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4:00 am Pacific

Gold has traded between $1,329 and $1,342 so far today after surging to a 3-week high yesterday…as of 4:00 am Pacific, bullion is down $11 an ounce at $1,330…new support now exists at $1,320, previous important resistance…Silver is off 18 cents at $22.52…Copper is down 3 pennies at $3.28…Crude Oil has slipped $1.50 a barrel to $96.50 while the battered U.S. Dollar Index, which hit a nearly 1-year low yesterday, is up slightly at 79.37…

Reuters reported this morning that 1 of India’s biggest Gold funds will begin accepting fresh investments again after shutting off new buy-ins 3 months ago to support government efforts to curb bullion demand and control a rising trade deficit…they’re biggest challenge, however, will be to find Gold supplies…the government’s measures to slow imports (they fell to 7 tonnes in September from a record 162 tonnes in April) have caused premiums in that country to jump to $120 an ounce over London prices as supplies have been unable to meet demand…

Goldman Sachs, which previously insisted the Federal Reserve would begin scaling back its bond-buying program in September, now says the Fed will likely delay tapering until March following the weaker-than-expected U.S. unemployment number yesterday…“Although December remains a possibility, this report makes it more likely that the Fed pushes the first reduction in the pace of its asset purchases into 2014,” economists at the bank wrote in a note late Tuesday according to a report from CNBC…

Given the likelihood of more political wrangling in the U.S. early in the New Year, and the damaging affects that could have on the economy, and the fact that Janet Yellen – probably even more dovish than Ben Bernanke – is taking over as Fed Chairman at the end of January – Goldman Sachs is quite possibly still off the mark in its prediction…it’s conceivable that tapering may not begin until much later in 2014…in the meantime, the Fed may even decide to ramp up its QE program…private payroll gains averaged just 129,000 a month in the 3rd quarter, compared with more than 200,000 in the 1st half of this year…

The White House yesterday put a finer point on how the government shutdown and threat of default harmed the U.S. economy recently, saying it shaved 0.25% off economic growth for the 4th quarter and, so far, has resulted in 120,000 fewer jobs being created…Jason Furman, chairman of the White House Council of Economic Advisers, said the shutdown and threat of default lowered sales, steel production and the number of mortgage applications filed…he said the council look at a variety of data, including consumer confidence surveys, sales growth figures and claims for unemployment insurance, to arrive at their number…

Australian Central Bank Gets Cash Injection, Government To Raise Borrowing Ceiling

What is happening in Australia?…if so-called conservatives can’t be trusted to reign in government spending, who can?…the country’s new conservative government has given the central bank a multi-billion dollar cash injection, saying it was necessary to protect the nation from potential global economic shocks…the same conservative government is also seeking to raise the ceiling on government borrowing by more than $200 billion U.S. – this from politicians who were elected just recently on a pledge to end a string of deficits under the previous Labor government…Treasurer Joe Hockey said the U.S. budget crisis remained a threat and had “only been kicked down the road”…the “conservative” Liberal National coalition promised to restore the budget to surplus within a year of winning office, but has since scaled back that ambition to achieving modest surpluses within a decade…

Global Copper Demand Outlook Better Than Expected

Global Copper demand is improving and any supply surplus is likely to be small, according to Richard C. Adkerson, President and CEO of Freeport-McMoRan Copper & Gold Inc. (FCX, NYSE). “The demand in China during this year has been stronger than many people had expected,” he said while speaking during a webcast on the company’s Q3 earnings.  He said sectors of the U.S. economy that use Copper are improving, such as construction and automotive. “And we’re seeing some initial signs of improvement in Europe through demand activities,” he added. “Globally, premiums for downstream Copper uses are strong. Consumer inventories remain low, and the demand side is positive.  Lots of things can happen that would change that outlook (for a surplus) as it has over the past 10 years when we were seeing Copper supply continually under-performing expectations.  In the longer run, the delay in projects with companies cutting back capital (spending) points to a supportive Copper supply situation.”

John has an updated Copper chart further down in today’s Morning Musings.

Garibaldi Resources (GGI, TSX-V) Updated Chart – Breakout Above A Flag

John’s Fib. targets, including 860 on the Venture, have been remarkably accurate in recent months…with age comes wisdom, as they say…so we are particularly encouraged by his bullish technical outlook on Garibaldi Resources (GGI, TSX-V) which is rapidly gaining fresh momentum…it closed up half a penny yesterday at 13.5 cents, confirming technically that a new uptrend is in place…

Supported by strong fundamentals including:  A $4 million capital position, monthly cash flow from operations in Mexico, non-stop activity on the ground throughout this fall and winter, geological advisers that feature the likes of Dr. Craig Gibson, Dr. Peter Megaw and Charlie Grieg, and the largest land position of any junior (with pending new exploration results) in the emerging Sheslay Valley camp in northwest B.C., Garibaldi is extremely well-positioned to be a leader in this improving Venture market…

Below is John’s updated GGI chart which shows a breakout above a bullish flag with the next Fib. level at 24 cents (followed by 37 cents, not indicated on this chart)…expect GGI to challenge a resistance band in the near future between 15 and 17 cents but with moving averages all in bullish alignment, and constant action on the ground and the growing potential for an important discovery in the Sheslay district, there are many reasons to have a positive short-term and long-term outlook for this very intriguing company…GGI is clearly distinguishable from most of its peers on the Venture, and fits into that top 10% category we have been referring to…

GGI 1-Year Weekly Chart

Probe Mines Ltd. (PRB, TSX-V)

We were practically screaming from our rooftop regarding Probe Mines (PRB, TSX-V) during the spring when this well-run junior with a large cash position, a substantial NI-43-101 Gold resource and a fresh high-grade discovery to add to that resource, was trading around $1.20 a share – even after Agnico-Eagle Mines (AEM, TSX-V) had just taken a 9.9% interest in the deal…of course during the 2nd quarter, no one wanted to buy Gold stocks which made quality situations such as Probe, Garibaldi and others so incredibly attractive…

Probe’s Borden Lake deposit in northern Ontario is looking better than ever, and yesterday PRB gained another dime to close at $2.22…once resistance around $2.20 is definitively cleared, next major hurdle is not until $2.60 with John’s Fib. target still sitting at $2.99 as you can see in this 2.5-year weekly chart…

Radius Gold Inc. (RDU, TSX-V)

Simon Ridgway’s Radius Gold (RDU, TSX-V) is sitting on piles of cash and recently commenced a drill program at its Santa Brigida epithermal Silver-Gold property in Mexico…look how RDU has broken above a down trendline (just like the Venture) in place since 2011…this is a classic bullish scenario from a technical standpoint…RDU closed down half a penny yesterday at 12.5 cents…as always, perform your own due diligence…

Today’s Markets

Asian markets were weak overnight with China’s Shanghai Composite slipping 28 points to close at 2183…Japan’s Nikkei average got hit the hardest, falling nearly 2% (287 points) to close at 14426…European shares are modestly lower today while stock index futures in New York are pointing toward a lower open on Wall Street…

Venture 3-Month Daily Chart

Last week, John identified “lift-off” for the Venture as soon as it reversed sharply in 1 day after touching the top of a very strong support band between 913 and 925…the chart we posted last night showed how the Venture has broken out above a down trendline in place since 2011…also, the Venture confirmed a breakout above critical resistance at 955 which becomes new support…it should not be long (month-end at the latest we suspect) before the Index has decisively cleared the 955-970 resistance band and potentially penetrates the psychologically important 1000 level…in short, the Venture is looking better now from a technical perspective than at any time since the bear market began in the spring of 2011…

U.S. Dollar Index 2.5-Year Updated Weekly Chart

Looking at a chart of the U.S. Dollar Index is like examining the Venture in reverse…the 2 tend to go in opposite directions of each other…while the Venture has broken above a long-term down trendline, the Dollar Index recently broke below an up trendline in place since 2011…this gave us added confidence that Gold would hold critical support and that the Venture would push higher as well…

Updated 6-Month Daily Copper Chart

Copper has been trading in a symmetrical triangle recently and a key event to continue to watch for is a decisive move through the low $3.30’s where stiff resistance can be expected…overall, however, Copper is looking strong and completed a classic double bottom and cup-with-handle pattern over the summer…

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

The Venture Exchange is looking stronger now technically than it has at any point since the bear market began in the spring of 2011, and below is a 3-year weekly chart that demonstrates that.  The Venture today confirmed a breakout above important resistance at 955, surging 12 points to close at 972 – a 6-month high – on the best volume in 34 sessions.  Significantly, a breakout has also been confirmed above a down trendline in place since 2011 as shown in John’s 3-year weekly chart.

A rising tide will not lift all boats.  Stick with the companies that have the working capital, the expertise (management and geological), the right properties in the right areas, attractive share structures, and the drive to succeed both on the ground and in the market.

Gold took off at 5:30 am Pacific after the release of a disappointing U.S. jobs number for September (148,000 vs. a consensus estimate of 180,000), another great example of how poor fiscal policy in Washington and political wrangling are likely going to prevent the Fed from scaling back QE until well into 2014…as of 5:50 am Pacific, the yellow metal is up $13 an ounce at $1,330…a close above resistance at $1,320 would be very bullish…Silver is up 34 cents at $22.59…Copper has gained 4 pennies to $3.31…Crude Oil has hit its lowest level since early July, pressured by rising U.S. inventories reflecting slow demand from the world’s top consumer…WTIC is currently flat at $99.26…inventories rose by a more than expected 4 million barrels in the week ending October 11 and increased at the Cushing oil storage hub for the 1st time since the end of June, data from the U.S. Energy Information Administration showed yesterday…the agency resumed the publication of its weekly inventory data which was delayed by the 16-day partial U.S. government shutdown…the U.S. Dollar Index is off one-fifth of a point to 79.51 after the jobs report…

London Bullion Market Association Gold forward rates have turned negative again, highlighting an apparent physical Gold shortage, says ETF Securities in a report carried by Kitco this morning.  “It is interesting to note that LBMA Gold forward rates have again dipped into negative territory, highlighting that physical demand – possibly from central banks as well as short covering – remains strong,” ETF Securities says. “This tightness has continued into the new week, indicating this was not solely short-term pre-debt deadline hedging and post-agreement short-covering demand. It seems clear the fact the U.S. debt issue has not been resolved, but only postponed, is accelerating central banks’ and private investors’ search for alternatives to the U.S. dollar as a reserve asset, with Gold one of the few viable alternatives.”

Global holdings in Gold ETP’s have fallen to around 2,027 metric tons, around the low from May 2010, according to data from Barclays…the record was 2,768.16 tons at the start of the year…outflows for October so far are around 34 tons, surpassing 25.7 tons in September and 17.9 in August, according to Suki Cooper, vice president and precious-metals analyst with Barclays… holdings in the world’s largest Gold ETF, SPDR Gold Shares (GLD, NYSE), are at their lowest level since February 2009, Barclays added…holdings in GLD stood at 882.23 metric tons as of Friday, according to the ETF’s web site…they fell 8.75 tons over the previous week and are now down 468.59 tons, or 35%, since 1,350.82 as of the end of 2012…redemptions were especially heavy when Gold crashed during the spring, with an outflow of 142.72 tons in April…

Venture Breaks Above Down Trendline In Place Since 2011

After failed attempts in 2012 and again at the beginning of 2013, the Venture has finally broken above a down trendline on a 3-year weekly chart…this move requires confirmation, but what’s particularly encouraging is how the RSI(14) is climbing in a trendline and at 47% still has plenty of room to head higher…this is a major technical development and suggests to us that the Venture bear market could indeed be over and that Gold prices have bottomed and could surprise to the upside this quarter…the Venture has built solid support in the low 900’s and is now at a 5-month high…

Venture Short-Term Daily Chart

Below is a 3-month daily CDNX chart…you can see that after several successive attempts since August, the Venture yesterday finally pushed through resistance at 955…buying pressure is showing signs of picking up which is important as there is more stiff resistance at 970…not shown on this 3-month chart, of course, is the 100-day moving average (SMA) which has flattened out at 928 and is now poised to reverse to the upside which should provide an additional momentum boost…

TSX Gold Index Updated Chart

Shorts beware – the TSX Gold Index appears to have formed a double bottom…like the Venture, the Gold Index RSI(14) is showing a rising trendline…could jump quickly to the upside…

6-Month Daily Copper Chart

We’re seeing positive signs as well in the Copper market…Copper’s recent breakout from the handle was not strong enough to push the metal above the top of the cup resistance at $3.38 and its consolidation has formed a symmetrical triangle…theory says a symmetrical triangle can break either up or down…however, given the RSI(14) pattern, and the fact Copper is riding above its SMA-20, the probability in our view is that the price will bust through the symmetrical triangle before meeting resistance again around $3.38…note that the Bollinger Bands are narrow which means some near-term volatility in Copper is indeed likely…this morning’s action in Copper seems to confirm this analysis…

Today’s Markets

Asian markets were mixed overnight…Japan’s Nikkei average posted a slight gain (20 points) to close at 14713…China’s Shanghai Composite, meanwhile, slipped 19 points to finish at 2211…average prices for new homes in China continue to rise, according to data released today by the National Bureau of Statistics, with the pace accelerating for the 8th consecutive month…as in August, prices were up in 69 out of 70 cities in September, despite nearly 4 years of controls on the property market…

European shares are higher in late trading overseas…in New York, stock index futures are nudging higher as of 5:50 am Pacific…the S&P 500 hit another intra-day record yesterday and eked out a slight gain to close at 1,744.66…meanwhile, the Nasdaq touched a fresh 13-year high and closed at 2920…

The TSX closed at 13197 yesterday while the Venture finished up 9 points at 960…

Madalena Energy Inc. (MVN, TSX-V)

Refer to yesterday’s chart – Madalena Energy (MVN, TSX-V), active in the Paddle River area of west-central Alberta, as well as Argentina, broke through resistance at 50 cents yesterday and closed up a nickel at 53 cents (a new 52-week high) on volume of 2.4 million shares (all exchanges)…buy pressure continues to increase…the cup-with-handle breakout target is 56 cents, but John’s Fib. levels above that are 67 cents (88.2%), 81 cents (50%) and 95 cents (61.8%)…the 20-day SMA, currently at 48 cents, has been providing rock-solid support…

Brigus Gold (BRD, TSX)

Strong drill results from Brigus Gold (BRD, TSX) and record Q3 production at its Black Fox Mine in Timmins have given this stock a big lift since the middle of last week, and yesterday BRD pushed through resistance at 70 cents…BRD has climbed 30% while trading 5.5 million shares over the last 3 sessions…next major chart resistance, as John pointed out yesterday, is 85 cents…

Starcore International (SAM, TSX)

Starcore International (SAM, TSX) continues to look strong and is threatening to overcome resistance at 24 cents…it closed up 2 pennies yesterday at 23 cents on the best volume (282,000 shares) in nearly a month…after eliminating the debt overhanging the company, SAM is drilling aggressively at its San Martin Mine in Mexico in order to increase reserves and resources…proven and probable reserves are adequate for 2 more years of production but the large land package is highly prospective for additional discoveries…

Doubleview Capital Corp. (DBV, TSX-V)

Doubleview Capital (DBV, TSX-V) is looking stronger technically as it commences drilling at its Hat Property contiguous to the Sheslay and Grizzly properties…DBV’s rising 20-day SMA at 7 cents is providing strong support while the 50-day SMA has flattened out just beneath the 20-day and appears poised to reverse to the upside…with exploration results due shortly from Prosper Gold (PGX, TSX-V) and Garibaldi Resources (GGI, TSX-V), including 3 important holes from Prosper that have the potential to produce some eye-popping numbers, the Sheslay area should soon be attracting much more attention…

Canada Carbon Inc. (CCB, TSX-V) Chart Update

Canada Carbon (CCB, TSX-V), as we’ve pointed out, has a tendency to be extremely volatile but a successful trading strategy has been to accumulate on weakness…the weekly chart has been showing strong support at 20 cents, and the stock appears to have unwound an overbought condition that emerged in late August/early September…CCB jumped 2 pennies yesterday to close at 24 cents…it appears to have enough momentum behind it again to push through Fib. resistance at 25 cents, but we’ll see…as always, perform your own due diligence…

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

The Saskatchewan uranium should remain red-hot right through the winter, and one of the juniors in an excellent position to benefit from that is Azincourt Uranium (AAZ, TSX-V) which gained a penny-and-half yesterday on strong volume to close at 24 cents…looks bullish as John shows in this 15-month weekly chart…

Note: Both John and Jon hold share positions in GGI and PGX.

Gold, coming off a $44 advance last week, has traded between $1,313 and $1,326 so far today…as of 7:00 am Pacific, bullion is up $2 an ounce at $1,319…Silver has jumped 34 cents to $22.30…Copper is up a penny at 3.27…Crude Oil is 73 cents lower at $100.08 while the U.S. Dollar Index is up slightly at 79.77…for much of this year, analysts were expecting the Fed to embark on the 1st step of reigning in 5 years of ultra-loose monetary policy by starting the process of scaling back quantitative easing by September…but expectations for tapering have now been pushed out considerably given recent political events in Washington, the virtual guarantee of more wrangling over the debt ceiling in the coming months and the affect all of that may have on employment growth and the economy as a whole…this will likely keep the greenback under continued pressure…recently, it broke below a 2.5-year uptrend on the weekly chart…

Gold’s challenge over the short-term will be to overcome resistance at $1,320 and in the $1,360’s…critical support held last week, on a closing basis, at $1,270…Deutsche Bank expects weakness in the greenback, and a cap on U.S. yields, to be supportive of Gold as this quarter continues…“Precious metals have been the best-performing sector over the past week on an excess returns basis. In our view, this rebound is linked to the U.S. debt ceiling deal and expectations that QE tapering will be delayed until the 1st quarter of next year. We expect these developments will help to cap the rise in long-term U.S. real yields and help to sustain dollar weakness, both of which should be supportive to Gold returns.”

Deutsche bank has revised upward its Q4 average Gold forecast by 3.8% to $1,350 an ounce…their Silver forecast has also been revised upward, by 4.9% to $22 an ounce…

Some interesting comments from Frank Holmes in his weekly Investor Alert (www.usfunds.com) over the weekend…“Over the past 20 years, Gold bullion is down 2 standard deviations (sigma) year-over-year as of October 11, 2013. A reading of 2 sigma or lower is an extremely rare occurrence, happening only 21 times over the last 20 years, or 0.04% of the time. The most curious fact is that these 21 occurrences all happened within the last 4 months. This analysis leads us to believe that Gold is in extremely oversold territory and mathematically due for a reversal toward the mean. Often, when Gold prices plummet, fear takes over and investors forget our recommendation to own 5 to 10% Gold in a portfolio. Gold is a diversifier for almost every portfolio, and should be held as a store of value. We argue Gold should not be considered as a way to get rich quick because the inherent volatility is too high.”

Venture At Critical Juncture

For the 5th time since August, the Venture is threatening to bust through important resistance at 955, while a stiff resistance band exists all the way up to about 975 going back to late April…what we can also see on this 3-year weekly chart from John is that the Venture is now once again up against a downtrend line in place since early 2011…on several occasions the Index has tried but failed to push above this downtrend line – will now be any different?…what is different now is an RSI(14) that is trending higher…in addition, the Venture has built solid support since its late June low of 859, and its out-performance relative to Gold over the past couple of months has been unusual…both factors point to some fresh underlying strength in this market that we haven’t seen since the bear market began in early 2011…the Venture’s 50-day moving average (SMA) has been rising since late August, while the 100-day has flattened out and appears ready to reverse to the upside after being in decline since the beginning of the year…the chance of an imminent breakout (by month-end), therefore, has to be considered greater now that at any point over the last couple of years…

CDNX 3-Year Weekly Chart

Today’s Markets

Asian markets were strong overnight…China’s Shanghai Composite surged 35 points to close at 2229…CNBC reported that Premier Li Keqiang stressed the importance of maintaining reform implementation at a State Council meeting yesterday…Japan’s Nikkei average hit a 3-week high, climbing 132 points to close at 14694…stocks were mixed in Europe today…

In New York, the Dow is off 5 points as of 7:00 am Pacific…this week brings a deluge of U.S. data following delays due to the partial government shutdown, with the closely-watched non-farm payrolls report slated for tomorrow…

The TSX, which closed above 13000 last week for the 1st time since July 2011, has gained another 46 points to 13182 through the first 30 minutes of trading…the Venture, meanwhile, is up 4 points at the magical 955 level…Doubleview Capital Corp. (DBV, TSX-V) is 1 of the early volume leaders, up a penny at 8.5 cents as drilling begins today at its Hat Property contiguous to the eastern borders of both the Sheslay and the Grizzly properties…more on Prosper Gold (PGX, TSX-V) and Garibaldi Resources (GGI, TSX-V) tomorrow…

Danny Deadlock’s basket of 45 junior mining stocks trading on the TSX and the Venture with a minimum of 1 million ounces of NI-43-101 Gold resources are trading at an all-time low of $17 an ounce, down from $24 an ounce in March and $46 an ounce in late 2011…28 of those 45 companies are trading below the current $17 average, and what’s hurting them is low grade (companies such as BAT, SWD, VIT, and VTR for example)…

B.C. Securities Commission Capital Ideas Conference – The Real Story

The mainstream media has reported about last Thursday’s B.C. Securities Commission Capital Ideas Conference in Vancouver…now the REAL story from a BMR reader, a seasoned and accredited investor, who attended the event (for $260) and sent us this email…

BCSC Capital Ideas 2013

Attended last Thursday, Oct. 17

The theme of the seminar was “B.C.’s Venture Market: Junior Mining at a Crossroads”

The seminar had 3 representatives from the BCSC: Brenda Leong, Chair & CEO basically opened and closed the seminar; Paul C. Bourque, Q.C., was the moderator for the panel portion; Peter Brady, Director, Corp. Finance, was one of the speakers. Peter presented a Power Point of some statistics but I don’t recall much of what he said – I doubt anyone who attended got much from his talk. W. Paul Levelton, KPMG, was hired by the BCSC to do a presentation on the state of the industry.  Turned out KPMG interviewed executives from 15 Venture listed companies. His conclusion was that, yes, the market is in turmoil but sometime over the next 3 years it will turn around again. Questions after Paul’s presentation basically made fun of the fact they only surveyed 15 companies to represent a consensus about an industry that involves over 1800 junior resource companies on the Venture alone. One other attendee suggested that due to the fact the biggest problem in the industry today is that the investors have almost all but totally left the scene, that maybe someone should have taken the time to survey a few investors.

Panelist

John McCoach –  President, TSX Venture Exchange

Patricia M. Mohr – VP Economics and Commodity Market Specialist, Scotiabank, Toronto

William ( Bill ) Whitehead – Senior Investment Advisor, PI Financial, Vancouver

D. Bruce McLeod, P. Eng. – President, CEO & Director, Mercator Minerals Ltd., Vancouver

Randee Pavalow – Chief Compliance Officer and Legal, Aequitas Exchange, Toronto

As usual, everyone came with their own agenda. Randee Pavalow to create awareness of the Aequitas Exchange and John McCoach holding his own to defend the TSX and its services. Patricia Mohr presented some statistics about the general markets and how large of an effect China has had and will continue to have on the world demand for commodities.

Bruce McLeod and Bill Whitehead Vancouver both brought up issues they felt were hurting the general markets.  Three of their main concerns were:

1. Commission fees on maker/taker orders. Maker orders are liquidity orders that sit in the bids and offers. They used to get preferential pricing while Taker orders that hit bids and took out offers were charged an extra fee per share.  John McCoach then notified that the Venture has just implemented a proposal to eliminate all maker/taker fees.

2. High Frequency Trading (HFT) was another concern. HFT is program trading that takes advantage of very high speed trading platforms that are able to use split second trading info to try and front-run any type of market momentum in a particular stock. No one from the BCSC or the TSX was willing to suggest any forthcoming changes to HFT in the near future. Suspect they all know that the big banks in Canada are the main players behind the HFT and no one in this country has the power to tell the big banks what they can or can’t do, even if it is illegal.

3. Level of bureaucratic regulations to run a public mining company. Gave a quick but good description of the many levels of expensive and time consuming bureaucratic regulations they contend with these days. Every year it just keeps getting worse.

As far as I was concerned there was not enough discussion about investors. Everyone who was there was either just worried about their own agenda or, as for the 3 BCSC representatives and Paul from KPMG, it was all about saying as little as possible and covering their ass.

Was hoping by now anyone even remotely involved had figured out that the investors are by far the most important thing in this business. Unfortunately only two of the panelists at the seminar had any regular direct dealings with retail and institutional investors.  By the looks of this seminar, most of the speakers and presenters haven’t the slightest idea how to fix the problem and I’m not sure they’d recognize the solution if it was presented to them on a silver platter.

For anyone not able to make it to Capital Ideas 2013 or couldn’t be bothered, you didn’t miss much. It was somewhat of a disappointment.

Submitted by: BMR reader (anonymous).

Madalena Energy Inc. (MVN, TSX-V)

Madelana Energy (MVN, TSX-V) continues to look strong, technically and fundamentally…aside from existing and expanding production from the Paddle River area of west-central Alberta, Madalena is focused on multi-billion barrel potential on 3 blocks within Argentina’s Neuquen basin…the government in Argentina appears to have softened its stance toward the energy industry in recent months…

Below is a 2.5-year weekly chart from John…Fib. levels beyond 56 cents (not shown on this chart) are 67 cents, 81 cents and 95 cents…the stock has been under accumulation much of this year, and buy pressure has been increasing gradually since August…MVN is unchanged at 48 cents through the first 30 minutes of trading today…

Brigus Gold Corp. (BRD, TSX)

Keep an eye on Brigus Gold (BRD, TSX) which reported an important drill result last week – the deepest intersection to date at its Black Fox Mine in Timmins…Hole GF454-01-W returned an interval of 40.71 g/t Au over 26.75 m including 103.2 g/t Au over 8.35 m…this test hole was drilled from underground and intersected Black Fox mineralization at approximately 700 m vertical from surface, extending the west zone by an additional 300 m at depth…this indicates continuity of the deposit both downdip and along strike, and next year the company will focus on infill and expansion drilling from underground in an effort to expand resources and the life of the mine…BRD recently reported record quarterly production of 27,000 ounces from Black Fox…Q3 financial results will be released November 12…

Below is a 3-year weekly chart from John…the stock faces strong resistance from both the down trendline and the “gap” around 70 cents…very strong support in the mid-50’s…BRD closed Friday at 67 cents and is showing some strength in early trading today, up a nickel at 72 cents as of 7:00 am Pacific…the key for BRD will be to close above that resistance for a couple of consecutive sessions – similar pattern to what we saw recently with Gold Standard Ventures (GSV, TSX-V)…

Updated Silver Charts

Mineweb reports that India has imported over 4,000 tons of Silver year to date…this would mean the country is on track to import over 6,000 tons in 2013, or over 3 times last year’s imports…

Below are updated Silver charts from John – the outlook is positive…

Silver 6-Month Daily Chart

Silver Long-Term Chart

Note: John, Terry and Jon do not hold share positions in MVN or BRD.  John and Jon both hold share positions in GGI and Jon also holds a share position in PGX.

With additional drill results imminent from Prosper Gold Corp.’s (PGX, TSX-V) Sheslay Cu-Au Porphyry Project in northwest British Columbia, it’s an ideal time to put more facts on the table that clearly demonstrate why the Sheslay holds such great potential in terms of both grade and tonnage.  Keep in mind as you read this, PGX’s current market cap (based on Friday’s 50-cent close) is $12.5 million, a mere 6% of the $219 million commanded by Copper Fox Metals Inc. (CUU, TSX-V) which holds 25% of a JV with Teck Resources Ltd. (TCK, TSX) to further develop the Schaft Creek deposit approximately 120 km southeast of Sheslay.

Schaft Creek, 1 of several Stikine Arch deposits that Sheslay could soon rival, has proven and probable reserves of 940 million tonnes grading 0.27% Cu, 0.19 g/t Au, 1.7 g/t Ag and 0.018% Mo according to a February 2013 feasibility study (5.6 billion pounds Cu, 5.8 million ounces Au, 52 million ounces Ag, 364 million pounds Mo).  Measured and indicated resources are 1.2 billion tonnes grading 0.26% Cu, 0.19 g/t Au, 1.7 g/t Ag and 0.017% Mo.  Inferred resources are 597 million tonnes grading 0.22% Cu, 0.17 g/t Au, 1.7 g/t Ag and 0.016% Mo.  So this is a large system.  They’re using a cut-off of 0.15% CuEq.  It is generally regarded as a primary porphyry Copper system, hosted in the intermediate rocks of the Stuhini Group, in a similar geological setting as the Sheslay.  Significant argillic alteration and a distal pyrite halo are notably absent at Schaft Creek, however.

Schaft Creek, where exploration started in the 1950’s, comprises 2 distinct and spatially separate zones – the Main Zone and the Paramount Zone.  The Main Zone extends up to 1.1 km east-west and more than 1.2 km north-south with a depth of approximately 300 metres.  Paramount is a contiguous zone of breccias extending along the west margin of the Main Zone and to the north for a total length of at least 2.1 km.  It’s not quite as wide as the Main Zone but extends a little deeper (to 500 metres).  The total project area is about 3 km x 3 km.

Just over 400 holes (about 10 x more than the Sheslay) have been drilled at Schaft Creek totaling 98,000 metres, not including the drilling carried out by Teck this summer.

The Sheslay

Let’s move ahead now to the Sheslay and hopefully our readers, though this comparison with Schaft Creek, can further appreciate the attractiveness of this project and how, at this stage at least, it appears to have better grade potential and the same or even better tonnage potential than Schaft Creek.  Quite frankly, the only reason the Sheslay is at a less advanced stage than Schaft Creek is because the former was in the “wrong” hands for the last 10 years.  Firesteel Resources (FTR, TSX-V) gave it their best, but they lacked the geological expertise and the financial strength to seriously advance this highly prospective asset.  Smartly, they finally recognized that.  One of the best exploration groups in the country is now taking the Sheslay – rapidly – to the next level.  Prosper Gold examined at least 150 properties around the globe before deciding on this one (that says a lot).

A minimum of 4 Cu-Au porphyry targets have been identified at the Sheslay within a 12 sq. km area – the Star (most advanced), North Star, East Star and Copper Creek.  Approximately 5 km southwest of the Star is the Pyrrhotite Creek porphyry which appears to be a distinct, multiple target area with a 2,000-metre long, 400-metre wide Copper-in-soil anomaly with elevated Mo values.

The Star target, based on historical geophysical, geochemical and drill data, covers an approximate 700 m by 500 m area. The discovery is open to depth and extension laterally in all directions beyond this confirmed area. Mineralization is not restricted to specific rock types. Both the porphyry and bounding volcanic rocks are mineralized.

Prosper Gold’s first 3 drill holes at the Star delivered excellent numbers, confirming historical results – 312 m grading 0.37% Cu and 0.24 g/t Au (S024); 269 m grading 0.42% Cu and 0.20 g/t Au (S025); and 263 m grading 0.35% Cu and 0.15 g/t Au (S026). Their 4th, 5th and 6th holes (assays pending) pushed deeper, and mineralization was intersected from top to bottom (598 metres) in the 4th hole (S028).  This particular hole could be a game-changer (same with the other 2 holes) and should provide valuable insight into the depth potential of the property.  Previous drilling at Sheslay was relatively shallow – almost entirely to depths not exceeding 250 m.  If Prosper, by drilling deeper, has hit a magnetite-enriched potassic zone, look out. That’s where grades could really ramp up.  All the evidence to date suggests there is a robust hydrothermal system at the Sheslay, one that’s capable of cooking up some juicy numbers.

How Tonnage At Sheslay Could Quickly Grow

Given the dimensions of the 2 Schaft Creek mineralized zones as noted above, it’s not hard to imagine how tonnage could build exponentially if Prosper is able to link even just 2 of its targets – the Star and the North Star.  The North Star is 1 km to the northeast of the Star and has never been drill-tested or trenched.  However, historical work indicates a strong IP chargeability anomaly and corresponding magnetic high covering a minimum 500 m x 700 m area with a coincident Copper-in-soil anomaly (individual soil sample results above 1% Cu) and Gold-in-soil anomaly.  The 1 km gap between the North Star and the Star is open, and historical anomalous Gold-in-soil results suggest a possible link between the 2.

The East Star is 1 km southeast of the Star, while Copper Creek is 2.3 km south of the Star.  Again, 4 porphyry targets clustered within a 12 sq. km area.  If they all link up, this would be an absolutely huge system – and that’s not even counting Pyrrhotite Creek which has incredible potential just on its own.

“We just think this thing has a lot of room and a lot of legs to get bigger,” PGX President and CEO Pete Bernier told BMR in an interview last month.  “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.  So we just think this has got a lot of room to grow.  And they never drilled it to depth.”

Yes, those gossans.  Below is one of them – definitely a good sign.

Bernier’s Brigade and “Captain Dirk”

In the risky junior exploration space, if you’re going to bet on a company making a major discovery, make sure the people running that company and directing everything on the ground know what they’re doing.  Lots of companies have great properties but lack either the money-raising ability or the geological expertise – or both – to deliver success and build shareholder value.  Ask yourself these key questions:

1. Does the company have enough working capital and the ability to raise lots more?

2. Does the company have true and proven expertise at both the management and geological levels?

3. Does the company have an attractive share structure (have they flooded the market with paper?)?

4. Does the company have a property (or properties) with legitimate potential where a discovery could be made, in a safe jurisdiction, that a major may want to buy?

5. Does the company have the ambition and the determination to build shareholder value, especially in the current environment in which so many CEO’s are hiding their heads in the sand and don’t seem to even care about shareholders – let alone taking on the challenging task of building value in the ground and in the market?

6. Does the company fit into the top 10% of Venture listings, or is it one of the 90%?

In the case of Prosper Gold, the answer to each of those questions is a resounding “Yes” (the same, by the way, applies to Garibaldi Resources – GGI, TSX-V – which is also the largest landholder among juniors in the rapidly developing Sheslay Valley camp).

Bernier and his chief geologist, Dr. Dirk Tempelman-Kluit, are of course coming off a huge win 2 years ago with Richfield Ventures which soared from pennies to more than $10 a share after getting taken out by New Gold Inc. (NGD, TSX) for just over half a billion dollars.  Bernier is running with the same team he had with Richfield, and has also added a couple of key recruits.

Tempelman-Kluit, meanwhile, is unquestionably one of the brightest geologists in the country.  If there’s anyone who can bring the attention of the world to a major discovery in the Sheslay Valley, it’s “Captain Dirk”.  At 74 years of age, he’s in incredible shape and as motivated as ever with experience and wisdom on his side.  For 2 years, as he explained to BMR in a recent interview, he and Bernier searched for the ideal project before settling on the Sheslay (click on the forward arrow to listen to this 2-and-a-half-minute excerpt of Jon’s interview with Dirk – requires Adobe Flash Player, version 9 or above):

[audio:https://e8d59e.a2cdn1.secureserver.net/wp-content/uploads/2013/09/Dirk-PGX-Clip-11.mp3|titles=Dirk PGX Clip 1]

Assay results from Prosper Gold’s first 3 holes came out September 30.  We’re now into the last half of October and 3 more holes are due.  Two-thirds of the outstanding shares (25 million) are locked up at the moment and can’t be sold.  Mineralization from surface to 598 metres in hole #4 (S027).  Suffice to say, things are about to get very interesting.  As always, perform your own due diligence.

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

TSX Venture Exchange and Gold

The Venture showed its resilience last week, holding strong support in the mid-to-upper 920’s despite pressure on Gold early in the week.  Then on Thursday, the Index reversed sharply to the upside with its best day of the year as bullion took off.  The Venture held steady Friday to finish the week up 22 points at 951.  The support band from the August low of 907 to the 100-day moving average (SMA) at 928 is VERY strong, but so too is the resistance between 955 and 970.  We’re about to find out how this battle between support and resistance is going to play out, and our guess – based on numerous technical and fundamental factors – is that the Venture will break to the upside.

Below is a 3-month daily chart from John.  This is the CDNX’s 5th attempt since mid-August to push past 955, which will make any breakout that much more significant.  With a 100-day SMA that appears ready to reverse to the upside after a long decline – another factor that can help drive momentum – the outlook for the Venture has to be considered more positive now than it has been for quite some time.  Higher Gold prices would obviously be a critical factor in triggering a breakout, in addition to some impressive exploration results (an absolutely stellar hole from  Sheslay, perhaps?).  In addition, the TSX last week finally overcame important resistance around 12900 and closed above 13000 for the 1st time in more than 2 years.

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 (at least most of them) to start 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 showed that 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 small universe of companies that have the ability to execute both on the ground and in the market – companies that have the cash, the expertise, the properties and the drive to make discoveries that majors will buy.

Gold

Gold held critical support at $1,270 on a closing basis early in the week, rallied powerfully on Thursday following the deal in Washington to once again kick the debt can a little further down the road, and impressively held almost all of those gains on Friday to finish the week up $44 at $1,317.  With more political shenanigans to come on Capitol Hill – perhaps a fight early in the New Year even more intense than the one we’ve just witnessed – the U.S. economy is going to continue to be restrained by an environment of fiscal and political uncertainty.  What’s worse, the man at the top – a President who lacks entrepreneurial instincts and has never had to meet a payroll in his life – seems to have little idea how jobs are created (i.e., Keystone XL) and how easily they can be destroyed (i.e., Obamacare).  His faith is rooted in government, not in the traditional American entrepreneurial spirit and the American Dream, and his focus is on trying to redistribute wealth, not create it.  The U.S. economy is being strangled by over-regulation and an obvious lack of visionary economic leadership from the White House.  What all of this means is the likelihood of continued weak employment growth and a less than stellar overall economic performance by the U.S., which is turn means QE to infinity – or at least until political and fiscal sanity return to Washington.  The growing consensus is that the Federal Reserve will not begin “tapering” until well into 2014 (at the earliest).  So much for the pundits’ prediction of a scaling back of QE by September.  The political dynamics and poor fiscal policies will force the Fed to keep its pedal to the metal.  With U.S. debt levels increasing along with the Fed’s balance sheet, Gold appears to be in a very good position to move higher.  The greenback, which had momentum in its favor earlier this year, is now clearly in a downtrend.

A wave of buy orders worth in excess of $2 billion surged into the Gold market overnight Thursday, shortly after Congress ended its impasse.  One of the catalysts for this was a downgrade of the U.S. credit rating by Chinese rating agency Dagong, though they don’t have much of a following outside of China.  But China of course is the world’s 2nd-largest economy and the world’s #1 Gold consumer.  Dagong trimmed the U.S. credit rating by 1 notch to A-minus from A, saying the agreement in Washington does not defuse worries about the U.S. deficit or improve the country’s ability to repay over the long-term.  More U.S. federal debt has accumulated under President Obama over the last 5 years than under all other U.S. Presidents combined.

Technically, the next 2 key levels Gold must deal with are $1,320 and $1,366 (followed by $1,400).  Closing prices above $1,320 and $1,366 will generate significant new momentum.   Below is a 3-month daily chart from John.  The outlook is positive.

Russia’s first Gold-backed ETF, the “FinEx Physically Held Gold ETF Fund”, has been launched by FinEx Group and the Moscow Exchange. The new ETF is listed on the Moscow Exchange and cross-listed on the Irish Stock Exchange. The new ETF is following a similar product launched in Shanghai, while seeking to benefit from Russia’s increasing Gold jewelry demand which rose 7.6% in 2012.

Silver gained 62 cents last week to close at $21.96,  Copper edged up a penny to $3.27, thanks in part to an encouraging 3rd quarter GDP number (7.8%) from China.  Crude Oil fell by over $1 a barrel to $100.81 while the U.S. Dollar Index got hammered again, falling three-quarters of a point to 79.61.

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 $3.5 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, deflationary concerns around the globe and the prospect of Fed tapering by the end of the year (not likely now) 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 $1,179 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.

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 has traded in a range between $1,314 and $1,329 so far today, following yesterday’s powerful move…events on Capitol Hill this week have demonstrated yet again to investors that Washington just isn’t serious about tackling its deficit and debt problems, and the growing consensus is that the Federal Reserve is now not likely to begin tapering until well into 2014 due to political and fiscal dysfunctionality in the U.S. capital…President Obama wants to blame everything on “ideological” Republicans, but that’s an argument we’ll leave for another day…one benefit to having Obama in power is that, overall, he has provided a great boost for Gold since taking over the White House in January, 2009…the Fed’s hands are tied – their next step might actually be to ramp UP quantitative easing as opposed to trimming it back  – and they will cite continued weak employment growth (thanks in part to Obamacare which is hurting full-time job numbers) and a challenging fiscal and political environment…Congress is clearly headed for another major showdown early in the New Year…

As of 7:45 am Pacific, Gold is down $2 an ounce at $1,320…Silver is 9 cents higher at $21.98…Copper has added 2 pennies to $3.28…Crude Oil is up 38 cents at $101.05 while the battered U.S. Dollar Index has slipped further to 79.59…

The U.S. Mint’s web site shows that American Eagle bullion coin sales are at their highest level since July, with 1-ounce coin sales already double the amount that was sold in August and September…as of 2 days ago, 20,500 1-ounce American Eagle bullion coins were sold for the month vs. only 8,500 in September and 9,000 in August…

Another factor helping Gold yesterday was news that a Chinese rating agency downgraded U.S. debt overnight Thursday…Dagong Global Credit Rating trimmed the U.S. by 1 notch to A-minus from A, saying the agreement in Washington does not defuse worries about the U.S. deficit or improve the country’s ability to repay over the long-term…

China Reverses First Half Slowdown

China’s economy expanded 7.8% in the 3rd quarter from the same period a year earlier, marking an acceleration from the 2nd quarter when it grew 7.5%…the rebound in the world’s 2nd-largest economy was largely the result of government efforts to shore up growth with looser monetary policy and a “mini-stimulus” of investment in infrastructure such as rail and subway systems…the big question is whether this rebound can be sustained in the coming quarters…a raft of monthly data released today by China’s National Statistics Bureau showed growth in industrial activity, retail sales and fixed asset investment slowed slightly in September compared with previous months…many economists believe the Chinese economy faces several fundamental challenges over both the short and long-term including major structural reforms the government will have to implement…

China & Base Metals Demand

China is expected to become a bigger market for base metals by 2017 than the rest of the world combined, accounting for 52% of global demand, advisory firm Wood Mackenzie stated in its latest base metals demand forecast issued today…China’s demand for base metals is currently at around 46% of the 96-million tonnes produced globally…“Our forecasts for the next 5 years show that across all of the base metals – Aluminum, Copper, Lead, Nickel and Zinc – growth in demand will come predominately from China,” stated Helen Matthews, Wood Mackenzie head of base metals market research…demand growth in the next 5 years would not be as fast as the previous 5 years have been, owing to weaker GDP growth in China, but Matthews stressed that demand would only be slower and not lower…“Demand growth has slowed from the double digits we saw from 2008 to 2013 to single digits – ranging from 5% to 8% – however, it’s important to note that in absolute tonnage terms we still see significant numbers.”

Today’s Markets

Asian markets were mostly higher overnight with China’s Shanghai Composite finishing 5 points higher to close the week at 2194…the pan-European Euro Stoxx 600 Index was at levels today not seen since June 2008 with all key European indexes and sectors in positive territory…

The S&P 500 hit another new new all-time high this morning (it topped its September 19 high with a strong close yesterday), thanks to upbeat earnings...Google topped the $1,000 mark for the 1st time ever this morning…as of 7:45 am Pacific, the Dow is off 22 points…the Labor Department said yesterday that it would release its report on September employment next Tuesday, as it provided a fresh schedule for some of the economic data that was postponed due to the partial government shutdown…

In Toronto, the TSX is up 61 points through the first 75 minutes of trading today after touching 13000 yesterday for the first time in more than 2 years…Canada and the European Union have reached an agreement in principle on a free-trade deal that will give Canadian businesses preferential access to an EU market of 500 million consumers and lead to what should be cost savings for consumers – this is an important, historic agreement…the Venture, meanwhile, is off a point at 951 after a powerful move yesterday…let’s take a look at some charts…

The TSX has finally busted through stiff chart resistance at 12900, as you can see in John’s 2.5-year weekly chart, and this important breakout certainly bodes well for the rest of Q4…

TSX 2.5-Year Weekly Chart

The Venture held critical support this week in the 920’s, and may now finally be ready to power through – or at least grind its way through – a strong resistance band between 955 and 970…from all we can discern technically, the Venture is set for “lift-off” during this last half of October…

Venture Exchange 3-Month Daily Chart

Kootenay Silver Inc. (KTN, TSX-V)

There are some interesting Silver plays worth watching closely at the moment, Kootenay Silver (KTN, TSX-V) being one of them…KTN commenced a minimum 5,000-metre drill program last month with 2 drill rigs as part of a continuing resource expansion initiative at its flagship Promontorio Silver Project in Mexico…drilling is targeting a series of high-grade Silver intercepts recently identified within a new breccia zone of Silver mineralization situated between the Pit and Northeast zones as reported by the company in June…Promontorio contains a combined measured and indicated Silver resource of 92.4 million Silver equivalent ounces (39.9 million ounces Silver, 508,000 ounces Gold, 394.8 million pounds Lead and 462.2 million pounds Zinc) and an additional 26.8 million Silver equivalent ounces in the inferred category (12.8 million ounces Silver, 147,000 ounces Gold, 99.5 million pounds lead and 109.1 million pounds zinc, see company’s Sept. 18 news release for details)…

KTN has no debt and reported $8 million in working capital at the end of June…it has 62 million shares O/S for a total market cap of $40 million based on the last close at 65 cents…the stock hit a 3-year low of 54 cents in August but has strong support and has been basing in a horizontal channel between 62 and 75 cents since then…with a resource as well as potential exploration upside in the immediate future, KTN is well-positioned to move higher this quarter in the event Silver prices continue to firm up…

Garibaldi Resources Corp. (GGI, TSX-V) – Grizzly Plus Mexico Gives GGI Powerful 1-2 Punch

Kootenay’s Promontorio Project is just several kilometres south of Garibaldi Resources‘ (GGI, TSX-V) Tonichi Project in Sonora…Tonichi has a diversity of mineral deposit opportunities for GGI, and the company has been generating monthly royalty income since February from a pilot coal program there…in addition, assay results are pending from 6 holes recently completed at the Locust target in the northern section of Tonichi…GGI President and CEO Steve Regoci says the company is now beginning to bear the fruits of a few years of systematic due diligence and exploration at Tonichi which has narrowed down the most prospective areas in a 500 sq. km land package (click on the forward arrow to listen to this 2-minute excerpt – requires Adobe Flash Player version 9 or above):

[audio:https://e8d59e.a2cdn1.secureserver.net/wp-content/uploads/2013/10/Regoci-GGI-Mexico-Clip-1.mp3|titles=Regoci GGI Mexico Clip 1]

We’ll have more from Regoci on GGI’s Tonichi Project and other Mexican opportunities Monday, including the very interesting La Patilla Gold Property that could rapidly emerge as a major catalyst for GGI in Mexico…in British Columbia, of course, Garibaldi is in the heart of what’s emerging as the province’s most exciting new exploration camp – the Sheslay Valley – and more results are pending from GGI’s exploration program launched at the Grizzly last month…GGI holds the largest land position (175 sq. km) of any junior in the area…with a market cap just modestly above its strong working capital position ($4 million), no warrants, no financing paper to hurt the market, monthly cash flow and a pipeline of exciting properties, the short-term and long-term prospects for GGI have to be considered extremely positive…

Prosper Gold (PGX, TSX-V) has assay results pending from its 4th, 5th and 6th holes drilled at the Sheslay, and Doubleview Capital Corp. (DBV, TSX-V) starts drilling Monday at its Hat Property, contiguous to the eastern borders of the Sheslay and the Grizzly…we’ll have more on the Sheslay Valley situation Monday and the incredible opportunity it presents for investors…

Fission Uranium Inc. (FCU, TSX-V) Updated Chart

On the subject of discovery plays, one of our favorites continues to be Fission Uranium (FCU, TSX-V) with its PLS Property in Saskatchewan…Fission released more results yesterday and the stock climbed 11 cents on strong volume to close at $1.14…as of 7:45 am Pacific, FCU is off a penny at $1.13…consider the recent pullback an early Christmas gift…

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