Gold has traded between $1,170 and $1,181 so far today…as of 9:30 am Pacific, bullion is down $4 an ounce at $1,174…Silver is up 3 cents at $15.87…Copper has retreated 2 pennies to $2.60…Crude Oil is down 83 cents at $60.18 while the U.S. Dollar Index has added nearly one-tenth of a point to 95.42 (see updated Crude and Dollar charts below)…

Reuters reported this morning that China is expected to receive approval from its central bank for a yuan-denominated Gold fix “anytime now”, with more details about the scheme potentially set to emerge at a major industry conference this week…

The world’s top Gold producer and its biggest consumer wants to be a price-setter for bullion and is asserting itself at a time when the global dollar-denominated benchmark, the century-old London fix, is under scrutiny for alleged price-manipulation…

If the yuan fix takes off, China could compel buyers in the mainland and foreign suppliers to pay the local price, making the London fix less relevant in the world’s biggest bullion market…however, given the yuan is not fully convertible, the two fixes could exist side by side globally…

Crude Oil Update

A U.S. government report this morning showed that Crude inventories fell more than expected for an 8th straight week…

Interesting chart for WTIC which continues to perform according to script…there seems to be little doubt, as we speculated in the spring, that Crude put in a double bottom in March just above $42 a barrel…the recovery since then has encountered resistance as expected in the low $60‘s, while the rising 50-day moving average (SMA) – currently $59.01 – has been providing strong support which is also solid in the mid-$50‘s (Fib. and chart)…

As you can see below, key levels to watch are between $62 and $64…WTIC has not been able to sustain a price above $62 since the beginning of May…$63 is the 200-day SMA while $64 is a Fib. level…there’s a real possibility WTIC could surprise many traders and run further to the upside (into the mid-to-upper $70’s) if the $64 level is cleared…this could happen if supply-demand dynamics continue to improve, and if the U.S. Dollar Index comes under renewed pressure…

U.S. Dollar Index

As Crude Oil formed a double bottom in the spring, the U.S. Dollar Index completed a double top along with a head and shoulders reversal pattern (RSI and price)…note how the Dollar Index in late April broke below the uptrend line (now resistance) in place since last summer…

The Dollar Index closed yesterday at its declining 50-day SMA…near-term, it could push modestly above that before encountering stiffer resistance around 97–98…the key “takeaway” is that the 2nd half of this year is not going to be a repeat of last year’s sizzling move to the upside – if anything, the dollar is poised to trend lower over the coming months, and that has favorable implications for commodities and the Venture…

Today’s Equity Markets

Asia

Japan’s stock market rose to its highest level in more than 18 years overnight, buoyed by optimism that Greece is moving closer to a bailout deal with creditors, while China shares continued to gain their footing following a volatile streak…

The Nikkei ended up 0.3% at 20868, its highest close since December 5, 1996…the Shanghai Composite, meanwhile, soared 2.5%…

Differences remain between Greece and its lenders, but progress has been made in talks on an agreement that would stop the country from defaulting and possibly leaving the euro zone…

Europe

European markets were mixed today…

North America

The Dow is down 105 points as of 9:30 am Pacific amid discouraging developments in the Greek debt talks…

The U.S. economy contracted less than previously thought in Q1 while it struggled with bad weather, a strong dollar, spending cuts in the energy sector and disruptions at West Coast ports…the Commerce Department stated this morning that GDP fell at a 0.2% annual rate in the January-March quarter instead of the 0.7% pace of contraction it reported last month…a stronger pace of consumer spending than previously estimated accounted for much of the upward revision…consumer spending, which accounts for more than two-thirds of U.S. economic activity, was revised up to 2.1% from the 1.8% growth rate reported last month…

TSX Chart Update

In Toronto, the TSX has climbed another 66 points to 14971 as of 9:30 am Pacific after triple digit gains Monday and yesterday…as this 6-month daily chart shows, the TSX is threatening again to push above a downsloping channel…15000 is really a key area to watch…a confirmed breakout above 15000 would be encouraging but the TSX would then have to deal with resistance at its declining 50-day SMA which is currently 15100…Fib. support held recently at 14554…

The Venture has added 1 point to 684 through the first 3 hours of trading…

Walker River Resources Corp. (WRR, TSX-V) Update

Accumulation has picked up in Walker River (WRR, TSX-V) in recent sessions, which leads us to believe the company is getting close to commencing drilling at its Lapon Canyon Gold Property in Nevada…the last update from the company was June 9…exploration work began in April and 6 drill targets have been identified, with planned drill hole lengths varying from 150 to 400 m…

Visible Gold has been noted in 2 different locations in the upper adit of the Lapon Rose Zone (1 of at least 4 shear zones at Lapon Canyon), the site of underground development…this shear zone shows a minimum strike length of 4 km, has a width of over 60 m and a vertical extent of at least 650 m…high-grade mineralization is hosted in what appears to be a quartz monzonite intrusive…this is a system that has clearly been under-explored, for a variety of factors, and offers excellent potential for early drilling success, especially down-dip from historic workings…

Below is an updated 2-year weekly WRR chart…this has several very favorable aspects to it including the RSI(14) pattern and a 50-day SMA that is now flattening out just above 3 cents…immediate resistance is 3.5 cents…

UrtheCast Corp. (UR, TSX) Update

High-flying UrtheCast Corp. (UR, TSX) is smartly capturing the benefit of the masses jumping on the bandwagon with this play as the company announced yesterday an increase in its bought deal offering to $86.5 million (21,625,000 subscription receipts at a price of $4 per subscription receipt)…

Amazing video, satellite imagery, and cool software – certainly the recipe for a hot stock and a potentially very profitable business…if you haven’t visited the company’s web site yet, check it out – Urthecast.com…

Technically, very overbought conditions have emerged in UR – so there’s sure to be a cooling off period in the not-to-distant future…that may not happen, though, until the next measured Fib. resistance level ($5.60) is hit…

UR is off 22 cents at $4.53 as of 9:30 am Pacific…

Macro Enterprises Inc. (MCR, TSX-V) Update

How many Venture companies have posted 15 consecutive profitable quarters, as Macro Enterprises (MCR, TSX-V) has?…if you’re bullish on the Oil and gas sector for the 2nd half of 2015, and British Columbia, then you ought to put MCR on your radar screen…

As John’s recent charts pointed out, the $2.40 to $2.50 area was an ideal accumulation zone for MCR which posted Q1 net income of $1.4 million or 5 cents per share…this was achieved despite a 66% drop in revenue from 2014′s record 1st quarter, which demonstrates how activity has slowed in the Oil and gas industry – particularly in Alberta where there is also now the added uncertainty of a socialist NDP government which is guaranteed to damage business confidence and scare capital away to other jurisdictions…

As part of its overall strategy, MCR is seeking out pipeline and facilities construction contracts in connection with the LNG projects being planned in B.C., an industry that is anticipated to bring substantial economic activity to the province over the next 30 years…Macro has completed bid processes and has entered into discussions with LNG project owners regarding future pipeline and facilities construction…a stronger emphasis on B.C. is a wise move on MCR‘s part…

Note the increasing buy pressure and how the MA(40) – the 200-day SMA on this weekly chart –  is flattening out and preparing to reverse to the upside…this bodes well for a strong second half of 2015 for MCR…exceptional support between the Fib. $2.43 level and the rising 50-day SMA at $2.75 ($2.82 on this weekly chart)…

MCR closed at $2.91 yesterday…

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

Gold has traded between $1,176 and $1,188 so far today…as of 7:00 am Pacific, bullion is off $6 an ounce at $1,180…Silver has fallen 30 cents to $15.87…Copper has added 3 pennies to $2.59…Crude Oil has slipped 60 cents to $59.78 while the U.S. Dollar Index has surged more than a full point to 95.47…

Last week, Gold buyers were once again overwhelmed by short sellers as Gold speculative net length dropped for the 4th consecutive week, according to the latest data from the Commodity Futures Trade Commission…

“You’ve got a patient who’s dying of cancer and we basically just fluffed his pillow,” commented one analyst this morning on the situation with Greece where there are signs of progress as negotiations continue…this morning, the ECB raised the limit on emergency funding to Greece for a 3rd consecutive day after reviewing a proposal from Greek leaders…this arrangement offers nearly 8 billion euros in fiscal concessions in order to close a funding gap…most of that would come from tax increases on the wealthy and businesses, rather than from spending cuts…

Today’s Equity Markets

Asia

A wild ride overnight for China’s Shanghai Composite…early in the session, the index shaved off as much as 214 points to hit its lowest level since May 29 following release of the flash HSBC/Markit Purchasing Managers’ Index for June…the flash PMI rose to 49.6, slightly exceeding most analysts’ expectations, but it still remained in contraction territory…the Shanghai recovered and finished the day up 97 points or 2.2% at 4572…

Below is an interesting 15-year weekly chart comparing the Shanghai with the price of Gold…since mid-2009, the two have generally had an inverse relationship as opposed to a close correlation during the previous 3-and-a-half years (why, exactly, who knows)…

Gold bulls can take some comfort in the fact that despite the massive move in Chinese equities since late 2014, which has drawn some interest away from precious metals, and the surge in the U.S. dollar from last summer to the spring of this year, bullion has managed to hold its ground near $1,200 an ounce…

CRB Index Updated Chart

There’s a strong correlation between the CRB Index and the Venture, and there’s also compelling technical evidence that the CRB hit an important bottom early this year at 206 given extreme oversold RSI(14) conditions that emerged on this 10-year monthly chart…in addition, the -DI indicator appears to have peaked, has formed a bearish “M” and is now moving lower…

Note the large gap between the CRB’s current level (223) and its long-term downtrend line…a rally to the top of that trend line over the next 12 months is certainly a very good possibility…given historical patterns and its current technical posture in this “Big Picture” chart, the CRB’s upside potential through the balance of this year appears to outweigh its downside risk…market tops and bottoms only occur when there is overwhelming bullishness or bearishness, and we’ve seen extreme levels of bearishness with regard to commodities during the first half of 2015…

Europe

European markets are generally up strongly in late trading overseas as hopes rise that the Greek crisis will sort itself out…

“I think there is a tremendous misunderstanding of the Greek situation in the financial market and people are pretending or acting that it is much more important than it is,” commented Jeffrey Christian, director for CPM Group, a New York-based commodities research firm.  “At some point it will be resolved and it will be resolved in a mutually dissatisfactory way, that is the way debt restructuring talks work out,” he explained.

Flash data released this morning morning showed that the composite PMI for the euro zone in June rose to 54.1, up from 53.6 in May – a 49-month high for the index by Markit that surveys activity in the region’s services and manufacturing industries…

North America

The Dow has added 53 points after the first 30 minutes of trading today…a gauge of U.S. business investment spending plans rebounded in May, offering a tentative sign of stabilization in the manufacturing sector after activity weakened sharply early this year…

In Toronto, the TSX has jumped 112 points while the Venture is off 1 point at 681 as of 7:00 am Pacific…

Security Devices International Inc. (SDZ, TSX-V)

An interesting non-resource play worthy of our readers’ due diligence – Security Devices International (SDZ, TSX-V) which closed a $2.5 million (U.S.) financing yesterday…SDZ is a defense technology company specializing in the development, manufacturing and sale of innovative, next generation less-lethal ammunition serving the corrections, law enforcement and military sectors…

President and CEO Gregory Sullivan stated in a news release yesterday, “The significance of this financing, being to a sole investment entity, demonstrates their belief in SDI‘s products and validates our business model as we move forward with continued market penetration. This financing will assist SDI in moving into the next stage of our growth and expansion phase. We look to increase our global customer base, giving military, law enforcement and correctional service agencies worldwide the ability to seek alternatives to violent encounters.”

Technically, SDZ has been under strong accumulation since last summer and has been following an uptrend line since the beginning of the year…a push through the 50-cent level would be bullish…a close below the uptrend line would be bearish…strong support (Fib. and the rising 200-day SMA) in the mid-30‘s…

Tribute Pharmaceuticals Canada Inc. (TRX, TSX-V) Update

John’s last chart update on Tribute Pharmaceuticals (TRX, TSX-V) was June 4 when it was trading around $1.30 after a powerful breakout from a pennant formation and a bullish “W” in the RSI(14) which is now well into overbought territory at 86%…

TRX climbed as high as $2.28 yesterday on total volume (all exchanges) of more than 2 million shares…it has risen for 9 straight sessions and overshot Fib. resistance at $2.09…be careful here…this is not a time to chase TRX but to lock in profits if you jumped in around John’s breakout point…

TRX is off 14 cents at $2.08 as of 7:00 am Pacific…

New Gold Inc. (NGD, TSX) Update

Massive short position in New Gold (NGD, TSX) which continues to traverse in a downsloping channel with Fib. support at $3.35 followed by chart support at $2.50…at some point this will likely recover strongly, but a “capitulation” moment has not occurred here yet…

NGD is off 3 cents at $3.63 as of 7:00 am Pacific…

Integra Gold (ICG, TSX-V) Introduces The Gold Rush Challenge

$1 Million Up For Grabs

Integra Gold (ICG, TSX-V) has taken a page out of Goldcorp’s (G, TSX) playbook from 15 years ago and has introduced “The Gold Rush Challenge” which will award a total of $1 million CDN (in various categories) for individuals who come up with the highest probability locations (voted by the company and the competition’s board of advisers) for a major new Gold discovery at the company’s past producing Sigma/Lamaque mines in northwest Quebec, immediately adjacent to its Lamaque South Project…Integra has already made significant headway in raising the award money through sponsorships and plans to announce the winners next March in Toronto at PDAC…

Integra is in the process of verifying and digitizing additional information for Sigma/Lamaque which it expects to release to contestants in September via a special web site…Integra says that to its knowledge, no mining company has ever released such a large amount of proprietary information to the public before…as highlighted in a news release last week, the company believes there is a wealth of potential Gold exploration targets that are expected to be generated as a result of this unprecedented digital database that spans more than 75 years of history…

Online prospectors will need to analyze and interpret the data to come up with a plan on where they think Integra has the best chance of making a major discovery…further details on what specific types of submissions the company is looking for will be announced prior to the database being made public in September…

In October last year, Integra completed the acquisition of the Sigma/Lamaque mine and mill complex and in doing so became the owner of 6 terabytes of historical mining and exploration data in a digital format…the company has spent the last 6 months compiling this information which, once completed, will be released to the public in one consolidated database…the data dates back to 1933 and includes over 30,000 historic drill holes, more than 50,000 Gold assays, hundreds of km of mined underground workings, other mining statistics and photos…

Integra’s “Gold Rush Challenge” is inspired by the famous “Goldcorp Challenge”…in 2000, Goldcorp’s then-chief executive Rob McEwen released all the company’s geological data for the Red Lake Gold mine online, and invited the public to provide advice on drilling targets…ultimately, the advice helped Goldcorp make some key discoveries at Red Lake, which is still thriving today…the prize money paid out was slightly more than $500,000, a bargain compared to what Goldcorp got…

Meanwhile, earlier this month, Abitibi Royalties (RZZ, TSX) launched an online platform called the “Abitibi Royalties Search”…the web site invites cash-poor junior mining companies to submit data on their projects…if Abitibi likes what it sees, it will cover the cost of the claim fees and taxes on the project, which may be unaffordable for the struggling miners…in return, Abitibi receives a permanent royalty…

Turning Visible Gold Into Invisible Gold

Visible Gold Mines‘ (VGD, TSX-V) President and CEO Martin Dallaire has provided a glowing example of why investors have lost so much faith in the junior resource market…below is a sentence from the company’s news release yesterday which tried to explain how 20 drill holes failed to come up with a single economic intersection from the area of the much-hyped highly mineralized Gold boulders discovered along provincial road 67 (VGD‘s Extension 67 Property) in northern Quebec…

“As Visible Gold Mines cannot guarantee the origin of some of the boulders collected on the 167 property and in order to avoid any potential contamination of samples collected to date, caused by the significant work done during the construction of the new 167 provincial road or caused by any other source, the prospecting team will focus on prospection and exploration of outcrops and boulders located farther away from areas which may have been contaminated. Visible Gold Mines believes that the outcrop sampling method will provide more accuracy on the origin of the samples, which is not the case with boulders that can come from different sources, even sources external to the property.”

The origin of those boulders – yes, that’s a good question…

In about a year, VGD‘s stock price went from a low of 1.5 cents to a high of 26.5 cents on “rusty” boulders which even drew in Rob McEwen and Ned Goodman as major new investors of VGD…

We wonder how excited they are today…

Note:  John, Terry and Jon do not hold share positions in SDZ, TRX, NGD, ICG or VGD.

Gold has traded between $1,181 and $1,200 so far today…as of 9:30 am Pacific, bullion is down $17 an ounce at $1,183…Silver is up 4 cents at $16.12…Copper is flat at $2.56…Crude Oil is 27 cents lower at $59.34 while the U.S. Dollar Index is up one-fifth of a point at 94.25…

The U.S. Oil rig count fell by 4 to 631 in the latest week, according to Baker Hughes Inc., marking the 28th straight week of declines…the number of drilling rigs, which is a proxy for activity in the Oil industry, has fallen sharply since Crude prices headed south last year…there are now about 61% fewer rigs working since a peak of 1,609 in October…

The latest Gold withdrawals figure from the Shanghai Gold Exchange (SGE) are encouraging – just over 46 tonnes for the week ending June 14 which is a solid figure for this time of year when seasonality factors are taken into account..half-year Chinese Gold demand as represented by SGE withdrawals is comfortably heading for a new record at well over 1,100 tonnes or more…

China continues to be the world’s largest buyer of Gold as Chinese authorities continue to work toward establishing the renminbi as a reserve currency…

Gold 20-Year Weekly Chart

This 20-year weekly Gold chart shows a very interesting RSI(14) pattern that could foreshadow a significant upside move in Gold at some point during the 2nd half of this year…RSI(14) has gradually been trending higher since mid-2013 and is working within a symmetrical triangle as you can see below…a breakout above the triangle would be a very bullish development…

Note the flag formation as well…resistance at the top of the flag ($1,300) and also at the declining 1,000-day moving average (SMA) at $1,445…

Today’s Equity Markets

Asia

After suffering its worst week in 7 years, China’s Shangai Composite tumbled again today as it fell another 304 points or 6% to close at 4481 – a healthy correction from very overbought technical conditions that were clearly evident in recent charts…

Japan’s Nikkei average climbed more than 1% overnight to close at its highest level in nearly 2 weeks…

Europe

European markets were sharply higher today as a deal between Greece and its creditors looked to be edging closer…the equity surge came as crucial meetings among euro zone leaders and finance ministers continued to discuss new reforms offered by Greece to its creditors…

North America

The Dow is up 94 points as of 9:30 am Pacific…U.S. home resales surged to a 5-1/2-year high in May as first-time buyers piled into the market, the latest indication that housing and overall economic activity were gathering steam in the 2nd quarter…

In Toronto, the TSX has shot up 125 points while the Venture is up a point at 685…

Richmont Mines Inc. (RIC, TSX) Update

Richmont Mines (RIC, TSX-V) is holding steady today despite the fall in the Gold price, another indication how strong this producer is…

Richmont has become an earnings machine and is also benefiting from the weak Canadian dollar…Q1 2015 net earnings were $4.6 million, or 9 cents per share, against a Q1 2014 net loss of $1.9 million, or negative 5 cents per share…Q1 revenues were $37.2 million vs. $29.5 million during the same period last year…

Richmont’s accelerated development of its Island Gold Mine in northern Ontario is on schedule and on budget, while RIC’s Quebec assets performed robustly during Q1 with cash costs and all-in-sustaining costs less than expected…

The company has maintained 2015 production guidance of 77,000 to 88,000 ounces, but our guess is that they will beat those expectations…Richmont had $71 million in cash ($1.22 per share) at the end of March and long-term debt of only $5.2 million…a tremendous turnaround for Richmont and the long-term outlook has to be considered exceedingly positive given the expansion of the Island Gold Mine into a deep high-grade zone…

RIC has been trading within a bullish downsloping flag since the beginning of the year with the rising 200-day SMA at $3.59 coinciding with Fib. support…watch for another important breakout in RIC over the summer…

RIC is up a penny at $4.06 as of 9:30 am Pacific…note the possibility of a confirmed breakout this week above the downsloping flag…

Doubleview Capital Corp. (DBV, TSX-V) Update

Breakouts above downsloping flags are usually very bullish signs…we saw this occur in April in Doubleview Capital (DBV, TSX-V) and since then the top of the flag has provided new support…rising 50 and 100-day SMA’s at 15 cents are also encouraging…note the bullish “W” in the RSI(14)…

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

Discovery Ventures (DVN, TSX-V) has pulled back to an attractive support area after hitting a 7-month high of 25 cents a week ago…a recent game-changing development for Discovery has been the recruitment of a major new investor, Winnipeg entrepreneur Dan Omeniuk, who is also slated to take over as CEO…Omeniuk, who heads up a successful transport business, brings a lot of new synergies to Discovery as it advances its Willa-Max high-grade Gold-Copper Project in southeast British Columbia…

There’s every reason to believe DVN will enjoy another strong summer as it did in 2013 and 2014 based on its current technical posture and the addition of Omeniuk who is also providing $7 million in credit facilities to the company…

DVN closed Friday at 19.5 cents…

Ascot Resources Ltd. (AOT, TSX-V) Update

Keep an eye on Ascot Resources (AOT, TSX-V) this summer…in April, the company commenced its 2015 drill program at the Premier Property near Stewart…it covers more than 100 sq. km and includes the old Premier mine, a past producer of 2.1 million ounces of Gold and 44.9 million ounces of Silver…

This year’s drilling will be concentrated in the Premier main zone and Premier west zone areas, following up on last year’s successful campaign that produced many multi-ounce Gold intercepts including 14,394.5 g/t Au over 0.75 m…

Technically, Ascot found strong support between Fib. levels $1.28 and $1.48, as expected, and has now pushed above a downsloping flag…look for new support around $1.80 on any pullback from Friday’s big move (next Fib. support below that is $1.63)…

AOT is up 6 cents at $1.96 as of 9:30 am Pacific…

Silver Short-Term Chart

As expected, Silver continues to test support at the top of the downtrend line (dotted blue, near $16) where it broke out from in May…

Silver is about to enter a traditionally strong period of the year, so it’s reasonable to expect the downtrend line support and chart support at $15.66 to hold…

Silver Long-Term Chart

An explosive push higher (eventually) – is this actually a scenario that could unfold in Silver over the next couple of years?…quite possibly, given the look of this 34-year monthly chart, though at the moment it’s hard to understand all the factors that could come into play to generate the kind of “Wave 5” move that appears to be in the works here…

It seems quite possible that the bottom of “Wave 4” came late last year when Silver briefly plunged to just above $14 an ounce…RSI(14) has managed to hold support which goes back to 2001…

Sell pressure continues to remain strong, however, as shown by the CMF – amazingly, at levels not seen in nearly 25 years since the low of $3.51…this intense sell pressure at the moment, which could continue for a while yet, should therefore be viewed in a larger context as a bullish contrarian indicator…

Several fundamental factors are currently in Silver’s favor…industrial demand for the metal is growing, and global supplies are poised for a deficit of 57.7 million ounces this year, according to Thomson Reuters…

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

 

On Friday afternoon, in a gathering at a popular Vancouver restaurant, Doubleview Capital (DBV, TSX-V) President and CEO Farshad Shirvani was presented with a “Golden Hat” – a fitting gift considering that today is his 50th birthday.

Keep in mind, as well, that it was half a century ago when exploration first commenced at the Hat Property in what is now northwest British Columbia’s prolific and emerging world class Sheslay district.

The Hat’s progression over the last 2 years has been nothing short of remarkable given the challenging junior resource market conditions and the fact that this nearly 40 sq. km property, now displaying all the classic signatures of a very large Gold-rich alkalic Copper porphyry system, had only been prospected and was never drilled until mid-2013.

A grassroots discovery overlooked for many years while drilling in the general area focused exclusively on a robust set of targets about 10 km to the west-northwest (now the Star Project).

As noted previously, DBV discovery holes 8 and 11 were miraculously born during a dangerous November 2013 arctic cold snap when a proper winterized camp had not yet been constructed at the Hat (drillers were forced to flee the scene after getting to 300 m in hole 11).  The company was also out of funds after those holes, and the only reason they got drilled in the first place was because Shirvani took out a second mortgage on his home.  A courageous move and a demonstration of complete faith in his project.

Results from holes 8 and 11 produced a district staking rush, one of the few seen in Canada in recent years, and turned DBV into a 10-bagger between December 2013 and May 2014.

Hollywood could not have written a better script.

But that was just the beginning, the first few chapters of what’s evolving into an amazing story of Canadian exploration grit featuring numerous interesting players, with human nature and all the dynamics of money, power and politics on growing display.  The stakes have risen dramatically.

Each round of drilling at the Hat since 2013 has produced increasingly significant results, and the recruitment of star geoscientist Dr. Abdul Razique early this year (he was previously with Antofagasta) has been a game-changer for Doubleview and the district.

The latest maps just posted on the DBV web site confirm that the Lisle Zone is merely a southeastern expression of a much larger system of stacked NW/SE trending corridors of Gold-rich Copper porphyry mineralization covering at least 3 km x 4 km.

Do the math – the volume potential here is enormous.  And somewhere in this cooked up hydrothermal system is very possibly a high-grade starter pit, a “Golden Hat” zone if you will.

Then there’s the district as a whole – hundreds of square km featuring prominent areas of similar geological, geophysical and geochemical signatures, driven by what many believe is the “heat engine” – the Kaketsa pluton, resting mostly on Garibaldi Resources‘ (GGI, TSX-V) Grizzly Project that some geologists are speculating hosts a “mother lode” Gold-Copper deposit at Grizzly Central due to unusual features.

Low-lying Grizzly Central, an expansive area free of any rivers and lakes or other sensitive features, carries additional value beyond its deposit potential as it’s believed at this early stage to be the ideal location for critical infrastructure including a mineral processing center in the event economic deposits are proven up in the district.  Grizzly Central is essential to the overall equation for any major producer contemplating turning the Sheslay district into northwest B.C.’s newest mining camp.

And majors are watching developments closely.  BMR sources in the area confirm “an interesting group of mining-type officials” were seen flying to the Hat Property from the airport at Dease Lake a few weeks ago.

No Coincidence As Chad Norman Day Enters The Picture

On May 21, with 23 holes completed at the Hat and more assays pending from the richest hole drilled to date on the property, and with Garibaldi gearing up for first-ever drilling at the Grizzly, a stunning letter from Tahltan Central Council President Chad Day is posted on the Tahltan web site.  It’s directed at Doubleview, Garibaldi and Prosper Gold (PGX, TSX-V), and later goes viral after extensive BMR research led to our June 7 article (“Sheslay District Drama As Tahtlan Hit the ‘Reset Button’).

Chad Day’s letter was, as stated in our report, confirmation with an exclamation mark that the Hat Project, and the district as a whole, have crossed an important threshold with the growing possibility of a cluster of world class deposits spread throughout an area spanning at least 400 sq. km, on the same trend as Red Chris about 100 km to the southeast.  It was a huge stamp of value on the Hat and the Sheslay district.

Day’s letter also came shortly after he negotiated an historic agreement with Imperial Metals (III, TSX) on the Red Chris mine, which is now going into full production after receiving its final permit from the B.C.  Ministry of Energy and Mines last Thursday.  The Red Chris is the 6th mine to open in mining-friendly British Columbia since 2011.

As Day remarked in a May 30 Vancouver Sun article, “Government and industry understand that the First Nations people need to benefit when these things are built.  But with the Tahltan, it actually makes a lot of sense to partner with us because we have the capacity, we have the work ethic, we have the experience

The Lisle Zone Is Merely The Edge, Not The Central Core

The Sheslay district is very ‘pregnant’ and the Hat could easily give birth to a large family of connected zones as you can see on the map below.

Dr. Razique will explain the significance of this map in layman’s terms in an exclusive interview with BMR this coming week, but below are just 3 initial observations:

1.  The geochemical responses (circled areas) increase in intensity northwest of the Lisle Zone;

2.  The Hat is a dynamic porphyry complex featuring multiple NW trending, sub-parallel linear magnetic anomalies well correlated with hydrothermal magnetite (important) in potassic altered diorite intrusions;

3.  There is strong correlation of magnetics, IP and overall geology and alteration throughout this classic alkalic porphyry system. 

The Challenge

The above is all wonderfully encouraging – the 23 Hat drill holes and how the results have improved with each round of drilling; the maps that clearly show how the Hat model is now much more understood; and the dynamic regional prospects including a 30-km long mineralized corridor widening to the south and spanning several properties.

The symbolism of Farshad’s new “Golden Hat” is a nice touch, but investors are hungry for more drilling and more results.

Less talk, more action.

Exactly 1 month after Chad Day’s letter, it’s time for Farshad to once again show the same courage and wisdom that brought him out of a difficult spot in late 2013 and led to a new Canadian early-stage discovery.

Much is at stake – Farshad must effectively and immediately push the Hat Project forward on the ground, unlocking shareholder value, while also respecting the Tahltan Nation and making the Hat work for them as well.

Deal positively with the Tahltan and get that drill turning again – quickly.  Those are urgent priorities.

Can he make it happen?

One thing is for certain – over the last 2 years it has always been a mistake to underestimate Farshad Shirvani.

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

TSX Venture Exchange and Gold

While volume tailed off last week, the Venture found strong support as expected at 680 and snapped a 3-week losing skid by adding 2 points to close Friday at 684.  The Venture firmed up slightly after Wednesday’s Fed statement and comments from Janet Yellen that combined to pressure the greenback while giving Gold a lift to its highest level in a month.

Summer officially begins this weekend, but what can prevent the “summer doldrums” on the Venture is some exploration excitement with results of a magnitude that would create much-needed fresh wealth in the sector and restore investor faith and confidence.  Last week, NexGen Energy (NXE, TSX-V) hit a new all-time high of 81 cents with a stellar intersection (56.5 m@ 11.55% U3O8 in drill hole AR-15–44b) from its emerging world class high-grade Uranium discovery in Saskatchewan’s Athabasca Basin.  NXE traded over 14 million shares on the Venture and is poised for a very active and perhaps dramatic summer.

Major success on other fronts in Canada and elsewhere is needed.  British Columbia will be a key jurisdiction to watch with rigs turning or about to turn in several areas of the province. In the prolific Sheslay district, Doubleview Capital’s Hat Property has rapidly growing possibilities while Garibaldi Resources‘ (GGI, TSX-V) Grizzly Project has “new discovery” written all over it.  Sunday, we’ll expand on the exciting Doubleview situation and issue a challenge to President and CEO Farshad Shirvani at the same time.

Interestingly, despite the dramatic late 2014 sell-off and the added difficulties the junior resource market has faced since, the Venture has been able to hold critical support at 680 on a monthly basis.  This support, as you can see in the chart below, is now more solid than ever with the Index beginning to move up again off its uptrend line (coinciding with Fib. support) from the December low.

6-Month Daily Venture Chart

What’s encouraging about this chart is the continued strong support and the bullish ascending triangle.  The SS indicator is now advancing strongly after touching extreme lows like it did in mid-March and mid-December.  Going into the summer, the Venture’s current technical posture is such that the chances of a breakout above 707 exceed that of a breakdown below key support defined by the Fib. band between 654 and 680.

Exact timing of a breakout, however, is the issue, and what would the catalyst be?  The junior resource market needs a boost from discovery excitement as well as higher commodity prices.

So the Venture’s upside potential, looking ahead through Q3, definitely appears to exceed its downside risk, a very different scenario than the one that existed last September when the Index simply fell apart technically, driven largely by the collapse in Crude prices and the record surge in the greenback.  Yes, the resistance just above 700 is frustrating but the Venture has also been building a strong base this year.  Non-resource issues of course have performed the best since last September.  But quality resource stocks could pick up strongly over the last half of 2015.

U.S. Dollar Index Update

A key market to watch, of course, is the U.S. Dollar Index which rallied during the last half of May – certainly not unexpectedly after it sold down to temporary support.  It has since pulled back again.  The Dollar Index faces strong resistance in the mid-to-upper 90’s given the double top pattern that formed in March and April, in addition to some other bearish indicators.  As long as a weak to neutral trend continues in the greenback over the coming months, the risk factor is limited at current levels for the Venture given the inverse relationship between the two. 

The Dollar Index clearly lost momentum as soon as it fell below an uptrend line in late April going back to the start of last summer’s rally.  As expected, the Index rallied back to the top of the uptrend line (98) where it reacted at fresh resistance.  A declining 50-day SMA, currently just above 96, is applying further downward pressure on the Index.  Ultimately – and this may take a few months to play out – the Dollar Index may have to test Fib. support around 88 before it commences a possible new uptrend.  Much will hinge on Fed policy and how the U.S. economy behaves.

The current consolidation in the Dollar Index is a healthy development given the record run it made over such a short period.  Technically very overbought RSI(14) levels peaked in March.  A mirror image of that could unfold at some point during the 2nd half of this year.  There is still no shortage of greenback bulls, just like there was no shortage of Gold bulls even a year after the metal hit an all-time high.

Gold

Gold rose for the 2nd straight week, adding $19 an ounce to finish at $1,200.  A more dovish than expected Fed statement gave Gold bulls some added confidence, but bullion’s immediate and not-so-easy challenge will be to overcome a band of resistance between $1,200 and $1,210, and then even stronger resistance in the mid-$1,220‘s.  On the bright side, seasonality factors will soon be in Gold‘s favor as Q3 traditionally is the metal’s strongest quarter of the year.

On this 2.5-year weekly chart, which has proven to be a very reliable guide, Gold continues to meander within a downsloping flag.  A breakout above or a breakdown below this flag will really be significant.  Important chart support exists at $1,150.  If this level fails, the first line of support is at the bottom of the flag (around $1,100).

Encouragingly, RSI(14) has continued to climb a gently sloping uptrend since last fall.

After declining $1.21 the previous 2 weeks, Silver found its footing and added 12 cents to close at $16.08.  Copper slipped another 12 cents to $2.56.  Crude Oil lost 57 cents a barrel to $59.37 while the U.S. Dollar Index slumped nearly a point to 94.06. 

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 3 decades in 2013, the fundamental long-term case for the metal remains solidly intact based on the following factors:

 

Gold has traded between $1,198 and $1,205 so far today…as of 8:00 am Pacific, bullion is off $2 an ounce at $1,200 but is headed for its 2nd straight weekly advance after hitting a 1-month high yesterday…Silver has retreated 9 cents to $16.07…Copper is off 2 pennies at $2.57…Crude Oil has fallen $1.10 a barrel to $59.35 while the U.S. Dollar Index has recovered one-fifth of a point to 94.26…

Due to the “DNA of its volatility”, it would be normal for Gold to move plus or minus 15% from its lows, Frank Holmes, CEO and chief investment officer of U.S. Global Investors, told MarketWatch in an interview…Holmes is not 100% certain that prices have hit a bottom but he’s leaning more toward the bullish side for Gold, saying it would be reasonable to see the metal finish the year around $1,350 an ounce…

The 2nd half of the year tends to see events that have a bigger impact on the consumption of Gold in the form of gift-giving, such as the holy festival of Ramadan, the wedding season in India and Christmas, he said…looking a bit further ahead, Holmes believes the big surprise for the Gold market this year could come from China…

“China is positioning itself to be the price maker for Gold,” said Holmes. “The physical market has moved to Shanghai and to attract the banks, (China) has created a tax-free financial zone.”

Gold, Euro Ignoring Greece Situation

Gold’s jump yesterday had more to do with Wednesday’s Fed statement and comments from Janet Yellen during her news conference that followed, as opposed to events in Greece which markets appear to be taking in stride…

The European Central Bank told a meeting of euro zone finance ministers yesterday that it was not sure if Greek banks, which have been suffering large daily deposit outflows, would be able to open on Monday…so it’s no surprise that this morning the ECB raised the funding cap on its Emergency Liquidity Assistance (ELA) for Greece’s banks, as reported bay Reuters…Greek savers have withdrawn about 2 billion euros from banks over the past 3 days, with outflows accelerating rapidly since talks between the government and its creditors collapsed last weekend, banking sources told Reuters…an emergency summit of euro zone leaders is to be held on Monday to deal with the Greece situation…

Meanwhile, Greek Prime Minister Alexis Tsipras is looking for love from Russia and may have found it…he addressed Russia’s showcase economic forum today…before that event, Russia’s deputy Prime Minister said his country would consider financial aid to Greece…in an interview on Russia’s RT television, which was reported by Associated Press, Arkady Dvorkovich said,  “The most important things for us are investment projects and trade with Greece. If financial support is needed, we will consider this question.”

The euro has climbed 4% against the dollar this month which basically says the currency at this point is essentially shrugging off the situation in Greece, or has already priced in any potential negative fallout…yields on government bonds in the euro zone have also risen, making the euro more attractive relative to the dollar…

TSX Gold Index Update

The TSX Gold Index is showing a very favorable technical pattern entering the 2nd half of 2015…note the rounding bottom consolidation base on this 5-year weekly chart, and the steady accumulation (CMF) throughout this year…

Based on this chart, there are two things we should expect in the coming months – 1) a breakout above the long-term downtrend line; and 2) a challenge of critical resistance at the 210 level…investors dismissing quality Gold stocks at the moment are making a huge mistake…

The Gold Index is unchanged at 158 as of 8:00 am Pacific…

Today’s Equity Markets

Asia

China shares have suffered their worst week in more than 7 years, as both the Shanghai and Shenzhen markets fell into correction territory today amid rising fears of a bubble in China’s volatile equity markets…

The Shanghai Composite finished down 6.4% at 4481 today and lost 13.3% for the week, marking the second time this year it has fallen into correction territory…it dropped more than 10% from a recent high in late May, before rebounding to hit its highest level since January 2008 earlier this month…as John’s chart showed Tuesday, the Shanghai hit Fib. resistance at 5132 as well as the top of an upsloping channel, so a significant pullback isn’t surprising as this market digests a 2000-point advance since March…

Europe

European markets were mixed today…

North America

The Dow is down 25 points as of 8:00 am Pacific…in Toronto, the TSX is off 63 points while the Venture is flat at 683…

NASDAQ 1-Year Weekly Chart

The NASDAQ finally eclipsed its March 2000 all-time high yesterday, surging 68 points to finish at Fib. resistance at 5133 (this Fib. level has been in place since the end of last year)…RSI(14) certainly has room to move considerably higher on this 1-year weekly chart, so expect the NASDAQ to continue its advance once this Fib. level has been successfully cleared…

UrtheCast Corp. (UR) – Flying High

The power of cool video…if you haven’t visited this site yet, check it out – Urthecast.com…

More news this morning from UrtheCast (UR, TSX) which plans to build, launch and operate the world’s first fully integrated, multi-spectral optical and synthetic-aperture-radar commercial constellation of Earth observation satellites, to be deployed over multiple launches expected in 2019 and 2020…the Constellation will provide what the company anticipates to be unmatched space-imaging capabilities, including high collection capacity, optical and SAR data fusion, weather-independent high-resolution imaging using the SAR, target revisit, and imaging latency…

The masses are definitely chasing this one at the moment (which always gets dangerous)…UR is up another 36 cents this morning at $4.20…the herd may continue to push UR higher to the next Fib. resistance level…

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

Garibaldi Resources (GGI, TSX-V) enjoyed its biggest volume day in nearly 5 years yesterday as 1.6 million shares changed hands…the increasing volume throughout the week has soaked up all or almost all of the flow-through paper (6 million shares) that became free-trading near the end of April, a bullish development as the company prepares for a busy summer including first-ever drilling at its B.C. flagship Grizzly Property…

Technically, GGI is turning the corner – the chart below from John May 22 was bang-on in terms of the support band and the likelihood of a near-term bottom as oversold conditions intensified…

What can be anticipated going forward is a breakout above the downtrend line and then a challenge of resistance in the mid-teens, just below the declining 200-day moving average (SMA)…the increased liquidity should generate additional interest in GGI as events at promising projects in Mexico and B.C. unfold quickly…

GGI is off half a penny at 8.5 cents as of 8:00 am Pacific…Sheslay district neighbor Doubleview Capital (DBV, TSX-V) is more active this morning, pushing as high as 17 cents in early trading…a major fireworks show up north is likely just around the corner…more on that very shortly…

Integra Gold Corp. (ICG, TSX) Update

Integra Gold (ICG, TSX-V) climbed another 3 pennies yesterday on strong volume as the company released a compilation of historical data related to its Sigma and Lamaque mines acquired late last year…they are immediately adjacent to the company’s Lamaque South Project where drilling is ongoing…

The Lamaque mine was the largest Gold producer in Quebec for 30 years, from 1955 until it shut down in 1985…the historic data compiled by the company provide compelling evidence for a downdip extension of the Gold-bearing system at Lamaque with the main plug continuing to depth…

Integra President and CEO Stephen de Jong stated yesterday, “Lamaque Deep is a world-class, royalty-free Gold exploration target in a prime jurisdiction with a permitted mill on site. Integra is well capitalized with $15-million in working capital and, aside from ongoing compilation and target generation work on this deep zone, we remain disciplined in executing on our exploration strategy for Lamaque South, including the resource expansion program under way at Triangle zone. We anticipate the second and third phase of compilation and target generation work on Lamaque Deep to take until the end of 2015.  We will continue to assess opportunities to create value for our shareholders and the unveiling of the Lamaque Deep target is another example of the potential resource upside at Integra, as well as further evidence of the value created by the company’s acquisition of the Sigma/Lamaque mine and mill.”

Technically, John noted the recent breakout above important resistance at 30 cents…this 2-year weekly chart suggests ICG is poised for a strong summer…

ICG is unchanged at 35 cents through the first 2-and-a-half hours of trading…

PyroGenesis Canada Inc. (PYR, TSX-V) Update 

We suggest readers perform their due diligence on PyroGenesis Canada (PYR, TSX-V) has come out with some interesting news in recent weeks, including June 8 when it announced something that could be quite revolutionary…PYR has been engaged by an unnamed junior mining and metals company (??) to evaluate the feasibility of using plasma for the purpose of refining ore into pure metal, in this case converting quartz into pure silicon metal…

“The world market for silicon metal is about 1.8 million tonnes per year and ore refining represents an interesting application of our plasma capabilities,” said Pierre Carabin, PyroGenesis’s director of engineering…

PyroGenesis is the world leader in the design, development, manufacturing and commercialization of advanced plasma processes, and its Plasma Atomization Process (PAP) is an enabling technology for 3D Printing…

Technically, PYR is gaining momentum with an RSI(14) bullish “W” and steady accumulation (CMF) since March…it has traded within a downsloping flag since late 2013 and could be gearing up for a test of resistance at the top of that flag…

PYR is off 2 pennies at 37 cents as of 8:00 am Pacific…

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