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Gold has traded between $1,251 and $1,259 so far today…as of 7:45 am Pacific, bullion is unchanged at $1,255…Silver is 9 cents lower at $18.93…Copper has retreated 7 cents to $3.10…Crude Oil is 48 cents higher at $93.14 while the red-hot U.S. Dollar Index is flat at 84.33…the greenback is near July 2013 highs versus a basket of leading currencies, tracking rising U.S. yields after a San Francisco Fed study noted investors are pricing in a lower trajectory for interest rate rises than members of the central bank…

Top buyer China returned from a holiday yesterday but failed to provide any significant support to Gold prices, though premiums on the Shanghai Gold Exchange are slightly higher (steady in the $4 to $5 range) than they were early last week…meanwhile, demand from India remains subdued ahead of the Indian wedding and festival season, which typically falls in October and November, when it’s considered auspicious to buy the metal…

Zinc prices remain close to 3-year highs…production is expected to fall short of demand this year for the first time since 2007, according to Goldman Sachs…several large, aging mines are scheduled to close next year, and miners need higher prices to justify the cost of finding and developing new sources of metal…miners may not produce enough Zinc to meet the needs of steel companies and coin makers until 2018, analysts say…meantime, a rebound in the U.S. property market and soaring global auto sales are creating new demand for galvanized steel…Zinc is used in everything from steel coatings to car tires to sunscreen, and the metal has few substitutes…

“Peak Gold”? 

Miners have reached “Peak Gold“ in which production of the precious metal has hit its high as easy-to-mine Gold deposits become harder to find, according to Chuck Jeannes, CEO of Goldcorp Inc. (G, TSX), the world’s largest Gold miner by market capitalization…a Wall Street Journal report quotes Jeannes as saying that a falloff in supply will support the Gold price, but make mining it even harder and lead to further consolidation in the industry. “Whether it is this year or next year, I don’t think we will ever see the Gold production reach these levels again,” he declared. “There are just not that many new mines being found and developed.” 

In that context, it’s even easier to understand Agnico Eagle Mine Ltd.’s (AEM, TSX) $205 million buyout offer announced after yesterday’s close for Cayden Resources Inc. (CYD, TSX-V), an aggressive Mexican explorer which has demonstrated multi-million ounce potential with its El Barqueno concessions – a possible new world class Gold district – in Jalisco State…it’s an encouraging sign to see a major step up to the plate in the current environment to buy what it considers to be an undervalued asset…

“This acquisition is consistent with our long-term strategy of acquiring promising, early-stage Gold projects, where we can add value through focused exploration and mine building,” said Sean Boyd, President and CEO of Agnico Eagle. “This strategy has served us well in Mexico, and we believe that the Cayden properties are a very good fit with our existing southern operations and skill sets,” he added. 

Meanwhile, last night, Taseko Mines Ltd. (TKO, TSX) announced an all-share buyout of Curis Resources (CUV, TSX-V) which holds the Florence Copper Project in Arizona, midway between Phoenix and Tuscon (probable reserves of 340 million tons grading 0.36% total Copper (TCu) at a cut-off grade of 0.05% TCu)…Taseko already owned a good chunk of Curis, having conducted a $7 million private placement in CUV late last year at 60 cents to boost its interest to 17%…

Today’s Markets

Asia

China got back to business after a holiday Monday, but the Shanghai Composite traded in a narrow range overnight and closed essentially unchanged at 2326…investors essentially shrugged off trade data released yesterday that showed growth in China’s imports slowed for the second straight month in August…Japan’s Nikkei average was up slightly overnight to close at 15749…

Europe

European markets are off modestly in late trading overseas…concerns are mounting over an upcoming independence vote for Scotland…meanwhile, the European Union formally adopted a package of new sanctions against Russia late yesterday, but said their entry into force would be delayed to leave time to assess whether a cease-fire in Ukraine is holding…

North America

The Dow is down 84 points as of 7:45 am Pacific…the 10-year U.S. Treasury yield has hit a 6-week high…a report from the San Francisco Federal Reserve states that the public seems to expect more accommodative policy than members of the Federal Open Market Committee themselves…it also notes that the public “might not give enough weight to how dependent the central bank’s guidance is on both current and incoming data”.

The TSX is up 7 points while the Venture has added 4 points to 989 through the first 75 minutes of trading…

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

As Garibaldi Resources (GGI, TSX-V) gears up for first-ever drilling at the Grizzly in northwest B.C.’s Sheslay District, company President & CEO Steve Regoci could not help but be highly encouraged at yesterday’s news of Agnico Eagle’s buyout of Cayden Resources which highlights the immense opportunities that do exist in Mexico…

As drilling continues at GGI’s Silver Eagle discovery, approximately 90 km northwest of Agnico Eagle’s La India mine which went into commercial production earlier this year, Regoci told BMR that his team is not only focused on expanding the high-grade open-pit potential of Silver Eagle, but exploiting what they see as a large-scale district opportunity and the emergence of a new mineral camp at Rodadero.

“Our guys are exceptionally excited by the nature of the mineralization and the clustering effect down there at Rodadero,” Regoci stated.  “I actually consider that this in fact a new mineral belt.  La Tortuga and Tarichi to the east and southeast of Silver Eagle have an awful lot of sampling done down there.  It’s more Gold than Silver, though even there we have exceptionally high-grade Silver.  But the Gold numbers are surprising.  You see the transition from the west to the east.  As you move toward the east you get more Gold than you do Silver, and it’s prolific.  So it’s going to be interesting to figure out exactly where we are in the system…what we feel is, we’re looking at high-grade near-surface, but it has the potential that there’s something very large and significant feeding this system which is kilometers wide in every direction.”

Prosper Gold Corp. (PGX, TSX-V) Update

Drilling started nearly four months ago at Prosper Gold’s (PGX, TSX-V) Star Project, so initial results could come almost anytime now…as we’ve stated repeatedly, the Star is an exceptional property with the potential to deliver stellar results that would confirm the world class potential of the entire Sheslay district…and if there’s anyone who can figure out this geological puzzle, it’s Dr. Dirk Tempelman-Kluit whose last project of course was the multi-million ounce Gold discovery at Blackwater that’s now in the hands of New Gold Inc. (NGD, TSX)…

Given historical results, plus the results of Prosper’s first phase of work completed late last year, there’s little doubt that the Star has massive tonnage potential with the opportunity as well for higher grade zones given the cooked-up nature of the rocks in this district…with a current market cap of only $8 million, the upside potential in PGX is huge in our view…several months ago, Tempelman-Kluit and President and CEO Pete Bernier invested about a combined $600,000 of their own money as part of a PGX private placement at 50 cents…

Technically, Prosper is showing clear signs of forming a bottom around strong support at 25 cents…SS is very oversold while RSI(14) on this 2.5-year weekly chart may have hit a low at 30% with a possible bullish “W” emerging…

Boxxer Gold Corp. (BXX, TSX-V) Update

Boxxer Gold (BXX, TSX-V), after recently announcing the closing of an over-subscribed private placement that hauled in $620,000 at 4 cents, announced another raise last Thursday – smaller ($150,000) but above the market price at a nickel…so we’re watching this a little more closely…

On August 18, BXX broke out above a long-term downtrend line after announcing very encouraging “visuals” from the first hole completed at the company’s DOK Project (JV’d with Continental Precious Minerals Inc. – CZQ, TSX) – 30 miles due south of the Grizzly…

As we cautioned previously, while the visuals from this first hole look quite promising, the likelihood of a lengthy economic intersection right off the bat would be quite remote in our view…we would define success for BXX and CZQ as finding a trail of mineralization that they can follow, one that warrants additional drilling…visuals can also be very deceiving at times but the geologists behind this are well respected…

Boxxer has more paper (over 300 million shares O/S) than any shredder could handle, but BXX is worth keeping an eye on in the event there’s a pleasant surprise out of DOK, plus the company has some other interesting projects on the go including one in Idaho that we suggest readers take a look at…

Below is a 3-year weekly BXX chart…the technical set-up is intriguing with very strong support at 3 cents and a band of resistance between a nickel and 7 cents…one advantage of so many shares outstanding is liquidity for investors – especially if something big were to unfold…BXX is up half a penny at 4.5 cents as of 7:45 am Pacific…

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

A Fib. support level at $1.90 continues to hold for Ascot Resources (AOT, TSX-V) in a consolidation phase following 12 winning sessions out of 13 between August 11 and August 27…the minor pullback from a multi-year high of $2.40 August 28 was certainly not surprising after such a powerful run…

Ascot continues to drill aggressively with three rigs at its Premier Property that covers more than 100 sq. km near Stewart and includes the past producing Premier high-grade mine…this is a potentially very prolific fundamental play in our view…historic work and recent Ascot drilling indicate a system where mineralization is focused in a structural zone with widths ranging from 30 m to 150 m, with a known strike length of over 1,600 m and a dip length of up to 1,200 m…

Below is an updated 1-year daily chart…buy pressure has been intense since mid-July, and a temporarily overbought RSI(14) condition appears to have been cleansed…as always, perform your own due diligence…

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