BullMarketRun.com

TSX Venture Exchange and Gold

Note:  Morning Musings tomorrow will be posted at approximately 6:00 am Pacific.

The Venture continues its march toward the critical 970 level and enjoyed a strong shortened Labor Day week with a gain of 16 points to finish at 955, its highest close since early June.  The Index has posted gains in 8 out of the last 11 sessions.  Particularly impressive last week was how the Venture held up so well during back-to-back weak days for Gold Wednesday and Thursday when bullion fell by about $40 an ounce.   The Venture, however, still managed to close up slightly each day.  It has been a long time since we’ve seen that kind of resilience by the Venture in the face of weakness by Gold, and it suggests renewed confidence in both the yellow metal and the Venture.  On Friday, of course, Gold rebounded and closed $21 higher to finish the week at $1,389. In addition, Crude Oil has staged a significant breakout – more on that tomorrow.

There is little doubt that the Venture will soon test the 970 resistance.  Initially, it could react slightly at that level again and retreat temporarily to its supporting 10 or 20-day rising moving averages (SMA’s) to cleanse any overbought conditions that could emerge, and then make its charge beyond 970.  Alternatively, it could slowly make its way up to 970 and then just blast right through.  Regardless, there is powerful technical evidence to suggest that a major breakout is in the works this month.  In fact, tomorrow we’ll be posting a fascinating chart that proves beyond a doubt in our view – based on a combination of indicators – that the Venture bear market finally peaked in late June, just like the bull market peaked in late 2010/early 2011.  A very important trend reversal has started.

Unlike the two previous failed attempts at crossing the 970 area (late April, early May and early June), the Venture’s 50-day SMA is now rising.  The 100-day SMA has flattened out and appears ready to reverse to the upside very soon.  The Venture has built up strong technical support in the low 900’s.  We’ve seen some failed rallies in 2011 and 2012 which has some investors nervous and ready to hit the sell button to lock in any small gains.  This time, what we’re witnessing in our view is a genuine reversal and you’ll see this clearly in the very important chart we’ll be posting in tomorrow’s Morning Musings.  Keep in mind, a rising tide as we’ve mentioned is not going to lift all boats.  Focus on the 10% to 15% of Venture companies who have the cash, the expertise, the properties and the drive to execute both on the ground and in the market.  By doing that you’ll increase your odds of success tremendously.

Below is an updated 9-month daily Venture chart. Note the increasing buy pressure, the bullish trend as shown by the ADX indicator, and the RSI(14) which at 64% certainly has room to move higher.

The Seeds Have Been Planted (And Continue To Be Planted) For The Next Big Run In Gold Stocks

There’s no better cure for low prices than low prices.  The great benefit of the collapse in Gold prices this year is that it forced producers to learn to become much more lean and mean in terms of their cost structures.  Among many others, Barrick Gold (ABX, TSX), the world’s largest producer, said it may sell, close or curb output at 12 mines from Peru to Papua New Guinea where costs are higher.  Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their operating structures.  Exploration budgets among both producers and juniors have also been cut sharply.  In addition, government policies across much of the globe are making it more difficult (sometimes impossible) for mining companies to put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists.  Ultimately, all these factors are going to create a supply problem – think about it, where are the next major Gold deposits going to come from? On top of that, a recent Mineweb study shows grades have indeed fallen significantly just over the past decade.  For instance, grades in the South African Gold sector fell from an average of 4.3 grams per metric ton in 2002 to an average of 2.8 grams per metric ton in 2011.  It doesn’t take a rocket scientist to figure out that the next huge bull market in Gold stocks is just around the corner due to demand-supply dynamics, much leaner producers who will suddenly become earnings machines, and a junior market that will be healthier simply because a lot of the “lifestyle” companies sucking money out of investors will simply disappear or get taken over by individuals or groups who are actually competent and serious about building shareholder value.   A healthy “cleansing” in the market has been taking place.  As this continues, more and more seeds are being planted for an incredible future move in well-managed Gold producers and explorers that could make the dotcom bubble look like a tea party.  As for the juniors, focus on the 10% to 15% of companies that have the ability to execute both on the ground and in the market – companies that have the properties, the cash, the management and the skills to make discoveries that majors will buy.

Gold

Gold experienced a volatile week, pushing as high as $1,416 before falling as low as $1,360.  It recovered Friday thanks to weaker than expected August job growth in the U.S., and higher Oil prices.  A couple of consecutive closes above resistance at $1,400 would certainly put the bears on the defensive.  Gold has numerous factors in its favor at the moment, not the least of which is seasonal – September, traditionally, is bullion’s best month of the year.  We’ll see if that pattern continues.  If it does, many traders/investors may come to the conclusion that the nearly 40% drop in the Gold price between September 2011 and late June this year was a much-needed correction that has indeed run its course.

Below is a 3-year weekly chart from John.  Sell pressure, dominant almost all year, has turned into buy pressure.  The ADX indicator shows the bearish trend has peaked, and a bullish +DI/-DI crossover could soon be in the works.  At 47%, RSI(14) has plenty of room to move higher and could accelerate quickly if and when it pushes through 50.  Notable resistance areas are $1,400, $1,475 and the previous strong support band between $1,550 and $1,600.  Gold was up 5.7% for the month of August after also increasing in July.

Bullion will have plenty to deal with this month including an important Federal Reserve meeting, a reconvened U.S. Congress that will have to grapple with the debt ceiling issue, the nomination by President Obama of a new Fed chairman (or chairwoman, the market is hoping for continuity with Yellen vs. Obama’s seemingly preferred choice in former economic adviser Larry Summers), plus of course geopolitical concerns with Syria at the top of the list at the moment.  An imminent but slow scaling back of the Fed’s bond-buying program –  by no means a certainty starting later this month – has likely already been baked into the Gold price, so Gold may go up no matter what the Fed decides to do at its meeting Sept. 17-18.

Silver found support at $23 and closed up 31 cents last week at $23.84 (John will have his usual updated Silver charts tomorrow morning).   Copper gained 4 pennies to $3.24.  Crude Oil jumped $2.88 a barrel to $110.53.  The U.S. Dollar Index, meanwhile, was up one-tenth of a point at 82.15.

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 this year’s drop, 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 (especially from China), 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 plunge during the spring below the technically and psychologically important $1,500 level, along with the strong performance of equities which drew money away from bullion.  June’s low of $1,180 may have been the bottom for bullion – time will tell.  We do, however, expect new all-time highs as the decade progresses.  There are many reasons to believe that Gold’s long-term bull market is still intact despite this major correction from the 2011 all-time high of just above $1,900 an ounce.

Below is a very revealing 10-year comparative chart from John that shows China’s Shanghai Composite, Copper and the Venture Exchange.  As we’ve often illustrated at BMR, there is a high correlation between the Shanghai and the Venture (plus the S&P/TSX Composite).

There are a few important points regarding this particular chart:

1) At 955, the Venture is on the verge of breaking out above a downsloping wedge as you can see on the bottom of this chart;

2) The SSEC, in our view, put in a double bottom and notice how the RSI(14) hit an important low in late 2012 and is currently in a clearly established uptrend – this is very bullish for the Chinese market and that in turn bodes well for commodities.  Again, there is a proven strong correlation between the Shanghai, the Venture, and the TSX Composite;

3) Copper has shown superb support and appears to want to move higher, which is significant for the Venture.

As part of Monday’s Morning Musings that we’ll be posting at approximately 5 am Pacific, John will be examining a very important long-term Venture chart that provides powerful evidence that the 2+ year CDNX bear market indeed appears to have ended.

SSEC, Copper & CDNX Comparative Chart

Welcome to our site, or at least the initial version of it!  BMR has been online for 4 years and strictly through word-of-mouth we have built a loyal following. 

We’re continuing with our plans to ultimately construct a very unique investment and money-management resource site that goes considerably beyond what we have now.  We focus a great deal on the Gold, Silver and Copper markets as well as trends in the global economy, in addition of course to the technical health of the TSX Venture Exchange (CDNX).  An important component of this site, as well, will always be original research on high quality junior exploration companies or small producers 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, and we are being more selective than ever in the current market environment.  We look for companies with the ability to execute both on the ground and in the market, who are determined to build shareholder value, which actually excludes most Venture stocks.  However, investors must understand that the companies we do put forward for our readers’ due diligence are still highly speculative situations and entail considerable risk, volatility and unpredictability.

Our intent is to provide you with information that you can use as part of your own due diligence.  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 dipped as low as $1,360 overnight but got a strong boost once a weaker than expected U.S. August non-farm payroll number (169,000 vs. an estimate of 180,000) was released at 5:30 am Pacific…as of 7:00 am Pacific, the yellow metal is up $18 an ounce at $1,386…the top of Gold’s previous resistance band ($1,350) has provided strong support…a couple of consecutive closes above $1,400 is what the bulls really need to start charging again…Silver continues to find support at $23, which it touched overnight, and it’s currently up 67 cents at $23.88…Copper has climbed 3 pennies to $3.25…Crude Oil is $1.24 a barrel higher at $109.59 as it edges closer again to $110 resistance, while the U.S. Dollar Index has fallen half a point to 82.13 on the weak jobs data…the greenback hit multi-week highs yesterday vs. both the yen and the euro…

Gold got hit hard yesterday for the 2nd day in a row, thanks to stronger than expected U.S. economic data (a survey from the Institute for Supply Management showed services industries in August posted their fastest growth since December 2005) and the growing belief that an attack on Syria for its use of chemical weapons against its own citizens may not occur…President Obama is so far losing the battle for votes in the U.S. Congress (could pass the Senate but the House is a major problem at the moment, according to numbers tabulated by The Hill) to authorize a strike against Syria…a “no” vote would be a major blow to his Presidency (no President has ever lost a Congressional vote for authorization of a military strike) and may actually make the world an even more dangerous place…Obama backed himself into a corner with his previous rhetoric on Syria that included talk of “red lines” that cannot be crossed, and he’ll end up appearing very weak if those words aren’t backed up with action…enemies of the West, including Iran, will be emboldened…Obama would have been wiser to use Teddy Roosevelt’s approach to foreign policy – speak softly and carry a big stick…when it comes to the troubled Middle East, not to mention the U.S. economy, one of Obama’s smartest moves would be to approve the Keystone XL Pipeline and focus on making America energy secure (with imports only from Canada and Mexico) by the end of his Presidency…on that issue, unfortunately, he’s also struggling as radical environmentalists have his ear…

The strike by some South African Gold miners appears to have ended after just 3 days of industrial action in pursuit of  higher wages, a union and major Gold producer both said today, according to a Reuters report…the National Union of Mineworkers launched the strike Tuesday night over wages…a day later, 2 junior producers signed agreements for lower than expected wage hikes, bolstering confidence the strike could soon be over…

Chinese Yuan Makes Top 10 Currency List

The Chinese yuan has rocketed into the top 10 of most frequently traded currencies for the 1st time, according to the Bank for International Settlements in its triennial survey of turnover in foreign exchange…in a rapidly growing global currency business, which the BIS said now generates $5.3 trillion a day in flows, up from $4 trillion in 2010, the yuan climbed to 9th place (Canada is 7th) from 17th 3 years ago…offshore trading in the currency drove this expansion, the BIS said in its report of the survey, which was carried out in April…the Mexican peso also regained a top-10 place, in 8th, for the 1st time since 1998, demonstrating the breadth of the rise in emerging market currencies…the Russian ruble, Turkish lira, South African rand and Brazilian real all also accounted for a bigger slice of global flows, albeit on a smaller scale…

Today’s Markets

The Dow is down 94 points through the first 30 minutes of trading…U.S. job growth was less than expected in August as the economy added 169,000 positions, raising new questions over whether the Federal Reserve will begin a pullback later this month on its historically easy monetary policy…the Bureau of Labor Statistics also said the unemployment rate dropped to 7.3%, due primarily to fewer Americans in the labor force (the labor force participation rate has slumped to 63.2%, a 35-year low)…of the more notable numbers from the BLS, previous months of solid job creation were revised substantially lower…

The TSX is off just 15 points at 12831 while the Venture is up 2 points to 950…

Asian markets were mostly higher overnight, though Japan bucked the trend as the Nikkei slipped 204 points or 1.45%…China’s Shanghai Composite surged to an 11-week high, gaining 18 points to finish at 2140 (its highest close since June 19)…

TSX Updated Chart

The TSX is at a critical point and the odds appear to favor an important breakout…a strong resistance band exists between 12800 and 12900…buy pressure is increasing, and RSI(14) at 61% shows increasing up momentum on John’s 6-month daily chart…

Venture-Gold Comparative Chart

It’s not often you see Gold drop by about $20 an ounce for 2 straight days while the Venture actually moves up a little…that’s what occurred Wednesday and Thursday, however, and what that demonstrates is impressive resilience on the part of the Venture and its current underlying technical strength…to us it also demonstrates strength in Gold…for the past 2 months, the Venture has remained within an uptrend channel as shown in John’s chart below…RSI(14), currently far from overbought at 60% on this 4-month daily chart, continues its gradual move higher as well…the Index is on track to test resistance at 970, and a confirmed breakout above that resistance would usher in a wave of fresh buying interest…

NexGen Energy Ltd. (NXE, TSX-V)

As regular readers know, we’re extremely bullish on the Patterson Lake South uranium discovery and some of the plays that are surrounding it…Fission Uranium (FCU, TSX-V), of course, is now taking over 50% JV partner Alpha Minerals (AMW, TSX-V) in an all-stock transaction valued at just under $200 million which makes perfect sense as the combined entity will be more appealing to a potential major…

A situation to also watch closely over the coming weeks is NexGen Energy (NXE, TSX-V) which is currently carrying out a 2-drill, 3,000-metre program on its Rock 1 Project immediately adjacent to and on trend NE from Fission’s high-grade discovery…the drill program is testing priority areas at shallow depth defined by overlapping geochemical anomalies, testing the northeast extension of the Patterson Lake South trend…the mineralized conductor corridor is interpreted to extend onto the southwestern zone of Rook 1…NexGen is well-funded, thanks in part to a recently oversubscribed private placement at 35 cents that raised $5 million…

NXE was as low as 22.5 cents in July before surging to 60 cents last month…it has been in a healthy consolidation over the last few weeks and closed yesterday at 49 cents, just above its rising 20-day moving average (SMA) which has been providing strong support…below is a weekly chart from John…there is Fib. resistance at 56 cents – after that, the next Fib. level is 77 cents…as of 7:00 am Pacific, NXE is up a penny at 50 cents…as always, perform your own due diligence…

Azincourt Uranium Inc. (AAZ, TSX-V) Chart Update

Azincourt Uranium (AAZ, TSX-V) recently attempted a breakout through the mid-30’s but got pushed back…however, the chart continues to look very promising and so do the fundamentals…AAZ has an option to earn a 50% interest in Fission’s Patterson Lake North Project…a VTEM max airborne geophysical survey, the initial component of planned exploration work this summer, was recently completed…drill targets are being prioritized for a 2014 winter program…

Aldrin Resource Corp. (ALN, TSX-V) Chart Update

Aldrin Resource (ALN, TSX-V) has been another favorite of ours in the Athabasca basin, and has almost doubled in price since we first brought it to our readers’ attention a few months ago…ALN started a field exploration program last month at its Triple M Property approximately 10 km southwest and on trend with the PLS discovery, in preparation for a winter drill program…next major technical resistance is at 18 cents, while strong support exists at previous resistance of 12 cents – half a penny below the rising 50-day SMA…

Gold has traded between $1,381 and $1,399 so far today…as of 4:55 am Pacific, bullion has reversed and is now up $4 an ounce at $1,396…the bullion market can be expected to be volatile given geopolitical events and tomorrow’s U.S. non-farm payrolls report for August…very strong technical support for Gold at $1,350…Silver dipped as low as $23.10 overnight (strong technical support at the previous resistance band between $22 and $23) but is now up 9 cents at $23.55…Copper is flat at $3.23…Crude Oil is up 60 cents at $107.83 while the U.S. Dollar Index is virtually unchanged at 82.21…

American Eagle Gold bullion coin sales fell to a 6-year low in August (11,500 ounces) with the majority of the sales taking place during the last half of the month…this compares with 39,000 ounces sold in August of last year…however, American Eagle Silver bullion coins enjoyed their 2nd strongest August ever in the history of the series at 3,625,000 ounces last month, up 26.3% from August 2012…

HSBC on Gold and Oil:  “A key reason for Gold to rally in response to Mideast tensions is the potential for Oil supply disruptions that a U.S. strike or an escalation of the conflict may trigger. In order for Gold to build on recent gains over $1,400/oz, Oil prices also have to remain strong, we believe. A relaxation in Oil prices – for whatever reason – could also undermine Gold. Also, unless conflicts are ongoing – a situation the U.S. administration has said it wishes to avoid in the case of Syria – geopolitically inspired Gold gains could fade quickly.  Gold has rallied in anticipation of a strike on Syria, which may mean that if a strike materializes, an element of the market will be quick to take profits on the first sign that the conflict will not deepen,” HSBC stated…

Interest rates continue to rise in the major economies of the world…German 5-year notes fetched a 21-month high yield of 1.00% yesterday…U.S. bond yields are also a 2-plus year highs…such suggests growing world economies, which in turn is a bullish factor for the raw commodity sector, including the precious metals, from a demand perspective…

Today’s Markets

Asian markets were mostly higher overnight, though gains were modest…Japan’s Nikkei average finished 11 points higher, closing at 14065 – its highest level in a month…China’s Shanghai Composite slipped 5 points to 2122…

The Bank of Japan today formally proclaimed that the world’s 3rd-biggest economy is back on a recovery track…the BOJ also underlined progress toward its price target by saying that inflation expectations “appear to be rising”…in an upbeat statement – the tone of which was the strongest since 2008, according to the Wall Street Journal – following a 2-day policy meeting, the BOJ said the economy is “recovering moderately”, boosted by a pick-up in exports and investment in fixed assets by companies on the back of higher profits…public investment is also rising, it noted, while the housing sector is looking stronger…as such, the BOJ kept its main policy settings on hold, as it has done every month since April, when governor Haruhiko Kuroda unveiled what he called a “new phase” of “quantitative and qualitative monetary easing”…

European shares are up modestly in late trading overseas…the European Central Bank (ECB) left interest rates at a record low of 0.5% today, as widely expected, offering support to a gradual recovery for the battered euro zone economy…recent economic reports point to a clear improvement in the euro zone, but analysts have warned that it is still far too early to give the region the all-clear…

North America

Stock index futures in New York as of 4:55 am Pacific are pointing toward a slightly lower open on Wall Street…the U.S. auto industry has shifted into high gear with new-car buyers snapping up vehicles last month at a pace not seen since before the financial crisis…all told, buyers purchased 1.5 million vehicles last month, up 17% from a year ago, with nearly all major auto makers reporting double-digit sales gains…

Economists polled by Reuters expect non-farm payrolls to have increased by 180,000 jobs last month, up from a gain of 162,000 the month prior…the Labor Department’s report comes out tomorrow…

The TSX begins the day at 12758 after after finishing 17 points higher yesterday…the Venture, despite weakness in Gold, climbed 5 points to 947 yesterday as it edges closer to the critical 970 area…

Prosper Gold (PGX, TSX-V), Garibaldi Resources (GGI, TSX-V) Updates

Pete Bernier’s Prosper Gold (PGX, TSX-V) started to gain traction yesterday, climbing 13 cents to close at 63 cents – a new all-time high – on much better volume (234,000 shares) than its opening day Tuesday…below is an updated map from BMR of PGX’s Sheslay Property (68 sq. km) and Garibaldi Resources’ (GGI, TSX-V) 175 sq. km Grizzly Property contiguous to the Sheslay western and southern borders…GGI is believed to be gearing up for exploration of its own at the Grizzly where work completed over the last several years (airborne surveys, geochemical sampling, geological modeling) has shown structures very similar to those that exist at the more advanced Sheslay…

The circled “Star” porphyry target (see map below) is where Prosper Gold is currently drilling with Bernier telling us in an interview the other day that they may go as deep as 800 metres as they test this outstanding target at depth…it’s open in all directions…historically, 80% of the holes drilled by Firesteel Resources (FTR, TSX-V) at the Star bottomed in strong Cu-Au mineralization but the average length of those holes was only about 175 metres with the deepest around 300 metres…as Bernier told us with respect to the entire Sheslay Property, “We just think this thing has a lot of room and a lot of legs to get bigger, and we’re trying to get deeper into the system”…

Prosper is aiming to release initial assay results during the 1st part of October…“We’re going to hold all the results at the lab until we can get 3 or 4 holes lined up and then we’ll let them out all at once,” Bernier said…

The trend of mineralization in this area is believed to be north-south, which makes GGI’s Southern Block (noted by the large star and specifically defined by airborne and geochemical surveys) highly prospective as it’s immediately south of 4 of the 5 porphyry bodies that are currently known to exist at the Sheslay where mineralization remains open in all directions everywhere…meanwhile, Prosper Gold has noted that the Pyrrhotite Creek in the southwest portion of the property appears to a “distinct multiple target area”…this corresponds with known Cu-Au prospects on the Western Block of the Grizzly which also hosts the critical Mount Kaketsa pluton…this feature is believed to be an important “heat engine”, driving mineralizing fluids in the area…this is not a barren pluton, it is mineralized…technical reports we’ve reviewed, and geologists we’ve spoken to, believe there is also the potential for high-grade Gold mineralization at depth on the Grizzly…of course the former Golden Bear Mine is just 30 km to the west…

There clearly appears to be a geological connection between these 2 properties which is why we such great potential with Garibaldi…of course they already have several solid projects in Mexico and they demonstrated the ability to create value there with the discovery at Temoris, a property that was sold to NYSE-listed Paramount Gold and Silver (PZG, NYSE)…

Teck Resources Ltd. (TCK, TSX) has staked a large package of ground right up to the southern tip of the Grizzly and could be a natural candidate to eventually take over both Prosper Gold and Garibaldi in the event a major discovery is made at either property…combined, the Sheslay and the Grizzly total 245 sq. km – prime exploration real estate right on trend with major systems to the southeast…

Bernier and his team reviewed around 200 properties over an extended period before selecting the Sheslay, so they did their homework on this which is why we believe our readers have a unique opportunity with both Prosper Gold and Garibaldi – and before the masses jump in as we believe this story could quickly gain a wide audience, especially considering Bernier’s large following…

Both companies are well-managed, well-funded, and have tight share structures…the respective management teams also hold major share positions…GGI has not had to do a financing since 2009 (how many Venture companies have blown up their share structures since then, with cheap paper to fight through?) and has no warrants outstanding…this creates a clear runway for the share price…

GGI Long-Term Monthly Chart

Garibaldi’s long-term monthly chart shows a powerful uptrend is currently in place with the 200 and 300-day moving averages (SMA’s) reversing to the upside and a +DI bullish crossover in the ADX indicator…the last time these situations occurred was in 2009, when the stock then proceeded go on a run to 55 cents…John’s initial Fib. target at this point, for the near to short-term, is 24 cents (this is not a price target, just a theoretical level based on Fib. theory and analysis)…GGI has staged a key breakout above 12 cents which had been resistance for 14 months…

Prosper Gold (PGX, TSX-V) Updated Chart

Prosper Gold (PGX, TSX-V) broke out of a long-term horizontal channel yesterday, going back to when it was trading as a CPC, as John shows in this weekly chart…note that the RSI(14) stayed in the O/B range for nearly 2 months in the spring of 2012…

Radius Gold Inc. (RDU, TSX-V) Chart Update

Simon Ridgway’s Radius Gold (RDU, TSX-V) is sitting on plenty of cash, as well as attractive JV and 100% owned projects in Mexico, Guatemala and Nicaragua…readers should continue to watch this one closely, especially since Ridgway’s Cordoba Minerals Corp. (CDB, TSX-V) has been on a role since the beginning of August…RDU has been firming up recently and closed at 14 cents yesterday…important resistance is at 15 cents – a move above level would constitute a significant technical breakout…below is a 2.5-year weekly chart from John…sell pressure, dominant for such a long period, has reversed to buy pressure…

Macro Enterprises Inc. (MCR, TSX-V)

Macro Enterprises (MCR, TSX-V) has done extremely well since we initially introduced it to our readers in late May, climbing nearly 70%…at BMR, we focus primarily on Gold, Silver and Copper and promising juniors, plus general economic and market trends, but occasionally a company comes along that really grabs our attention if it’s serving a special niche and performing very efficiently…MCR is a great example as the company specializes in construction and maintenance of pipelines in Alberta and British Columbia…

MCR has been an earnings machine this year and closed yesterday at $5.30, up 18 cents…this is a situation we will continue to monitor closely, but keep in mind that MCR has risen in Zenyatta-like fashion and is encountering resistance, as expected, at the $5.61 Fib. level…of course it could eclipse that Fib. level at some point in the near future, but John has proven to be very accurate with his use of this particular technical indicator…the probability of a cleansing in the technically overbought condition of MCR has risen significantly, so please be aware of that as John points out in this 1-year weekly chart…it never hurts to take at least some profits off the table…as always, perform your own due diligence…

Note:  John and Jon both hold share positions in GGI.  Jon also holds a share position in PGX.

Gold continues to be volatile, trading between $1,390 and $1,415 so far today…as of 7:00 am Pacific, bullion is down $19 an ounce at $1,393…Gold stocks are holding up reasonably well, however, which is an encouraging sign…Silver has slipped 79 cents to $23.50 (strong support at $23)…Copper is off 6 cents to $3.22…Crude Oil is down $1.26 a barrel to $107.28 while the U.S. Dollar Index is off slightly at 82.29…

A heavy monsoon season in India this year is bullish for Gold demand in that country…it should bring a bounty to India’s rural population and a much needed boost to a struggling economy…a swelling of agricultural income and more cash in the hands of farmers also brings an unwelcome consequence for the government – more demand for Gold…about 60% of Gold demand comes from rural areas…the “Love Trade” and the “Fear Trade” are both at work in India, and rural buyers in particular use bullion to store wealth as they lack regular access to banking networks…

HSBC has noted that last week was the 7th straight week that funds have covered short positions in Gold, a major factor in bullion climbing back above $1,400…longs will be needed going forward…a couple of consecutive closes above $1,400 would be bullish from a technical perspective…

Reuters reports that a strike in at least some of South Africa’s Gold mines began yesterday…the stoppage was called by the National Union of Mineworkers, which represents two-thirds of the workers in South Africa’s Gold mines, after weeks of talks between unions and companies broke down last week…the union and management are miles apart on wages, with the dominant NUM seeking 60% pay hikes for entry-level miners and the more hardline Association of Mineworkers and Construction Union (AMCU) pushing for 150%…work stoppages in the auto and banking sectors have already hurt the South African economy, and the Gold industry – already in decline there, due in part to falling grades – could be crippled by a potentially prolonged and widespread strike…the industry has offered pay increases of up to 6.5%…

Today’s Markets

Japan’s Nikkei average hit a 1-month high overnight, climbing 74 points to close at 14054…the Bank of Japan (BOJ) kicks off a 2-day monetary policy meeting tomorrow…while no action is expected, the Asahi newspaper reported that the central bank may consider further easing if Prime Minister Shinzo Abe decides to raise the sales tax as planned next April…China’s Shanghai Composite gained 5 points to finish at 2128, its highest level since August 16…more positive economic data out of China this morning as growth in the country’s services sector hit a 5-month high in August, according to HSBC’s services purchasing manager’s index (PMI)…

The Dow is up 16 points through the 1st 30 minutes of trading…investors are looking ahead to the G-20 meeting beginning tomorrow in Russia, which could be overshadowed by debates over Syria…the Federal Reserve, meanwhile, will publish the latest edition of the Beige Book, its region-by-region assessment of the economy at 11:00 am Pacific today…

The TSX is down 21 points at 12710 while the Venture, despite Gold’s drop today, is up 6 points at 948…

TSX Gold Index Updated Chart

The TSX Gold Index experienced a healthy pullback recently, falling over a 3-day period last week from an intra-day high of 219 to an intra-day low of 195…it closed yesterday at 201, holding support at its rising 20-day moving average (SMA)…the Index appears to be in the process of climbing back to higher levels, though it’s down modestly in early trading today…an overbought condition in the RSI(14) has been unwinding…the measured target breakout from the ascending triangle is 226…the Gold Index through yesterday was up 30.5% from it late June low…few investors were brave enough to buy back then despite the strong support from the 2008 Crash low – what a shame…

Prosper Gold Corp. (PGX, TSX-V) Update – BMR Interviews Bernier

Prosper Gold Corp. (PGX, TSX-V) hit a new all-time high of 60 cents yesterday and closed up 7.5 cents at 49.5 cents after trading resumed following a 4-month trading halt as the company went through the Venture approval process for its Sheslay Copper-Gold Porphyry Project qualifying transaction…trading was light in this tightly-held play yesterday, but it’s reasonable to expect interest to ramp up steadily as this top quality exploration story gains traction with a wider audience in the days and weeks ahead…not surprisingly, President and CEO Pete Bernier and his team are moving at high speed on the ground with drilling, airborne and ground geophysics well underway…in fact, the company expects to be able to release the first batch of drill results by early next month, so look for the speculation factor to kick in…there are few companies who have the ability of performing at the level of Bernier’s team which is armed with a $3.6 million financing, mostly “hard” dollars…there’s also an accelerator clause on the 60-cent warrants (if the stock closes above 80 cents for 20 consecutive trading sessions) that potentially could bring in another $2.5 million…

Phase 1 drilling is focusing on the most advanced of 5 porphyry targets on the 68 sq. km property – the “Star“, and Bernier told BMR in an exclusive interview yesterday that they may drill as deep as 800 metres in this area…historically, Firesteel Resources‘ (FTR, TSX-V) 2 dozen holes averaged less than 200 metres in length and the deepest was about 300 metres…80% of the holes ended in strong Copper-Gold mineralization…the system is open at depth and laterally in all directions…

“We probably looked at well over 150 to 200 projects from grassroots all the way up,” Bernier told us yesterday in explaining his decision to acquire the Sheslay in an under-exploited region of northwest British Columbia, right on trend with major systems to the southeast…“As you know, a lot of companies can’t afford to do any work in the market right now.  Dirk (Tempelman-Kluit, PGX’s VP, Exploration), is a very smart geologist, very talented.  He took his time and we visited quite a few projects that he saw fit to visit.  And this one just stuck in the back of his mind all the way along.  We just think with the win we had before with Richfield and the Blackwater deposit that we needed to find something that may be or could be as big, albeit this is a Copper-Gold property.  We just think this thing has a lot of room and a lot of legs to get bigger.

“It’s looking very good.  It’s a big area.  It looks like it could extend outward quite a bit.  The gossans in the area are phenomenal from the air, all over the place up there.  So we just think this has got a lot of room to grow.  And they never drilled it to depth.”

Like Blackwater, exploration at the Sheslay started in the 1950’s but the right group obviously didn’t come along until Bernier, Tempelman-Kluit and the Richfield team in 2009…Bernier has many of the same Richfield personnel at his side with Prosper Gold, and has also added a couple of other key individuals…despite the big success at Blackwater, he told BMR yesterday that he’s just as motivated now to make another major discovery in British Columbia…

Below is another short audio excerpt (1:40) from our discussion with him yesterday…click on the forward arrow below to listen to this 2nd excerpt between Jon and Bernier (requires Adobe Flash Player, version 9 or above).   More later in the week.

[audio:https://bullmarketrun.com/wp-content/uploads/2013/09/BernierPGXclip2.mp3|titles=BernierPGXclip2]

Banks Island Gold Ltd.(BOZ, TSX-V)

Another company making progress in B.C. that’s worthy of our readers’ due diligence is Banks Gold Ltd. (BOZ, TSX-V)…BOZ recently broke out above an ascending triangle, but is currently up against technical resistance and may need to consolidate for a brief period and unwind temporarily overbought conditions…look for areas of strong support (mid-60’s) on John’s 2.5-year weekly chart…

Banks released more news last week, announcing assay results from their Red Mountain Gold project located near Stewart (they intersected 6.3 g/t Au over 52.5 m) as well as developmental progress at its Yellow Giant Gold Project near Prince Rupert…Banks has a very capable management team…CEO Ben Mossman, Chief Engineer at Alexco Resource Corp.’s (AXR, TSX) high-grade Bellekeno Mine during the successful construction and commissioning of that operation in 2010, has not missed a beat this summer, which is why BOZ has been a strong performer in the market since bottoming out around 50 cents in late May…as always, perform your own due diligence, but this is an interesting situation in our view – particularly on any near-term pullback in the stock…

Canada Carbon Inc. (CCB, TSX) Chart Update

Canada Carbon Inc. (CCB, TSX-V) continues to perform well and broke above important resistance yesterday, jumping 6 cents to close at 21.5 cents on total volume (all exchanges) of 2.6 million shares…the company last reported results from its 100% owned Miller hydrothermal lump/vein graphite property August 20…note the 25-cent Fib. resistance on John’s 3-year weekly chart, and that’s where CCB reacted in early trading today…as of 7:00 am Pacific it’s up a penny at 22.5 cents…

Continental Gold Ltd. (CNL, TSX) Chart Update

Interesting chart this morning – keep an eye on Continental Gold (CNL, TSX) which has pulled back to the “neckline” after releasing positive results a week ago from its Buritica project in Antioquia, Colombia, where 8 drill rigs are currently in action…this chart is just one more reason we’re bullish on Gold stocks at the moment – look at the classic head-and-shoulders bottom that formed in CNL between May and July…

North American Nickel Inc. (NAN, TSX-V) Chart Update

Assay results are pending from North American Nickel Inc. (NAN, TSX-V) which reported strong sulphide mineralization August 23 in 3 drill holes from the Imiak Hill Nickel-Copper-Cobalt zone at its Maniitsoq Project in Greenland…the stock has traded in a range between 21 and 38 cents since that time, and closed yesterday at 26 cents, a penny below its rising 10-day moving average (SMA) and 4 cents above its rising 20-day SMA…a temporarily overbought condition has been unwinding which is positive…of course, the ultimate direction of NAN will depend entirely on the assay results from these holes and others…the sulphide content in MQ-13-026, in particular, suggests the potential for high grades…it’ll be interesting to see how this one plays out as NAN attempts to follow high-grade mineralization down toward the base of the Imiak Hill mafic norite intrusion with additional drilling and borehole geophysics…

Below is an updated chart from John…key resistance, on a closing basis, as we mentioned earlier is 30 cents…as of 7:00 am Pacific, NAN is off 3 cents at 23 cents…

Note: Both John and Jon hold share positions in GGI.  Jon also holds a share position in PGX and NAN.

Pete Bernier’s Prosper Gold Corp. (PGX, TSX-V) has commenced drilling as well as airborne and ground geophysics at the highly prospective Sheslay Copper-Gold Porphyry Project in northwest British Columbia, a 68 sq. km property that features a minimum of 5 porphyry targets. Phase 1 drilling is focusing on the most advanced target known as the “Star” where PGX may go as deep as 800 metres. Not surprisingly, Bernier’s team is moving at high speed on the ground and the company is aiming to report initial assay results during the 1st part of next month.

Prosper Gold began trading today after its qualifying transaction was given final approval from the Venture Exchange at the end of last week.  While volume was relatively light on the opening day following the closing of the QT, PGX hit a new all-time high of 60 cents and finished at 49.5 cents, an 18% increase over its last closing price in early May when the Sheslay deal was announced and the stock was halted for the normal Venture approval process.  Expect activity to ramp up significantly as September progresses as this top quality exploration story gains traction with a wider audience, and speculation builds.   Initial results aren’t far off – Bernier doesn’t waste time and gets right to the task at hand.

BMR conducted an extensive interview this afternoon with Bernier, whose last deal – Richfield Ventures – was bought out by New Gold Inc. (NGD, TSX) for half a billion dollars in 2011 after his team made a multi-million ounce Gold discovery at Blackwater in central British Columbia.  Exploration at Blackwater, like the Sheslay, started in the 1950’s.  But it took award-winning geologist Dirk Tempelman-Kluit to unlock the mysteries of Blackwater between 2009 and 2011, and that’s now his task at the Sheslay which is right on trend with major Copper-Gold systems to the southeast.

Click on the forward arrow below to listen to the 1st excerpt (4-and-a-half minutes) of the discussion (audio) between Jon and Bernier (requires Adobe Flash Player, version 9 or above).   More throughout the rest of the week.

[audio:https://bullmarketrun.com/wp-content/uploads/2013/09/BernierPGXclip1.mp3|titles=BernierPGXclip1]

Updated at 8:15 am Pacific

Gold has traded between $1,384 and $1,406 so far today…as of 8:15 am Pacific, bullion is up $5 an ounce at $1,402…Silver continues to out-perform Gold, typically a positive sign for precious metals…Silver has jumped 83 cents to $24.36 (John has updated Silver charts in this morning’s report)…Copper is up a penny at $3.28…Crude Oil is 18 cents higher at $107.83 while the U.S. Dollar Index is up more than one-tenth of a point at 82.45…

Bullion holdings through exchange-traded products climbed 0.1% last week, according to Bloomberg, the 3rd straight advance and the longest run of increases this year…

Money managers boosted their net-long positions in Gold significantly last week and are now the most bullish since January 22, according to the latest available data from U.S. Commodity Futures Trading Commission…

“Investors have sobered up with their perceptions of Gold,” money manager Michael Cuggino told Bloomberg…Cuggino manages $12 billion of assets at Permanent Portfolio Family of Funds Inc. in San Francisco.  “You have people talking about it as an investment again.  Physical demand never really tailed off.”

Russia and Kazakhstan expanded their Gold reserves for the 10th straight month in July, while Mexico reduced its holdings…Russian holdings, the 7th largest by country, gained about 6.3 metric tons to 1,002.8 tons…Kazakhstan’s reserves rose 1.1 tons to about 132 tons, and Turkey boosted holdings by 22.5 tons to 464 tons…various nations added 534.6 tons to reserves last year, the most since 1964, and the World Gold Council expects that central banks may buy 350 additional tons this year…

Interesting prediction from a Citgroup analyst as reported by www.usfunds.com in its weekly Investor Alert:

“Citigroup strategist Tom Fitzpatrick said in a telephone interview that Gold and Silver should surge in the coming years as the precious metals continue to benefit from easy monetary policies adopted by central banks. “We believe we are back into that track where Gold is the hard currency of choice, and we expect for this trend to accelerate going forward. We still believe that in the next couple of years we will be looking at a Gold price of around $3,500. As the Gold and Silver ratio plummets near 30, this would also suggest a Silver price above $100,” Tom commented in the interview.”

Today’s Markets

The Dow is up 91 points as of 8:15 am Pacific…the U.S. manufacturing sector grew last month at its fastest pace in more than 2 years, according to the Institute for Supply Management…meanwhile, construction spending rose more than expected in July (0.6% vs. estimates of 0.3%) in data released this morning by the Commerce Department…

The TSX has climbed 116 points (see long-term chart below) while the Venture is up 6 points at 945…

Asian markets were strong overnight…Japan’s Nikkei average surged over 400 points to close at 13978…China’s Shanghai Composite, meanwhile, added 25 points to finish at 2123…a gauge of China’s manufacturing sector (PMI) jumped to a 16-month high of 51 in August as the economy perked up on the back of government policy support…analysts have pointed to 2 main factors for the upturn in China…1) Credit growth surged at the start of the year, but that wave of financing is only just now translating into real economic activity; and 2) Over the past 3 months, the government has taken a series of steps – referred to by some as a “mini-stimulus” – to boost growth…it has cut taxes for small businesses, provided support for exporters and, most importantly, boosted investment in rail and infrastructure…

European shares down modestly today after a strong performance yesterday thanks to better-than-expected euro zone economic data…signs of growth in Spain and Italy helped manufacturers overall grow at the fastest rate in over 2 years, according to data provider Markit in its monthly report…

TSX Long-Term Chart

On Friday, Globe and Mail writer Scott Barlow stated that Canadian investors are “whistling past the graveyard” as they continue to largely ignore the financial crisis that is erupting in emerging markets (capital has been flowing out of some of these markets as U.S. long-term interest rates have been moving higher, though China has been shielded from this problem due to capital controls in that country)…Barlow points out that the Canadian equity market is “defying gravity” relative to the MSCI Emerging Markets Index (it covers over 800 securities across 21 markets and represents approximately 13% of world market cap)…since July of this year, the TSX Composite has climbed higher while most emerging market equities have rolled over…Barlow wonders if there is any reason to think the Canadian stock market has decoupled from the emerging markets exchanges (the TSX, he points out, has moved virtually in lockstep with emerging markets over the past decade)…

Our research suggests the TSX has a closer correlation specifically with China’s Shanghai Composite than with the Emerging Markets Index, though China is part of that Index (so keep a close eye on the Shanghai which has been performing well lately)…in addition, what we’re seeing in the TSX long-term chart is actually a very bullish pattern…over the past 2 years, the Index has formed an ascending triangle which it’s now threatening to break out of as you can see in John’s 10-year weekly chart below…given the support of rising long-term moving averages (300, 500 and 1,000 day SMA’s), currently between 12246 and 12381, combined with increasing buy pressure, the probability of a breakout in the TSX in our view is significantly greater than a retreat at this point…

Fission Uranium Corp. (FCU, TSX-V) To Acquire Alpha Minerals (AMW, TSX-V) In All-Share Transaction

Fission Uranium Corp. (FCU, TSX-V) and Alpha Minerals Inc. (AMW, TSX-V) have signed a non-binding letter of intent (LOI) pursuant to which Fission has proposed to acquire Alpha and its primary asset, its 50% interest in the Patterson Lake South (PLS) joint venture, the other 50% of which is held by Fission…under the terms of the LOI, Fission has agreed to offer shareholders of Alpha 5.725 shares of Fission for each Alpha share they hold…the offer is higher than Fission’s original offer and an 11.0% premium to Alpha’s closing price last Friday…as of 8:15 am Pacific, AMW is up 39 cents at $7.30 while FCU has slid 2 pennies to $1.32…

Prosper Gold Corp. (PGX, TSX-V) Commences Drilling At Sheslay

Pete Bernier is wasting no time in tackling the Sheslay Copper-Gold Porphyry Project as the company has already commenced a drill program at the Star discovery with initial results expected by early October, as announced this morning…a deep-penetrating IP survey is also being conducted…Prosper Gold’s qualifying transaction with Firesteel Resources (FTR, TSX-V) was given final approval by the Venture Exchange at the end of last week, and trading began this morning in PGX after a nearly 4-month halt…PGX is up 18 cents at 60 cents on light volume so far, as of 8:15 am Pacific, but this story should gain considerable traction and a wider audience in the days ahead as Bernier begins to focus on the market side of the equation…

Bernier and award-winning geologist Dirk Tempelman-Kluit executed with amazing precision at Blackwater, allowing Richfield to get taken out in 2011 by New Gold Inc. (NGD, TSX) for half a billion dollars, so they have a template to follow at Sheslay and the same personnel to carry out their game plan…if you want a decent chance to make big money on the Venture, stick to companies like Prosper Gold that have the cash, the properties, the expertise and the drive to succeed both on the ground and in the market, and can find deposits that majors will buy…Garibaldi Resources (GGI, TSX-V), 100% owner of the even larger Grizzly Property contiguous to the western and southern borders of the Sheslay, also falls into that category…

As long-time BMR readers know, we followed Richfield closely from the early stages at Blackwater, and some of our readers made massive profits…no one, of course, can say for sure if Prosper Gold will be as successful, but 5 things are certain which help make the risk-reward ratio in this case very attractive:

1) Bernier and Tempelman-Kluit have found a highly prospective area;

2) They have a substantial following and the ability to raise lots of money;

3) The Prosper Gold share structure is fabulous;

4) They will carry out an exploration program with extreme efficiency and professionalism;

5) They will move at lightning speed (as they did at Blackwater)…

Garibaldi’s Regoci:  “This (Bernier’s deal) Has Certainly Changed The Dynamics In The Area”

Following Friday’s news that the Venture Exchange has given its final blessing to the Prosper Gold qualifying transaction, BMR was finally able to get some brief comments from Garibaldi President and CEO Steve Regoci who has promised us an extended interview in the “very near” future:  “The Sheslay River Valley holds immense exploration potential,” Regoci stated rather emphatically, “which is why we’ve always been excited about the Grizzly, holding on to every square inch of this large property over the last several years while advancing our significant assets in Mexico and creating value there.  The work that we have done at the Grizzly since we acquired it has been extremely encouraging.  We’re delighted to see that Prosper Gold has successfully completed its QT with a significant financing to allow Pete and his group to exploit the opportunity at the Sheslay.  Yes, this has certainly changed the dynamics in the area.  We’re looking forward to updating investors in the immediate future with regard to the Grizzly and our Mexican properties.”

Combined, the Grizzly and the Sheslay total 240 sq. km – the scale of which is being taken into consideration, no doubt, by Bernier and Tempelman-Kluit…while the Grizzly is much less advanced from an exploration standpoint than the Sheslay, it nonetheless appears to be a critical piece of the overall puzzle and offers its own “blue sky” potential…the Kaketsa pluton rests on the northwest corner of the Grizzly and is believed to be an important “heat engine”, driving mineralizing fluids in the area…the Grizzly covers the western and southern contacts of the Kaketsa intrusion with the surrounding Stuhini Group volcanics, and shows many of the characteristics of alkalic porphyry Copper-Gold mineralization…the possibility of a high-grade Gold system at depth somewhere on this property also can’t be ruled out, according to some geologists we’ve spoken to and technical reports…the Garibaldi group is solid, as we’ve been reporting, and they have the working capital, the expertise and the desire to take full advantage of this unique opportunity…while GGI already has impressive assets in Mexico, and hasn’t had to do a financing in 4 years due to success down there, the Grizzly could yet have an immense impact on this company and its valuation…

Probe Mines Ltd. (PRB, TSX-V) Update

Another high quality exploration story (still not on everyone’s radar screens, amazingly) continues to unfold in northern Ontario, as we’ve been reporting for months, where Probe Mines (PRB, TSX-V) is building tonnage and hitting some stellar grades at its Borden Lake Gold Project…

We have written about Borden Lake on numerous occasions and the incredible work that Probe is doing under the strong guidance of President and CEO David Palmer…Agnico Eagle Mines (AEM, TSX) took a position in Probe a few months ago and for good reason…Borden Lake, which already boasts a significant resource, is evolving in a major way with a dramatic improvement in Gold grades in the expanding southeast extension of the deposit…Probe is actually reclassifying the deposit as a more traditional high-grade, Archean lode Gold system, amenable to underground recovery, which is also bounded by significant ancillary lower-grade mineralization, the latter ideally suited to potential open-pit mining techniques…drilling continues at Borden Lake, Probe is sitting on piles of cash and has only 75.7 million shares outstanding for a current market cap of $167 million based on Friday’s closing price of $2.21…still plenty of upside potential as exploration continues, especially if Gold and Gold stocks in general continue to strengthen through the balance of the year…the latest assays from Borden Lake came out August 21…hole BL13-455 on Section 1500m SE returned an impressive interval of 44 m averaging 4 grams g/t Au…100 metres to the southeast, hole BL13-458 returned an equally impressive 41.0 m grading 5.1 grams g/t Au…

Palmer stated August 21:  “The deposit continues to distinguish itself not only with its high grades, but also the remarkable consistency of the mineralization. This consistency is an important element that is often missing in Gold deposits and should aid in the potential development plans with improved efficiency and therefore costs. Our priority now is to continue delineating and defining the high-grade zone in order to incorporate this into the economic studies.”

Below is an updated Probe chart from John (2.5-year weekly)…you can see how volume and buy pressure have both picked up considerably recently, and how Probe has also significantly outperformed the Gold price even though bullion has enjoyed a terrific couple of months…the stock closed at relatively minor resistance Friday, and has pushed through that in early trading today…as of 8:15 am Pacific, PRB is up 12 cents at $2.33…

Eagle Hill Exploration Corp. (EAG, TSX-V) Updated Chart

Eagle Hill (EAG, TSX-V), which now controls 100% of the Windfall Lake deposit, continues to look strong…Windfall Lake, of course, is a northwestern Quebec high-grade Gold exploration project currently hosting an indicated resource of 538,000 ounces at 10.1 g/t Au and an inferred resource of 822,000 ounces at 8.8 g/t Au (see July 25 2012 news release for details)…the company has completed a total of 106 drill holes since the last mineral resource estimate…technically, the stock’s recent overbought condition has unwound, laying the groundwork for an assault on resistance at 14 cents…this is looking good…as always, perform your own due diligence…as of 8:15 am Pacific, EAG is off half a penny at 12.5 cents…

Ginguro Exploration Inc. (GEG, TSX-V) & Endurance Gold Corp. (EDG, TSX-V)

On Friday morning we commented about Ginguro Exploration Inc. (GEG, TSX-V) and its channel sampling results from the recently discovered 007 Zone at the Pardo Paleo-Placer Gold Property 40 miles northeast of Sudbury…the stock rocketed from a low of 3 cents at the beginning of last month to a multi-year high of 35 cents intra-day Friday (you can’t beat the leverage this industry offers)…

Average Gold content over the 22.5-metre length of channel sampling was an impressive 40.1 g/t Au…we’ll see how this develops…GEG has arranged financings at 10 cents and 15 cents totaling $2.3 million as they try to ramp up exploration at Pardo…it’s not the easiest property for most investors to understand from a geological perspective, so not only are future results important but so too will be the way the company communicates this story…so far, President and CEO Richard Murphy is telling the story very well – so well, in fact, he has made it a whole lot easier for GGI to successfully complete its financings with the stock closing at 31 cents Friday…he says Ginguro is targeting “the first large-scale Precambrian paleo-placer Gold deposit in North America”, offering “potential for mineralization on a scale never seen before in Canada.”

According to Ginguro, it has identified a “Gold-bearing channelized conglomerate reef system that is approximately 11 km x 4 km in extent…drilling and geological analysis has demonstrated geological processes at work that are similar to those that created the world’s largest Gold deposits in the Witwatersrand basin of South Africa.”

Ginguro earned a 55% interest in this property from Endurance Gold by completing $1 million in exploration expenditures and making cash payments totaling $200,000 over a 3-year period ending in 2012…a JV was formed and Ginguro was appointed operator…Ginguro, however, is now financing 100% of the current work program and states that its interest in the Pardo JV will increase as a result…according to EDG’s most recent MD&A for the 6 months ending June 30, 2013 (released August 27), “In April 2012, the Pardo JV Management Committee approved a drilling and geological basin analysis program with a budget of approximately $1 million.  The Company (EDG) elected…not (our emphasis) to fund its proportionate share of this program, which was to have been completed by the end of April 2013.  The operator has not yet provided the financial reports for the 2012 Program.  The operator has not yet provided any of the financial and all of the technical reports for the 2012 Program.  The Company will not be in a position to make an informed decision with respect to its participation in the Pardo JV until such time as the Company has received and reviewed the required reports.”

Well, that’s certainly interesting…as it stands right now, EDG’s interest in the Pardo JV is still 45% and we’ll see how everything plays out…both the 007 Zone and the Eastern Reef are located within the Pardo JV package (Ginguro also holds 100% of approximately 90 sq. km of claims)…Robert Boyd, a widely respected geologist who was formerly Vice President Exploration for Homestake Canada, is the President and CEO of Endurance…EDG had approximately $450,000 in working capital as of the end of June…GEG had about twice that much, and as mentioned they’re in the process of trying to raise over $2 million…

Endurance seems to be more excited about its Rattlesnake Hills-Natrona Gold Project in Wyoming, and to us that looks interesting as well…EDG now controls 18 Tertiary volcanic complexes which define both the northern half and eastern and western extensions of the Rattlesnake Hills Gold district…these complexes, comprising 6,500 acres, are related to known Gold mineralization in the district…EDG also has other projects – the key for them will be to focus on 1 and do it well…impressively, company insiders took down a $500,000 (non-flow-through) financing in early July at 10 cents when the stock was trading at 2.5 cents…there are currently nearly 70 million shares outstanding…

Below is an EDG 5-year weekly chart from John…there has been strong accumulation in EDG for than a year, and the trend at the moment is clearly bullish…the stock closed Friday at 9 cents, a penny below important resistance…definitely worth putting on the radar screen…EDG is up a penny at 10 cents as of 8:15 am Pacific, while GEG has added 1.5 cents to 32.5 cents…

Updated Silver Charts

Silver enjoyed its biggest monthly gain in August since January 2012, climbing nearly 20%…Silver’s out-performance vs. Gold is typically a sign of positive money flow into precious metals…

Silver Long-Term Chart

RSI(2), which had become extremely oversold (a great entry point) during the 2nd quarter, is now at 75.87% and still has room to move higher based on historical patterns…the biggest challenge Silver faces in the near future will be to overcome strong resistance at $26 and then break above the down trendline in place for more than 2 years…if that were to occur, then Silver has a chance to really explode…but this won’t happen overnight…

Silver Short-Term Chart

The 6-month daily chart (completed last Friday) shows how oversold RSI(14) conditions in June turned into overbought conditions last month…there is strong support at $23, the top of a resistance band that is now a support band…there is also resistance at $24.50…note how the Silver-Gold ratio started to change dramatically in August…

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