Gold has traded between $1,251 and $1,265 so far today…as of 8:30 am Pacific, bullion is up $9 an ounce at $1,261…Silver has gained 16 cents to $19.22…Copper is up a penny to $3.04…Crude Oil is 9 cents higher at $104.50…Oil exports from Libya have dropped to a trickle in recent months, removing as much as 1.4 million barrels per day (bpd) of high-quality, light crude from the oil market…sanctions on Iran and turmoil in several other Oil producers have also reduced supply, pushing Oil prices towards the top of recent ranges…at the same time, Oil demand appears to be picking up again after a long period of below-par global economic growth…the U.S. Dollar Index has added one-fifth of a point to 80.81…
Gol
d has been steadying lately and could benefit from a short-covering rally, according to HSBC…the yellow metal has held up despite a strong U.S. jobs report late last week, plus recent euro weakness and a stronger stock market, HSBC notes. “The heavy net speculative short positions on the Comex – almost the highest this year – leaves Gold open to a short-covering rally, but we do not see an immediate or obvious catalyst,” the bank stated. “Gold appears to be steadying after the May slump, which we attribute to an unwinding of long positions in reaction to the easing in geopolitical tensions in Ukraine.” For now, the physical market looks “moderately positive at best,” HSBC says.
The monsoon season in India is off to a low start, which may negatively impact Gold demand which is significantly dependent upon the wealth of Indian farmers…
Today’s Equity Markets
Asia
China’s Shanghai Composite jumped 22 points overnight to close at a two-week high of 2052…financials led the way after the People’s Bank of China cut the reserve ratio requirement for rural banks yesterday…meanwhile, Chinese consumer inflation picked up in May following a dip in April that had raised concerns about the danger of deflation in the world’s second-largest economy…the headline consumer price index rose 2.5% from a year earlier, compared with a 1.8% increase in April, but remained well below the government’s “upper limit” target of 3.5% for the year…producer prices also ticked higher but remained in deflationary territory, where they have been for more than two years…
Japan’s Nikkei fell 129 points overnight to close at 14495…
Europe
European markets were mixed today, though the German DAX hit an all-time high…the ECB’s easy money continues to lift up the euro zone bond market…yields on some European 10-year bonds are now trading lower than the yield on the 10-year U.S. Treasury note…some analysts are concerned that the rallying European bond markets have reduced the urgency for policy makers to tackle long-term economic issues such as the region’s competitiveness and structural overhauls…
North America
The Dow is down 12 points as of 8:30 am Pacific…small business owners were more upbeat about the U.S. economy in May, according to a monthly industry survey…the National Federation of Independent Business on Tuesday said its Optimism Index rose 1.4 points to 96.6 in the month, the highest reading since September 2007…the NFIB cautioned, however, that while the survey has showed an improvement in sentiment for the third straight month, the index remains far below readings that have normally accompanied an expansion in the U.S. economy…
The TSX is off 7 points while the Venture is down 1 point at 987 as of 8:30 am Pacific…
TSX Chart Update
The TSX continues to climb within an upsloping channel, though this has also been accompanied by a notable decline in volume during 2014…the MA-10 on this 5-year weekly chart (the 50-day SMA) has been a close supporting moving average and currently sits at 14613…
Euromax Resources Ltd. (EOX, TSX-V)
Euromax Resources (EOX, TSX-V) has demonstrated how individual stocks (in this case, a company with a Gold-Copper porphyry deposit) can post enormous gains, even in slow markets…pre-market last Thursday, EOX released results of a Prefeasibility Study, including a maiden mineral reserve, for its 100%-owned owned Ilovitza Gold-Copper porphyry Project in Macedonia…the stock opened at 17 cents that morning and climbed as high as 75 cents intra-day yesterday for a better than 4-fold jump…EOX has 85 million shares outstanding…
Ilovitza is a Gold-Copper porphyry with total sulphide probable reserves of 209 million tonnes at an average grade of 0.34 g/t Au and 0.20% Cu…oxide probable reserves are 16 million tonnes at 0.33 g/t Au…over a 23-year mine life, Ilovitza is expected to produce 95,000 ounces of Gold and 16,000 tonnes of Copper annually…the project has a pre-tax NPV(5%) of $675 million and a pre-tax IRR of 18.6%…initial capital expenditures are estimated at just over $500 million…
Ilovitza is surrounded by excellent infrastructure and would be the first major modern mine in Macedonia…it’s also one of the few permitted mining projects in all of Europe with very strong local and national support…
Technically, EOX is yet another classic example of a Venture stock that has broken above a long-term downtrend line…when this kind of event occurs, the upside momentum can be very significant…entering the upcoming third quarter, astute investors should pay particular attention to stocks that are on the verge of breaking out above their long-term downtrend lines…we’ll point out some of those situations in coming weeks…
Below is a 3-year weekly chart for EOX…note the 67-cent Fib. resistance level, and what should now be a strong support band between 40 and 60 cents…EOX is down 20 cents at 55 cents as of 8:30 am Pacific…
Discovery Ventures Inc. (DVN, TSX-V) Update
As witnessed with EOX, positive Prefeasibility Studies can produce major upside returns for investors…that’s why we turned so bullish recently on Discovery Ventures (DVN, TSX-V) when it trading in the high teens after releasing its Prefeasibility Study for the Willa-Max Gold-Copper-Silver Project in southeast British Columbia…this high-grade project has the makings of a potential cash cow for DVN given the low capex ($12.8) million and projections for revenue and operating expenses…the IRR for Willa-Max (4.25-year mine life) is a stunningly impressive 412%…we encourage readers to check this one out as DVN should attract increased attention with those kind of robust numbers…DVN is up half a penny at 24 cents as of 8:30 am Pacific…
Midlands Minerals Corp. (MEX, TSX-V)
Keep an eye on Midlands Minerals (MEX, TSX-V) which started Phase 1 drilling at its Parlozi Project in Serbia a couple of weeks ago…MEX, which had about $3 million in cash and working capital at the end of March, optioned Parolzi from Reservoir Minerals (RMC, TSX-V) at the beginning of this year…Parlozi is a Silver-Lead-Zinc-Gold prospect with an historical (non-compliant) resource in an area featuring excellent infrastructure…the 1,500-m Phase 1 drill program has several objectives:
- Extend the validation of the historical resource, and the presence of both vein and carbonate replacement mineralization over wide intervals at the Parlozi prospect;
- Test the extrapolation from depth toward surface of the historical resource at the Parlozi prospect;
- Test the downdip extension of mineralization beneath the underground workings at the Plandiste prospect where the company recently released the analytical results of underground chip sampling, which provided a true width of 6.0 m grading 671 g/t Ag, 20.8% Pb, 0.13 Zn and 0.44 g/t Au);
- Identify additional targets for exploration drilling in Phase 2.
MEX 4-Year Weekly Chart
MEX has nearly 200 million shares outstanding which gives it a current market cap of $5 million, but that still leaves room for upside over the summer if speculation intensifies and drill results are good…a Fib. resistance band exists between 2.5 and 4 cents, but strong support has built up at 2 cents which coincides with the rising 100-day SMA…as always, perform your own due diligence…
Edge Resources Inc. (EDE, TSX-V) Updated Chart
Edge Resources (EDE, TSX-V), a growing Western Canadian oil and gas play that we recently introduced to our readers when it was trading below 20 cents, has pulled back slightly from a new 52-week intra-day high yesterday of 28.5 cents…EDE’s fundamentals have been gaining strength along with the share price, so this is a high quality situation that is certainly worthy of any investor’s attention…
EDE has had a strong run recently and may need to take a slight breather, so keep that in mind – especially with RSI(14) on this weekly chart in overbought territory at 81%…technical support, however, should be very strong in the low-to-mid-20’s…EDE is off 3.5 cents at 24.5 cents as of 8:30 am Pacific…
Note: John holds a share position in EDE while Jon holds a share position in DVN.
Jon, what do you make of DBV’s trading lately? Farshad has exercised some warrants which will bring some much needed dollars to DBV’s coffers. The only positive I see is that institutional buying is occurring, albeit not much.
Comment by Chris — June 10, 2014 @ 9:39 am
Nice day for PGX even though volume wasn’t there.
Comment by Martin — June 10, 2014 @ 1:13 pm
Chris- many thanks for yesterdays reply regarding Caven.
Comment by Greg J. — June 10, 2014 @ 3:23 pm
Greg- No problem. Don’t write off Cavan just yet. They have a lot things going for them. Just be patient.
Comment by Chris — June 10, 2014 @ 4:46 pm
Chris, the way in which DBV has communicated its message the last few weeks is more puzzling to me than the current trading, and perhaps may help explain the current trading. That being said, they’re drilling again, we know that Farshad is a bulldog and he and his team have a very good handle on how the Hat system is coming together. They have shown excellent volume potential, now they have to drill for grade (for the market) and get into the heart of the Sheslay Red Stock. We’re still very early in the game as far as the Hat and the entire district are concerned. It’s very reasonable to suggest that we’ll see new discoveries over the summer, and plenty of volatility as a result. In that kind of environment, buying into the dips makes sense to me as a personal strategy as there is so much upside, geologically and share-price wise, with all of these Sheslay plays. Prosper is next up to report drill results and that should help rekindle the fires.
Comment by Jon - BMR — June 10, 2014 @ 4:49 pm
Jon, thanks a lot. I appreciate it.
Comment by Chris — June 10, 2014 @ 4:54 pm
Hi Jon, will you get in touch with Prosper management?
Comment by Martin — June 10, 2014 @ 6:47 pm
Hi Martin, I have spoken with Pete just recently, and he’s very excited about the prospects for this first phase of drilling. Obviously what’s different about the drilling now is that Prosper is stepping out from where they drilled last year, which was to confirm historical holes completed by Firesteel. No disrespect to Firesteel, but Prosper is bearing down on this property with an exponentially greater degree of resources, and IMHO there is no one more capable of turning the Star into a major discovery than Dirk Tempelman-Kluit. With 10,000 meters, he will do it, mark my words. Prosper will update the market in due course. If you remember back to Blackwater, once these guys get rolling, once they see some smoke, they are unstoppable. Stock firmed up nicely today. Volume should increase as the drilling intensifies. Keep in mind, a second rig is warming up, ready to join in, and a third is on standby for later.
Comment by Jon - BMR — June 10, 2014 @ 7:23 pm