Gold has traded between $1,150 and $1,165 so far today…as of 11:15 am Pacific, bullion is down $7 an ounce at $1,156…Silver is off 13 cents at $15.49…Copper is 2 cents higher at $2.53…Crude Oil is flat at $52.57 while the U.S. Dollar Index has jumped more than three-quarters of a point to 96.83…
Gold-mining companies are “far more prepared” for lower prices than the markets may perceive, according to a report issued today by analysts from BMO Capital Markets. “Our view is that the precious-metal miners as a group are far more prepared for lower Gold and Silver prices than the market perceives. However, the stark reality is that some precious-metal miners are better prepared than others to weather lower metal prices.
“The analysis of FCF (free cash flow) breakeven price suggests that 50% of the Gold miners generate free cash flow below $1,150 (U.S.) with an average FCF breakeven Gold price of $1,135 for 2016E,” the report stated. “Excluding dividends, the FCF breakeven Gold price for the miners declines to $1,070/oz in 2016E.
“Companies with the lowest FCF breakeven Gold price include RandGold (GOLD-LSE), Lakeshore Gold (LSG-TSX), Tahoe (THO-TSX) and Primero (P-TSX).”
Over the next 5 years, the outlook for Gold producers looks to be more positive with 86% of the miners expected to achieve a FCF breakeven Gold price below spot Gold, BMO reported.
Gold Comparative Chart In U.S. Dollar, Euros, CDN Dollar
Below is a 17-month weekly Gold chart showing how the yellow metal has performed vs. the U.S. dollar, the euro, and the Canadian dollar…
Gold is down just 6% vs. the U.S. dollar during this period, despite a record run by the greenback that began in the summer of last year…bullion has appreciated substantially when measured in euros (up 14.5%) and in Canadian dollars (up almost 12%)…
Certain Canadian Gold producers look particularly attractive considering bullion has climbed moderately in Canadian dollar terms while Crude Oil prices (major cost component) have declined substantially…
Near Total Capitulation By Greece
Some tough medicine to swallow for far-left Greek Prime Minister Alexis Tsipras whose strategy with euro zone leaders appears to have backfired…another Marxist gets a lesson in how the real world works…
Euro zone leaders said they would give Greece up to 86 billion euros ($96 billion U.S.) in fresh bailout loans as long as the Tsipras government manages to implement a round of punishing austerity measures in the coming days…
The rescue deal was hammered out after 22 hours of tense negotiations between the currency union’s leaders and finance ministers, and requires the Greek government’s near-total surrender to its creditors’ demands…but it gives the country at least a fighting chance to hold on to the euro as its currency…
“The deal is hard,” Mr. Tsipras admitted after the summit, warning that the measures required by creditors will send the country’s economy further into recession…
Euro 1.5-Year Weekly Chart
The euro is down just over 1% today following news of the deal with Greece…technically, the euro has been flirting with a breakout above the downtrend line you see below but so far just hasn’t been able to gain traction above this important resistance…this week could be key, especially with RSI(14) essentially resting at its uptrend line – which way will it go?…
Today’s Equity Markets
Asia
China’s Shanghai Composite rallied again overnight, climbing 93 points to close at 3971…strong chart resistance at 4055…Japan’s Nikkei average clawed back above the 20000 level after adding 310 points or 1.6%…
Europe
European markets breathed a sigh of relief and closed strongly higher today after negotiators reached a deal over a 3rd bailout for Greece…
North America
The Dow has surged 188 points as of 11:15 am Pacific…in Toronto, the TSX has climbed 140 points while the Venture is 2 points higher at 643 as it tries to stabilize after touching its December low last week…
Venture Long-Term Chart
RSI(14), the ADX indicator, -DI and +DI levels are consistent with historical extremes witnessed on the Venture…could conditions become even more extreme?…anything is possible, but this 16-year weekly chart is conclusive in the sense that this is indeed a period in the market cycle when certain high quality juniors can be accumulated for a fraction of what they may trade at some point down the road…we’re seeing the mirror image of conditions that existed in late 2010/early 2011, yet almost everyone wanted to keep chasing the market higher at that point…
NexGen Energy Ltd. (NXE, TSX-V) Update
NexGen Energy (NXE, TSX-V) is developing a world class Uranium asset with a rapidly growing discovery at its Rook 1 Project where 5 rigs are now turning as part of a 25,000-m, $9 million summer drill program that commenced just over a month ago…while Fission Uranium’s (FCU, TSX-V) discovery is at much shallower levels with impressive grades, NXE‘s Arrow Zone has churned out some exceptional grades at depth…
Many assays from the 2014 and 2015 drilling seasons have reported grades ranging between 0.13% and 66.80% U3O8 with grades between 1.5% and 5.0% U3O8 intersected regularly across substantial intervals…1.0% U3O8 is the equivalent of 23.5 g/t Au on a dollar per tonne basis (using U.S. $45 lb. U3O8 and U.S. $1,300/oz Au)…
Recent overall market weakness opened some fresh opportunities with NXE as it backed off in a healthy fashion from its all-time high of 90 cents June 29, finding support as expected in the low 70’s…
NXE is now threatening to break out above Fib. resistance at 83 cents…it’s up 2 pennies at 85 cents as of 11:15 am Pacific…
Equitas Resources Corp. (EQT, TSX-V) Update
A junior explorer with a good chance of success during the 2nd half of this year is Equitas Resources (EQT, TSX-V)…in mid-May, Equitas released encouraging results from a VTEM plus airborne survey completed on its Garland Property, 30 km southeast of the Voisey’s Bay mine in Labrador…9 areas of conductivity prospective for Nickel-Copper sulphides have been identified with most responses at the very limit of, or significantly deeper than, detection limits of historic surveys…this is certainly a speculative play to watch closely over the next several months…exploration on the target areas is expected to commence shortly…evaluation of the anomalies will include mapping and prospecting, 30 line km of large-loop EM surveys, and up to 4,000 m of diamond drilling…
Since the discovery of the Voisey’s Bay deposit in the early 1990’s, small parcels of Garland have been owned by 9 separate companies…this is the first time that this large property has been consolidated under 1 owner…
On June 24, EQT announced the appointment of Raymond Goldie to its board of directors…Goldie is currently a vice-president and senior mining analyst with Salman Partners Inc…2 days later, the company announced it has arranged a non-brokered private placement of 6 million its at 8.5 cents per unit for total gross proceeds of $510,000 (closing is still pending)…
EQT has been in a gradual uptrend since its restructuring late last year as you can see on this 2+ year weekly chart…the uptrend line and the rising 200-day SMA at 8 cents are providing strong support…
Silver Short-Term Chart
Interestingly, Silver plunged below Fib., chart and downtrend line support in the mid-$15.50‘s during the recently completed week, but recovered to close Friday at $15.57…it needs to make a convincing move past this area to the upside in the near future, or risk going lower again…one can make a good argument that the strong support in the mid-$15.50‘s will indeed hold, and the bullish “W” in the RSI(14) is very encouraging…
Seasonality factors are also in Silver’s favor at the moment…
Silver Long-Term Chart
An explosive push higher (eventually) – is this actually a scenario that could unfold in Silver over the next couple of years?…quite possibly, given the look of this 34-year monthly chart, though at the moment it’s hard to understand all the factors that could come into play to generate the kind of “Wave 5” move that appears to be in the works here…
It seems quite possible that the bottom of “Wave 4” came late last year when Silver briefly plunged to just above $14 an ounce…RSI(14) has managed to hold support which goes back to 2001…
Sell pressure continues to remain very strong, however, as shown by the CMF – amazingly, at levels not seen in nearly 25 years since the low of $3.51…this intense sell pressure at the moment, which could continue for a while yet, should therefore be viewed in a larger context as a bullish contrarian indicator…this doesn’t necessarily mean that Silver has hit rock bottom, however…
Note: John and Jon do not hold share positions in NXE or EQT.
Have we finally seen the lows in the venture and if we have does it move up substantially or bounce along at these lows building a base that may take years ?
Comment by Les — July 13, 2015 @ 11:07 am
I wouldn’t say the Greek deal is a done deal. The government hasn’t voted on it yet, and I have a hard time believing that they will pass this new deal. But I’ll wait and see. I also expect a new round of elections sometime this year if the rescue deal doesn’t pass. A military coup is not out of the question as well. But the military will have to be on the same page since their are two factions governing the military: The faction that wants to stay in the EU and the other faction that still sympathizes with the Greek junta circa 1967. And trust me, you don’t want the latter in power, because they are Golden Dawn on steroids. You think Trump’s views on immigration are draconian? It’s nothing compare to these guys.
Comment by chris — July 13, 2015 @ 11:13 am
DBV will have to take action against this blockade as GGI just sits back and waits. Farshad Shirvani will have to weigh his options carefully as he desperately wants to get back drilling. If he gets a court injunction will the Tahltan Drillers go against their chiefs wishes? If they do it would certainly break the hold Chad Day has on the whole operation . If DBV brings in other drillers it may cause an even stronger resolve among the people in that area. We can only guess as to what options DBV will exercise and in any case any nogoations between government and First Nations do not move quickly as the poster earlier pointed out with Red Chris. Good luck to all.
Comment by Les — July 13, 2015 @ 1:43 pm
Les, IMO suing the Tahltans ought to be the last resort. Hiring other drillers is tantamount to stirring up a hornet’s nest. Get a deal ASAP between DBV-GGI-PGX, the government and the TCC.
Chris, the Greek deal is a done deal. They will re-shuffle the coalition to reach a majority vote on wednesday. A military coup? The IMF, USA, Germany, France, Spain; all the heavy hitters are pushing to close the deal!
Comment by Concerned Citizen — July 13, 2015 @ 2:29 pm
I’m sure a deal with the Tahltans will happen soon…..once they get what they want they will suddenly get along with DBV again…..lol.
Comment by D4 — July 13, 2015 @ 2:46 pm
C.C., it’s not a done deal until it’s voted on. Don’t get to far ahead of yourself. One step at a time. Watching Greek TV now, and let me tell, Syriza will have a hard time getting a majority since a lot of the smaller parties do not like the deal. Regarding the military coup, half on the Greek military doesn’t give a crap about the IMF or any other country. I have 19 family members in the Greek military occupying different positions, and they don’t give a crap about the technocrats. They’ll shoot to kill if it comes down to it, and that feeling is widespread among the military members.
Comment by chris — July 13, 2015 @ 3:03 pm
Chris, Greek media report that Tsipras and the opposition will collaborate. Panagiotis Lafazanis and Dimitris Stratoulis will resign, these two serve as leaders of the left wing of the Syriza alliance and monitor a group of 40 seats of the 300 government seats. A violent coup is a scary thought.
Comment by Concerned Citizen — July 13, 2015 @ 3:27 pm
CC, from the Greek newspaper ekathimerini: “Energy Minister Panayiotis Lafazanis, who heads SYRIZA’s Left Platform, told journalists on Monday that he would not vote for the legislation but that he would not resign from the government either.”
Like I said above, let’s not get too far ahead. Too much confusion at this very moment.
Comment by chris — July 13, 2015 @ 3:40 pm
You’re right Chris. Good posts. Certainly not a done deal yet.
Comment by Jon - BMR — July 13, 2015 @ 4:14 pm
EQT certainly looks like a play that could garner tremendous attention when the drill starts turning just 30km southeast of Voisey’s Bay mine. The 9 identified VTEM targets are very intriguing given the previous VTEM only penetrated 75 meters. The latest VTEM went approximately 5 times that at 350 meters deep, and what they discovered were “nine knock your socks off targets” according to EQT’s geological team. And it’s quite the team, with Makela and King reviewing the data, plus Goldie joining the team in June. Jon, thank you for giving it a mention today. I picked up shares in EQT about a month ago and been adding few more along the way.
Comment by Dan — July 13, 2015 @ 4:31 pm
Jon, i have watched the new interpretation video of the Hat video, very educative, did Dr Razique tell you how he sees the grizzly and how he would attack it?
Comment by Martin — July 13, 2015 @ 4:31 pm
Chris, If the Greek parliament rejects the requested legislation, this is resulting in a Grexit and impoverishment of the Greek people. Draghi is waiting for approval of the reformations by the Greek Parliament to supply the Greek banks with liquidity, to put pressure on the government. IMF, USA, Germany, ECB; all pushing for reform. Sure it’s possible this deal bombs and we’ll get a violent coup and civil war…
Comment by Concerned Citizen — July 13, 2015 @ 4:42 pm
I mean from this map, everything seems so clear. Did not thought of it this ways, plus looking back at old video on YouTube -“Doubleview Capital Corp.- Hat Project” April 28, 2014 – make a clear understanding.
Comment by Martin — July 13, 2015 @ 4:43 pm
Martin, excellent question. While there are some local variations in areas, it’s clear that there are many common signature characteristics (geological, geophysical, geochemical) throughout the Sheslay mineralized corridor. In general, these deposits appear to be off-set from the strong mag highs, and geochemistry is key. The main structures are NW/SE (very systematic) but there are also cross-cutting NE/SW structures and the contact between those structures can be a really favorable environment for higher grade zones.
At the Hat, as Dr. Razique explained, you have a major intrusive, and then multiple associated dykes and shear zones. Open up your hand and look at it. Imagine those fingers are carrying zones of mineralization. The key is to drill across the hand (the trend), as opposed to drilling right down a gap (sub-parallel to the trend) where you could hit little. It’s the frequency of these “fingers” right across the Hat system that makes it so attractive and makes for a potential world class deposit – that’s a good layman’s description.
In a porphyry system you’re going in and out of mineralization. You need to drill it properly to prove it up. In the case of the Grizzly, there are plenty of things to be learned from the Hat and the Star. One thing everyone has learned, and Dr. Razique has emphasized this, geochem is very, very important. I think the mistake at Anomaly “C” last year for DBV was that they drilled right into the heart of a mag high, and in the wrong direction (away from the geochem anomaly), and possibly at the wrong angle (still, they made a “technical” discovery there). These are things you learn as you go along. Sometimes a “miss” or what’s perceived as a “bad hole” by the market is more important than a hit.
The geometry of the Hat system is now very well understood, and that’s a huge advantage going forward. Greatly increases the chances of higher grades and new discoveries.
Comment by Jon - BMR — July 13, 2015 @ 5:45 pm
The geochem has not been done on the grizzly central!
Comment by Martin — July 13, 2015 @ 5:58 pm
Incorrect, Martin, it has, and I’m sure even more is being carried out. Such a very large area.
Comment by Jon - BMR — July 13, 2015 @ 6:11 pm
Great commentary Jon. Thanks.
Comment by PaulH — July 13, 2015 @ 7:13 pm
Jon
Love the analogy of the hand for us lay people, that makes a lot of sense and easier to understand
thanks for all you guys are doing to keep all of us informed…
Comment by Greg — July 13, 2015 @ 8:38 pm
Jon
with all of this information on what DBV has done so far, it should really increase the odds greatly of GGI hitting something early on? if they ever get to drill.. I wonder if this info has helped Prosper at all? they seem to be forgotten in all of this and they have a great team of people over there too..
Comment by Greg — July 13, 2015 @ 8:40 pm
John. Could you check out if cia.to is forming the handle for the cup and handle formation on the daily chart? Thanks in advance.
Comment by tony T — July 14, 2015 @ 4:08 am
C.C, whatever happens the Greek economy is screwed, to put it bluntly. The Greek people are already impoverished with the bailouts they’ve already received. What makes you think THIS is the bailout that will help the Greek economy/people? When the crisis started Greek debt was $100 billion; now it has ballooned to over $300 billion. It’s too late to do anything now. The time to act was 7-8 years ago. Anyhow, I just want the EU to go gently into the night so countries can go back using their own currency and regain their sovereignty. It’s the only solution. I’ll leave at that for the time being.
Comment by chris — July 14, 2015 @ 5:25 am
Jon do you think DBV will give up to date regularly !
Comment by guy delisle — July 14, 2015 @ 6:02 am
LND hits the market today…..good for the Venture!
Comment by STEVEN1 — July 14, 2015 @ 6:10 am
Guy, I believe what Farshad stated in his news – they are reviewing all options, consulting with their legal counsel, and will provide further updates ASAP.
Another blow to Chad Day’s credibility on this whole issue as a Tahltan source speaks out in Morning Musings today.
DBV is on very solid ground IMHO and that drill rig could be turning again sooner than some expect. Then Farshad has a national audience. Same with GGI.
Comment by Jon - BMR — July 14, 2015 @ 6:12 am
Hi tony T
At the moment SP is way O/B and needs to unwind. The FIB. Support levels are at 13, 14 and 15c. Handle is void if it closes below 13c. Give it some time.
Comment by John BMR — July 14, 2015 @ 6:24 am
thanks John. Much appreciated.
Comment by tony T — July 14, 2015 @ 6:30 am
For me Jon only one option NEGOTIATION !
Comment by Guy Delisle — July 14, 2015 @ 7:00 am
More bombshells this morning, Guy…negotiation is always a preferred route, of course…
Comment by Jon - BMR — July 14, 2015 @ 7:50 am
Bombshells Jon? What could that be? Will you let us know in your morning musings? Thanks.
Comment by Dan — July 14, 2015 @ 8:03 am
Time for blo to go!!!
Comment by Matt — July 14, 2015 @ 8:19 am
Dan, we’re posting a little late again this morning due to Sheslay related matters, but stay tuned…
Comment by Jon - BMR — July 14, 2015 @ 8:33 am
A chance that we have BMR Thank’s a lot BMR
Comment by Guy Delisle — July 14, 2015 @ 8:42 am
Jon you said that Farshad has national attention. I haven’t seen national attention yet. Is there something that I missed or is it something that you expect to come soon?
Comment by d4 — July 14, 2015 @ 8:46 am
Just wait, d4…that is to come.
Comment by Jon - BMR — July 14, 2015 @ 8:50 am
Good stuff this is exactly what we need. National attention right before we start drilling and discover a world-class deposit….all eyes on us!
Comment by d4 — July 14, 2015 @ 8:56 am
In the end I hope that the Tahltan have a good working relationship with DBV!
Comment by d4 — July 14, 2015 @ 8:59 am
I really hope so, too, Pat…right now this is very much about Chad Day, not the Tahltan people…
Comment by Jon - BMR — July 14, 2015 @ 9:03 am
Hear Chad Day in this (First Nations) radio interview, two short clips. Good to hear him speaking, sounds like the big issue is with the BC Government and DBV caught in the middle.
http://cfnrfm.ca/tahltan-blockade-mine-exploration-site/
Comment by vepper — July 14, 2015 @ 9:39 am