It has been an eventful 24 hours…Gold has surged to a new record high this morning despite the fact the possibility of a U.S. debt default has all but vanished following the approval of the debt ceiling legislation by the House of Representatives last night…the legislation is expected to easily sail through the Senate today before it’s signed into law by President Carter (oops, meant Obama of course)…the market’s attention has turned to the soft U.S. economy and perhaps Gold’s strength today is due in part to an expectation that the Federal Reserve is about to enter the picture again with some creative form of “QE3″…Gold bulls were also emboldened by reports overnight that South Korea’s central bank bought 25 tons of Gold while Greece’s central bank added 1,000 ounces to its reserves…in addition, holdings of the metal in exchange-traded products rose for a sixth day yesterday, climbing 1.4 metric tons to a record 2,153.6 tons according to data compiled by Bloomberg…we’re also approaching that time of year when the “Love Trade”, as Frank Holmes calls it, begins to kick in…September is the beginning of the gift-giving season for the yellow metal which helps drives up demand…the transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, continues to have a huge impact on Gold…it’s really now becoming just a question of when, not if, Gold hits $2,000 an ounce…ultimately, $3,000 or more is very possible…for now Gold continues to trade in a predictable bullish upsloping trend channel, as John’s chart below illustrates, and what we have to watch for is resistance at the top of that channel or even a potential breakout from it…John’s estimate has been for Gold over the near-term to get as high as $1,675…as of 7:45 am Pacific, the yellow metal is up $17 an ounce at $1,637 after touching a new all-time high of $1,642…John’s chart is based on Friday’s closing price of $1,627 but one gets the picture…
As of 7:45 am Pacific, Silver has gained 90 cents to $40.14, Copper is unchanged at $4.40, Crude Oil is 33 cents higher at $95.22 while the U.S. Dollar Index is unchanged at 74.29…Canadian markets of course were closed yesterday…the Dow went on a wild ride (3% intra-day reversal) thanks to the debate in Congress and weak economic data (the ISM Manufacturing Index showed new orders slipped to their lowest levels in two years while overseas, the latest HSBC’s China Purchasing Managers Index fell below 50 in July for the first time in a year)…yes, the economy looks rather ugly in the U.S. but that’s not necessarily a reason to sell stocks…what it does say is that America, which has lost its way, needs a President who understands how a properly functioning economy is supposed to work – not a President who’s a “community organizer” with no experience at running a business and just wants to tax the “wealthy” and take shots at “Big Oil” and Wall Street…America needs to get back to its roots, downsize government, overhaul and simplify the tax system, reduce job and investment-killing taxes and other burdens that businesses both small and big are facing, and unleash the incredible entrepreneurial spirit of its citizens…that’s a big part of the recipe for a financial Revival of America and that revival will be the major theme of the 2012 presidential elections…okay, that’s our speech for today, let’s now take a look at how the Gold stocks and the Venture Exchange are performing as a new month begins…the CDNX, which recovered nicely Friday after hitting an intra-day low of 1963, is up 7 points at 1986…the TSX Gold Index, which fell more than 5% last week, is up 9 points in early trading at 385…John spent the long weekend reviewing some company charts and has updates this morning on two situations that readers should watch closely…Silver Quest Resources (SQI, TSX-V), which just completed a $12 million financing, has a very interesting chart with the stock up 3 pennies at the moment at $1.05…
(Both John and Jon continue to hold positions in SQI, Terry does not hold a position)…Silver Quest, of course, has a 25% interest in the northern portion of New Gold Inc.’s (NGD, TSX) very attractive Blackwater deposit in central British Columbia…Blackwater is a project that BMR has closely followed since late 2009 with NGD officially closing its acquisition of Richfield Ventures‘ a couple of months ago…NGD continues a major drill program at Blackwater…Silver Quest also has a strong presence in the Yukon’s White Gold District and increased its summer exploration budget for that area last month to $7 million…the Yukon is hot, as our readers know, and we’re also watching with great interest the progress of such companies as Golden Predator (GPD, TSX), Kaminak Gold (KAM, TSX-V), Pacific Ridge Exploration (PEX, TSX-V), Northern Tiger (NTR, TSX-V), Ethos Capital (ECC, TSX-V) and a 10-cent “sleeper” we mentioned last week that readers should perform due diligence on, Dawson Gold (DYU, TSX-V)…in northwest Quebec, an exciting month of August is likely shaping up for Richmont Mines (RIC, TSX) which has tremendous earnings momentum right now with Q2 financials expected soon…folks, the street has not yet discovered Richmont and what’s developing at its Wasamac Property west of Rouyn-Noranda which is why it’s so important to investigate this opportunity and understand the RIC “big picture”…Richmont appears to be keeping its costs under control and is benefiting hugely from the increase in the price of Gold…the company is expected to produce between 80,000 and 85,000 ounces this year and should be able to increase that total by 40% next year with commercial production scheduled to begin at the Francoeur Mine by Q1 2012…Wasamac has the potential to add another 100,000 ounces or more per year to Richmont’s production…RIC is currently up 35 cents to $7.81…earnings of $1 per share this year are very possible for this company which has no debt, approximately $50 million in cash and a market cap of only $250 million….drilling aggressively around Wasamac and about to launch a major exploration campaign at the Joutel Project 150 kilometres north of Rouyn-Noranda is Visible Gold Mines (VGD, TSX-V) which also has a very bullish-looking chart as August gets underway…VGD was up 49% in July after struggling from April through June during the CDNX correction…this company is in the process of drilling 40,000 metres this year over some very prospective ground, so we like VGD a lot for its discovery potential…the fact it’s positioned around Wasamac is an advantage while at Joutel, VGD‘s Eastern Extension has excellent potential to host a deposit (or even a series of deposits) similar to Agnico-Eagle’s (AEM, TSX) past producing Telbel, Eagle and Eagle West mines just a few kilometres to the northwest…VGD’s senior geologist is Robert Sansfacon who is highly respected in mining and geological circles in Quebec – he was involved in the discovery of Osisko’s (OSK, TSX) giant Canadian Malartic deposit…VGD is quiet so far this morning after closing Friday and the month of July at 33.5 cents…
Both John and Jon hold positions in Visible Gold Mines (Terry does not)…
Jon
The lack of news makes it difficult for you to comment on GBB. I have concern
over this silence, and the market for the stock. Would appreciate your current
thoughts………..
Comment by Bob — August 2, 2011 @ 7:28 am
Hi guys,
Rumor is that Brewery creek would be a Carlin type deposit, Any tought?
Good luck with VGD,
Martin
Comment by Martin — August 2, 2011 @ 7:32 am
Hi Bob, what’s there to be concerned about? It’s a waiting game right now with regard to GBB – everyone is waiting for the 43-101. It’s in capable hands with GENIVAR so I wouldn’t worry about it. We commented about GBB and ran a chart on it last Friday, plus of course the weekly review on Saturday. Don’t expect us to comment on GBB or any other company every single day. The potential of the LONG Bars Zone remains enormous, and I believe results to date have demonstrated that. Yes, it’s low grade, but near-surface and the metallurgical testing so far has been positive. Surrounded by excellent infrastructure in one of the best places in the world for mining. Lots of positives.
Comment by Jon - BMR — August 2, 2011 @ 7:58 am
If the BMR folks are Canadians, which i am of the understanding they
are, are they able to personally evaluate President Obama’s performance
in a fair manner ? Hopefully, they are not basing their remarks on some
of the talking heads, on some of the anti Obama u.s. radio/tv stations. As
for Gold, it would be nice to see it go to $2,000.00, but if the speculative
gold plays don’t follow, what’s the use.
R !
Bert
Comment by Bert — August 2, 2011 @ 8:30 am
Bert, that’s exactly what the market wants you to think.
Sell gold stocks because gold goes up and the stocks don’t follow.
There’s nothing further from the truth – be it producers, explorers or specs.
Plays under $10 M market caps like SD and etc may not follow this but that’s because they’re in their own speculative category and are still very risky plays.
Plays like GBB, NES, and AVR should do very well in here and giving away gold stocks cause they’re not performing is the worst possible move at this point. Especially if you held throughout the whole summer and are now looking to let go of the stocks 3 weeks before gold stocks always begin turning.
Comment by Taylor — August 2, 2011 @ 8:40 am
i agree with Taylor obviously..the run will start soon !
Comment by dude — August 2, 2011 @ 8:53 am
Hi Bert, yes, we’re all Canadians……I have always had a keen interest in U.S. politics and that also was an area of study for me at university many years ago……I’m also a conservative and in the U.S. I’m sure I would fit very comfortably within the Republican Party, probably unlike most other Canadians…..so that’s where I’m coming from…I firmly believe the Obama presidency has been a disaster, though I must admit he inherited a difficult situation…..he’s probably one of the most left-of-centre Presidents in American history – he’s very much the Pierre Trudeau of the United States or another Jimmy Carter….unfortunately, most younger Americans can’t remember the disastrous policies of Carter back in the late 1970’s which is why they got duped by Obama…..he can make a great speech but he’s clueless on economic policy and his first cabinet that was sworn in had the least private sector experience of any cabinet in American history….enough said….he’ll be gone in November 2012….
Comment by Jon - BMR — August 2, 2011 @ 9:01 am
Jon
Thanks for the reply & because i am also a Canadian & have followed
U.S. politics for an extended period of time, i feel you may not be
giving proper consideration to the mess he was left with & i mean
a mess, compounded by the Bank’s mishaviour, etc. etc. Anyway, there’s
lots for us to argue about & i will leave it at that, but as for the
November 2012 U.S. election, i feel President Obama will survive, but
if i am wrong, good luck to President Palin.
R !
Bert
Comment by Bert — August 2, 2011 @ 10:07 am
Hi Bert and other Americans. I can tell you this, MOST Canadians would trade our leader for yours pretty damn quick. We just elected a conservative majority but even the most rabidly conservative Canadians would have nightmares about the Teaparty and their ilk being seriously considered for the world’s hardest job. Of course that is just my opinion but I talk politics a lot and generally the people that I speak to love BO. To put Obama down because of his economic policies is to malign the pitcher who goes in for the last inning with his team down 17 run. George Bush, or should I say Rove was the worst president EVER. Jon how can Obama’s presidency not be a disaster, who would have done a better job, McCain? Pallin? Come on. Experience? Where would one get the experience to save the mess that was left after Bush?
Comment by mike — August 2, 2011 @ 10:16 am
Hi Mike, thanks for your input….it great to have some lively discussion…….Bush’s economic policies generally made a lot of sense, IMHO, and under his presidency the United States experienced record job growth and economic expansion……where the U.S. got into difficulty was around excessive leveraging in different areas, and some of those problems actually began under the Clinton regime in terms of making it a lot easier for people to obtain mortgages….there is a lot of blame that can be spread around for the 2008 Crash……my major point is that Obama is out of the mainstream in terms of traditional American economic and political thinking – he firmly believes in an expanded role for government at the precise time when government actually has to be shrunk considerably in the United States…..he just doesn’t understand the concept of wealth creation or the basics of business or how a free enterprise economy should function, not surprisingly because he’s not from that background (he was a “community organizer”)…..also, to say that taxes should be raised for anybody in the United States when a government can’t control its spending is ridiculous – it’s no different than giving a pay rise to a guy earning 100K a year who spends everything he makes and then some and is racking up his credit card bills……what do you think he’s doing to do with the extra money? the whole u.s. tax system needs an overhaul……Obama wants to go after the “wealthy” but the richest 5% of Americans also pay 60% or more of all income tax…..I’m not sure Palin is necessarily the answer……..
Comment by Jon - BMR — August 2, 2011 @ 10:39 am
Taylor
I appreciate your comments, but it is obvious that i have become negative.
Gone are the days when we had to wait for a newspaper to find out about stocks. Today we know as much about China & other countries, as we do about our
own country, they are all connected one way or another. There are several
countries in trouble, which may have a negative affect on those, who are doing better. The talking heads on the radio/tv stations, will bring forward all things negative & will put their spin on all things possible & some things not possible. I waited for a positive conclusion to raising the debt ceiling in the U.S. feeling better days once it was signed, but today i feel bothered. No doubt, if the U.S. catches a cold, the rest of the world sneezes. The U.S. economy is very weak & they come up with a deal, concentrating on cutting spending with no REVENUE &
they need revenue. Starting to cut the deficit is good, but cutting spending may mean things may get worse & that in my mind is bad news, especially with 9.2% unemployment & the possibility of a credit downgrade, which will cost them
& others, as a result of higher costs for credit. It could be all about perception,
& that may be a drag on the markets, in particular the CDNX, the weakest link. I can go on & on, but who am i to continue on with such negativity, preaching about something, which i am not an authority on, therefore i quit & hopefully, i am wrong in my thinking Good luck !
R !
Bert
Comment by Bert — August 2, 2011 @ 11:09 am
Sorry, but there’s one sentence i omitted from my last post & that is,
“””The rich get richer & the poor get poorer”””.
R !
Bert
Comment by Bert — August 2, 2011 @ 11:20 am
Well I am an American and I agree 100% with Jon’s statement above, Obama just does not get it and never will, we need less government whether it be republican or democrats, the goverment of the United States does not create wealth, they consume it, when you have big business scared to death to do anything because they do not know how the current Government is going to treat them going forward you have nothing being created, that is the problem right now in the US, there is no job creation because nothing is being created, you have big banks moving money around and making money off the spread, they are getting rich and nothing is being created, that is the problem.
now lets get back to discussing which of the juniors are going to hit the big one, come on GBB, volume is up today on CQXFF, anyone have any idea why?
Comment by GREG — August 2, 2011 @ 11:56 am
Wow
gold is now up 37 bucks and silver over 1.50, it has to be just a matter of time before these gold and silver stocks catch up, people are going to wake up to this pretty soon.
Comment by GREG — August 2, 2011 @ 11:58 am
I really think somehow the gold and silver stocks are being manipulated, they should be flying today!
how can a stock like Alexco AXU be down today 8 cents? makes no sense?
Comment by GREG — August 2, 2011 @ 12:01 pm
No Palin is not the answer, that will never happen!
Comment by GREG — August 2, 2011 @ 12:05 pm
I read from Robert Kiyosaki’s book that both Democrats and Republicans are spenders. They differ in revenue generation; Democrats usually increase tax and Republicans usually borrow money.
I think the problem with Obama administration is that there is little to show for while the debt was ballooning.
Anyways, USA has some tough decisions to make. At current rate, the default is when, not if.
Comment by Bruce — August 2, 2011 @ 12:10 pm
Bang on, Greg, thank u……governments never, ever create wealth – but they’re very good at destroying it……..a government’s responsibility is merely to help foster the right environment (conditions) for the private sector to flourish….the government has been “crowding out” the private sector in the United States and that’s never a recipe for creating jobs and expanding an economy……..all the liberals out there don’t seem to understand that the best social program is a job………just one great example of Obama’s (and the Democrats’) “over-reaching” was Obamacare which has created more problems than it has solved, and it has also been a jobs-killer……..when there is uncertainty, when the government is making decisions that are jacking up the cost of doing business, jobs and investment go out the window…..the scenario I see unfolding in the United States (hopefully) is the emergence of a strong pro-business presidential candidate with a proven track record in the private sector, and a great communicator, who can usher in the sweeping changes that are necessary in Washington and rally the nation behind him (or her)……America is a great country with tremendous resiliency – it has been through tough times before and has come out swinging and stronger than ever……it’s time for another true leader along the lines of Ronald Reagan…….
Comment by Jon - BMR — August 2, 2011 @ 12:25 pm
Dow down 265 pts. today, not good. Someone out there somewhere, don’t like something.
Comment by Bert — August 2, 2011 @ 12:49 pm
My sixth sense forecast seems to be quite right … GBB closed at 36.5 cents and my prediction was 37 cents. SD no changes at 3.5 cents, BER … it will go back to 10- 11 cents and closed at 12 cents today. NAR at 18 cents and this is a good buy if someone can dump it. SFF closed at 27 cents unchanged… it will drop back to 24 cents…. The overall junior stock market remains quiet and I am waiting for the new of SD which will bring up the volume to 5 – 10 million shares… my buying lot 3 cents are still good… If I raise to 3.5 cents… for sure, I will get it…. but I will only put 100,000 at a time….. VGN and VGD remain untouched by me.
Comment by Theodore — August 2, 2011 @ 5:20 pm
Jon, ABI had a news release yesterday with results from 8 holes. Renaud describes the results as “continuing to intersect excellent silver values”, yet two of the holes had no significant values and the others were not outstanding with wide ranges in values (47g/t – 400+ g/t Ag)- can you help me interpret the results or understand how Renaud can describe them as excellent? Thanks.
Comment by Andrew — August 3, 2011 @ 5:42 am
The Venture is playing catchup, down 23 pts… If this is to be
considered a healthy pull back, i would hate to see the Venture
become sick. R !
Comment by Bert — August 3, 2011 @ 7:18 am
Bert, your entitled to your opinion but that doesant make it any less annoying. Posting as much as you do on BMR one would hope you have something with a shred of credibility. If only there was a ignore button for people like you.
Comment by jeff — August 3, 2011 @ 7:25 am
Jeff
Why do you require an ignore button, you know my name, why
read me ? I will continue to have my say, as long as i am
requested by this site to “leave a comment”…
Comment by Bert — August 3, 2011 @ 7:45 am
Hi Andrew….as I mentioned a little while back, I’m going out to Rouyn later this month and I hope to have a chance to meet with Renaud and get his thoughts on how Abcourt-Barvue is coming together…personally I thought the latest results were pretty good – they are hitting zones of quite rich grade (look at hole 47)….just a couple of misses but we don’t know why….I think the market would appreciate an updated deposit model…..I know they are trying to fill gaps between different zones and I believe they’ve had success doing that….they also need to go down to deeper levels….75 metres north of the main zone, for example, “the junction of these two zones at a depth of 600 metres approximately, is possibly a site of enrichment for silver, zinc and copper mineralization. Our next drilling program will target this area”………..Abcourt has not done a great job of marketing itself or this deposit……I still contend the company is a very attractive potential takeover target given the quality of its properties…..the GENIVAR report on Abcourt-Barvue really speaks volumes….most of this deposit can be mined by open-pit, as indicated in that report, and the tonnage and grades are impressive……I’m a firm beleiver we’ll see much higher silver and zinc prices in the year ahead…….that bodes well for Abcourt……I know some mining industry players in Quebec are watching this situation closely……
Comment by Jon - BMR — August 3, 2011 @ 8:00 am
BMR: I wanted to comment on your response about Obama being left of center. HOW!! He is more republican than republicans. He kept in place major office holders that were put there by a republican. He sided with the banks on the bailouts, he doesn’t support unions, doesn’t support fair trade, continued the wars overseas and started another one on his own, disallowed discussion on single payer health care and constructed a system to favor the health care companies is OK with scaling back Social Security even thought it is entirely funded via the employer and employee for another 30 years. Need I go on? If you read his books and I have, the man who wrote them is not in the white house.
Comment by MJJP — August 4, 2011 @ 9:24 am