Gold climbed as high as $1,224 this morning but has since pulled back…as of 9:25 am Pacific, bullion is down $1 an ounce at $1,212 after touching a 6-week low yesterday when it found support as expected at the $1,200 level…Silver is flat at $16.50…Copper was down earlier this morning but is now unchanged at $2.61…Crude Oil, under pressure from another weekly build in U.S. inventories and a possible rise in Saudi output, briefly fell below $50 a barrel but has since recovered some of that lost ground…WTIC is now at $51.35, 80 cents lower for the day…the U.S. Dollar Index, meanwhile, has gained one-fifth of a point to 94.32…
While Gold’s correction from its January high hit nearly 8% yesterday following a 16% advance from its early November low (a healthy 50% pullback), Gold stocks have been more resilient in the face of bullion’s recent weakness – a bullish sign (today’s Morning Musings includes an updated TSX Gold Index chart)…and although the Venture has more of a correlation with Oil than Gold these days, a fact that’s in evidence again today, it’s nonetheless encouraging that the Venture recorded 9 positive sessions out of 13 (Jan. 30 through yesterday) while bullion fell $60 an ounce during that time to test support at $1,200…
Gold got a boost yesterday when minutes of the Fed’s Jan. 27-28 meeting showed that officials struggled to determine the appropriate timing for a rate hike…they appear reluctant to pull the trigger anytime soon…the Fed’s benchmark interest rate has been at a record low near zero since December 2008, and policymakers are obviously concerned that inflation has slipped further from the 2% target in recent months…this is due of course to big declines in energy prices and a stronger U.S. dollar which makes imported products cheaper for American consumers…
Copper Update
Overlooked during yesterday’s gyrations in Gold is that Copper prices managed to hit a 4-week high…analysts have started whittling down their estimates for how large a supply glut Copper markets will see this year after BHP Billiton said last week that its Olympic Dam may see a production shortfall of as much as 70,000 metric tons due to an electrical failure…on the demand side of the equation, investors will will be keeping their eyes on a flurry of PMI’s scheduled to be released toward the end of the month to gain a better idea on how the manufacturing sector in Asian and European countries fared in February…
Euro Zone Continues To Grapple With Greece
More drama on the way here…Greece and its euro zone creditors are poised for another round of tough negotiations over extending the government’s bailout program, after Germany today summarily rejected a request for an extension sent by Athens…
TSX Gold Index Update
The behavior of the TSX Gold Index continues to support the notion that bullion’s decline is temporary…the Index has retreated rather gently given the drop in Gold from $1,300 to $1,200, and an overall uptrend in the Gold Index remains firmly intact based on this 6-month daily chart…
The rising 50-day moving average (SMA) coincides with Fib. support in the mid 160’s while 175 Fib. support held yesterday on a closing basis…what we’re seeing here is normal consolidation after a powerful initial wave (an advance of just over 50% in less than 3 months) following the dramatic early November low…the next phase should be another substantial leg up to test resistance just above 200…there’s every reason to believe that the Fib. support range between 158 and 175 will hold…
Richmont Mines (RIC, TSX) Update
Our favorite producer remains Richmont Mines (RIC, TSX) which released Q4 and full-year financial results this morning…the company earned $8.2 million or 18 cents per share in 2014 on total Gold sales of 94,503 ounces at a cash cost per ounce of $956 CDN, 15% below 2013 levels…total 2014 revenues were up 47% to $132.2 million…
As of February 11, following the closing of a financing at $4 per share, Richmont had a cash balance of $67.5 million and limited long-term debt (under $6 million)…the company will be able to leverage its strong cash position to accelerate development plans for its Island Gold Mine (IGM) this year and begin to unlock the value of that northern Ontario asset…
Richmont is forecasting production of 78,000 to 88,000 ounces of Gold during this transitional year, but a steady ramp-up in production is expected thereafter as the company starts mining the impressive high-grade deep resource at IGM…
RIC is down 4 cents at $4.16 through the first 3 hours of trading today…
Below is an updated 4-year weekly RIC chart…breakouts above long-term downtrend lines, as occurred in RIC at the beginning of last year, are typically exceedingly bullish…the strong fundamentals with this company increase the likelihood that RIC will continue to follow the price uptrend line for an extended period…any pullbacks to that uptrend line, as witnessed late last year, are classic buying opportunities as the chart has already demonstrated…
Today’s Equity Markets
Asia
Japanese stocks rose to a 15-year high overnight…the Nikkei gained 0.4% to finish at 18264.79, the highest since May 2000…China and some other Asian markets remain closed due to the Lunar New Year holiday period…
Europe
European markets were mostly modestly higher today despite news that Germany had rejected Greece’s request for an extension to its loan agreement with its creditors…
North America
The Dow is down 31 points as of 9:40 am Pacific…in Toronto, the TSX is off 35 points while the Venture has dipped 5 points to 693 with the weakness in Oil this morning…
Ryan Kalt’s Gold Royalties (GRO, TSX-V) nearly doubled in price yesterday, surging 8 cents to close at 18.5 cents, thanks to a takeover offer from Sandstorm Gold (SSL, TSX)…Gold Royalties, which traded as high as $1 per share in 2012, has approximately $2 million in cash and a portfolio of 18 royalties on 13 mining projects in Canada, including 1 royalty that is generating cash flow from Gold production…upon the closing of the arrangement, Sandstorm will have a portfolio of 10 streams and 59 royalties…
Kalt can focus more now on Athabasca Nuclear (ASC, TSX-V) which has speculative potential as a large landholder in the emerging Pikoo diamond play…North Arrow Minerals (NAR, TSX-V) commenced a 3,000 m drill program at its Pikoo Project last week, so this is an area that could indeed heat up in the coming weeks and months…ASC is trading at just 3.5 cents…
Kaminak Gold Corp. (KAM, TSX-V) is raising more money, a $21 million bought deal financing with a syndicate of underwriters co-led by Cormark Securities Inc. and Raymond James Ltd. who have agreed to purchase a combination of hard dollar units at 90 cents per share and flow-through units at $1.15 per share…no warrants attached…Kaminak is off 2 cents at 92 cents on the news as of 9:25 am Pacific…
Venture 3-Year Weekly Chart
The Venture’s 3-year weekly chart shows a rebuilding pattern similar (so far at least) to the one witnessed during the summer of 2013…downside risk has eased considerably as the Index continues a slow recovery from its recent low (637 in mid-December)…
RSI(14) is trending higher after landing at previous support (the 2013 low)…important near-term chart and Fib. resistance (not shown below) exists at 707…if and when that area is cleared, the next major hurdle would be around 745 followed by 875 and then 970…so the Index has some work to do but the current trend offers encouragement with solid support around 680…
Help could come in the form of a rebound in commodity prices or a much-needed major discovery somewhere…
Garibaldi Resources Corp. (GGI, TSX-V) Update
There are few exploration companies on the Venture with the kind of explosive, company-building opportunities Garibaldi Resources (GGI, TSX-V) has in both Mexico and British Columbia…we came to that conclusion after extensive due diligence on Garibaldi in mid-2013, and since that time GGI has tripled in price despite a challenging overall market environment…the discovery at Rodadero in Mexico has long legs given Silver Eagle and a dozen nearby target areas, the La Patilla Gold Property has excellent near-term exploitation potential, while the Grizzly in northwest B.C. has massive scale to it in a district that continues to move in a highly encouraging direction…more near-term discoveries in the under-explored Sheslay region seem almost certain, and this could ultimately lead to a major mining company stepping in and taking out the likes of Doubleview Capital (DBV, TSX-V) and Garibaldi…given the results this emerging district continues to produce, incredible outcomes are possible here…geologists are thinking big…investors need to as well…
In the speculative junior resource market, volatility is the norm which it’s why it’s important to use technical analysis to better understand price movements including primary trends and healthy pullbacks…
In the case of GGI, the pullback from last year’s high of 32.5 cents can best be understood as a “Wave 4” correction within the context of a continuing primary uptrend as shown in this 2-year monthly chart…
“Wave 4” has been no different than “Wave 2” which also resulted in a 50% pullback…”Wave 3” was a powerful move to the upside…the stage appears almost set for “Wave 5” where Fib. resistance is indicated…
GGI 10-Year Monthly Chart
This 10-year monthly GGI chart provides additional perspective and also helps confirm the 2-year monthly chart…there are several important “takeaways” here:
1. Note the rising 500-day moving average (SMA) at 15.5 cents which also coincides with Fib. support levels;
2. The bullish +DI crossover in mid-2013 marked a major trend change which continues to hold;
3. An extended period of sell pressure switched to buy pressure (CMF) in late 2013, and accumulation remains strong;
4. RSI(14) has held within the 40% to 80% bullish range since mid-2013;
5. GGI has significantly outperformed the Venture (in blue) since mid-2013 which puts the stock in an elite category.
When it comes to junior resource stocks, having a proper grasp of the bigger picture, both on the ground and in the market, doesn’t guarantee success but makes one less likely to commit silly trading/investing mistakes based on emotion…
Note: John and Jon both hold share positions in GGI and DBV.
BMR – “Wave 4” has been no different than “Wave 2” which also resulted in a 50% pullback…
”Wave 3” was a powerful move to the upside…the stage appears almost set for “Wave 5”
where Fib. resistance is indicated…
Bert – The market must have noticed some weakness in GGI, otherwise WAVES would not have slowed
down the S.S. Garibaldi…
Comment by Bert — February 19, 2015 @ 9:58 am
GGI – thats a 10 year chart. I’ll be dead waiting for the mechanics of a turnaround on a 10 year chart
Comment by dave — February 19, 2015 @ 10:07 am
Greg – WRR – a repost from my #25 yesterday. I hear ya, I have a stink bid in at .03 – I might get lucky, but I already own a bunch so not worried here.
Comment by dave — February 19, 2015 @ 10:10 am
correction – stink bid at .035
Comment by dave — February 19, 2015 @ 10:11 am
Only 14.5M shares outstanding
A microscopic market cap (about 700K)
Proven 400,000 oz Au deposit with a 43-101
The top mgmt team in the North (Alaska/Yukon/NWT) per Tickerscores Feb 2014 Power Rankings
Lots of paid-for data to work with due to ~$3M of exploration work on its property pre-acquisition (based largely on this data, management is confident that the current deposit can be proved up to over 1,000,000 oz Au.
Within six months of listing on the Venture Exchange Banyan Gold acquired 100% of the Hyland Gold Project for approximately $1/oz of resourced gold and demonstrated significant geological upside positioning the shareholders well as market conditions rebound. The Hyland 400,000 oz gold NI43-101 compliant gold resource coupled with near term plans to drill and expand the Main Zone and advance Cuz Zone and Montrose Ridge discoveries separates Banyan Gold from its TSX.V peer group. On the strength of the impressive Hyland Gold property, Banyan Gold intends to grow shareholder value through discovery and accretive acquisitions.
Tight Share Structure
Shares issued and outstanding: 14,484,000
Warrants: 3,500,000 ($0.15 until Mar 1, 2015)
Options: 1,075,050
Shares (fully diluted): 19,059,050
Major Shareholders:
Management & Board 37.7%
Victoria Gold 15.3%
Pat Sheridan Group 14%
Comment by Sebastian — February 19, 2015 @ 10:23 am
Thanks-Dave!! I am way, way, down the list for a .035 fill,.. Whats half a cent,.. These days lol Cheers!!
Comment by Greg J. — February 19, 2015 @ 10:26 am
Banyan Announces $1,000,000 Non-Brokered Private Placement
Calgary, Alberta (FSCwire) – BANYAN GOLD CORP. (“Banyan” or “Banyan Gold” or the “Corporation”), subject to TSX Venture Exchange approval, is conducting a non-brokered private placement of up to twenty million units at 5 cents per unit for gross proceeds of $1,000,000.
Each unit consists of one common share and one half of a non-transferable common share purchase warrant, with each full warrant exercisable into one common share of the company at an exercise price of 7.5 cents, exercisable for a period of 24 months from the date of issuance. The Warrants, which form part of the Unit, may have their expiry time accelerated at any time prior to the expiry of the Warrants if the volume weighted average trading price of the Corporation’s shares on the TSX Venture Exchange is greater than $0.12 for 15 consecutive trading days, at which time the Corporation may give notice in writing to the Warrant holders within 10 days of such an occurrence that the Warrants shall expire on the 30th day following the giving of such notice. The financing may be closed in tranches at the discretion of the Corporation. A finders fee of up to 6% may be paid on a portion of the financing.
The funds raised will be used for the Banyan’s Hyland Gold Project, and general and administrative costs.
This News Release has been reviewed and approved by Paul D. Gray, B.Sc., P.Geo., Vice President Exploration for Banyan Gold, the Qualified Person as defined by NI 43-101.
Read more at Stockhouse website…
Comment by Sebastian — February 19, 2015 @ 10:37 am
DBV – I suspected that was going to happen. The .16 support was a very low 2 confluence number, not strong at all. The .15 level has a very strong confluence level. It should not drop below .15
GGI had something very interesting happen yesterday. I want to see how she responds tomorrow before I toot my horn. I will be watching the open and post it in the morning.
Comment by dave — February 19, 2015 @ 1:09 pm
Jon- when will the Patrick McAndless interview be available? Thanks
Comment by d4 — February 19, 2015 @ 1:55 pm
Hi d4, Pat agreed to our request for an interview but scheduling conflicts on both parties’ part haven’t made that possible yet. It will happen. In the meantime, we are working on something else immediately with regard to a very educational piece, so stay tuned. Much more to come on the Hat and of course the district as a whole. Just geologically speaking, this is incredibly fascinating, not to mention the market aspect of it.
Comment by Jon - BMR — February 19, 2015 @ 3:15 pm
Gezz, all this secrecy, hope I can sleep.
Comment by Tombc — February 19, 2015 @ 4:10 pm
I will end my suspence now. GGI – She did an inverted hammer on Wednesday. You know how I love my inverted hammers. But confirmation is needed. Yesterday she opened higher and remained there. That is your confirmation. Today, she opened yet higher again. She should start to move up. .18 is the strongest resistance right now. If she can ever pass .23, she will run hard.
Comment by dave — February 20, 2015 @ 6:41 am
Can you comment on xme news today john? The whole vms lingo is over my head. Didn’t find graphite but def hit something.
Comment by Franky g — February 20, 2015 @ 7:08 am
That’s positive Dave, won’t be long now.
Comment by Tombc — February 20, 2015 @ 7:22 am
Seems they’ve hit some sort of a system, Franky; the small batch of test assays from 2 holes aren’t exciting but…that’s just a very small batch. The semi-massive to massive sulphides they encountered will at least give reason for some speculation here until all assays are in…
Comment by Jon - BMR — February 20, 2015 @ 7:41 am
Tombc – GGI – yes, just be a little more patient. It won’t break out overnight, but it should. As an example, just one of my many. Look at the chart to ALV. I bought that off the inverted hammer at .31 – it took a few weeks, then bamm. I am almost always in a green trade ratio with these and I love them. With John being BMR chartist, He may think I’m crazy, but I have traded these for years.
Comment by dave — February 20, 2015 @ 7:49 am
Thanks Jon. Drilling grasset right away too. Might get some excitement going with two properties going at same time!!
Comment by Franky g — February 20, 2015 @ 7:50 am
Any chance of a chart on xme?
Comment by Franky g — February 20, 2015 @ 7:57 am
Dave
Re: GGI, i hope you are correct because i am a shareholder,
but i feel we will not go up today, considering this & that
& today being Friday.
Comment by Bert — February 20, 2015 @ 7:59 am
Franky, we’ll see how it does today and look at it perhaps on Monday. Resistance at 6 cents. I like the reference to the sulphides; if the initial test assays weren’t part of this morning’s news, the stock would probably be doing a lot better just on speculation…those results (albeit initial and very small in number) have restrained the move so far, but this is interesting nonetheless…
Comment by Jon - BMR — February 20, 2015 @ 8:41 am
Bert
Still green, patience – a little every day. Look at the chart to ALV at .30 – a little every day and then the breakout. Oh, also support has moved up from .15 to .16 – Cheers
Comment by dave — February 20, 2015 @ 9:06 am