Gold has traded between $1,193 and $1,211 so far today…as of 8:30 am Pacific, bullion is up $13 an ounce at $1,207 as it attempts to finish the week on a positive note (against the euro, Gold is now at a 9-week high)…Silver has added 33 cents to $16.48…Copper is up 3 pennies at $2.75…Crude Oil has gained 49 cents a barrel to $51.28 while the U.S. Dollar Index is poised to register its 5th straight daily advance though it has backed off somewhat from its morning highs…it’s currently up one-third of a point at 99.28…
The case for the Federal Reserve to raise U.S. interest rates in June remains “strong”, a top Fed official said today, dismissing the impact of a rising dollar and falling Oil prices as temporary…Reuters reported that Richmond Fed President Jeffrey Lacker, a voting FOMC member who has long called for a prompt tightening of monetary policy, repeated his views that consumer spending, the labor market and other economic conditions have improved significantly over the last year. “Unless incoming economic reports diverge substantially from projections, the case for raising rates will remain strong at the June meeting,” Lacker said in prepared remarks for a Global Interdependence Center event…
U.S. Dollar Index Updated Chart
The surprise in the markets this week has been the strength of the greenback following last Friday’s much weaker than expected U.S. jobs report…after dipping to strong support at the 50-day moving average (SMA) near 96 last Friday, the Dollar Index has rebounded sharply back toward resistance at 100…
If a bad jobs report can’t slow down the dollar, one wonders what can – speculation regarding a potential Fed rate hike (whenever that may come) continues to underpin the greenback along with diverging monetary policies between the U.S. and most other central banks around the world…
Ironically, the higher the dollar climbs, the chances of a Fed rate hike this year likely diminish given the deflationary impact of a strong currency among other potential negatives including a decline in U.S. exports…
Support at 96 is obviously very strong but so too is the resistance band between 100 and last month’s 12-year high of 100.71, so we’ll have to see how this plays out…for now, we’re still of the opinion that the Dollar Index is in the midst of a corrective phase that may persist for a number of weeks or a few months…
The near-term direction of the dollar is obviously key in gauging how the Venture and commodities will behave over the coming weeks…
Today’s Markets
Asia
Japan’s Nikkei average crossed the 20000 milestone for the first time since April 2000 at Friday’s open, but quickly pulled back on profit-taking…the Nikkei closed down slightly at 19908…
China’s Shanghai Composite, meanwhile, roared ahead another 77 points to a 7-year high as the latest inflation data signaled a favorable environment for further government stimulus…the Shanghai closed at 4035, just 43 points below a Fib. resistance level…
China’s consumer inflation held steady in March, but wholesale prices remained entrenched in deflation, signalling a favorable environment for fresh stimulus measures…the CPI rose 1.4% on year, above expectations of a 1.3% rise predicted in a Reuters poll and following a 1.4% rise in February…wholesale prices, or the PPI, fell 4.6% in March, better than the average forecast of a 4.8% decline, and after dropping 4.8% in February…
Europe
European markets were generally strong again today, hitting new long-term highs…
North America
The Dow is up 90 points as of 8:30 am Pacific…prices of U.S. imported goods fell last month, suggesting the weak global economy and moves by foreign central banks are holding back U.S. inflation…import prices declined a seasonally adjusted 0.3% in March from February (in line with expectations), the Labor Department reported this morning…prices have fallen for 8 of the past 9 months and are down 10.5% in the past year…
Dow Transportation Average
The Dow Transportation Average is generally a reliable guide for future overall market behavior, and it’s important to note that this index has managed to hold key Fib. and chart support…RSI(14), at 43%, is also now moving up from a bullish “W”, so a new uptrend appears to have commenced…
In Toronto, the TSX is up 68 points as of 8:30 am Pacific and appears poised for a confirmed breakout above the 15250 level…the Venture, meanwhile, has added 5 points to 696…
Canadian Finance Minister Joe Oliver said today that the federal government now projects 2% economic expansion for 2015, down from the 2.6% growth forecast in the annual fall fiscal update released last November…the 2% forecast represents the average of economists polled and will form the backbone of fiscal and economic assumptions in the budget plan, to be released April 21…
The Globe and Mail reported this morning that Canada’s biggest Uranium producer is in advanced talks with India on a deal to supply the country of 1.2 billion with fuel for nuclear power plants as Ottawa prepares to welcome Indian Prime Minister Narendra Modi next week…Modi has made it clear that obtaining a commercial supply of Uranium from Canada’s Cameco Corp. (CCO, TSX) is a major goal for him as he gets ready to visit Canada on April 14-16…
Venture Update
The Venture has enjoyed an encouraging week, breaking above resistance around 680…the next key level, of course, is just under 710 where the Index reacted on January 2 and again on February 27…
The tech and health sectors (just as speculative as the resource sector) continue to help underpin the current rally in the Venture as investors chase the potential of quick returns in liquid issues…a good example is the activity in Vancouver Pharmaceuticals Inc. (NPH, TSX-V) which soared from below 20 cents in mid-February to a high of 94 cents March 12…
We’ve had a few requests for an NPH chart…below is a 6-month daily that shows NPH rebounding from its 50-day SMA with a bullish “W” formation in the RSI(14)…for this move to gain momentum, NPH will need to overcome resistance between the downtrend line (around 50 cents) and the Fib. 50% level (54 cents)…
NPH is off 1.5 cents at 46 cents as of 8:30 am Pacific…
International Montoro Resources (IMT, TSX-V) Update
There aren’t many but there are some incredibly interesting exploration developments unfolding in North American jurisdictions – most notably, Mexico, British Columbia, Saskatchewan, Quebec and Ontario…
News yesterday from International Montoro Resources (IMT, TSX-V) has us even more intrigued with the Pecors target near Elliot Lake, west of the Sudbury Nickel camp, where IMT appears to be drilling into a previously overlooked Ni-Cu-PGE system in Canada’s only mining camp to have achieved commercial production of rare earth oxides (in addition to more than 300 million pounds of Uranium oxide)…
At depths never previously tested in this area, under the Huronian sediments, IMT could be drilling its way into a rich Archean Nickel sulphide deposit, thanks to a valuable re-interpretation of local geology by both the Ontario Geological Survey and IMT’s technical team…
As reported yesterday, IMT is extending its first drill hole at the Pecors anomaly to a depth of 1200 meters…what’s notable is that visible sulphide mineralization, containing disseminated pyrite, chalcopyrite and pyrrhotite, started in a gabbro unit at a depth of 600 m and has continued in these rocks through 900 m…drilling remains on target and this initial hole should be completed within a few days, hopefully cutting into a long section of massive sulphides…
This is an excellent example of geologists and geophysicists thinking “outside the box” and coming up with fresh theories…
A 3D interpretation of the target has allowed geophysicists to see how the structure at Pecors appears to be laying and the direction it’s pointing…based on the intensity of the airborne survey, IMT’s technical team was able to pinpoint what appears to be the center of the anomaly with the first drill hole…
The first hole is being extended and a second one is coming up – early results, mystery and speculation are driving investor interest in this play, and what appears to be a large mafic intrusive body located beneath the Huronian rocks could certainly host rich concentrations of Nickel and Copper…
IMT has found some “smoke” – and that’s exactly what was postulated following the review of a very large, intense geophysical anomaly at Pecors combined with a high-density, lake sediment and geochemical survey by the OGS that revealed robust levels of Nickel and Copper…
Based on a compelling set of geophysical, geochemical and other data, the OGS concluded that “the potential for magmatic Cu-Ni-Cr-PGE mineralization is very high” at Pecors (Open File Report 6251) and surrounding areas…
Just the geophysical anomaly itself is believed to be more similar to those observed at Nickel mines in the Sudbury basin than those related to the Uranium and REE deposits in the Elliot Lake district…
There are never are guarantees in the risky exploration business which requires not only a high level of skill but also a healthy dose of good luck…assays will ultimately determine the significance of what IMT has hit, but we do like how this one is shaping up in the early going…it’s a story with legs that have grown longer with yesterday’s news…everyone should be rooting for any company with a decent chance at an important discovery that could breathe fresh life into the junior resource sector…
Note: John and Jon both hold share positions in IMT.
Lion One Metals V.LIO will be releasing their 43-101 within 2 weeks. All permits in, mine plans started. It should be very interesting.
HISTORY
Discovered in 1987, the Tuvatu gold deposit was “fast-tracked” to development in the late 1990’s by the Emperor Gold Mining Company as an additional source of high-grade feed for its mill at its nearby Vatukoula Mine. Over US$20 million in expenditures were incurred in the initial exploration and development of the deposit. By mid-2000, work completed included over 80,000 meters of drilling (60,000 meters of core and over 20,000 meters of reverse circulation), completion of a 1,630 meter decline, bulk sampling and test mining, metallurgical testing, reserve and resource estimation, mine design and optimization, and completion of a feasibility study (FS or historical feasibility study) in conjunction with Bateman Engineering. A preliminary mine plan was developed based upon production of 80,000 oz. Au per annum at a rate of 400,000 tonnes per annum, with overall operating cost estimates of A$67.81 (US$37.47) per tonne or A$317.91 (US$185.02) per oz. (based on year 2000 average conversion rates of US$0.582 to A$1.00 and average gold prices of US$279.11 or A$480.06). The FS concluded that the project was profitable, even at what was then a challenging economic environment for commodities. Further deterioration of gold prices however, led to the project being placed into care and maintenance in late 2000.”
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Of course a lot has changed since this ‘ancient’ history of 15 years ago, including the resource estimate going way up. The US dollar has gone up 50% from inflation since then so that would put their operating cost at $300 US per ounce (which would be unbelievably cheap-$600 would be cheap. They were basing their 80,000 oz per year on milling twice the tonnage than the mill LIO is ordering can handle, but it doesn’t mean Lion can’t pick up another modular mill (or 2) as needs be.
Lets all hope this 20 year “old” non compliant 43-101 feasibility study is even partially on the money.
I still can’t believe the cheapness and low trading of LION.
Comment by Carl — April 10, 2015 @ 8:21 am
Carl, I don’t know if it was you or another poster who brought up LIO in the last week or 2, but I have been following since then, and also find it a compelling story. However, reading the bio of the CEO, Walter Berukoff, reminds me of the many times I thought of buying La Mancha Resources, and did not, as it delivered a 10 bagger in the couple of years up to 2012.
Comment by terry — April 10, 2015 @ 10:22 am
Also note that GBB had a press release today (not the big one).
“Gold Bullion Receives Wood Cutting Permit for Site Clearing in Preparation for Gold Production at Granada” at CNW web site (April 10, 2015).
Comment by terry — April 10, 2015 @ 10:27 am
Terry, I wish I had known about Wally Berukoff back then. La Mancha actually went from $.03 to $3.50.
Wouldn’t you know it-yesterday I sold a 3rd of my holdings in Soltoro to buy more LIO and today V.SOl was taken over by Agnico for a 40% gain. Oh well sometimes ya gets the bear and ……
Keep an eye on LION, I think it could be major. Berukoff seems to be the main man . Two of the companies he was principle of sold for over a billion and La Mancha for half a bill.
Lion has tremendous potential with a MC of only $18 million. I was told by their PR guy that some large funds have been liquidating their juniors, including LIO, so it may be the time to check it out at sale prices. If the PEA is anywhere decent, the market will react fast. imho do your own DD and good luck.
Comment by Carl — April 10, 2015 @ 12:09 pm
Great movement by the venture and next week should be interesting. Anxious to read tomorrow’s musings.
Comment by tony t — April 11, 2015 @ 3:50 am
me too! Venture closing in on 700 again! and feeling some momentum! BMR was right!
Comment by STEVEN1 — April 11, 2015 @ 8:47 am
I am thinking we might see some movement in WRR this week as they get ready to start drilling and with the newest PP at 5 cent. I am thinking it might be just one large investor as 3 million shares would only be 150 grand. High grade gold has a way of drawing the attention of some of the bigger players.
Comment by Ed — April 11, 2015 @ 7:44 pm