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Gold came under pressure this morning but found support on fresh concerns regarding Ukraine…reports within the last hour are that Ukraine forces have engaged a Russian armored column on Ukrainian soil…bullion, which up until this morning was in its narrowest weekly range since August 2007, traded as high as $1,316 overnight before plunging to $1,292…as of 8:30 am Pacific, it’s down $8 an ounce at $1,305…Silver has fallen 18 cents to $19.71…Copper is flat at $3.13…Crude Oil has rallied $1.13 a barrel to $96.71 while the U.S. Dollar Index is down more than one-tenth of a point at 81.46…

The Financial Times is reporting that European foreign ministers attending an emergency meeting in Brussels today expressed concern that the “aid” convoy of Russian trucks waiting at the frontier with eastern Ukraine had been a diversion while Russian vehicles and arms crossed the border elsewhere…all this while Vladimir Putin declared on a visit to Crimea, “We will do everything in our power so that this conflict is ended as soon as possible, so that the blood can stop flowing in Ukraine.”

Hedge fund Paulson & Co maintained its stake in the world’s biggest Gold-backed exchange-traded fund, SPDR Gold Trust, in the second quarter, while Soros Fund Management LLC sharply boosted its investment in Gold mining stocks…legendary investor George Soros nearly doubled his ownership in Market Vectors Gold Miners ETF and initiated new stakes in certain producers, suggesting the big names in hedge funds continue to have confidence in the yellow metal…

Franco-Nevada Corp.’s (FNV, TSX, NYSE) $500 million bought deal announced late Wednesday, to fund additional royalty and streaming acquisitions, is certainly a positive sign for the sector…Franco-Nevada has been one of the best performing major mining stocks in the Gold space this year, recording a gain of nearly 50%…the FNV offering at $63.38 CDN was priced aggressively, just 1.8% below the closing price that day…

The 117-year-old London method to set a price for Silver, known as the “fix,” is coming to an end on Friday, replaced by a new electronic pricing mechanism that regulators hope will bring more transparency to the system…

Today’s Equity Markets

Asia

China’s Shanghai Composite rebounded after two sessions in the red and gained 20 points overnight to close the week at 2227…Japan’s Nikkei was relatively unchanged at 15318…

Europe

European stock markets were modestly higher for most of today, despite disappointing economic data yesterday, but reversed to the downside late in the session on news out of Ukraine…

The gloomy economic numbers out of the euro zone – whose roughly $13 trillion economy accounts for 17% of the world’s gross domestic product – join a litany of similarly sour reports this week from Asia, all pointing to signs of sudden weakness among many major economies…the downturns in Europe and Asia come as the U.S. flashes signs of increasing economic vigor after a brief chill earlier this year, but the American strength is fragile and would undoubtedly weaken in Q4 if the global economy were to suffer some unexpected shocks…

North America

The Dow is down 36 points as of 8:30 am Pacific…U.S. industrial production edged higher in July (0.4%, slightly above expectations) according to data released by the Federal Reserve this morning…

Below is an updated 6-month Dow daily chart from John…support at the rising 200-day moving average (SMA) held earlier this month, as expected, (the same has occurred with the Venture), and RSI(14) is showing strong up momentum, pushing above its SMA(25)…

The TSX is off 84 points through the first two hours of trading while the Venture has shed 7 points to 989, about 5 points above its rising 200-day SMA…

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

“We’re going to get aggressive” – those were the first words from Garibaldi Resources Corp. (GGI, TSX-V) President & CEO Steve Reogci in reference to drilling at the Rodadero North Project in central Sonora State where GGI has made a significant high-grade discovery at the Silver Eagle target…there appears to be a strong association between mineralization and silicified structures at Silver Eagle and throughout Rodadero, so GGI is on a trail that has a very good chance of leading them to new drilling discoveries over a broad area…

Click on the arrow to view Part 2 of our discussion with Regoci…more next week on both Rodadero and the Sheslay district…

Discovery Ventures Inc. (DVN, TSX-V) Update

Discovery Ventures (DVN, TSX-V) continues to look very solid…since a confirmed technical breakout above 23 cents in early June, that level has held as important new support with DVN showing an uptick in momentum this week…Discovery has an asset package that we find very compelling – a high-grade Gold-Copper deposit in southeastern B.C. (the Willa) along with impressive mill facilities less than 100 miles away that can process Willa material and accommodate other potential mill feed from the area…much more needs to be done to pull all the pieces of this project together, but the Discovery team has been making steady progress and we see plenty of reasons for interest in this play to remain high…

DVN is off a penny at 26 cents as of 8:30 am Pacific…below is an updated 2.5-year weekly chart….

Calibre Mining Corp. (CXB, TSX-V) Update

We’ve been keeping a close eye on Calibre Mining (CXB, TSX-V) over the last couple of months, due to technical factors and the strength of its projects in Nicaragua, and the companies it has partnered with…

Significantly, it appears CXB will confirm a breakout this week above resistance at 7.5 cents…note the importance of the move in late June above the 2-year downtrend line…

CXB is unchanged at 9 cents as of 8:30 am Pacific…

Cypress Development Corp. (CYP, TSX-V) Update

Cypress Development (CYP, TSX-V) has a lot of shares outstanding (150 million) but it got highly encouraging results from a Phase 1 drill program at its Gunman Project (Zinc-Silver-Copper) in Nevada, and another round of drilling starts later this month…with some of the high grades CYP has been reporting, from surface sampling and drilling, investor interest in this play could accelerate over the coming weeks…

Below is a 10-year monthly chart that puts the “big picture in perspective – strong new support at 3 cents, resistance at a nickel…between 3 and 3.5 cents appears to be the “sweet spot” as an entry point…as always, perform your own due diligence…

CYP is off half a penny at 3.5 cents through the first two hours of trading…

Constantine Metal Resources Ltd. (CEM, TSX-V) Update

Constantine Metal Resources (CEM, TSX-V), which we first mentioned recently when it was still trading under 20 cents, is worthy of our readers’ close attention as the summer progresses…on July 22 the company released results from the first two holes of a 10,000-m drill program at the Palmer VMS Project in Alaska…initial drilling intersected a thick lens of massive sulphides 150 m down dip of the lower edge of the South Wall zone, a major expansion of the zone to depth…hole CMR14-54 returned 22.1 m grading 2.48% Cu, 4% Zn, 24 g/t Ag and 0.39 g/t Au…if additional holes can return even better grades, then CEM could gain a lot more attention…

The current drilling is part of a $6.2-million (U.S.) budget for 2014 financed by partner Dowa Metals & Mining Co. Ltd. of Japan…Dowa is in the second year of an option agreement in which it can earn 49% in the Palmer project by making aggregate expenditures of $22-million (U.S.) over four years…at this early stage, Palmer hosts a 4.75-million-tonne inferred resource grading 1.84% Cu, 4.6% Zn, 0.28 g/t Au and 29 g/t Ag…

Below is an updated 2.5-year weekly chart from John…CEM is trading at levels not since seen 2011, a very bullish sign…note that there is measured Fib. resistance at 21 cents, followed by 31 cents (not shown on this chart), so the narrow trading range in the low 20’s over the past three weeks is not surprising…the 20-day SMA, currently at 21 cents, has been providing rock-solid support since the beginning of June…good potential as the summer progresses…

CEM is up half a penny at 22.5 cents as of 8:30 am Pacific…

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

Grade has traded between $1,308 and $1,321 so far today…as of 7:30 am Pacific, bullion is up $1 an ounce at $1,313…Silver has climbed 9 cents to $19.90…Copper is off slightly at $3.12…Crude Oil is down 68 cents at $96.91 while the U.S. Dollar Index has fallen more than one-tenth of a point to 81.47…

Total global Gold demand in the second quarter fell 16% to 963.8 metric tons, versus 2013’s second quarter, the World Gold Council said this morning in its latest report…demand in Q2 2013 was unusually strong, of course because of the 25% price drop during April-June, which stoked a big jump in metal purchases.  “The second quarter saw a continuation of many of the factors that were in play during Q1: the huge stockpiling of Gold that took place in Asian markets during 2013 was still, to some extent, being digested; the election and import restrictions forestalled Indian consumers; bar and coin investors continue to sit on the sidelines; while jewelry consumers in the U.S. and U.K. were further encouraged by improving economic conditions,” the WGC said in its report…

Jewelry demand fell 30% in the second quarter, to 509.6 tons, versus the second quarter 2013…technology demand fell 3% to 101 tons, and total bar and coin demand was down 56% to 275.3 tons…ETF’s saw outflows of 39.9 tons…however, total investment demand rose 4% year-over-year to 235.4 tons…central bank net purchases were up 28% to 117.8 tons…

Today’s Equity Markets

Asia

Japan’s Nikkei extended gains into a fourth session, climbing 100 points to to hit a one-week high, on the back of a weak yen…China’s Shanghai Composite fell 16 points to finish at 2206…yesterday’s unexpectedly weak growth in July’s investment, retail sales and bank lending, which pointed to vulnerabilities in the world’s second-largest economy, weighed on sentiment…

Europe

European markets are up slightly in late trading overseas…investors appeared to take comfort from “calming words” by Russian President Vladimir Putin…on a visit to Crimea, Putin said that Russia would do its utmost to stop the bloodshed in Ukraine, adding that his country did not need conflict with the outside world…so expect a Russian invasion of Ukraine in the not-too-distant future…

North America

The Dow is up 23 points as of 7:30 am Pacific…the TSX is 35 points higher through the first hour of trading while the Venture has added a point to 1001…John has chart updates on a couple of interesting situations this morning – Critical Elements Corp. (CRE, TSX-V) and NioCorp Developments Ltd. (NB, TSX-V)…tomorrow, we’ll be posting the second excerpt of our interview with Garibaldi Resources Corp. (GGI, TSX-V) President and CEO Steve Regoci…

Venture 5-Year Weekly Chart

It may seem that the Venture is like watching paint dry at the moment, but it’s in this kind of “quietness” when a market can suddenly come to life…the underlying technicals remain very supportive of a breakout to the upside given the incredible support that has been established in the immediate vicinity of the rising 200-day moving average (SMA)…

As you can see on the chart below, the RSI(14) appears to have found support at the rising trendline…if the pattern established over the last year continues, RSI(14) should imminently reverse higher along with the market…buy pressure remains steady…the next Fib. measured resistance is 1057…notice how the 200-day, in the mid-980’s, has provided rock-solid support throughout the year…additional strength is immediately below that around 970…

Updated CRB Chart

The CRB Index, which correlates well with the Venture, got a little ahead of itself in June when it surged above 310, and it has since retreated to strong support around 290…it staged an important breakout through 290 and a downsloping wedge earlier this year…

Critical Elements Corp. (CRE, TSX-V) Update

We’ve been bullish on the prospects for Critical Elements (CRE, TSX-V) since it was trading in the high teens in early June…this morning, the stock hit a new 52-week high of 32 cents following news from the company that its low iron lithium concentrate has been successfully tested by ceramic and glass manufacturers…samples sent to multiple end-users for testing in May all tested positively…Critical Elements will now proceed with plans to diversify its material output featuring at least three different products – tantalum concentrate; low-iron lithium concentrate; and battery-grade lithium carbonate…

Below is an updated 2.5-year weekly chart from John who made an excellent call on the confirmed breakout above 25 cents…what will be interesting now is how CRE handles Fib. resistance at 30 cents, and obviously that’s an issue this morning…RSI(14) is also in overbought territory on this longer-term weekly chart (could remain there for a while), though that’s not the case on the 1-year daily chart…

CRE is up half a penny at 30.5 cents as of 7:30 am Pacific…

NioCorp Developments Ltd. (NB, TSX-V) Update

On Monday, NioCorp Developments (NB, TSX-V) reported its highest assay results yet from its Elk Creek project in Nebraska where it continues to drill a defined resource with a recently added third rig (Niobium has physical and chemical properties similar to those of tantalum, it’s a rare and a soft transition metal primarily used in the production of high grade steel such as that used in gas pipelines)…

Technically, NB has gradually unwound an overbought condition that emerged in May and has been consolidating within a pennant…a breakout at some point above that pennant appears very possible…RSI(14) has reversed higher after appearing to bottom out near the 50% level…looks promising…as always, perform your own due diligence…

NB is up 6 cents at 69 cents as of 7:30 am Pacific…

Agnico Eagle Mines Ltd. (AEM, TSX) Update

The Agnico Eagle Mines‘ (AEM, TSX) chart shows how a strong turnaround has taken hold among producers, at least the companies who have been successful at reducing costs and improving their bottom line…

Note:  John, Jon and Terry do not hold share positions in CRE, NB or AEM.

Gold has traded between $1,304 and $1,316 so far today…as of 8:40 am Pacific, bullion is up $2 an ounce at $1,311…Gold was off slightly during the overnight hours but got a lift on weaker-than-expected U.S. retail sales for July…Silver is off 13 cents at $19.79…Copper has retreated 4 pennies to $3.13, a 7-week low…Crude Oil is down 48 cents at $96.88…the Energy Information Administration said U.S. crude stockpiles surged by 1.4 million barrels in the latest week, at a time when Crude Oil production had averaged an estimated 8.5 million barrels per day in July, the highest level since April 1987…the U.S. Dollar Index is up one-tenth of a point at 81.62…

Given the crisis in Ukraine and deteriorating ties with the West, Russia has been aggressively accumulating Gold reserves…the IMF, in its recently released International Financial Statistics report, showed that the Russian central bank hiked its Gold holdings by 16.8 tonnes to 1,094.8 tonnes in June…between Q1 2009 to Q1 2014, Russia’s Gold reserves almost doubled, while India’s central bank increased its reserves 56% to 557 tonnes… China’s central bank, on the other hand, increased its Gold reserves 75% to 1,054 tonnes when it last stated official reserves in 2009, data showed…it is widely believed that China has accumulated larger – possibly much larger – reserves since…

Today’s Equity Markets

Asia

China’s Shanghai Composite gained a point overnight to close at 2223…in Japan, the Nikkei rebounded from earlier losses to chalk up gains for a third consecutive session, overlooking weak data that showed the economy contracting sharply in the April-June period…Japan shrank an annualized 6.8% in the second quarter, compared with a Reuters forecast for a 7.1% contraction, as a nationwide consumption tax that took effect in April caused household spending to tumble…many economists are sticking with the view that the fall would be temporary…consumption in May and June rose compared to a dismal April…

Europe

European markets were up modestly today, thanks to some upbeat corporate earnings reports…EU industrial production fell 0.3% in June versus May and was unchanged year-on-year…a monthly rise of 0.3% was expected…the EU’s second-quarter GDP estimate is due for release tomorrow and is expected to show a paltry growth rate of 0.1%…

North America

The Dow is up 99 points as of 8:40 am Pacific…U.S. retail sales were unexpectedly flat in July, pointing to some loss of momentum in the economy early in the third quarter…the Commerce Department reported today that retail sales, which had increased 0.2% in June, were held back by a second straight month of declines in receipts at auto dealers, as well as weak sales of furniture and electronics and appliances…July’s reading was the weakest since January…economists polled by Reuters had forecast retail sales, which account for a third of consumer spending, increasing 0.2% last month…

The TSX is up 7 points as of 8:40 am Pacific…Stats Canada surprised the markets yesterday by disclosing that it had made an error in last week’s key jobs report which showed a loss of 59,700 full-time jobs in July, and a gain of 60,000 part-time positions (well short of forecasts for net job gains of about 20,000)…the agency didn’t specify the mistake, saying instead that they would issue a new report this Friday…

The Venture is off a point at 998 as of 8:40 am Pacific…the Index has been trading in a very narrow range this month between its 100 and 200-day SMA’s…in a situation such as this, the rising longer-term SMA is the best clue that the Index is going to break higher…in this case, the 200-day is also accompanied by strong Fib. and exceptional overall chart support…

Graphene 3D Lab Inc. (GGG, TSX-V) has been a stellar performer since its debut Monday following an RTO…GGG is up again this morning, climbing as high as $1.20, after opening Monday at 40 cents…

Canadian Dollar Update

Like Gold, the Canadian dollar enjoyed a strong June before retreating last month when it successfully tested support at 91 cents…it’s now showing signs of perking up again, as shown in John’s 2.5-year weekly chart, which may mean another challenge of strong resistance at 94 cents…it’s too early to tell, but it’s possible an important bottom may have formed in the loonie at 88 cents in mid-March…

Canamex Resources Corp. (CSQ, TSX-V) Update

The market gave Canamex Resources (CSQ, TSX-V) a boost yesterday following an early session trading halt and mid-day news that RC hole B-1436 intersected 9.1 m grading 11.9 g/t Au (0.347 oz/ton Au) at the bottom of the hole from 228.6 to 237.7 m at the company’s Bruner Project in Nevada…the hole was drilled at the open northern extension of the Penelas East zone, and bottomed at 237.7 m in 25.9 g/t Au (0.755 oz/ton Au) material from 236.2 to 237.7 m…this suggests the potential presence of a new, deeper Gold-bearing breccia body…the high-grade zone intersected in hole B-1436 remains open to the west and north…B-1437 was drilled about 50 m to the north of B-1436 with assay results pending from that hole and others in the immediate vicinity…

Technically, what John sees with CSQ is the start of “Wave 5” in a 5-Wave Motive Phase…CSQ has overcome Fib. resistance at 19 cents, so speculation at the very least has good potential to take this higher over the near-term…

Gold Mountain Mining Corp. (GUM, TSX-V) Update

Gold Mountain Mining Corp. (GUM, TSX-V) is certainly worthy of our readers’ due diligence, and it’s also on the radar screen of Frank Holmes after his recent visit to the company’s 100%-owned Elk Gold Property near Merritt…

What’s interesting at the moment is that the company has resumed an open-pit bulk sample test…more than 3,000 tonnes of mineralized material have already been mined, as reported by GUM July 24, and the average grade of the mined material so far is approximately 19.1 g/t Au, representing 1,840 ounces of Gold with an attributed gross value of approximately $2.4-million (U.S.) at $1,300 per ounce…the average Gold grade for the bulk sample material immediately adjacent to the exploration drill holes exceeded the average Gold grade for the 13 drill holes by 4.28 times…

The company stated that the higher Gold grades in the mined bulk sample are believed to be due to the significant amount of pyritic gouge material recovered in many areas of the bulk sample pit that may have been lost during diamond drilling…pyritic gouge material can be washed away with drilling mud, and the Gold associated with the pyrite lost in the core sampling process…this hypothesis will be further tested with continued mining, additional sampling and testing of the mineralized bulk sample material…

Gold Mountain acquired a 100% interest in the 16,700 hectare Elk Project from Almaden Minerals (AMM, TSX) three years ago…at the time, a NI-43-101 Technical Report prepared by SRK Consulting gave a resource calculation of 563,000 ounces in the measured, indicated and inferred categories (200,000 tonnes measured at 8.77 g/t Au; 2,000,000 tonnes indicated at 3.82 g/t Au; 1,150,000 tonnes inferred at 7.13 g/t Au) using a 0.5 g/t and 5.0 g/t Au cut-off for in pit and below pit resources, respectively…exploration drilling by GUM since then has added strike length and depth to the known zones, and new Gold-bearing veins have also been discovered…

Below is an updated 2-year weekly GUM chart…this is quite encouraging and volume could pick up significantly on a potential breakout above resistance at 21 cents…after declining throughout 2012 and 2013, the 200-day moving average (SMA) flattened out at the beginning of this year and has finally reversed to the upside…chart support at 18 cents…

Blackbird Energy Inc. (BBI, TSX-V) Update

Blackbird Energy (BBI, TSX-V) continues to look very promising from a technical standpoint, especially with the formation of a bullish “W” in the RSI(14)…BBI has found strong support at its rising 100-day moving average since early this year with that SMA now at 22 cents (coincides with Fib. support) as you can see in this weekly chart going back to the summer of 2012…BBI has a balanced and growing asset base with producing oil and gas production and exploration and development projects in Saskatchewan and Alberta…as always, perform your own due diligence…

BBI is off half a penny at 25.5 cents as of 8:30 am Pacific…

Note:  Jon holds a share position in GUM.

 

Gold has traded between $1,305 and $1,319 so far today…as of 8:15 am Pacific, bullion is up $7 an ounce at $1,315…Silver is off 3 cents to $19.88…Copper is down a penny to $3.17…Crude Oil is 82 cents lower at $97.26 while the U.S. Dollar Index is up one-tenth of a point to 81.56…again, the Dollar Index and Gold are rising together…

Both the TSX Gold Index and the Venture are technically positioned for bullish moves which suggests Gold may be gathering energy for a near-term breakout through a critical resistance band between $1,320 and $1,330…John has an updated TSX Gold Index chart below…bullion has shown excellent support in the $1,280’s, in the immediate vicinity of its 200-day moving average (SMA)…there’s also plenty of Fib. support in the $1,280’s…

Russia said a convoy of 280 trucks left for Ukraine today carrying humanitarian aid, amid Western warnings against using help as a pretext for an invasion…while geopolitical tensions boil over different parts of the globe, the seemingly disengaged American President – criticized over his confused foreign policy by his ex-Secretary of State, Hillary Clinton – is enjoying a two-week vacation, playing golf at Martha’s Vineyard…the optics are awful, but this can only help Gold…

The U.S. Geological Survey reported yesterday that U.S. Gold production dropped 9% year-over-year from 614,079 troy ounces in May 2013 to 556,207 oz…Nevada led U.S. Gold production for the first five months of this year with 1,990,131 oz, followed by the combined states of Arizona, California, Colorado, Idaho, Montana, New Mexico, South Dakota, Utah, and Washington with 382,593 oz of Gold output…

Today’s Equity Markets

Asia

Asia markets were mostly higher overnight, though China’s Shanghai Composite retreated 3 points to close at 2222…trading was cautious ahead of key economic data to be released tomorrow – urban investment, industrial output and retail sales figures for the month of July…Japan’s Nikkei rose 31 points to finish at 15161…

Europe

European markets were down modestly today as investors weighed corporate releases, data from the euro zone and geopolitical tensions in Ukraine, Gaza and Iraq…in Germany, the country’s widely-watched ZEW index plummeted to just 8.6 points in August (the lowest level since December 2012) vs. 27.1 in July…the ZEW index guages economic expectations…

North America

The Dow is down 40 points as of 8:15 am Pacific…the TSX is up 18 points, bolstered by a higher Gold Index, while the Venture has shed 2 points to 997…

TSX Gold Index Chart Update

The TSX Gold Index is creeping closer to a major technical breakout…the key level to watch is 210…a confirmed breakout above 210 could lead to a rapid acceleration of the Index…the only way this could occur, in our view, is if Gold were to surge through the $1,320-$1,330 resistance band…such an event would also likely cause some significant short-covering in bullion…

As of 8:15 am Pacific, the Gold Index is 4 points higher at 208…

Imperial Metals Corp. (III, TSX) Update

The Financial Post reported this morning that Imperial Metals (III, TSX) doubts the Mount Polley tailings pond breach will result in delaying the start of the Red Chris mine near Iskut…Imperial plans to start production at Red Chris late next month…it has applied for, but not yet received, a permit to discharge waste from the open pit mine…

While last week’s tailings breach was indeed very unfortunate (and avoidable, though bureaucratic delays within the Ministry of Mines may have played a role in not addressing risks at Mount Polley sooner), the real tragedy of this story may turn out to be the shameless sensationalism of the media – in particular certain Vancouver outlets with an anti-mining bias who have pandered to environmental and native groups spreading misinformation…the mining industry in B.C. needs to do a better job in the public relations arena at countering the ignorant, slanderous and misleading statements that have the potential of negatively impacting its image and brand…Imperial as well could have handled this situation more effectively at the outset…

Below is a link to an excellent article on the Mount Polley situation written by geologist Steve Todoruk who’s also a Senior Investment Executive with Sprott Global Resource Investments Ltd. – readers should find this balanced view very informative, and it certainly helps counter the garbage being spewed by the toxic Vancouver tabloids…

Sprott’s Thoughts – Mount Polley

SilverCrest Mines Inc. (SVL, TSX) Update

SilverCrest Mines (SVL, TSX), down 2 pennies at $2.28 in early trading, will report is Q2 financial results after the market close tomorrow…the company has completed the new 3,000 ton per day mill and facilities commissioning at its wholly owned Santa Elena mine in Sonora State, Mexico. “We will continue to adjust and optimize all the components of the facilities in efforts to achieve through-put tonnages at or above the nameplate capacity of 3,000 tpd,” stated Eric Fier, president and chief operating officer. “Our near-term focus now turns to achieving further milestones, including underground stope production in August and free cash flow in Q3 2014.”  Santa Elena is currently transitioning from an open-pit heap-leach operation to a conventional 3,000 tpd conventional mill facility and underground operation…SilverCrest will be extracting production from the first underground stope in August using long hole stoping methods…

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

Sonora State is rich in Silver and Gold deposits, and Garibaldi Resources Corp. (GGI, TSX-V) clearly has a “tiger by the tail” at its 45 sq. km Rodadero North project approximately 120 km of Hermosillo…to the northwest is Yamana Gold Inc.’s (YRI, TSX) Mercedes mine which produced 50,000 Gold equivalent ounces in the first half of 2014, while to the southeast are Agnico Eagle’s (AEM, TSX) La India mine which began commercial production earlier this year, and Alamos Gold’s (AGI, TSX) Mulatos mine…what gives Rodadero even greater potential and credibility is Garibaldi’s track record of success in Mexico and the fact that Dr. Craig Gibson, highly respected in industry circles with some important discoveries under his belt, is overseeing the project…input has also come from Dr. Peter McGaw, founder of Mag Silver (MAG, TSX) who’s also a member of the Garibaldi Advisory Board…

With drilling continuing at Rodadero following a high-grade, near-surface Silver discovery recently reported by Garibaldi, the possibility that this project could imminently become a major new catalyst for GGI cannot be underestimated…Rodadero has scale written all over it in addition to two deposit types already being targeted…if GGI can find structural linkage among even just some of the 11 targets identified to date at Rodadero, as Yamana did among half a dozen or so targets at Mercedes, then Garibaldi could very possibly explode to new all-time highs…what’s also critical to keep in mind regarding GGI is how the La Patilla Gold Property in Sinaloa State and the Grizzly Project in northwest B.C. are also coming together…by itself, the Grizzly has the potential to “change the face” of the company, in the words of President and CEO Steve Regoci, and GGI expects to update investors in the near future with regard to recent progress at the Grizzly…

A few days ago we conducted a 30-minute interview with Regoci, covering everything from Mexico to B.C., and from that we’re creating several short clips which we’ll be posting over the next week…below is the first excerpt – Regoci on the scale, shallowness and styles of mineralization at Rodadero…

Key Points Regarding Silver Eagle & Rodadero

• Very shallow high-grade mineralized system at Silver Eagle (within 50 meters of surface) – open-pit potential;

• Drill holes SE-14-03 and SE-14-06 show that Silver Eagle is widening to the south – still open in all directions;

• Infrastructure advantages – road and water access at Silver Eagle plus power lines running through target;

• Surface sampling and drilling have confirmed hyperspectral data at Silver Eagle;

• 8 targets strike immediately to the south, southeast and east of Silver Eagle as defined by hyperspectral data and sampling;

• High-grade Silver and Gold have been sampled at targets adjacent to Silver Eagle as reported last week;

• Mineralization observed so far at Rodadero could be near-surface expression of robust system(s) at depth;

• More than one potential deposit type at Rodadero;

• Location makes drilling very cost effective – approximately $100 per meter;

• Very limited modern exploration has been carried out at Rodadero – plenty of “blue sky” potential over a large area.

Isaac Newton’s First Law of Motion is that an object in motion stays in motion until acted upon by an outside force…this concept can certainly be applied to the stock market…Garibaldi has been hugely successful in a challenging junior resource sector environment because of the quality of its management and geological team, and their combined abilities to keep GGI in motion – on the ground and in the market…that motion is accelerating with no outside force in sight to stop it…that puts GGI in an elite category, the reason it has performed so incredibly well over the past 12+ months…

Reservoir Minerals Inc. (RMC, TSX-V) Update

A fantastic discovery story we’ve been following for many months is Reservoir Minerals (RMC, TSX-V) which is enjoying tremendous success with its Timok Project (100%-owned permits and JV’s) in Serbia…the company is well-capitalized with over $40 million in its treasury as of the end of May…

Technically, RMC currently appears to be in the “sweet spot” around $6 a share…you can see in this 2.5-year weekly chart how overbought RSI(14) conditions that emerged early this year have unwound to the 50% support level…in addition, the rising 200-day SMA is also providing strong support…buy pressure (CMF) is beginning to pick up again and the ADX indicator confirms a bullish overall trend…RMC is certainly a take-out candidate down the road if their success with Timok continues…

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

Yet another discovery play with great exploration upside – North American Nickel Inc. (NAN, TSX-V)…drilling continues at NAN’s 100%-owned Maniitsoq Nickel-Copper-Cobalt-PGE project in southwest Greenland…one drill rig is focused on the the Imiak Hill conduit complex (IHCC) while a second drill rig is now testing regional exploration targets…a total of 3,000 m of exploration drilling is planned to test approximately 15 widely spaced targets located throughout the Maniitsoq property…

Technically, it was encouraging to see NAN hold important support recently in the mid-to-upper 40’s as John suggested it would…that was a normal retrace from the 52-week high of 65 cents, and it also cleansed the temporarily overbought RSI(14)…there is measured Fib. resistance at 72 cents, not a price target – just a theoretical level based on Fib. and technical analysis…

NAN is up 3 cents at 53 cents as of 8:15 am Pacific…

Fission Uranium Corp. (FCU, TSX-V) Update 

Interesting news yesterday from Fission Uranium (FCU, TSX-V)…it has discovered anomalous radioactivity with exploration hole PLS14-255, approximately 17 km southeast of the main discovery where high-grade mineralization has been outlined along a 2.24-km strike length…PLS14-255 is also just 330 m north of Fission 3.0’s (FUU, TSX-V) Clearwater West property, where exploration work, including Fission 3.0’s patent-pending airborne survey, has identified several high-priority basement-hosted conductive anomalies and co-incidental and possibly related surface radiometric anomalies…

Fission continues to churn out excellent results at PLS, and the possibility of a bigger fish eventually swallowing Fission seems inevitable…

Technically, the recent reversal in the 50-day SMA was a clue that was a fresh advance was in the making…the chart looks very strong…Fib. resistance levels range from $1.32 to $1.46…

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

Gold has traded between $1,304 and $1,312 so far today…as of 6:40 am Pacific, bullion is down $1 an ounce at $1,308…Silver is up a nickel at $19.96 (see updated Silver charts below)…Copper is unchanged at $3.18…Crude Oil has added 23 cents a barrel to $97.88 while the U.S. Dollar Index is flat at 81.45…

Gold is coming off its best week in a month-and-a-half as geopolitical tensions fueled demand for the precious metal as a safe haven…Gold traders have also turned the most bullish since January, according to a Bloomberg survey…the recent appetite for Gold is encouraging as it coincides with a strong U.S. dollar, defying the historically negative correlation…the greenback hit a 9-month high last week…at times of rising inflationary expectations, like 1993, the negative correlation doesn’t always hold, however…on that note, the Citicorp Inflation Surprise Index has staged an upturn from a cyclically-low level, which historically bodes well for higher Gold prices even in the face of a firmer U.S. dollar…

ETF Gold holdings rose by just under 1% in July from a 4-year low in June…the increase was the largest-monthly gain since late 2012, and halted a 3-month decline…Gold ETF holdings are down 1.6% year-to-date as outflows have slowed dramatically this year…

The U.S. and global recoveries have been “disappointing” so far and may point to a permanent downshift in economic potential, U.S. Federal Reserve Vice Chair Stanley Fischer said today…in an overview of the years since the 2007-2009 financial crisis and recession, Fischer said a slowing of U.S. productivity, declining labor force participation and other factors may have hindered the United States’ ability to generate economic growth…the same thing may be happening for different reasons in Europe, major emerging economies like China, and elsewhere, he said, forcing central bankers to reassess their understanding of inflation, employment and growth in general…

Hillary Clinton, President Barack Obama’s first secretary of state, dramatically distanced herself from the President’s approach to foreign policy in an interview published yesterday.  “Great nations need organizing principles, and ‘Don’t do stupid stuff’ is not an organizing principle,” Clinton told The Atlantic’s Jeffrey Goldberg, knocking the Obama administration’s foreign policy…

Today’s Equity Markets

Asia

Japan’s Nikkei average snapped a 7-day losing streak overnight to rake in its biggest daily gain in four months…the Nikkei climbed 352 points or 2.4% to close at 15130…China’s Shanghai Composite was also strong today, climbing 30 points to finish at 2225…Chinese consumer price inflation stayed at 2.3% year-on-year in July, according to official data released on Saturday…global investors have been net buyers of Chinese equities for the past nine weeks, with a total $6.6 billion injection…this comes in response to various signs of favorable economic policy and potent political leadership on top of low absolute and relative stock valuations, a distinct reversal from $3.6 billion net redemptions in 2013…

Europe

European markets are up sharply in late trading overseas…

North America

The Dow is 41 points higher through the first 10 minutes of trading today…over 85% of S&P 500 firms have now reported their second-quarter results…so far, the earnings-per-share (EPS) beat:miss ratio is running at a solid rate of around 3:1, according to Deutsche Bank…

The TSX is up 53 points while the Venture has added 2 points to 999 as of 6:40 am Pacific…

Venture 3-Year Weekly Chart

The Venture 3-year weekly chart has been an extremely reliable guide over the past year, and you’ll notice in this update that RSI(14) has touched the uptrend line just like it did in December before the Index blasted off to the upside…

Copper Mountain Mining Corp. (CUM, TSX) Update 

Copper Mountain Mining (CUM, TSX) this morning reported net earnings of $9.5 million or 8 cents per share in the second quarter, thanks to record production at the Copper Mountain Mine in B.C. totaling 19.9 million pounds of Copper, 5,000 ounces of Gold and 113,300 ounces of Silver…Q2 production was up 27% over the same period last year, marking the seventh consecutive quarter of increased Copper output…CUM is up a nickel at $2.87 as of 6:40 am Pacific…

Calibre Mining Corp. (CXB, TSX-V) Update

Calibre Mining (CXB, TSX-V) is very active with excellent geological prospects in Nicaragua including the Eastern Borosi Project which was recently optioned by Iamgold Corp. (IMG, TSX)…Eastern Borosi hosts Gold-Silver resources in two deposits and a series of well-defined low-sulphidation epithermal Gold-Silver targets…a 3,400-m drill program is in progress as announced July 14…the series of drill targets represent more than 3 km of potential Gold-Silver-bearing structures within the tens of km’s of potential structures which have been identified within this prolific district…

Early last month, CXB provided an encouraging update with regard to its Minnesota Gold Project JV in Nicaragua with B2Gold Corp. (BTO, TSX)…B2Gold also increased its equity ownership in CXB to approximately 15.2% by exercising common share purchase warrants for proceeds to Calibre of $500,000…

Technically, John noted how CXB broke out above a 2-year downtrend channel near the end of June – a very bullish development…RSI(14) at 65% continues to climb an uptrend line on this weekly chart, and a breakout above 7.5 cents now appears to be unfolding…CXB is up 1.5 cents at 9 cents as of 6:40 am Pacific…

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

With an early-stage high-grade discovery in Mexico as Phase 2 drilling begins, and exciting possibilities at the Grizzly in northwest B.C., the Garibaldi Resources Corp. (GGI, TSX-V) “engine” is switching into high gear just in time for a traditionally strong period for junior resource stocks…tomorrow, we’ll be posting the first excerpt of our interview with GGI President and CEO Steve Regoci…

Last week’s results from the Silver Eagle target at Rodadero North suggest this project may have some “very long legs”, according to Regoci, especially if targets can be structurally linked…that’s what occurred to the northwest at Yamana Gold Inc.’s (YRI, TSX) producing Mercedes mine (50,000 Gold equivalent ounces through the first half of 2014)…Rodadero is situated strategically between Mercedes, 140 km to the northwest, and two other producers approximately 90 km to the southeast – Agnico Eagle Mines’ (AEM, TSX) La India mine (commercial production began in February) and Alamos Gold’s (AGI, TSX) Mulatos mine…given the prolific nature of Sonora State for both Gold and Silver deposits, it wouldn’t be surprising if some bigger “fish” are keeping a close eye on developments at Rodadero…

Rodadero has scale (45 sq. km) plus shallow high-grade mineralization as demonstrated by the “truth machine” – the drill rig…that’s a recipe for success not only on the ground, but in the market…the Garibaldi team, led in the field by the highly respected Dr. Craig Gibson, has a proven track record in Mexico…the company’s proprietary hyperspectral remote sensing data allowed it to cash in big on a property in early 2009, and it has been very effective in targeting mineralization at Silver Eagle and elsewhere at Rodadero…

Two Fascinating GGI Charts

There are only two measured Fib. resistance levels (upper 30’s and around 60 cents) separating GGI from a powerful technical breakout to a new all-time high, and Rodadero could be like adding gasoline to this year’s continuous fire…Garibaldi surged 47% in Q1 and another 36% in Q2 thanks to positive developments at the Grizzly, La Patilla and Rodadero…there is no cheap paper holding this stock down like other plays – no significant financing has been carried out in more than five years…the share structure is conducive to a healthy and robust market for this company’s shares…

This long-term chart shows a powerful uptrend support line, a bullish trend gaining strength (ADX indicator), and RSI(14) at a modest 63% which allows for plenty of more upside…often in a bullish situation like this, RSI(14) will climb well into overbought territory (above 70%) and remain there for a while as it with GGI back in 2006 when it soared from current levels to 90 cents…

GGI Seasonality Chart

Historically, Garibaldi shows a pattern of stronger second half performance, closing higher in an increasing number of months from August through the end of the year…the current dynamics on the ground suggest we’ll see a continuation of this historical pattern…

Kaminak Gold Corp. (KAM, TSX-V) Update

This is a highly interesting chart, an update of the one we provided last week on Kaminak Gold Corp. (KAM, TSX-V)...KAM staged an important breakout earlier this year above a long-term downtrend line, followed by the completion of an inverted head and shoulders bottom…

Watch for a potential breakout above the neckline which could come at anytime now…if such a scenario were to unfold, KAM could accelerate very quickly to the indicated measured Fib. resistance…

Kaminak recently closed a $13.5 million financing (Ross Beatty was one of two placees) and also commenced a feasibility study for its Coffee Gold Project in the Yukon…results are pending from the 2014 Phase I drill program which has tested some of the greater than 20 kilometres of Gold-in-soil anomalies outside of the current resource area…depending on the numbers from Phase 1, a Phase 2 drill program is possible this quarter…  

KAM is unchanged at $1.02 as of 6:40 am Pacific…

Silver Short-Term Chart Update 

This 6-month daily chart shows how extreme RSI(2) conditions in Silver persisted for most of June with a healthy unwinding of that overbought situation in recent weeks…in fact, RSI(2) plunged into extreme oversold territory recently at just 4% and now sits at 29%…a strong Fib. support band between $19.50 and $20.00 is expected to hold…a reversal to the upside can’t be far off…

Silver Long-Term Chart Update

Silver has broken out above one important downtrend line which should now provide strong support…RSI(2) closed last week at 38% – notice the higher lows in this indicator over the past year…

Also note how the SS is moving up from a low bullish “W” while the ADX indicator shows the growing potential for a bullish +DI/-DI crossover this quarter…bottom line – Silver looks highly attractive around the $20 level…

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

TSX Venture Exchange and Gold

It was a lackluster week for the Venture but the Index recovered after touching an intra-day low of 989.55 Thursday to finish the week down just 4 points at 997.  An uptick in both the RSI(14) and buy pressure as shown by the ADX indicator in the 6-month daily chart demonstrates how the Venture is backed by a massive wall of technical support in the immediate vicinity (plus or minus 10 points) of the rising 200-day moving average (SMA) at 981.  This support is so strong because it was resistance for a considerable period last year and has been tested successfully on various occasions since March.

We’ll follow this chart closely in the days ahead.  As soon as the Index breaks above the short-term RSI(14) downtrend line, that would be the signal that the July-early August weakness has run its course and a sustained move higher can begin.  While this market has been like watching paint dry in recent weeks, the underlying technical strength is very evident and points to an important Q3 breakout above the 1050 resistance.

Venture 5-Year Weekly Chart

Understand the primary trend, key support and resistance areas, and stay focused on the “Big Picture” which remains very positive for the Venture. Below is the updated 5-year weekly chart with a Gold comparative.  Note the string of higher lows the Venture has made since bottoming at 859 in June of last year.

RSI(14) on this 5-year weekly chart is once again testing the uptrend line (very healthy) around 50% which should continue to hold as support after serving as resistance since mid-2011 (major trend change).  A modestly overbought condition in the RSI that emerged in March when the Index hit 1050 has gradually unwound to this new support.

The Q2 decline that took the Venture to superb support at 968 May 20 came on light volume, and accumulation (CMF indicator) remains steady and strong – the most extended period of healthy accumulation we’ve seen, actually, in a few years.  This is a very bullish dynamic, and includes a recent +DI/-DI crossover.  Those who gave up on this market during the 8% retreat from 1050 made a profound miscalculation.  Astute investors have a great chance to cash in big over the next two to three months in particular before the possibility of a more substantial correction during Q4.

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 in 2013 is that it forced producers (at least most of them) to start to become much more lean in terms of their cost structures. Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their their overall operations. 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 carry out exploration or put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists (technology has made it easier for groups opposing mining projects to organize and disseminate information, even in remote areas around the globe). Ultimately, all of 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, grades have fallen significantly just over the past decade.

Gold

Much to the frustration of the bears, Gold is stubbornly holding important support around $1,280 despite strength in the U.S. dollar.  Geopolitical tensions appear to have put a strong floor underneath the price of Gold, and we’re also quickly approaching the traditionally bullish month of September when physical demand from Asia almost always kicks in.

Gold gained $15 last week to close at $1,309.  A key resistance band exists between $1,320 and $1,330.  A sustained breakout above that area would really put the bears on the defensive.

Silver fell 39 cents last week to close at $19.91 (John will have updated Silver charts tomorrow morning as usual).  Copper fell 3 pennies to close at $3.21.  Crude Oil was relatively unchanged, finishing at $97.65.  The U.S. Dollar Index gained nearly one-tenth of a point to 81.40.

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 and will continue to support prices.   Despite Gold’s largest annual drop in three decades in 2013, the fundamental long-term case for the metal remains solidly intact based on the following factors:

• Growing geopolitical tensions, fueled in part by a highly dangerous and expansionist Russia under Vladimir Putin, have put world security in the most precarious state since World War II;
• Weak leadership in the United States and Europe is emboldening enemies of the West;
• Currency instability and an overall lack of confidence in fiat currencies;
• Historically low interest rates, a Fed balance sheet at more than $4 trillion (still expanding), and money supply growth around the globe;
• Signs of increasing inflation;
• Continued strong accumulation of Gold by China which intends to back up its currency with bullion;
• Massive government debt from the United States to Europe;
• Continued net buying of Gold by central banks around the world;
• Flat mine supply and a sharp reduction in exploration and the number of major new discoveries.

Deflationary concerns around the globe and the prospect of Fed tapering had a lot to do with Gold’s plunge during the spring of 2013 below the technically and psychologically important $1,500 level, along with the strong performance of equities which drew “momentum traders” away from bullion.  The June 2013 low of $1,179 was the bottom for Gold.  Extreme levels of bearishness emerged in the metal last year.  With the long-term bull market remaining intact, we expect new all-time highs in Gold as the decade progresses.  Inflationary pressures should eventually kick in around the globe after years of ultra-loose monetary policy and the reluctance of central banks to increase interest rates.