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TSX Venture Exchange and Gold

Have you noticed a very curious and different pattern between how the Venture has performed since July this year vs. the same period last year?  And how the U.S. Dollar Index pattern has also been so different?

In July of this year, the Venture tumbled 11.5%, one of its worst July’s on record.  In August it crashed another 14.3% to an intra-day low of 509 on “Black Monday” the 24th before recovering impressively to close the month at 559 (still a 5.9% loss for August).  Through the first 13 trading sessions of September, the Venture has declined a modest 1.6%.

In 2014, the Venture fell 2.5% in July, gained 2.2% in August and lost 5.8% through the first 13 sessions of September.  We know what happened from mid-September last year to mid-December – the Venture broke down technically and sold off sharply, more than 30% as commodities, especially Crude Oil, cratered.

The U.S. dollar has also behaved very differently since the beginning of July this year than it did from July to mid-September last year.  In September 2014, the Dollar Index was in serious breakout mode.  It’s now under pressure with the technical internals continuing to deteriorate.

The point is this:  The Venture is in a much different pattern now than it was at this time last year.  That’s great news for the bulls who may finally get the upper hand in the near future with a continuing trend suggesting that the final few months of 2015 will not resemble the same period last year.  The bears’ grip on this market is loosening.

Friday’s Trading

Amazingly, Friday’s trading was like a repeat of exactly 2 weeks ago when the Dow plunged 272 points, the TSX lost 118 points, and the Venture essentially held steady, losing just 1 point.  Yesterday, the Dow fell 290 points, the TSX surrendered 140 points, and the Venture lost just 1 point to finish at 550, a 3-point advance for the week.

This kind of Venture resilience in the face of broader equity market weakness is a very positive sign.  Commodities are on a much more stable footing than they were at this time last year, and that’s giving the Venture some much-needed support.

Once again, the Fed has “chickened out” on raising rates.  Janet Yellen was the dollar bulls’ biggest ally from the middle of last year to the spring of this year.  She’s now their achilles’ heel.

Venture “Awareness Chart”

As soon as the Venture can break loose from its EMA(8) and EMA(20), currently 550 and 553, respectively, that’s when this market will gain fresh momentum and traction.  The Venture would then be expected to challenge the next Fib. resistance on this 4-month daily chart which is 586.

Other key takeaways from this updated “awareness” chart:

1.  RSI(14) has climbed out of oversold conditions which it had been trapped in since the beginning of July.  It’s currently at 43% – near-term resistance at 50%, new support at 30%;

2.  The recent bearish trend (ADX indicator) has weakened dramatically since the August 24 low – what to watch for here is a potential +DI bullish cross over the near to short-term;

3.  The SS indicator is showing increasing up momentum, a factor in the bull’s favor;

4.  Fib. support at 515 has held – on a monthly basis, Fib. support around 560 also held in August.  One cannot rule out the possibility of a double bottom at the 515 Fib. level, but a close above 560 by the end of September is probably more likely and such an event would have bullish implications for October.

More than ever, the Venture and the junior resource market in general urgently need a fresh grassroots discovery in Canada.  Two of the best near-term possibilities in our view are in Labrador and northwest British Columbia – Equitas Resources‘ (EQT, TSX-V) Garland Nickel Project near the Voisey Bay’s mine, and Garibaldi Resources‘ (GGI, TSX-V) Grizzly Central area in a district where a second deposit has already been found and more appear to be a virtual certainty.  First-ever drilling at Garland and Grizzly Central are coming up.

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, and recent weakness with the drop below $1,100, is that it has forced producers to become much more lean in terms of their cost structures. Producers, big and small, continue to make hard decisions in terms of costs, projects, and rationalizing 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 eventually create a supply problem and therefore great opportunities in Gold and quality Gold stocks.  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.

U.S. Dollar Index Update

The U.S. Dollar Index continues to meet resistance at the 96 level and is looking increasingly weak.

The consistent position we’ve maintained over the last several months is that the Dollar Index hit its 2015 high during March-April based on what has proven to be, so far at least, a very reliable 9-month daily chart.  Fundamentally, a runaway dollar would not be healthy for the U.S. or global economies, a factor the Fed obviously took into account when it updated its policy statement Thursday.

Dollar Index support has been strong around the 93 level as expected up to this point.  However, the Dollar remains a crowded trade.  The potential exists for a serious unwinding of the greenback over the next few months after the record run that started in the summer of last year.  This could mean a drop to about 88 (base support) on the Dollar Index which would be very supportive of commodities.

Gold Update

September is traditionally Gold’s best month of the year, and after a slow start to this September the yellow metal finally kicked into gear last week with a gain of $31 an ounce to $1,140.  The Fed’s further delaying of a rate hike hurt the dollar and gave bullion a boost.

John’s 6-month daily chart shows how bullion has pushed through some important Fib. levels and could be on its way to challenging resistance again around $1,160.  Support held around $1,100 which was encouraging to see.  The 50-day SMA is flattening out just below $1,120 – appears poised to reverse higher by the end of this month or the beginning of October.

Silver shot up 56 cents or nearly 4% last week to close at $15.18.  Copper eased off 6 cents to $2.38.  Crude Oil bounced around before closing the week up 20 cents at $44.98 while the U.S. Dollar Index finished relatively unchanged at 95.15 after rallying half a point Friday.

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, and fresh weakness now, the fundamental long-term case for the metal remains solidly intact based on the following factors (not necessarily in order of importance).

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

Gold has traded between $1,127 and $1,143 so far today (see updated chart below)…as of 8:45 am Pacific, bullion is up $7 an ounce at $1,138…Silver is a nickel higher at $15.19…Copper is off 6 cents at $2.37…Crude Oil has fallen $1.67 a barrel to $45.23 after the Fed warned on the health of the global economy and bearish signs persisted that the world’s biggest Crude producers would keep pumping at high levels to maintain market share…meanwhile, the U.S. Dollar Index has reversed higher after nearly touching 94 this morning…it’s now up one-tenth of a point at 94.73 after selling off yesterday…

As expected, the Fed didn’t have the courage to pull the trigger on a rate hike yesterday.  “In light of the developments that we have seen and the impacts on financial markets, we want to take a little bit more time to evaluate the likely impacts on the United States,” Fed Chairwoman Janet Yellen said at a news conference following a 2-day policy meeting…

The perception of “ZIRP” forever (Zero Interest Rate Policy) should provide underlying support for the commodity sector as the U.S. Dollar continues to weaken (see updated chart below)…most of the policy makers at the meeting, 13 of 17, indicated they still expect to move this year, but that was down from the 15 who held that view in June…the central bank has two more scheduled policy meetings this year, in late October and mid-December…it’s growing increasingly likely that the Fed may not act at all in 2015, and how would potentially affect their credibility?…

In a media note following yesterday’s interest rate decision, the World Gold Council emphasized that central bank monetary policy decisions are only one factor that impacts the Gold market and not a dominant driver…

“Research shows that higher interest rates are not necessarily bad for Gold,” the council said in its note.  “While higher interest rates make holding Gold more expensive, the vast majority of global physical demand is not linked to investment demand in the U.S.  Further, Gold’s role as a diversifier remains a valuable trait for investors and this has been the case historically with inflation-adjusted rates as high as 4% – far from where we are now.”

Updated Gold Chart

It appears Gold is gearing up for another run at chart resistance at $1,150, thanks to the Fed’s continued inaction with regard to a rate hike…for the past 2-and-a-half years, Gold has remained within a downsloping flag as shown below…on the previous three occasions when it touched the bottom of this flag, it then rallied within a few months to the resistance at the top of the flag…it’s reasonable to expect this trend to continue…

TSX Gold Index Updated Chart

The TSX Gold Index has some work to do to push through various resistance levels (the nearest is 135), but the general outlook for producers (particularly ones with low cost structures) has to be considered positive…the Gold Index has consistently found support at the bottom of a bullish downsloping wedge since 2013…the 50-day moving average (SMA) has been in decline since June and could soon reverse to the upside – that would mark a “momentum” shift…

The Gold Index is relatively unchanged at 128 as of 8:45 am Pacific…

U.S. Dollar Index Updated Chart

As we’ve been pointing out for the last several months, the U.S. Dollar Index is looking increasingly weak and another test of key support around the 93 level appears likely…dollar bulls have been counting on the Fed to raise rates, and Janet Yellen keeps letting them down…if the Dollar Index were to break below its primary support band as noted in the chart, the bulls will be jumping ship in a hurry…

Today’s Equity Markets

Asia

China’s Shanghai Composite edged slightly higher overnight, closing the week at 3099…Japan’s Nikkei average fell 2%, however, to finish at 18070…

Europe

A grim day for European markets – they were all down significantly, led by Germany’s DAX which tanked 2.8%…

North America

The Dow is off 161 points as of 8:45 am Pacific…financials are leading the U.S. market to the downside…in Toronto, the TSX has fallen 122 points while the Venture is off a point at 550…a strong finish to the week for Equitas Resources (EQT, TSX-V) which has added a penny-and-a-half to 18.5 cents as of 8:45 am Pacific on total volume (all exchanges) of more than 2 million shares…we’ll have an update on EQT over the weekend for BMR Pro and Gold subscribers..

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

Meet the man (pictured below) behind yesterday’s Garibaldi Resources‘ (GGI, TSX-V) news regarding the outlining of multiple targets over an overburden-covered 25 sq. km area of Grizzly Central where GGI believes it has an excellent chance for a new drilling discovery in the coming weeks in the prolific Sheslay district…Charlie Greig, M.Sc. P. Geo., is highly respected in the B.C. geological community and has been a senior geologist with Pretium Resources (PVG, TSX) for the last several years…below, he’s pictured on Pretium’s Brucejack Project, south of the Sheslay district, which is now being developed as one of the world’s highest-grade underground Gold mines…

Geologist Charlie Greig on Pretium’s Brucejack Project.

“The data compilation and interpretation from Charlie and his team have been instrumental in taking us to the stage now where we have a legitimate chance very quickly of making an important new drilling discovery in the Sheslay district,” GGI President and CEO Steve Regoci told us in a lengthy interview following the company’s news late yesterday (more from that interview with Regoci by Monday).

“We are extremely excited with how our upcoming drill program is shaping up,” Regoci stated.  “The crews we have on the ground now, they’re passionate.  A key part of our success to date has been to always surround ourselves with people that aren’t just looking for a paycheck, they’re passionate about what they do.  We’re just lucky to have access to these kind of individuals.  They’re young, aggressive, just bulls on the ground, working toward helping us find the next discovery which they want to be involved with.”

Keep in mind, Doubleview Capital’s (DBV, TSX-V) Hat discovery originally reported in early 2014 was the second in this emerging district – 10 km on trend from the Star porphyries – validating the theory that there’s likely much more to be found along a minimum 30 km long mineralized corridor in this district…historically, it was the lack of outcrop in the heavily forested Grizzly Central area that discouraged prospectors…modern technology has changed everything, and – ironically and speculatively – this low-relief part of the district could host the richest mineralization and the biggest deposit (or deposits)…

There’s a reason why the Association For Mineral Exploration British Columbia (AME BC) calls the Sheslay district “the #1 greenfield project in B.C.”, and the coming weeks could back that statement up in a major way as Grizzly Central is drill-tested for the first time ever while Doubleview makes preparations to return to the Hat discovery to the east…

GGI 2.5-Year Weekly Chart

Technically, the pattern with GGI has turned bullish following the RSI(14) and price breakouts above downtrend lines in place since early this year as you can see on this 2.5-year weekly chart…John has examined countless individual company charts on the Venture, and this is clearly one of the most promising going into the end of this month and entering Q4…some investors prefer “chasing” stocks, and they wonder why they aren’t more successful in their trading…the smart money jumps in before the chase…

Also note how the 50-day SMA is now just beginning to reverse to the upside – that’s almost always an ideal time for accumulation, and another signal of building strength…

GGI is off a penny at 8.5 cents as of 8:45 am Pacific…

Discovery Ventures (DVN, TSX-V) Update

People make the difference…Discovery Ventures‘ (DVN, TSX-V) new CEO Dan Omeniuk is a Winnipeg entrepreneur who has built a very successful trucking business…his decision recently to step into DVN and also provide significant funding for the company has been a “game changing” development, in our view, so some good things could be in store here…

DVN, off a penny at 15.5 cents as of 8:45 am Pacific, has had a strong week, and this updated chart shows new support at the 15-cent level…

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

It was no overstatement when the Association For Mineral Exploration British Columbia recently referred to the Sheslay district as “British Columbia’s #1 greenfield project.”

In addition to the discovery of a Gold-rich Copper porphyry deposit at Doubleview Capital’s (DBV, TSX-V) Hat Project, and the Star deposit and porphyry systems about 10 km to the northwest of the Hat, Garibaldi Resources (GGI, TSX-V) has made an important technical discovery that has identified “significant porphyry-style targets along a 5 km north-south and 5 km east-west trend at Grizzly Central” under an area mostly covered by overburden.

This afternoon’s news confirmed that Garibaldi crews remain on the ground, “proceeding aggressively toward drilling” of a previously untested north to northwest trending corridor in the heart of the Sheslay district.  Keep in mind, just 10 km to the east of these targets, Doubleview made an important drilling discovery on just its 8th hole in late 2013.

Deposits Hidden Under Overburden?

British Columbia has a history of major mines or soon-to-be-mines whose deposits were originally hidden under an overburden “cover” – Blackwater in central B.C. being the most spectacular example.

One thing is certain about the Sheslay district:  Impressive outcrop and surface alteration on portions of the Hat and Star properties, and the western side of the Grizzly, drew the interest of historical prospectors decades ago.  It’s entirely possible, and more likely now given today’s news from Garibaldi, that they missed something potentially huge at Grizzly Central as this low relief area of the district is heavily forested and 95% covered by overburden.

“The geochemical and geophysical data over Grizzly Central targets provide a clear roadmap.  Results are consistent with the signatures that have produced outstanding results in the district, and attest to the scale of the mineralizing system in this emerging mining camp,” stated GGI President and CEO Steve Regoci.

It’s worth noting that the “Qualified Person” on Garibaldi’s news this afternoon is none other than Charlie Greig, a key consultant for Pretium Resources (PVG, TSX) which is advancing its world class high-grade Brucejack Gold Project to production.

Garibaldi President and CEO Steve Regoci apparently has plenty to say regarding the Grizzly and the Sheslay district following today’s news, and has agreed to an interview with BMR this evening.

More by the am.

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

Gold has traded between $1,115 and $1,123 on this important day with a Fed policy statement due at 11:00 am Pacific…as of 7:00 am Pacific, bullion is off $2 an ounce at $1,117 after a strong advance yesterday…Silver is up 2 pennies at $14.95…Copper is unchanged at $2.44…Crude Oil has turned positive after some early weakness, now up 32 cents at $47.47 while the U.S. Dollar Index has fallen one-tenth of a point to 95.19…

Fed Chair Janet Yellen has made clear she would rather delay an interest rate hike for too long than move sooner and risk jeopardizing a tepid economic recovery, a conviction that will face its sharpest test yet later today…

A rate hike would be the first in the U.S. in nearly a decade…Fed watchers, however, see the outcome as a toss-up, with Yellen’s consistently stated desire to see workers reap more benefits from the recovery, coupled with weak price rises and a variety of global risks, looming large.  “It is a game-time decision. The key is what Yellen thinks and my guess is that she will want to wait,” said Mark Zandi, chief economist for Moody’s Analytics. “If you put yourself in her shoes, you don’t want to err by going too soon.”

In addition to the release of the policy statement at 11:00 am Pacific, Fed policymakers also will issue a fresh set of economic projections that will provide insight into the expected pace of subsequent rate hikes and other key economic matters…Yellen will hold a news conference shortly after…

It’s important to note that in the 7 years since the world’s central banks responded to the financial crisis by slashing interest rates, more than a dozen banks in the advanced world have tried to raise them again…all have been forced to retreat, including the ECB…

Federal-funds futures, used by investors and traders to place bets on central-bank policy, showed yesterday a 21% likelihood of a rate increase today, down from 25% earlier this week, according to data from CME Group Inc. (the odds were 45% a month ago and 58% 6 months ago, according to CME)…

Gold Demand From India Down This Month

Gold discounts in India, the world’s second-biggest consumer, widened this week as dealers struggled to offload stocks amid sluggish demand, according to a Reuters report…dealers were offering discounts of $6 to $8 an ounce to the global spot benchmark this week, compared to discounts of $4 to $6 last week…

The value of India’s August Gold imports jumped 140% from the same month a year ago to $4.96 billion, the trade ministry said this week…this followed a 62% jump in imports in July from a year ago to $2.97 billion…imports have been on the rise due to lower prices and expectation of robust purchases, but demand has been soft this month due to a weaker than usual monsoon…

“Anticipating robust demand, everyone in the supply chain was buying last month. But demand is not as good as expected,” said Daman Prakash Rathod, director at Chennai-based wholesaler MNC Bullion.  “Now everyone is trimming purchases. Imports will be much lower this month.”

Updated Gold Chart

Historically, September is Gold’s best month of the year, and the short-term chart is now looking better than it has at anytime this month…today and tomorrow of course will prove critical given the Fed decision and investors’ reaction to it across a broad spectrum of markets, including of course precious metals…

Gold rallied back up to its 50-day moving average (SMA) again yesterday, currently $1,119…the key will be to move above that decisively and push through important Fib. resistance around $1,130…a weekly close above $1,130 would give bullion fresh momentum entering the final 8 trading days of the month…

Crude Oil Update

A glue of Crude may keep Oil prices low for the next 15 years, according to Goldman Sachs Group’s Jeffrey Currie…there’s less than a 50% chance that prices will drop as low as $20 a barrel, most likely when refiners shut in October or March for maintenance, said Currie, head of commodities research at the bank who earned recognition for his bearish call on Gold more than 2 years ago…Goldman’s long-term forecast for Crude is at $50 a barrel, he said..

Walker River Resources (WRR, TSX-V) Update

Finally, after a few months’ delay, drilling is ready to commence at Walker River Resources’ (WRR, TSX-V) Lapon Canyon Project in Nevada…drilling of an initial 6 holes into high-grade Gold targets is expected to begin within the next few days as reported by the company yesterday…

Walker River has now completed a definitive exploration agreement with an option to form a joint venture with privately-held Nevada Canyon…the latter will have an option to acquire an initial 25% interest in the project for $250,000 (U.S.) of exploration expenditures within a 1-year period…

After being in decline since May, WRR’s 50-day SMA has reversed to the upside while RSI(14) is showing strong up momentum…key initial resistance is at 3.5 cents…a better overall market would help WRR tremendously over the next several weeks…

WRR is off half a penny at 2.5 cents through the first 30 minutes of trading today…

Discovery Ventures (DVN, TSX-V) Update

Interesting news from Discovery Ventures (DVN, TSX-V)…new DVN CEO Dan Omeniuk is a shrewd operator, as evidenced by the announcements this morning and yesterday that DVN has saved $3 million and considerable dilution by amending an agreement with the optionors of the Willa Property in southeast British Columbia…Discovery has paid $130,000 to the optionors to acquire a 100% interest in the Willa, subject to a 2.5% NSR…DVN agreed to pay the optionors an advance royalty payment, which will be credited against the NSR, of $144,000 each year until it commences commercial production at Willa…if Discovery fails to start commercial production by September 2020, or defaults for 3 months on the advance royalty payments, the company must transfer the Willa property back to the optionors…

“This is big step forward for our company,” stated Omeniuk. “The funds that we would have used to pay Numberco (the Willa optionors) are anticipated to be used towards advancing the WillaMax project and finalizing the 100% acquisition of 42 Metals Inc.“

We pointed out Discovery the other day as a potential rebound situation when it was trading around 12 cents…it’s now attempting to overcome resistance at 15 cents as per John’s 3-year weekly chart which shows a bullish “W” in the RSI(14) and increasing up momentum (SS and ADX indicators)…

As of 7:00 am Pacific, DVN is up a penny at 16 cents on good volume…looking strong…

Tweed Marijuana Inc. (TWD, TSX-V) Update

If you believe there’s going to be “regime change” in Ottawa come October 19, with a possible NDP government potentially backed by the Liberals, such an outcome would no doubt have some negative effects but 1 sector that would clearly benefit is medical marijuana…that potentially explains the sharp move in Tweed Marijuana (TWD, TSX-V) which recently completed a game-changing acquisition of Bedrocan Cannabis Corp. which analysts believe will allow Tweed to become cash-flow positive within the next 6 months…

Liberal leader Justin Trudeau has long promised to legalize and regulate marijuana if elected, while NDP leader Tom Mulcair favours decriminalization…

Tweed has run into stiff resistance at its 200-day SMA (currently $1.98) throughout 2015…keep an eye on this one for a potential major breakout above the 200-day and important chart resistance at $2.10, but don’t dismiss the odds of Harper and the Conservatives continuing in office and defying the mainstream media’s predictions…

TWD is off 2 pennies at $1.82 as of 7:00 am Pacific…

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

Gold has traded between $1,103 and $1,126 so far today as the Fed begins a much-anticipated 2-day meeting…as of 9:45 am Pacific, bullion is up $19 an ounce at $1,124…Silver has surged 52 cents to $14.92…Copper is up slightly at $2.44…Crude Oil has jumped nearly $3 a barrel to $47.24 while the U.S. Dollar Index has slid nearly half a point to 95.21…

CPM Group sees Gold as an “excellent investment at current prices” although a sharp rally could still be a couple of years away, they contend…the New York-based consultancy included the view in a late-Monday market commentary downplaying market rumors about the Comex potentially not having enough warehouse inventories to meet hypothetical demand…such rumors surface periodically, but CPM Group reports that while the percentage of Comex Gold open interest covered by total Comex reported stocks has fallen over the past year and a half, it remains high by historical standards and “presents no perceptible risk of imminent problems with deliveries.”

CPM Group views Gold as an excellent investment at current prices and market conditions, on a long-term basis.  “We do not expect prices to rise sharply for a couple of years, however, since we do not see any exogenous economic or political problems become so threatening as to stimulate sharp increases in investment demand until late 2017 at least.”

Any hawkish guidance from Federal Reserve members, even if they leave interest rates unchanged tomorrow, could mean renewed pressure on Gold, according to TD Securities…while the Federal funds futures have been pricing out the possibility of a September U.S. rate hike, many traders are suggesting that Fed officials may also send a message saying they are willing to hike rates this year, provided the economy cooperates, TDS says…if so, an increasing U.S. dollar and upward short-term rate moves would lift Gold carry costs, TDS stated…

Interesting – for the first time in the 5-year history of CNBC’s Fed Survey, a plurality of respondents forecast that the central bank WILL raise rates at the current meeting…despite harrowing market volatility and rising anxiety over global growth, 49% see the Fed hiking rates tomorrow…of the 51 economists, money managers and strategists who responded, 43% say the first hike will come later, down 4 points from the August survey…the percentage saying they are unsure rose to 8% from 5%…

At BMR, we see a U.S. dollar with increasingly poor technicals that could break below key support in the near future, no matter what the Fed announces tomorrow…

Hungary Seals Off Border With Serbia

Hungary sealed off its border with Serbia with massive coils of barbed wire yesterday and began detaining migrants trying to use the country as a gateway to Western Europe, harsh new measures that left thousands of frustrated asylum-seekers piled up on the Serbian side of the border…human rights activists condemned the move, with Amnesty International saying Hungary’s “intimidating show of militarized force is shocking.”

Prime Minister Viktor Orban defended the measures, saying he was acting to preserve Christian Europe, which he said had become threatened by the large numbers of Muslims streaming into the continent.  “The supply is nearly endless – we can see how many of them are coming,” Orban said in a televised address just before the new laws took effect at midnight.  “And if we look at the demographics, we can see that these people have more children than our communities who lead a traditional, Christian way of life.  Mathematics tells you that this will lead to a Europe where our way of life will end up in a minority, or at least face a very serious challenge.”

Mulcair’s Growing Problem – From Within…Plus Your TFSA Under Threat

The real NDP is beginning to speak up…as Tom Mulcair attempts to convince Canadians that the NDP is a “moderate” choice in the upcoming federal election, a number of prominent party supporters have strategically released a radical manifesto ahead of the October 19 vote…best-selling author and activist Naoemi Klein said the election was the best time to release the manifesto, which calls for an overhaul of the country’s capitalist economy, as politicans’ eyes are “focused so tightly on the polls.  Elections are times when our country talks about politics a lot more than usual and we talk about the direction we want our country to go.  So that’s why we launched it ahead of the election,” said Klein…Mulcair would have wished she had simply kept quiet…

The “Leap Manifesto” is signed by a number of prominent NDP supporters, including former Ontario NDP leader Stephen Lewis…it says austerity “has systematically attacked low-carbon sectors like education and health care, while starving public transit and forcing reckless energy privatizations – it’s a fossilized form of thinking that has become a threat to life on Earth.”

Where would new jobs originate?…expanding “low-carbon” sectors such as “caregiving, teaching, social work, the arts and public interest media.”

And where would the money to fund the leap originate?…easy…soak corporations and the “rich”…end (non-existent) fossil fuel subsidies…slap on transaction taxes (thus punishing and reducing transactions)…raise resource royalties…impose carbon taxes…typical NDP strategies, some of which are currently hurting Alberta, and have decimated provincial economies historically in British Columbia and Ontario…

Meanwhile, pledges by both the NDP and Liberals to roll back the Harper government’s plan to increase to $10,000 the annual TFSA contribution limit is supported by only 33% of Canadians, according to a national survey by the Angus Reid Institute…

Today’s Equity Markets

Asia

The “rescue team” jumped in near the end of the trading session to give China’s Shanghai Composite a nearly 5% gain overnight…it shot up 147 points to close at 3153…meanwhile, Japan’s Nikkei climbed 145 points to finish at 18172 (important support for the Nikkei at 18000)…

Europe

European markets were up solidly today…

North America

The Dow is up 110 points as of 9:45 am Pacific…in Toronto, the TSX, fueled by Gold and Oil today, has soared 262 points while the Venture has added 6 points to 554…Pure Energy Minerals (PE, TSX-V) gapped up and climbed as high as $1.03 following news that it has entered into an agreement with Tesla Motors Inc. for the potential supply of lithium hydroxide that Pure Energy plans to produce from the company’s Clayton Valley Lithium Brine Project in Nevada…PE has broken out above Fib. resistance at 75 cents (new support) and came within a dime of the next measured Fib. resistance in early trading today (see John’s chart in today’s earlier post) before profit-taking set in…we’ll update the PE chart with more comments for BMR Pro and Gold subscribers later today…

TSX Updated Chart

This 6-year monthly chart for the TSX is encouraging given the extent of oversold RSI(14) conditions and a broad area of strong support from the Fib. 50% level (12830) to the 1000-day moving average (SMA) around 13350…as long as the socialist hordes don’t grab the reigns of power in Ottawa, the TSX – plus the Venture – could both finish the year on a strong note…

Equitas Resources (EQT, TSX-V) Update

Equitas Resources (EQT, TSX-V) nearly reached the 23-cent Fib. resistance level yesterday before reversing and closing the day down 2.5 pennies at 18 cents…the modest pullback carried over into this morning with EQT touching support at 15.5 cents before stabilizing…the overall chart pattern continues to look highly favorable, and the start of actual drilling at Garland – to begin soon – should add some fuel to the fire, so speak…

EQT is off a penny at 18 cents as of 9:45 am Pacific…

Cardiff Energy Corp. (CRS, TSX-V) Update

We saw a good trading opportunity here last week with Cardiff Energy (CRS, TSX-V) resting at support around 10 cents…it quickly exploded to an intra-day high of 18.5 cents Friday before pulling back to fresh support around 14 cents (previous Fib. resistance) which is also the rising 100-day moving average (SMA)…room for this one to resume its climb, perhaps to the chart resistance highlighted by John….as always, perform your own due diligence…

CRS is unchanged at 15.5 cents as of 9:45 am Pacific…

Richmont Mines (RIC, TSX) Update

Richmont Mines confirmed this morning that not only is it carrying out extensive deep drilling to expand the Island Gold mine’s high-grade resource below existing workings, but the upcoming drill program will also include important step-out exploration to test 6 target areas with 30-35 holes elsewhere on the large property in northern Ontario…within a 15 km radius of the current operations are 4 past producing mines, 3 of which occur within the same regional Goudreau shear zone that hosts the Island Gold mine…this underexplored region with proven favorable geology, a lack of regional exploration data at depth and the success Richmont has had in establishing the significant 1 million ounce high-grade resource below the Island Gold mine, are all evidence of very promising, untested potential across this land package…

Island Gold Property covers 77 sq. km which includes approximately 8 km of strike length of the favourable regional Goudreau shear system…the producing mine and its defined resources span roughly 1.5 km of strike length and over 1 km to depth along this prominent shear zone, where it is pervasively silicified with disseminated pyrite and significant high grade gold mineralization…

RIC is up 14 cents at $3.97 as of 9:45 am Pacific…

Richmont’s Island Gold mine in northeast Ontario…a major drilling program will attempt to expand the 1 million ounce high-grade resource below the mine, while target areas elsewhere on the large land package will also be tested.

Pretium Resources Inc. (PVG, TSX) Secures $540 Million U.S. Construction Financing Package For Brucejack

Pretium Resources (PVG, TSX) has secured a $540 million (U.S.) construction financing package with the Orion Mine Finance Group and Blackstone Tactical Opportunities…the financing, which provides for immediate access to $340 million (U.S.) at closing, will finance a substantial portion of the costs to develop the underground high-grade Gold mine at Pretium’s Brucejack Project in northwest British Columbia… The financing is expected to close on or about Sept. 18, 2015…the $540-million (U.S.) in proceeds from the financing cover more than 70% of the estimated capital cost of $747-million (U.S.) to develop Brucejack based on the June, 2014, feasibility study…it’s worth noting, however, that the feasibility study used an exchange rate of 92 U.S. cents to $1 (Canadian)…as a significant portion of capital expenditures are sourced in Canadian dollars, the decline in the Canadian dollar over the last year is certainly a factor in Pretium’s favor… 

Klondex Mines Ltd. (KDX, TSX) Update

Klondex Mines Ltd. (KDX, TSX) has released mineral resource updates for its high-grade Fire Creek Project and its Midas mine, both in northern Nevada…at Fire Creek, increased total measured and indicated AuEq ounces have increased 13% to 473,000…inferred AuEq oz. have increased 22% to 441,500 ounces, net of depletion…keep in mind that more than 90% of the Fire Creek land package remains untested…

At Midas, measured the indicated AuEq ounces are up 7% to 562,000 ounces while inferred AuEq ounces have decreased 8% 267,500 ounces…all resource numbers are net of depletion…

Its calls for actions stand in stark contrast to the practical platform Mulcair is offering, which includes balanced budgets, openness to free trade deals and sustainable development of Alberta’s oilsands.

KDX is up 7 cents at $3.27 as of 9:45 am Pacific…

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

6:45 am Pacific

Pure Energy Minerals (PE, TSX-V), which has tripled in value since we introduced it to our readers in July, was halted late in yesterday’s trading session, and this morning announced a deal with Tesla Motors Inc. for the potential supply of lithium hydroxide that Pure Energy plans to produce from the company’s Clayton Valley Lithium Brine project in Nevada (a Preliminary Economic Assessment, Pre-Feasibility Study or Feasibility Study will need to confirm the technical feasibility and economic viability of the project).

Certainly excellent news for Pure Energy as it continues to aggressively advance this project in a highly favorable jurisdiction.  The agreement establishes a commitment for an annual purchase volume of product over a period of 5 years by Tesla and/or its authorized purchasers, and also sets a predetermined price that is below current market rates and is aligned with Tesla’s goal to continuously reduce the cost of its lithium ion batteries.

Below is John’s latest PE chart (2.5-year weekly).  Yesterday’s close at 80 cents confirmed a breakout above the Fib. 75-cent level.

PE resumes trading at 7 am Pacific.

Note:  John and Jon do not hold share positions in PE.