Silver To Test $50 In 2013?
Silver prices should range from $33 to $47 per ounce and perhaps test a price of $50 an ounce in 2013, Phillip Klapwijk of Thomson Reuters GFMS advised yesterday…during a conference call conducted under the auspices of the Silver Institute, Klapwijk forecast that Silver prices may hit $36 in December and average $40-$42 per ounce next year…GFMS estimates that 43% of Silver demand this year will be from industrial users, 30% for Silver investments, 21% for the manufacturing of jewelry and Silverware, 5% for photography, and 1% for producer de-hedging…this compares to 46% in Silver industrial demand, 26% for Silver investment demand, 22% for jewelry and silverware, and 6% for photography use in 2011…
Japan’s government has approved its second round of stimulus in a little more than a month, as prime minister Yoshihiko Noda tries to pep up a flagging economy in the run-up to December’s…the cabinet announced today that it would tap reserve funds to spend$10.7 billion U.S. on a variety of measures, including rebuilding areas hit by the March 2011 earthquake, employment support and aid to cash-strapped small businesses…the plan is roughly double the size of a package announced in late October, which was also drawn mostly from reserves and aimed at reconstruction efforts…the stimulus comes as Japan hovers on the brink of a technical recession, its fifth of the past 15 years, as manufacturers cut production amid a steady worsening in their sales and profit outlook…falling exports were the main contributor to a 0.9% contraction in gross domestic product between July and September, and economists are braced for another GDP contraction in the three months to December…
Canadian Growth Slows
Canada’s gross domestic product rose just 0.1% in the third quarter compared with the second quarter, Statistics Canada reported this morning…on an annualized basis, Canada’s GDP expanded at just 0.6% in the third quarter – below forecasts and well down from the second quarter’s 1.9%…among the culprits in the third quarter were exports (they fell 2% amid soft demand in the United States and a strong dollar), declining business investment and residential investment, an indication that the housing market is cooling…the drop in exports was the fastest since the quarter of 2009…mining, excluding oil and gas extraction (-2.8%), was also down in the third quarter, as production declines at potash and at copper, nickel, lead and zinc mines offset increases in coal mining, Stats Canada reported…
Today’s Markets
Asian markets were stronger overnight with Japan’s Nikkei average hitting a 7-month high while China’s Shanghai Composite Index snapped a four-day losing skid by rising 16 points to 1980…property and infrastructure-related sectors gained after local media reported that Vice Premier Li Keqiang said urbanization will drive most of the country’s development in the next decade…markets are modestly higher in late trading in Europe while there’s a little bit of “green” in North America with the Dow up 14 points and the TSX 16 points higher as of 7:30 am Pacific…the Venture is steady at 1218…
Updated Copper Chart
Copper is a key leading indicator of the health of the global economy, and it has managed to hold an important support band between $3.45 and $3.50 which leads us to believe China is on the road to recovery…the next major resistance is $3.70…the supply-demand dynamics also look bullish for at least the first half of 2013…
Huldra Silver (HDA, TSX-V)
Huldra Silver (HDA, TSX-V) has pulled back about 25% from its early November 52-week high of $1.77, and John’s latest chart (2.5-year weekly) shows strong support near current levels with the rising 100-day SMA at $1.37 and the rising 500-day SMA at $1.29…HDA is unchanged at $1.37 in early trading…
Blackwater Update
It’s almost too quiet in the Blackwater district these days – perhaps the lull before the storm…RJK Explorations (RJX.A) announced yesterday that it has completed drilling for the 2012 season on the Blackwater East and Blackwater West properties with assays pending…reading between the lines of RJK’s news, it seems the company may have been quite pleased with the core it saw in the holes at Blackwater West…we say that because RJK also announced that “Upon completion of the initial drill holes on Blackwater West, (the company) has now decided to proceed with and pay the final property option cash payment prior to (an initial deadline of) Dec. 1, 2012″…
Troymet Exploration (TYE, TSX-V) is awaiting results from reverse circulation drilling in 16 holes at its Key Gold Project, while Parlane Resources (PPP, TSX-V) commenced a drill program at its Big Bear Property just over two weeks ago…
New Gold (NGD, TSX), of course, has been conducting a lot of drilling as it continues to build a very impressive resource with its Blackwater deposit…below is an updated chart for New Gold which has some important resistance to clear at current levels…it’s up 9 cents to $10.76 after the first hour of trading…
Richmont Mines (RIC, TSX)
Not surprisingly, Richmont Mines (RIC, TSX) is taking a hit this morning on the news that it has shut down its Francoeur Mine and will be putting its Wasamac Project on hold until the potential economics of it improve…these are positive steps by CEO Paul Carmel which should help lead to a recovery by Richmont in 2013 as it continues with its two current producers (Island Gold Mine and Beaufor) and investigates new opportunities that will focus on “lower-cost, longer-life assets to secure its future and generate an improved valuation in the marketplace”…RIC is armed with plenty of cash and has no long-term debt…typically, in situations like this, a company’s stock will become very oversold so we’re looking for a potential opportunity here over the next few weeks…as of 7:20 am Pacific, RIC is off 97 cents to $2.83…
John/Jon…. GQC was at .04… quite the opportunity… with most stocks being way under water… such as VGD… in your opinion what would be your top 3 beaten down ‘gems’…??? just asking since for some reason I missed the fact that GQC drill results were still outstanding, which may have helped my decision making!! your coverage of the blackwater stuff is very helpful…
do you have any opinion on D V V ?? Bert brought it to our attention some time ago.. and along with everything else the baby was thrown out with the bath water…
thx in advance guys!
Comment by Jeremy — November 30, 2012 @ 7:41 am
GQC…. I do not feel good about it even though I made some money…. 47 cents may be an entry level for day trade and I may reset to buy back some for day trade at 45 cents….
Comment by Theodore — November 30, 2012 @ 12:30 pm
RBW – 370k for sale at 0.20. Oh man…
Comment by Kalkan - Sweden — November 30, 2012 @ 12:46 pm
kalkan,just hang tight,hopefully next week its worth double that,3 sites goin at the same time,way i look at it a 1 in three shot,thats a better chance than the lottery,its even better,we still have another 2 shots after that,agree with jon this company is no doubt working there butts off to be the main attraction,keep confident,have a safe wknd everyone…..
Comment by tom — November 30, 2012 @ 1:39 pm
Hi Tom,
yeah I am hanging in there. Have been doing it since may. My average is 0.195. I’ve agree with you. There is always a risk but they doing a hard job and hope it will pay off in the end..
Comment by Kalkan - Sweden — November 30, 2012 @ 3:04 pm
bmr,i seen something about sidon a day or two ago,is this a fact or someones idea of a joke,i’m not at all laughing if it was,could you please give us the facts if there is any,thx….or could it be someone has been asleep for the past year?? thx again.
Comment by tom — November 30, 2012 @ 3:47 pm
SSo we should get a major update on rbw next week. I hope that they have some assay results to release first. I believe that assay results have to be formally presented not in the chatty form of a major update.
Comment by richard l — November 30, 2012 @ 4:11 pm
new listing on vanc. market, deveron (DVR.V) worth doing DD on. Blackwater property, very low share structure. \\looks interesting. richard l
Comment by richard l — December 1, 2012 @ 9:13 am
Thanks, Richard, for pointing that out, forgot to mention it the other day. I actually picked up some of the IPO on DVR. You’re right – very tight share structure. The only shares available for sale at the moment are from the 25-cent IPO, about 3 million shares, and out of that I’m sure insiders added to their positions. Greencastle holds about two-thirds of DVR. Their Blackwater property is good, positioned right above Parlane which is currently drilling, and of course this property was acquired a couple of years ago by Greencastle in the early stages of the Blackwater story. It’s not drill-ready yet, I don’t believe. They put out news this last week, stating some more sampling was completed. Airborne surveys were done in late 2010 or early 2011 and identified some interesting areas. So they could be in a position to drill this maybe next summer or fall, after a little more work. There’s not much outcropping at Blackwater, so defining drill targets can be a little tricky and time consuming. Three companies – RJK, PPP and TYE – will have drill results coming out, so keep an eye particularly on PPP with regard to DVR. As bullish as I am on the Blackwater area, in my view Deveron will need to add another project somewhere. But that shouldn’t be a problem knowing the group that’s behind this deal. Geologist Jim Pirie has considerable experience with projects in Ontario and Nevada. This is exactly the kind of situation on the Venture that I find particularly appealing as I personally consider this very low-risk even though it’s in a high risk industry. You’ve got a very tight share structure, low burn rate, and in this case Deveron is backstopped financially by Greencastle. Plus the prospect of another project of maybe a more advanced stage going into DVR. $1 on Deveron is a market cap of only $11 or $12 million. So I’m just going to sit back and be patient and wait for something to click, which could be a few months, a year, or whatever, but eventually something significant should happen. Of course the near-term potential upside comes from Blackwater if one of those companies, particularly PPP, hits. I also hold some Greencastle as if and when Deveron takes off, so too will Greencastle, at least to some extent. Every 10 cent move to the upside in Deveron represents an increase of about $800,000 (nearly 2 cents per share) in marketable securities on Greencastle’s balance sheet. By the way, VGN CEO Tony Roodenberg has been been a buyer of his own stock over the last 3 months (check out the insider reports) and whenever he’s buying, that’s the sign it’s the right time to step in. As always, perform your own due diligence and check out the DVR prospectus available at Sedar.
Comment by Jon - BMR — December 1, 2012 @ 10:00 am
Jon: can you give us some sort of year end targets? what happened to 1700 for the Venture,etc? Also, tax loss may keep newsflow dormant for the next 10 days and then we head into Christmas holiday break…..most people are saying that 2013 will be the Ventures year to shine again……
Comment by steven — December 1, 2012 @ 10:06 am
I think the key to the Venture is this support around 1200, and how it behaves over the next 10 or 12 trading sessions. Markets don’t like uncertainty and with all that we have right now, in particular the U.S. situation over the budget, combined with some tax loss selling pressures, if there was ever a reason for the Venture to break below critical support (1165) it would be over the next 10 to 12 sessions. But my guess is that won’t happen, which will give the market confidence to stage an end-of-year rally and then we have 2013 off to a great start which may very well include a breakout (finally) above the long-term down trendline. I really believe we saw the low in the Venture at the end of June, and you’ll notice there have been higher lows on the RSI(14) since the low point in May. So that’s a bullish divergence. The Index has been basing for a period of time and that’s usually a bullish sign. So we’ll have to see what happens. Selling pressure and sentiment hit extreme lows during the May-June period. I guess it could happen again but my gut and my head tell me support will hold. I also of course like the fact we’ve had a reversal in the 1,000 day SMA which does indicate a change in long-term trend. The charts for a significant number of individual stocks are looking a lot better than they were several months ago. 1700 to 1800 is a realistic target – the question is timing.
Comment by Jon - BMR — December 1, 2012 @ 10:30 am
Jon there is some question as go whether RBw major update is just that or will include assays. Surely they wouldn’t just five an update after all this time without assays would they?? What are your thoughts?
Comment by Heath stockford — December 1, 2012 @ 6:03 pm
Hi Heath, assays are obviously due so my guess is there will be assays and an overall exploration update. I would imagine it’s too soon for assays from Jewel Ridge, so we may not get much on Jewel Ridge other than an update on number of holes drilled. But the words “major exploration update” have been stated, so…maybe there’s something more cooking than meets the eye. We’ll find out soon enough. Generally with most companies, “early in the week” news is usually better than Thursday afternoon or Friday news.
Comment by Jon - BMR — December 1, 2012 @ 6:25 pm
Article from La Presse.
Basically, Dundee Capital says that the worst is behind RIC and that it is a buying opportunity. $5.50 is the call by the analyst.
Il est temps que l’année 2012 finisse pour Mines Richmont. L’action (RIC) a perdu plus de 25 % hier à Toronto, au lendemain de l’annonce de la fermeture de la mine Francoeur et de la suspension de l’exploration à Wasamac, propriété pourtant très prometteuse il y a un an à peine.
Depuis le mois de février, la valeur en Bourse de l’entreprise de Rouyn-Noranda, dont la Caisse de dépôt et placement détient presque 10% des actions, a fondu de plus de 75%, à 112 millions. La mine Francoeur, près de Rouyn-Noranda, a été la première mine de la société et a d’abord été exploitée de 1989 à 2001. Après plusieurs années d’efforts, la société abitibienne a relancé la production commerciale dans cette mine en août, mais en vain : les coûts étaient trop élevés, et les perspectives de rentabilité presque inexistantes dans un avenir rapproché. Environ 115 personnes perdent leur emploi et reçoivent une indemnité équivalente à 16 semaines de travail. «On ne peut pas continuer à financer des mines en perte d’opération», justifie le président et chef de la direction de Richmont, Paul Carmel, en poste depuis le mois de mai. L’analyste Ron Stewart, de Dundee Capital Markets, salue cette «décision prudente», «dans le meilleur intérêt des actionnaires».
Au troisième trimestre, Francoeur a produit 1087 onces d’or à un coût de 2664 $US l’once. Francoeur avait beaucoup de prises contre elle : les teneurs étaient beaucoup plus faibles que prévu, la mine était à 100 kilomètres de l’usine de traitement, et le manque d’employés d’expérience avait un impact important dans cette mine non mécanisée.
Richmont avait déjà réduit de 75 % la valeur de Francoeur en juillet. Pour la fermeture, elle ajoutera une radiation de 11 à 13 millions aux résultats du quatrième trimestre.
Désillusion pour Wasamac
Mines Richmont comptait aussi beaucoup sur le projet Wasamac, dans la même région, pour franchir un jour le seuil de production de 200 000 onces. «Les attentes étaient élevées», concède Paul Carmel, et la quantité de ressources pouvait permettre d’espérer. Mais les résultats de la première étude économique, en mars, ont dissipé les illusions. Le projet nécessitait un investissement initial élevé (plus de 500 millions) pour un faible taux de rendement et un long retour sur investissement (huit ans).
Dans ce contexte, Richmont place le projet sur une tablette mais continuera les études métallurgiques et le processus d’obtention des permis. Advenant une hausse suffisante du prix de l’or pour assurer une meilleure rentabilité, «on aura gagné du temps», dit Paul Carmel.
En attendant, Richmont va se concentrer sur la mine Island Gold, en Ontario, qui produit entre 40 000 et 50000 onces par année. «C’est elle qui offre le plus de potentiel», dit M. Carmel, en soulignant une récente découverte en profondeur.
Richmont, qui exploite aussi la mine Beaufor, à l’est de Val-d’Or, prévoit désormais produire entre 65 000 et 70 000 onces, contre un pronostic précédent de 85 000 à 95 000 onces.
L’analyste Ron Stewart, de Dundee Capital Markets, suggère aux investisseurs de profiter de la faiblesse du prix de l’action pour en acheter. «Les mauvaises nouvelles sont derrière», croit-il. Il note que Richmont n’a pas de dette, a des liquidités de 67 millions et deux mines avec «des occasions de croissance significatives». Il abaisse tout de même sa cible de 6,60 à 5,50 $.
Comment by Alexandre — December 2, 2012 @ 1:41 am