Gold has traded between $1,270 and $1,278 so far today…as of 9:30 am Pacific, bullion is up $1 at $1,274…Silver has added a dime to $19.63…Copper has gained 2 pennies to $3.03…Crude Oil remains firm, up 31 cents to a 9-month high at $106.84…major problems brewing in Iraq, OPEC’s second-largest producer…reports are that heavily armed Islamist militants flush with $450 million in stolen cash pushed toward Baghdad today, sending thousands fleeing in fear from the Iraqi capital…al Qaeda-linked insurgents who overran large parts of the north of the country earlier this week seized about $450 million during a bank heist, Mosul Mayor Athier Nujaifi told NBC News this morning…that makes the Islamic State of Iraq and al-Sham (ISIS) the world’s richest terrorist group…Sunni-Shiite tensions in Iraq have the potential to drive Oil prices through critical resistance around $110 over the summer, and this would obviously drive Gold higher as well…if these tensions in Iraq spread to the south or threaten the south, anxiety in the Oil market will grow significantly…
Today’s Equity Markets
Asia
China’s Shanghai Composite gained 19 points overnight to close at 2071…investors digested a raft of May economic data from China…Retail sales rose 12.5% on year, beating expectations for a 12.1% increase, while industrial output increased 8.8% on year, in line with estimates…fixed asset investment rose 17.2% on year for the January-to-May period, just above expectations for a 17.1% rise…
Japan’s Nikkei surged 124 points to close the week at 15098…as expected, the Bank of Japan left monetary policy unchanged…speaking at a news conference, Governor Kuroda said the economy will continue its moderate recovery despite the decline in demand from April’s sales tax hike…
Europe
European markets were down slightly today…
North America
The Dow is up 35 points as of 9:30 am Pacific…in economic news, U.S. producer prices unexpectedly sank in May…the PPI retreated a seasonally adjusted 0.2%…economists polled by MarketWatch had forecast a 0.1% gain for the PPI index…meanwhile, consumer sentiment fell modestly in June as views by consumers with the lowest incomes soured, according to a closely-watched survey released this morning…the Thomson Reuters/University of Michigan’s preliminary June reading on the overall index on consumer sentiment came in at 81.2, down from 81.9 the month before…it was below the median forecast of 83.0 among economists polled by Reuters…
The TSX is up 82 points while the Venture has fallen 4 points to 994…
Venture Updated Chart
As we mentioned yesterday, the Venture appears to be on the verge (immediate or near-term) of a confirmed breakout above the downtrend line in place from the mid-March high of 1050 (see updated 6-month chart below)…more accurately, this “downtrend” was a healthy pullback to exceptional support within the context of a primary uptrend which appears ready to soon resume in earnest, setting up a distinct possibility for very bullish conditions in Q3…
In our view there are a multitude of outstanding opportunities for selective investors in this market at the moment, and this morning’s takeover by Pilot Gold Inc. (PLG, TSX) of Cadillac Mining Corp. (CQX, TSX-V) is the latest example…
This short-term chart shows the current situation with the Venture…wouldn’t be surprising to see the Index reverse intra-day and confirm the breakout – if not today, then likely next week…
Long-Term Gold Chart Update
The Venture is behaving in a manner that tells us we’ve seen the low (last year) in Gold prices, and that the $1,200 floor will hold…
This 20-year monthly Gold charts shows that bullion remains in a long-term bull market with the $1,200 area an important Fib. (61.8%) retracement level…the bearish trend since late 2011/early 2012 has been weakening…Goldman Sachs continues to try to “talk” Gold down (while they continue to accumulate it) but whether they’ll be able to talk it down below last year’s low ($1,180) is highly questionable…
Brazil Resources Inc. (BRI, TSX-V) Update
Interesting chart from John which should also help readers understand the value of technical analysis (including Fibonacci), and how important it is when a stock (or an Index in the case of the Venture) breaks above a long-term downtrend line (the Venture did so last October)…
BRI took off sharply to the upside after pushing through a downtrend line early this year…it became technically overbought (see the extreme RSI levels), and has since retreated to Fib. support levels and the the top of the downtrend line which is also very strong new support…BRI is unchanged at 90 cents as of 9:30 am Pacific…
Discovery Ventures Inc. (DVN, TSX-V) Update
Discovery Ventures (DVN, TSX-V) has been advancing an interesting project (Willa deposit) in southeast British Columbia since late 2012 and continues to make significant headway, especially since its announced acquisition of the past producing Max mine and mill facilities about 135 km from the Willa deposit…recently, we alerted our readers to DVN when it was trading in the high teens following its release of a very positive Preliminary Economic Assessment for the Willa based on measured and indicated NI-43-101 resources (not reserves)…a lot of hard work and skill have gone into pulling this project together, and it would certainly be a boost for the mining industry in southeast B.C. (and the communities in the immediate area of this project) if the Willa can be put into production…
DVN is up another 2.5 cents this morning to 30 cents…below is a 2.5-year weekly chart from John…as always, perform your own due diligence…
Note: Jon holds a share position in DVN.
The venture closed a little down, but I like they way my gold stocks traded today. Most of them are up over %10 this week alone. DBV was having a good day until anonymous decided to whack the bid at the end and get it to unchanged for the day. Trading like that boils my blood. I am going out on a limb and say that DBV will be trading in the 20 cent range next week, as anticipation begins to set in. Anyhow, I am heading out for the weekend, so I would like to wish all the dads out there a Happy Father’s day. Cheers.
Comment by Chris — June 13, 2014 @ 3:32 pm
Venture recovered intra-day and finished down just half a point, Chris, but the “unconfirmed” breakout is now confirmed with today’s close. Chart tomorrow. Back over 1000 next week, it looks like. The summer moving is starting.
Comment by Jon - BMR — June 13, 2014 @ 6:12 pm
Jon is it still good sign in your opinion that Prosper gold is so quiet, they have probably ended the first four hole at the star, so they are probably drilling east star at the moment! My tought is that if they were confident enough they would have update drilling info plus they would have announce the beginnig of drilling at Pyrrhotite Creek. What do you think?
Comment by Martin — June 13, 2014 @ 6:59 pm
Martin, it was just over 3 weeks ago (May 20) when Prosper announced the start of drilling. End of June/early July is probably a likely time for initial results, just going by last year’s timelines. They are drilling an exceedingly good property, and there is no one more capable of finding a discovery hole than Dirk Tempelman-Kluit. They run a tight ship, so don’t expect any leaks. Be patient and the fireworks will start. At the moment there’s a major “disconnect” between what the stock is doing (or isn’t doing) and the reality of what is likely to unfold on the ground through 10,000 meters of Phase 1 drilling. This “disconnect” won’t last much longer. Went thru the exact same thing with Blackwater. Pete and Dirk have not even fired their first bullet yet this year.
Comment by Jon - BMR — June 13, 2014 @ 9:21 pm
With ABC and D, I think the goal is to double the size of the mineralisation above the 300 meters level, lets say the it the same grade that what as been previously seens plus lets say north star or east star would provide the same type of result, wath could the stock worth in these kind of market?
Comment by Martin — June 13, 2014 @ 9:31 pm
Martin, the Star porphyry has only been drilled over a footprint of 300 m by 300 m with about 30 holes, and it clearly expands out. The consistency of mineralization at the Star has also been quite remarkable, rather unusual for a porphyry. And hole 24 last year was very representative with 312 m grading .37% Cu and 0.24 g/t Au. An abundance of geophysical and geochemical evidence suggests a strong possibility of the Star porphyry connecting with at least 1 of the other 2 porphyry targets (Star North and Star East) that have yet to be drill-tested. Back-of-the-envelope calculations are that Prosper should be able to build tonnage up to at least half a billion tonnes (conservatively) by connecting the Star with just 1 of the other 2 targets. In a best-case scenario, 1 billion+ tonnes.
One of the keys of course will be grade. If they’re able to find a high-grade starter area, that would be a serious game-changer. And I like the odds of that happening given the team that’s involved here and their proven ability to uncover a major deposit. Prosper’s current market cap is about $14 million. If they have the kind of success that I believe they’re capable of producing, given the prolific nature of the area and the abilities of Dirk and his team, PGX could easily command a market cap 5 x where it is now, perhaps a lot more if they pull a big discovery hole. Meanwhile, Pyrrhotite Creek is a potential major new discovery by itself 4.5 km to the southewest of the Star. So the potential with this property is enormous. Be patient and keep the faith. This is a fantastic team, armed with money, and they will pull this together.
For comparison purposes, if you noticed just recently, EOX in a PEA reported a Gold-Copper porphyry in Macedonia 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. Of course those are reserves, not measured or indicated resources, but it demonstrates that 200 million tonnes at those grades can be quite economical. 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. EOX has quadrupled since the end of May and has a current market cap of $50 million. If you look at Gold Reach in B.C., the Ootsa Property has significantly lower grades than the Star Project, several hundred million tonnes, and a market cap of nearly $30 million. Prosper is on its way to building a world class deposit IMHO and that should translate into a share price much higher than what we’re looking at today, but be patient and let Dirk figure this out as the summer progresses. They have yet to fire their first bullet and they’ll be firing many of them.
Comment by Jon - BMR — June 14, 2014 @ 7:49 am