popular lodge in Iskut is busier than ever with exploration personnel.

Greetings again from Iskut, British Columbia, where Colorado Resources (CXO, TSX-V) is getting set for a major round of new drilling at the province’s newest Copper-Gold discovery, while Victory Ventures (VVN, TSX-V) is hoping for a discovery of its own in a similar fault setting to the east at its Copau Property…other companies are busy preparing for drill programs around here including West Cirque Resources (WCQ, TSX-V), a very promising deal that has been flying under most investors’ radar screens…

Gold has traded in a range between $1,383 and $1,393 so far today…as of 4:45 am Pacific, the yellow metal is down $3 an ounce at $1,385…Silver is up 3 cents to $21.81…Copper is a penny lower at $3.21…Crude Oil has retreated 38 cents to $95.50 while the U.S. Dollar Index hit a new 4-month low and is currently off one-tenth of a point at 80.74…

Today’s Markets

Japan’s Nikkei average tumbled 844 points or 6.4% overnight to close at 12445, a whopping 21% drop from last month’s 5.5-year high of nearly 16000…the steeper the climb, the harder the fall…in response to the plunge, Bank of Japan Governor Haruhiko Kuroda was quoted by the Nikkei business daily as saying that the Japanese economy is on a steady path to recovery and that financial markets will calm down over time…the Nikkei is now at levels not seen since the BOJ launched its massive stimulus program April 3…markets in China re-opened after the 3-day “Dragon Boat” holiday and the Shanghai slipped 3% to finish at 2148, below the support of the old downsloping channel…more weakness in the Shanghai is likely on the way…European shares are off their lows of the day but still down moderately while stock index futures in New York are pointing to a slightly negative open on Wall Street – nothing approaching the steep losses in Asia…the TSX will try to get back on track today after declining in 8 out of the last 9 sessions…the Venture has fallen 23 points or 2.4% this week (vs. a 2.1% drop in the TSX and a 2.5% drop in the TSX Gold Index)…

The Son Or Maybe The Big Daddy Of Red Chris?

As we speculated in yesterday’s Morning Musings, given intense activity we’ve witnessed both on the ground and in the air, Colorado Resources is ready to re-start drilling at North ROK and they are going after some juicy targets as announced after yesterday’s close…meanwhile, 10 km to the east, we saw some happy faces at the Copau Property which is being drilled for the first time ever after very promising geophysics data…we begin with North ROK…don’t let last week’s sell-off fool you…at this early stage it clearly has the potential to be just as big if not bigger, than the Red Chris 15 km to the southeast (301.5 million proven and probable tonnes of 0.36% Cu and 0.27 g/t Au)…

Below is the latest map from Colorado showing the full extent of the Mabon chargeability high which now measures more than 1300 metres x 2000 metres, cored by a continuous magnetic high 300 metres to 400 metres wide x 1200 metres long trending southeast…CXO will be targeting that “core” with a 5,000-metre drill program beginning next week…as you can see from the map, the coincident chargeability and magnetic anomaly has only been drill tested on its far northern end over a 100-metre x 300-metre area…it has demonstrated a very strong correlation with well-mineralized Copper-Gold drill intercepts…

As President and CEO Adam Travis stated in yesterday’s news release, “Where we have intersected the magnetic high feature in 3 drill holes, over 694 metres of cumulative length our average grade is 0.40% Cu and 0.60 g/t Au”…those numbers compare extremely favorably to Red Chris…

Keep in mind that the East and Main zones at Red Chris occur in a 200 to 500-metre wide x 1,500 metre long zone…there are satellite zones at Red Chris, just like their appears to be strong potential for satellite zones at North ROK to the north and south of the discovery hole…

Interestingly, CXO has discovered a strong chargeability anomaly 1 km north of the discovery hole – 500 to 800 metres wide, 1300 metres long, and open to the north…so they have a massive prospective area to explore that currently extends more than 3 km north-south…ultimately, hundreds of holes will likely be drilled at North ROK in an effort to prove up a world class deposit…CXO cutting a deal with a major before year-end is certainly a distinct possibility…

As one highly respected geologist from the Yukon told us the other day, ”Historically, this whole region has been poorly mapped and under-explored…that leaves open a lot of possibilities”…

Which brings us back to Victory Ventures at Copau…

Victory Ventures (VVN, TSX-V) Aims For The Sweet Spot – First Hole Success Like Colorado?

Significantly, perhaps, Victory’s Copau Property lies at the intersection of 2 major regional faults…some extensive work started a couple of years ago at Copau on the belief that this area about 10 km north of the Red Chris had been overlooked after an initial surface discovery (“B31” Cu showing) by the B.C. Geological Survey…a ground magnetic survey was carried out in 2011 and located a pronounced northwest-southeast linear-trending anomaly throughout much of the claim area, and this was followed up by an IP survey last summer after Victory optioned the property from geologist Robin Day…the IP survey confirmed the need to drill some holes into Copau – a strong chargeability response (intensifying with depth) is interpreted as being caused by 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, and their locations coincide with underlying IP chargeability responses…the present known extent of the anomaly at Copau varies between approximately 300 and 400 metres wide (east-west) and 1200 metres long (north-south)…it appears open to both the west and the south and at depth…we suspect they took direct aim at the heart of the IP in the very first hole…

We’re impressed with the property’s easy access as a logging road just off Highway 37 cuts through the southernmost portion of it…Victory’s drill program was launched June 2, with the rig set up right at the edge of the road as you can see in our picture below…

Victory Ventures' first hole was drilled into a strong and widespread IP anomaly at Copau.

Given the success Colorado has had from interpretation of encouraging geophysical data, there are good reasons to be optimistic regarding Victory’s chances with Copau…exploration is always a risky business and you never know for sure what you’re going to hit, which makes it particularly interesting…the potential leverage for an investor is huge…Colorado made a 10-fold jump over about 20 trading days after announcing its discovery…with a current market cap of less than $3 million and a tight float, all Victory needs is a sniff of something significant and it’s off to the races…

West Cirque Resources (WCQ, TSX-V)

A company with important holdings in the Iskut River area that has been overlooked by most investors since the announcement of Colorado’s discovery is West Cirque Resources (WCQ, TSX-V)…they didn’t go unnoticed by Freeport McMoRan (FCX, NYSE), however, as the Canadian division of one of the world’s largest Copper and Gold producers cut a deal a few months ago with West Cirque for exploration of WCQ’s Castle, Tanzilla and Pliny properties…Freeport can earn an initial 51% interest in the properties by financing cumulative expenditures of $8 million over 4 years…West Cirque will remain the operator during the earn-in, meaning they will also have control over the news flow which is important…the property with perhaps the most potential is Castle which is situated about 15 kilometres west of North ROK (25 km northwest of Red Chris)…WCQ drilled half a dozen holes at Castle last year and 5 of them intersected broad zones of Gold-Copper mineralization in monzodiorite porphyry over a strike length of 1 kilometre…the system is open in all directions and features a 5.5 km alteration zone with high-grade Gold at surface (historic samples up to 138 g/t Au, 434 g/t Ag)…so this has big potential in our view, and Freeport obviously agrees…

West Cirque also has other properties in B.C. including its 100%-owned Aspen Grove Gold-Copper-Silver Project halfway between Merritt and Princeton, not far from Huldra Silver’s (HDA, TSX-V) mill site…there are 2 mines currently producing in that belt – New Afton (85 km to the north) and Copper Mountain (45 km to the south)…earlier this week, WCQ reported very encouraging results from a reconnaissance scale mapping and sampling program that focused on 6 significant Copper-Gold-Silver occurrences at Aspen Grove including 3 separate porphyry systems…

WCQ had $1.5 million in working capital as of the end of March with only 26.5 million shares outstanding…of course it won’t have to spend a nickel on its Iskut River properties as extensive exploration on those this summer will be funded by Freeport…WCQ closed yesterday at 30 cents…volume in the stock is gradually beginning to pick up…the 3-year chart shows plenty of upside potential with support solid as a rock at 20 cents…

Probe Mines (PRB, TSX-V)

One of our favorite exploration projects continue to be Probe Mines‘ (PRB, TSX-V) Borden Lake Property in northern Ontario, and just recently Agnico Eagle Mines Ltd. (AEM, TSX) grabbed a 9.94% stake in Probe on a non-diluted basis…below is an updated PRB chart after the stock got through resistance yesterday at $1.55…PRB is now above its 100-day moving average (SMA) for the first time since mid-January…

Yamana Gold (YRI, TSX) Chart Update

Yamana Gold’s (YRI, TSX) chart is giving us encouragement that despite some recent weakness, the Gold stocks will hold important support in the days ahead…below is John’s 9-month daily chart for YRI which climbed 34 cents yesterday to close at $11.48…its 20-day moving average (SMA) has flattened out and appears ready to reverse to the upside…yesterday’s candle also completed a Bullish Engulfing at the base…

Note: John, Jon and Terry do not hold positions in PRB or YRI.  John and Jon hold share positions in VVN and Jon also holds share positions in CXO and WCQ.

Iskut, British Columbia – 4:45 am Pacific

Greetings from the village of Iskut, British Columbia, literally “buzzing” with activity as one of Canada’s most exciting exploration stories continues to unfold…when Colorado Resources (CXO, TSX-V) stated last week that it’s planning an “expanded drill program to commence shortly on the North ROK Property,” they meant it…Colorado is firing on all cylinders, and there’s every indication that the company’s next round of drilling will start imminently given intense activity on the ground and in the air…

The Canadian and U.S. flags fly proudly atop a lodge at Iskut that is hosting drillers, geologists and other exploration and company personnel.

“I’ve never seen or heard anything quite like this around here before,” stated the owner of a lodge we’re staying at, once visited by former Canadian Prime Minister Pierre Trudeau, and just a few kilometres from North ROK…he pointed to his very busy facility and the hockey rink under construction in the village as just two examples of the positive economic benefits that increased exploration and mining are bringing to the area…

Yes, it’s not just what you see but what you hear around Iskut – the almost constant buzzing of helicopters delivering supplies, or in some cases carrying out geophysical surveys…the area already has one Copper-Gold mine – the Red Chris – ready to go into production as soon as the Northwest Transmission Line is completed next year, and the possibility of more major discoveries has to be considered very real…”Historically, this whole region has been poorly mapped and under-explored,” one geologist told us yesterday…”That leaves open a lot of possibilities”…

Colorado is clearly the leader of the pack on the exploration front around Iskut but more than a dozen other companies, from juniors to majors, are “in the game” as well and preparing for a busy summer…  just last week, Victory Ventures (VVN, TSX-V) launched a drill program at its Copau Property in between North ROK and Red Chris…the fault setting at Copau is similar to that at North ROK, one of several reasons the Victory crew is excited and cautiously optimistic…with a market cap of less than $3 million, VVN is a tantalizing speculation – especially since they’re the first company besides Colorado to have launched a drill program in the immediate area…

North ROK is being guarded like Fort Knox at the moment (a positive sign), while Victory is also keeping its cards close to its chest at Copau though we were given 30-minute supervised access to that property – we’ll be posting some pictures in tomorrow’s report…

Nailing down a porphyry deposit is never an easy task…hundreds of more holes could end up being drilled at North ROK, so with results out on just 4 holes this is really only the beginning…so far, grades are very comparable to those at Red Chris…the geophysical footprint is also huge and 95% of it has yet to be drill-tested…the “big picture” is highly encouraging and the upcoming round of drilling will reveal much more about the geometry, size and grade of North ROK…

Iskut River:  “Contenders & Pretenders”

Getting to this area is not difficult – a quick flight (1 hour) from Vancouver to Terrace, and about a 6-hour drive north along famous Highway 37 straight to Iskut…our two-day excursion is for research and due diligence purposes as we continue to work on our “Contenders & Pretenders” piece, and it’s also an opportunity to lay the foundation for a longer visit this summer…yes, North ROK is for real – you can get that answer from anyone around here – and so are some other situations in the immediate area and all the way out to Telegraph Creek to the northwest…we fully expect that this “play” is going to heat up significantly over the summer…elsewhere in northern B.C., Stewart as always is worth watching closely…

Northern British Columbia Ready To Flex Its Mining Muscles

According to the Conference Board of Canada and its January, 2013, document, “The Future of Mining In Canada’s North”, northern British Columbia is expected to see the fastest expansion of mining output out of all the northern regions in Canada through 2020…northern British Columbia’s mining output will increase by an impressive 300% between 2011 and 2020, with a compound annual growth rate of 17%…the number of jobs in the mining sector in northern B.C. is expected to nearly triple by 2020…all of this will generate wealth, development, and even more exploration…last month’s provincial election result, with the anti-development NDP badly losing a race that many seasoned observers assumed they would win easily, has given investors and companies a much-needed boost of confidence…

Victory Drills At Copau

Much remains to be learned about the geology immediately north of the massive Red Chris deposit, a fact that was stated in a 2012 Imperial Metals‘ (III, TSX) technical report, which makes Victory’s drilling of the Copau Property even more interesting…Copau lies at the intersection of two major regional faults and has never been previously drilled, so this has the ingredients for a potential surprise – especially when one considers the large and strong anomalies identified at the property…the B.C. Geological Survey made the initial discovery at Copau (Copper at surface) during a mapping program in 1994…work has been performed since then but no drilling has occurred until now, thanks in large part to last year’s geophysics which created a sense of urgency…what we also like about Copau is its accessibility – a logging road, immediately off Highway 37, cuts right through it, so the initial drill set-up for Victory was easy…there are never any guarantees in the risky exploration business, but Victory has a great opportunity to generate a big “POW” out of Copau…more on that in tomorrow’s report from Iskut including, as we mentioned, some exclusive pictures…

After hitting a 3-week low yesterday, Gold has traded in a narrow range so far today…as of 4:45 am Pacific, the yellow metal is down $1 an ounce at $1,377…Silver is up 6 pennies at $21.74…Copper has added 2 cents to $3.21…Crude Oil is flat at $95.35 while the U.S. Dollar Index has gained nearly one-fifth of a point to 81.28…

Gold coin and bar sales have cooled at two of the world’s largest mints, the Perth Mint and the U.S. Mint, as the buying seen during April’s breakneck pace eases…however, sales are still substantially higher than they were at this time last year…total Gold ounces sold at the Perth Mint, which includes coins and bars, were 86,983.54 ounces in May, compared to a record 111,505.06 in April…total Silver ounces sold at the Perth Mint were 587,454.82 compared to 1.1 million in April…even though May Gold sales slipped from April, last month’s sales were nearly triple the pace of May, 2012…the U.S. Mint’s May sales also softened versus April, and the pace of sales for early June is also slowing…in May, the U.S. Mint sold a total of 70,000 ounces in Gold coins, down from the 209,500 ounces sold in April…for silver, May sales at the U.S. Mint were 3.46 million ounces, down from April’s 4.09 million ounces…despite the slowdown in Gold and Silver coin sales, a robust first half means the U.S. Mint is likely to outpace last year’s sales figures…so far this year, they sold 594,000 ounces of Gold coins and 23.2 million ounces of Silver coins…for full-year 2012, the Mint sold a total of 753,000 ounces of Gold coins and 33.7 million ounces of Silver…

Today’s Markets

Japan’s Nikkei average was down as much as 2% overnight but rebounded to close down just 28 points at 13289…European markets are up modestly while stock index futures in New York are pointing toward a positive open on Wall Street after yesterday’s sell-off…

TSX Chart Update

The TSX has fallen in 7 out of the last 8 sessions, shedding 523 points or 4.1% during that short stretch (the Venture has performed slightly better, falling 2.6% over the last 8 sessions)…technically, it’s important to note that the TSX has strong support at an ascending triangle just 200 points below where it closed yesterday…below is a 3-year weekly chart from John…

Pacific Potash (PP, TSX-V) Updated Chart

As expected, Pacific Potash (PP, TSX-V) has broken out to a new 52-week high…the stock jumped 3 more pennies yesterday to close at 21 cents on total volume (all exchanges) of 2.4 million shares…PP has climbed 4 days in a row and the next major resistance is at 26 cents as shown in this 2.5-year weekly chart…

Encanto Potash (EPO, TSX-V)

Another potash play with an encouraging chart pattern is Encanto Potash (EPO, TSX-V) which inched up a penny-and-half yesterday to close at 26.5 cents on volume of nearly 1 million shares…EPO’s Muskowekwan project’s proven and probable reserves, combined with its measured and indicated resources, could support a mine life in excess of 70 years, assuming an annual production of 2.8 million tonnes per year, according to management…:The merit of putting this project into production keeps getting stronger with each milestone,” stated Encanto CEO and President Jim Walchuck in the company’s June 3 resource update…below is a 6-month daily EPO chart from John…there has been a major change in sell pressure/buy pressure since the end of May, while the ADX trend indicator has turned bullish…

Note: John, Jon and Terry do not hold positions in PP and EPO.  Jon and John hold share positions in VVN while Jon also holds a share position in CXO.

Commodities are weak across the board today…as of 6:00 am Pacific, Gold is down $17 an ounce at $1,370 but has rebounded slightly from its low of $1,366…Silver is off 34 cents at $21.61…Copper is down a nickel at $3.19…Crude Oil has declined $1.09 a barrel to $94.68 while the U.S. Dollar Index is also under pressure, off its lows but still down over one-tenth of a point to 81.57…

After flexing its muscles beginning in February, the Dollar Index has gone into reverse just recently after being unable to push through important resistance just above 84…it has fallen below its 50-day moving average (SMA), as you can see in the chart below, with the 50-day now beginning to trend downward…weakness in the Dollar Index would normally be bullish for commodities…we’ll see what develops in the weeks ahead…

Bank of Japan Stays The Course, Raises Assessment Of Economy

The Bank of Japan raised its assessment of the Japanese economy for the 6th straight month this morning, noting a “pick-up” in exports and industrial production and continued “resilience” in private consumption…the central bank kept its main monetary policy settings on hold, saying it would buying enough assets to expand the country’s monetary base at an annual pace of 60 trillion yen ($612 billion)to 70 trillion yen to help achieve an inflation target of 2%…the BOJ disappointed some investors who were hoping it would address market volatility in its statement…

Updated Shanghai Chart

China’s Shanghai Composite is closed until Thursday due to the “Dragon Boat” holiday in that country…when trading resumes, the Index – which closed last Friday at 2211 – will face an important test of support at the old downsloping channel at 2180…the Index is suddenly looking vulnerable (note the bearish -DI/+DI crossover in John’s chart) after a very encouraging May, and that has us concerned especially given what appears to be a weakening economic situation in China including accelerating producer price deflation…

Today’s Markets

Japan’s Nikkei average fell 1.45% or 197 points overnight to close at 13318…European markets are down significantly, around 2%, in late trading overseas…the German constitutional court started a two-day hearing into the legality of the ECB which has played a large role in calming financial markets in Europe…in New York, stock index futures are pointing toward a weak opening on Wall Street…

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

Bellhaven continues to show strength since reporting a significant discovery at its La Garrucha prospect in Colombia last week which appears to be part of a cluster of high-grade Copper-Gold porphyry deposits on its La Mina concession…BHV closed higher again yesterday, finishing at 15 cents cents on total volume (all exchanges) of 1.5 million shares…importantly, BHV broke out of a downsloping channel on last week’s news and momentum has been pulling it higher…more results are pending…below is an updated chart from John…

Solvista Gold Corp. (SVV, TSX-V)

Also in Colombia, Solvista Gold Corp. (SVV, TSX-V) has reported more encouraging results from its Caramanta Project within the last hour including some of the highest Silver values encountered in a porphyry system environment in Colombia…5 holes were completed at El Corral, the second of 6 targets identified so far at Caramanta, and all 5 holes intersected significant intervals of Cu-Au-Ag-Mo mineralization including 197.9 metres grading 0.92 AuEq in CAD-1205…that’s not as spectacular as the 456.3-metre interval grading 1.40 AuEq at El Retten reported May 21, but it’s solid nonetheless…final assay results from the third target area (Ajiaco Sur) are pending…8,000 metres in total were drilled at all 3 targets…Caramanta continues to hold excellent potential for significant new Gold-Copper porphyry discoveries with related mineralized bodies along a stretch of at least 3 km…

Aldrin Resource Corp. (ALN, TSX-V)

Keep a close eye on Aldrin Resource Corp. (ALN, TSX-V) which we’ve mentioned a few times in recent weeks as the company commences exploration at its Triple M Property in the Patterson Lake area of Saskatchewan…the 12,000 hectare property is 9 km south and 11 km west of the Fission Uranium (FCU, TSX-V) and Alpha Minerals‘ (AMW, TSX-V) discovery…the technical picture continues to look quite promising with Aldrin as shown in John’s long-term monthly chart below…

Pacific Potash Corp. (PP, TSX-V) Updated Chart

Pacific Potash (PP, TSX-V) continues to look strong as it threatens to push to a new 52-week high…

Note: John, Jon and Terry do not hold share positions in BHV, ALN or PP. Jon holds a share position in SVV.

Gold has traded between $1,375 and $1.388 so far today after Friday’s sharp decline that took bullion back below $1,400…as of 7:15 am Pacific, Gold is flat at $1,385…Silver is up 25 cents at $21.95…Copper is off 3 cents at $3.24 after economic data out of China over the weekend raised more concerns regarding growth in that country…Crude Oil is down 68 cents at $95.35 while the U.S. Dollar Index is up slightly at 81.92…

China has approved 2 domestic exchange-traded products backed by Gold as global holdings of the precious metal in ETPs dropped to a 2-year low…Huaan Asset Management Co. and Guotai Asset Management Co. have received the China Securities Regulatory Commission’s permission to start the funds, which will be denominated in yuan…they will be traded like stocks on the Shanghai Exchange, tracking movements of spot Gold…

Deutsche Bank has launched its second-biggest Gold-storage vault in Singapore that can hold up to 200 tonnes of the metal as it looks to capture surging global demand for physical bullion…Singapore last year excluded Gold traded for investment from sales tax, prompting interest in buying and storing bullion in the city-state…”The time is ripe for a facility in the region (Asia-Pacific) to pick up steam.,” stated Mark Smallwood, head of wealth planning at Deutsche Asset & Wealth Management for the Asia-Pacific region…”We believe that Singapore is well positioned to develop as a complementary custody and trading platform to the traditional hubs,” he added (source: Reuters)…

China’s Producer Price Deflation A Concern

The downturn in the Chinese economy could be the most drawn-out since the 1997-1998 Asian Financial Crisis, according to research firm IHS, following a slew of weaker-than-expected economic data for May released over the weekend…”The macro data for May have confirmed that the economy is stuck in stagnant growth again after a brief rebound…the risk for growth is now predominantly on the down side,” Xianfang Ren, senior economist at IHS, wrote, highlighting that persistent deflation in producer prices and the pullback in fixed asset investment growth are two grave concerns…”Deflation (producer prices) has lasted for 15 straight months, compared with 12 months during the Global Financial Crisis (in 2008-2009)…that offers a signal that this round of downturn might turn out to be the most drawn-out one since the Asian Financial Crisis which had thrown China into 31 straight months of deflation,” she said…China’s producer price index fell 2.9% in May from a year earlier, steeper than a 2.6% decline in April…industrial deflation is ‘poisonous’, Ren added, as it impacts business profitability and thus deters investment in inventory or equipment…the cornerstone of China’s economic recovery, fixed asset investment, also saw growth weakening to 20.4% year-on-year in the January-May period from 20.6% in the January to April period – driven by a slowdown in the manufacturing sector…

Today’s Markets

China’s Shanghai Composite is closed until Thursday as the country celebrates the “Dragon Boat” holiday…Japan’s Nikkei average soared 5% overnight to close at 13514 after a revised reading of Japan’s first-quarter GDP surpassed market forecasts and fueled hope that Prime Minister Shinzo Abe’s stimulus policies – dubbed “Abenomics” – are strengthening the economy…government data showed that the economy expanded at an annualized rate of 4.1% between January and March, lifted by strong household spending and a pick-up in private residential investment…that was much higher than the preliminary estimate of 3.5%, which was already the fastest rate recorded by any Group of Seven economy…European shares are up slightly in late trading overseas…the Dow is down 32 points to 15216 through the first hour of trading…credit rating agency Standard & Poor’s this morning upgraded its credit outlook for the U.S. government to “stable” from “negative”, saying the chances of a downgrade of the country’s rating is “less than one in three”…in August 2011, S&P became the first credit rating agency to downgrade the sovereign U.S. credit rating from top-rated “AAA” to “AA”, the second highest rating, and had left the U.S. credit outlook at “negative” at that time…the TSX is off 12 points as of 7:15 am Pacific while the Venture has slipped 4 points to 947…

TSX Gold Index Chart Update

The TSX Gold Index met resistance at 210 last week and got hit hard Friday as Gold dropped about $30 an ounce…the 210 area for the Gold Index is like the 970 area for the Venture – both are critical resistance levels that need to be overcome in order for bullish momentum to really kick in…the Gold Index closed Friday at 198, 3 points above its rising 20-day moving average (SMA) which has provided support this morning…below is an updated 1-year weekly chart from John…the bearish trend is clearly weakening which of course is a positive sign, but investors must be patient…the Gold Index touched 195 in early trading today but is now up a point as of 7:15 am Pacific at 199…

GoldQuest Mining (GQC, TSX-V)

The GoldQuest train can pick up speed in a hurry once it gets moving, and it finally started moving last week and cleared a very important resistance band between 40 and 48 cents which now becomes support…GQC closed Friday at 54 cents which confirmed the breakout…the market is expressing confidence that the newly-identified Guama trend immediately west of last year’s Romero discovery could bear fruit as drilling continues (see our report and interview with GoldQuest Executive Chairman Bill Fisher May 30)…below is an updated technical look at GQC in a 2.5-year weekly chart from John…GQC is unchanged through the first 45 minutes of trading at 54 cents after climbing as high as 58 cents…

Everton Resources (EVR, TSX-V)

History shows that when GoldQuest starts flying, Everton Resources (EVR, TSX-V) is usually not far behind…EVR of course has a large land package in the DR, most notably the APV Property right next to the massive Pueblo Viejo Mine operated by Barrick (ABX, TSX) and Goldcorp (G, TSX)…EVR appears to have bottomed out at 2.5 cents (May) and closed Friday at 4.5 cents…EVR must overcome technical resistance at a nickel and then resistance at the down trendline as shown in this 3-year weekly chart…

Updated Silver Charts

Geoff Candy at Mineweb reports that Silver prices may see weakness coming from reduced industrial demand…according to the note, Silver demand from solar panels accounts for 10% of physical demand but despite growing sales of solar panels around the world, the product’s main market is Europe which will likely see significantly lower sales in 2013…as a result, Silver may take longer than Gold to see a price reversal…indeed, Silver has been under-performing Gold for a while now…the short-term chart for Silver shows continued strong sell pressure as the metal struggles to form a base around $22 an ounce…it closed slightly below that level at the end of last week…

Short-Term Silver Chart

Long-Term Silver Chart

Note the very extreme RSI(2) oversold condition at an incredible 1.88%, an all-time low for this indicator since the bull market in Silver began over a decade ago…this kind of situation tells us that a turnaround in Silver can’t be far off, though even slightly lower prices are possible first…

TSX Venture Exchange and Gold

The 970 area continues to serve as major resistance for the Venture which climbed as high as 971 intra-day Tuesday before finishing the week at 951, an 11-point drop from the previous Friday.  Investors must be patient.  The overall technical picture is looking better for the Venture with upsloping support forming an ascending triangle as shown in John’s 9-month chart below.  Buying pressure also continues to increase.  As soon as the Index does push through 970 (assuming it does), this will mark the start of a significant rally that should give the Venture enough momentum to test its 100 and/or 200-day moving averages (SMA’s) which are currently at 1065 and 1160, respectively.  Whether that will be just another bear market rally remains to be seen.  But even a bear market rally can be extremely profitable if you’re in the right stocks.

Gold

Gold is having a hard time staying above the $1,400 level, and tumbled $29 an ounce Friday to finish $3 lower for the week at $1,385.  Again, investors must be patient.  Interestingly, a bullish low “W” pattern has formed in the RSI(14) in the 2-year weekly chart.  The April-May double bottom, coupled with very strong physical demand in the mid-$1,300’s, has us convinced that for now at least Gold should hold up well with the strong probability of a convincing push through the $1,400 level over the summer.  The COT structure is bullish with commercial traders’ net short positions at their lowest levels since the October, 2008, bottom.

In India, the world’s largest bullion market, taxes on Gold imports have been hiked once again in a futile attempt to dampen record imports of the yellow metal…the South Asian nation is battling a record current account deficit at a time when physical demand for jewelry and investment is at very high levels…effective immediately, bullion imports are subject to an 8% levy, up from the previous 6%…it’s worth noticing that the levy stood at 2% at the beginning of last year…the tri-fold increase over the last 15 months has had minimal effects on improving the trade deficit as Indian merchants and buyers find alternative ways to circumvent government measures.

Silver continues to struggle, falling 58 cents for the week to close at $21.69.  Copper was off a penny at $3.27.  Crude Oil jumped $4.06 a barrel to $96.03 while the U.S. Dollar Index got hit hard, losing 1.5 points to finish at 81.69.

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.