BullMarketRun.com

Tensions are increasing in Ukraine, giving a boost to Gold to start the new week…Russia is clearly attempting to destabilize the country in order to provide a pretext for military intervention…as of 8:00 am Pacific, bullion is up $11 an ounce at $1,329 after hitting a 3-week high of $1,332…Silver is up 6 cents at $20.02 (John has updated Silver charts at the bottom of today’s Morning Musings)…Copper is down a penny at $3.02…Crude Oil is 17 cents higher at $103.91 while the U.S. Dollar Index has gained more than one-tenth of a point to 79.75…Palladium hit a nearly 3-year high of $815 on potential supply concerns as tensions escalate over Ukraine…while Palladium and Platinum may be less likely to be subjected to western sanctions than other metals because of the difficulty in replacing them in European and U.S. markets, they may be a potential target of Russian counter-sanctions, Goldman Sachs wrote in a report yesterday…Palladium particularly is a “crucial and not substitutable input” in the car industry, it said…

A day after threatening a full-scale military operation to drive pro-Russian militants out of a string of eastern Ukrainian cities seized over the weekend, the country’s acting President offered an apparent olive branch today, saying he wasn’t opposed to a countrywide referendum on possibly granting regions greater autonomy…a referendum on greater independence from the central government in Kiev has been a key demand made by the militias that have commandeered government buildings in the east…Oleksandr Turchynov’s comments came as a deadline for the pro-Russian militants in eastern Ukraine to lay down their arms or face a full-scale “anti-terrorist” operation expired with no sign, as of yet, of military action…

Russia has apparently massed tens of thousands of well-equipped troops near the Ukrainian border in preparation for what could be a Crimea-style invasion, while Russia has denounced what it claims is Ukraine’s “Russophobic, anti-Semitic leadership”.  “Satellite images show that there are between 35,000 and 40,000 Russian troops in the vicinity of the border with Ukraine, equipped with combat aircraft, tanks, artillery and logistical support units,” stated Mark Lyall Grant, U.K. ambassador to the U.N.  “This is in addition to the 25,000 Russia troops based illegally in Crimea,” he added.

Asian Gold Enthusiasts Vastly Outnumber Western Gold Bears

Check out the article this morning by Mineweb’s Lawrence Williams at www.mineweb.com.  “Within an interesting almost hour-long discussion published on Chris Martenson’s Peak Prosperity website, Alasdair Macleod of Gold Money made the interesting – but in retrospect, patently obvious – comment that Gold buyers and sellers in the West are hugely outnumbered by a traditionally Gold hoarding community in Asia.  And as Asian economies develop, this Gold-oriented (carefully chosen word!) community is expanding rapidly as is its purchasing power. Macleod commented thus: ‘The point is there are 4 billion people in Asia who have got a very old-fashioned view of Gold, and they have become wealthy over the last 20 years. And their view is likely to prevail against the ~1 billion of us in North America and Western Europe. I mean it really is as simple as that. It’s not a question of Austrian economics, or Keynesian, or whatever. We’re outnumbered.'”

China’s Copper Grab Continues, Las Bambas Sells For $5.8 Billion

Glencore Xstrata said yesterday that is has agreed to sell the mining company’s Las Bambas Peruvian Copper Project to a Chinese consortium led by MMG Ltd. (MMG is the Hong Kong-listed offshore arm of China’s state-owned Minmetals Corp.) in an all-cash deal worth at least $5.8 billion…the acquisition is the largest Chinese purchase of an overseas mining asset since state-owned Aluminum Corp. of China, or Chinalco, took a 12% stake in Rio Tinto for $14 billion in 2008…like that purchase, this latest deal gives China greater control of the raw materials its industries crave…it also underlies the global scarcity of large high-quality Copper deposits and the continued Chinese demand for this metal…the country accounts for roughly 40% of global Copper demand…

Las Bambas, located in the Apurimac Region of Peru, is one of the world’s largest Copper projects under construction…it contains about 0.95 billion tonnes of reserves at 0.73% Copper but has no Gold…the measured and indicated resource is 1.2 billion tonnes at 0.66% copper and 0.02% molybdenum…it’s expected to produce more than 2 million tonnes of Copper concentrate in its first five years of operation, beginning in 2015…it has a 20-year projected mine life with opportunities to extend the existing resource as a significant proportion of the license area is currently unexplored…other companies interested in Las Bambas included a western consortium made up of Teck Resources Ltd. (TCK.B, TSX), Newmont Mining Corp. (NEM, NYSE) and private equity firms Blackstone Group and Magris Resources…

If you wonder why there is such keen interest in an emerging world class Copper-Gold porphyry district as the Sheslay Valley, look no further than the above…not only is their widespread porphyry Copper mineralization in this 1,500 sq. km district, but Gold, Silver and potentially molybdenum as well…

We’ll continue our coverage of the Sheslay Valley tomorrow after an extensive visit to the area…

Today’s Equity Markets

Asia

Asian markets were mixed overnight…China’s Shanghai Composite added a point to close at 2132 while Japan’s Nikkei slipped 50 points to close at 13910…critical data from China will likely be the center of attention for market players this week, with first-quarter GDP, March retail sales, industrial output and fixed asset investment slated for release on Wednesday…economists surveyed by Reuters expect Chinese GDP to rise an annual 7.3% which would mark China’s slowest pace of growth since 2009 and come in well below the 7.7% reading in the final quarter of 2013…

Europe

European shares are mixed in late trading overseas…industrial production across the 18 countries that share the euro rose slightly in February, although output in many of the currency area’s troubled southern members declined…the modest nature of the industrial expansion, together with its narrow spread, underline the weakness of the euro zone’s recovery as policy makers at the ECB mull new measures to counter a period of very low inflation…

North America

The Dow has shot up 133 points as of 8:00 am Pacific after falling 410 points Thursday and Friday…the S&P 500, coming off its worst weekly decline since 2012, is 17 points higher while the Nasdaq has gained 50 points…Citigroup kicked off a big week for earnings reports, topping analysts’ expectations with a 4% increase in quarterly net profit as a narrower loss on its troubled assets made up for a big drop in revenue and profit from its core trading and lending businesses...meanwhile, the Commerce Department reported this morning that U.S. retail sales were up 1.1% in March, furthering the notion that the U.S. economy is recovering after harsh weather curbed spending at the beginning of the year…

A weak earnings report on Friday from JPMorgan Chase prompted global markets to extend losses…through Friday, a mere 52% of companies topped earnings estimates and only 48% beat profit estimates – albeit it from a tiny sample of 29 companies that represent just 6% of the S&P 500…with regard to earnings, one concern is that many corporations have utilized the Fed’s zero-interest-rate policy to run up huge levels of cheap debt, which they then used for share buybacks…more than $1 trillion of buybacks have reduced share counts and thus “artificially” boosted earnings-per-share levels for some companies to record highs…the question now is whether companies can begin to drive earnings organically once the Fed ends QE, which has sent the central bank’s balance sheet to nearly $4.3 trillion…

The TSX is up 72 points  at 14258 while the Venture is 3 points higher at 1001…

Updated Venture Chart

Below is an updated 5-year Venture chart from John…buy pressure has remained steady on this long-term chart while RSI(14) may have found support at 50%…+DI remains above -DI on the ADX indicator which is bullish…the Venture is underpinned by tremendous technical support ranging from 945 to 985…the rising 100 and 200-day moving averages (SMA’s) are at 970 and 950, respectively…what this chart is telling us is that any weakness is a buying opportunities as the dynamics of this market have fundamentally changed in recent months…

Abcourt Mines Inc. (ABI, TSX-V) Update

Abcourt Mines (ABI, TSX-V) continues to make progress with the development of its Elder Mine near Rouyn-Noranda, Quebec…while Elder is not yet officially in production, Abcourt received gross proceeds of $2.1 million from the sale of Gold and Silver (1,436 ounces of Gold, 803 ounces of Silver) during the first quarter of 2014 as reported by the company last Friday…mine production averaged 4,164 tonnes per month with an impressive mill recovery rate of 96.8% and an average grade of 5.23 g/t Au…ABI expects to reach full mine production (12,500 tonnes per month) in the second half of this year…the company is keeping costs down and appears to be on track in terms of achieving its goal of turning Elder into a profitable small producer in the range of 15,000-20,000 ounces of Gold per year…

Technically, the challenge for ABI is to overcome the long-term downsloping channel resistance as you can see in this 2.5-year weekly chart…ABI is unchanged at 7 cents as of 8:00 am Pacific…

Alix Resources Corp. (AIX, TSX-V) Update

Our recent fly-over of the Sheslay Valley district revealed how strategic Alix Resources Corp.’s (AIX, TSX-V) North Cap East, North Cap West and South Fork projects are, and we’ll be expanding on that theme later this week with some pictures as well…the Golden Bear access road runs through much of the South Fork, where Alix will be targeting a couple of important MINFILE occurrences, while the company’s North Cap East holdings are contiguous to the entire northern border (approximately 8 km) of Prosper Gold Corp.’s (PGX, TSX-V) advanced Sheslay Project…North Cap West, meanwhile, stretches several km across the northwestern border of Garibaldi Resources Corp.’s (GGI, TSX-V) Corp.’s Grizzly Property where a very distinctive trend runs in a northwesterly/southeasterly direction…

Technically, a 4-year chart shows a turnaround in AIX with RSI(14) in a gradual uptrend and the stock trading in the parameters of an upsloping channel…AIX closed Friday at 4 cents…

Atico Mining Corp. (ATY, TSX-V)

We suggest our readers perform their due diligence on Atico Mining Corp. (ATY, TSX-V) which continues to make steady progress, both in terms of development and exploration, at its El Roble mine in Colombia…El Roble continues to operate at approximately 320 tonnes per day (scale-up to 650 tonnes per day is on schedule to be completed in the third quarter of this year) with ore currently being processed from the upper levels of the mine…of particular significance, high-grade mineralization has been discovered below historic workings, and the company expects that underground stope preparation in the Goliath and Maximus massive sulphide deposits will provide some high-grade ore prior to the start of full-scale stoping activities commencing this summer…

This 2-year weekly ATY chart shows a cup-with-handle pattern and strong support in the 60’s (watch for a potential breakout above the cup, but timing is uncertain)…ATY is up 2 pennies at 80 cents on light volume as of 8:00 am Pacific…

Silver Short-Term Chart

RSI(14) on this short-term Silver chart appears to have bottomed, hence Silver has stabilized above support around $19.75 after a 10% drop during the second half of March…Silver will have plenty of resistance to fight through, though, between $20 and $22…

Silver Long-Term Chart

This 11-year monthly chart confirms that the metal has exceptional support just below $20…sell pressure has been dominant since early last year but is weak…if and when Silver breaks above the main downtrend line, watch out (there are two downtrend lines to take note of)…RSI(2) has unwound from above 80% to 38%…

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