Gold has traded between $1,084 and $1,111 so far today, taking a hit immediately following the release of a much stronger than expected U.S. jobs report for October…as of 9:30 am Pacific, bullion is down $15 an ounce at $1,089 as it continues to follow a negative trend that started last week and prompted us to recommend the DUST (triple short Gold Miners ETF) as a hedging strategy (see update on that below)…Silver is off 23 cents at $14.71…Copper has dipped 2 pennies to $2.26…Crude Oil has slid 79 cents to $44.41 while the U.S. Dollar Index has surged more than a full point to 99.22 as it threatens to challenge the spring high…
U.S. employers in October surprisingly hired at their strongest pace of the year while wage growth showed signs of picking up, indications of labor-market vigor likely to reassure Federal Reserve officials as they weigh raising interest rates in December for the first time in nearly a decade…non-farm payrolls rose a seasonally adjusted 271,000 in October, the Labor Department reported this morning (way above the consensus estimate of around 185,000)…in just the last hour, President Obama took advantage of this “anomaly” to officially reject Keystone and lecture Americans on the best way to create jobs…the unemployment rate, obtained from a separate survey of U.S. households, fell slightly to 5.0% in October, the lowest reading since April 2008 and down from 5.1% the prior month…October’s robust job growth and the revisions bring the average monthly job gains in the past three months to 187,000…
Chicago Federal Reserve President Charles Evans said during a CNBC interview this morning that the much stronger-than-expected October employment report is “very good news” and supports his 2016 economic outlook of 2.5% economic growth…he said stronger job growth will help push up inflation (how will inflation go up if the Dollar keeps rising?) which has been lagging below the central bank’s 2% target…Evans is a voting member this year on the FOMC and has been one of the Fed’s more dovish members, generally arguing that December for the first Fed interest rate hike in 9 years might be too soon…but he’s made some recent noises that he could accept a rate hike this year as long as the path higher is gradual…
In today’s Morning Musings…
1. U.S. Dollar Index breakout…
2. Powerful hedging strategy – 60% gain in the DUST over just 9 trading sessions…what’s the next move?
3. Lingo Media (LM, TSX-V) chart update…
4. A Venture company with 9-month earnings of 12 cents per share, trading at just 30.5 cents ($4.4 million market cap)…
5. A “Kaketsa kick” through resistance on the way for Garibaldi Resources (GGI, TSX-V)…
Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…
KSK- What should we expect next from this with respect to drilling and Teck?
Comment by 02charoc — November 6, 2015 @ 10:06 am
That situation is quite interesting, 02charoc, and I believe we’ll learn more next week.
Comment by Jon - BMR — November 6, 2015 @ 10:10 am
RBY wow http://i.imgur.com/0Udi5Dg.png Very risky bounce play…
Comment by ConcernedCitizen — November 6, 2015 @ 10:18 am
Sorry Les – you had said wake up people in your post so I thought you owned Pe. Anyway, I have a person here in Atlanta with a sizeable position in PE and we were talking about these warrants. Ya know, it pays to do your own digging. It’s a shame when people within the company don’t get it right. Yes, there are 11.5 million warrants outstanding on PE but they do not expire at the end of the year. They do not expire until June of 2016. With that being said it is possible for PE to move up some and the warrants being taken out at a higher price. I’m glad I decided to put the time in to dd this. PE could possibly be making a “W” formation in the chart. We need confirmation on the far right leg to start an upswing.
Comment by dave — November 6, 2015 @ 10:27 am
Jon, can you adjust the page. Its running off on the left again.
Comment by dave — November 6, 2015 @ 10:29 am
The selling has dried up on EQT people, you know what that can mean. Watch for a volume breakout, I hope anyway.
Comment by dave — November 6, 2015 @ 10:49 am
Dave ,I feel the easy money on PE was made on the run to a buck , depending on how soon it’s needed for production there is the possible take over in the near future.
Comment by Les — November 6, 2015 @ 10:59 am
EQT and GGI – what’s happening to ggi seems very similar to what happened with eqt. Drilling, can’t get above resistance and down. Difference is eqt was hyped and ggi not so much. Hopefully next week is the week.
Comment by 02charoc — November 6, 2015 @ 11:35 am
Les, I agree with you and after doing my own dd on this warrant situation and discovering they don’t expire until next June, PE could have a move up from here. It would make sense for the warrant holders to wait for higher prices. The chart is showing a possible “W” formation and a beauty at that. Monday will confirm if this is reality and time to buy.
Comment by dave — November 6, 2015 @ 11:51 am
PE – Les, another run to a buck could be coming. With the recent appointment (my post yesterday), this is hinting heavily on a buyout and getting the right negotiator in place. Drilling permits will be in place very, very soon for them to start going to the lower aquifer. My guess is 2-3 holes is all they will need, should not take long to complete and not cost too much. Then the flow testing, this may take some time, I willing to wait. The resource calculation is at 816,000 metric tonnes (LCE) is an inferred Resource and 43-101. IMO the resource will increase substantially after this round of drilling. Then ripe for a buy out as you say…. more easy money coming or hold till the offer?
I feel this is a good price to get in at, I topped up this week.
Dave – I was wondering what you were talking about with the 12 million warrant due now. I was doing due dilly but not received a return call yet. I wonder if company is in a blackout period???
Comment by vepper — November 6, 2015 @ 12:09 pm
Jon what is your take on the Eurocontrol halt ??
Comment by bernie .p — November 6, 2015 @ 12:17 pm
Dave, speaking of warrants, in EQT are there not 6,134,918 of them excercisable at .15 from a PP on July 16 that become free trading on November 18th?(four month and a day hold period) If so, that could take the steam out of a decent run notwithstanding drill results.
Comment by DBReese — November 6, 2015 @ 12:24 pm
vepper, I had heard about the 12 million warrants that became free trading and expired at the end of the year. I called IR late yesterday and confirmed this and stated it was hurting the share price as some were coming through now.
Today, I did some dd and discovered that 11.5 million warrants are out there all right, but they don’t expire until June of 2016. My point was that there is not a rush to push them through by the end of the year along with tax loss season to push the stock down into the .30’s.
The warrant holders can hold them and push them through at a higher price cause they have the time to wait before they expire.
Comment by dave — November 6, 2015 @ 1:05 pm
DBreese – yes on eqt warrants. But if you look at the tsx acceptance in July, it talks about the warrants at .085 and then gives a .15 price, so I’m not quite sure when they will be executed. Strong support is at .09, so the question is do they get them out now or wait for a bump up in the price. There is the chance that news comes out and moves the stock prior to them becoming free trading.
Comment by dave — November 6, 2015 @ 1:12 pm
CDNX broke support at 540 and now on its way back to test support at 520 . Hope it holds .
Comment by Les — November 6, 2015 @ 2:41 pm
Now a shareholder of GGI again……why? In a nutshell its because of the most recent core pic, what they’re drilling into, what the CEO said in the interview and the fact that they’re using an XRF and are excited with what its telling them! Its just a starter position but I will add more when I know that they will extend the drill program.
Comment by DDD4 — November 6, 2015 @ 5:05 pm
Jon would we be in an epithermal gold deposit within a porphyry environment? high sulphidation?
Comment by Martin — November 6, 2015 @ 5:37 pm
Martin, that’s quite possible. Given that GGI has already described this as a robust, hydrothermal system, if they are into an epithermal gold situation, it could be of the high-sulfidation type which is high temperature, oxidized, plenty of hydrothermal fluids, pervasive alteration of host rock, broad alteration halo, etc., and would almost certainly be associated with a porphyry system…and we know they are into a porphyry environment. It also seems they are seeing something a little different as well.
Below is some interesting reading, on porphyry deposits and epithermal gold deposits. Yanachocha in Peru is one of the 5 largest Gold mines in the world, 50 million ounces, a 250 sq. km open pit. It’s an epithermal gold deposit related to a porphyry with mineralized chimneys. Wouldn’t that be nice along the Sheslay Corridor!
incaminerals.com.au/userfiles/file/3_porphyry%20deposits%20november.pdf
Comment by Jon - BMR — November 6, 2015 @ 7:09 pm
check out the top editorial piece on 321 gold – presented by Equitas
Comment by Phil — November 6, 2015 @ 7:40 pm
Dave, I backed up the truck last couple of days and picked up another 75,000 of EQT @ .105 It’s bottomed out, I’m looking for major move on decent drill results expected on or before the 20th.
Comment by Jeff — November 6, 2015 @ 8:51 pm
This will be huge Jon :-), just grizzly central area 2,3 on top of what is unfolding near kaketsa! Imagine this type of mineralisation spread in a 25 sq flat bed. This systems is huge and force of nature as work it out differently that to the north, north east in my opinion. Could get frightened at some point.
Spent almost 2 hrs looking for pyrite magnetite core that would look like the most recent one, could’nt find any.
Comment by Martin — November 6, 2015 @ 9:16 pm
If copper were to drop to 4500 per tonne and gold to 1,000 per ounce would there be enthusiasm left for DBV, GGI? That would likely mark the bottom of copper and gold but I’m curious how this would affect the Sheslay darlings?
Comment by ConcernedCitizen — November 7, 2015 @ 2:34 am
Tried to send an email to GGI strictly to say great job in BC….these companies sometimes only hear bad things from investors. Anyways, kept getting a delivery failure message stating “mailbox full”. So either they never check there email or a lot of people are sending inquiries. So we wait….on those assays…interesting times.
Comment by weatheritout — November 7, 2015 @ 4:57 am
Good to have you back DDD4.
The core samples look good and Regoci seems very pleased. I’m hoping that GGI’s first couple of holes will match and maybe exceed the best that DBV and PGX have hit so far. A grade of 0.7% CuEq would be an excellent starting point. I may be getting my hopes up but reading between the lines, they may have better grades than that.
Comment by Tom UK — November 7, 2015 @ 5:54 am
thanks for posting Phil. This is the reason for the excitement of EQT drilling…..like I said before….EQT is like a lottery ticket and we worth having just in case their hit! Interesting that this was sponsored by EQT and published on 28 Oct which is 8 days after their update saying that core samples were sent to the lab.
visualcapitalist.com/the-story-of-voiseys-bay-the-discovery-1-of-3/
Comment by DDD4 — November 7, 2015 @ 6:27 am
Does anyone know if EQT is using an XRF?
Comment by DDD4 — November 7, 2015 @ 6:29 am
Any thoughts on the GBB news release yesterday?
Comment by Matt — November 7, 2015 @ 7:09 am
It’s encouraging that they’re finding some non-dilutive ways to bring some dollars in, Matt. Perhaps they’ll be able to avoid a rollback while they wait for the CA. There are still some “outstanding matters” to address with the CA, but at least it looks like it’s proceeding on a faster track. The bureaucracy in Quebec is unbelievable. Much different than it was even just several years ago when Osisko got the Malarctic mine pushed through in extremely timely fashion.
Comment by Jon - BMR — November 7, 2015 @ 7:47 am
Positive news yesterday from EUO after the close (it was halted all day). We’ve been tracking this one recently. They’ve completed a definitive deal, subject to shareholder and Venture approval, on the sale of one of their subsidiaries for $16 million cash and post-closing earn-out payments. They expect everything to close following the Dec. 18 shareholder meeting (for approval) and prior to Jan. 4, 2016.
Comment by Jon - BMR — November 7, 2015 @ 8:02 am
Matt- Currently they plan to mine near-surface hygrade at Long Bars to send to Iamgold.
It sounds as if the geology at Aukeko is similar. If they could drill off more
near-suface hygrade it would give them further very profitable ore for custom-
milling at Iamgold. It could also raise the possibility of a 3.5 km strike length of
hygrade near surface ore, something not considered previously. The CA should now be just
around the corner- but has been painfully slow.
Comment by Bob — November 7, 2015 @ 8:24 am
# 22. CC , I have those same questions in the back of my mind as copper has long way down to match other commodities like oil and iron . In previous brutal bear markets like the 1930s and 1880s , the only one to hold value was gold and that’s because gold is money . The higher the gold content of any of the Sheslay are plays the better. Incidentally the term ” Great Depression ” was coined in reference to the 1873 / 1892 period not the 1930s .
Comment by Les — November 7, 2015 @ 8:54 am
Again, the prices of commodities has very little impact on discovery plays. It obviously has affect on overall prices on the venture index and also not all boats ( companies ) will float. Even in a bear market a true discovery play can do very well. However, you can’t just aimlessly shoot money at the venture right now and expect good returns. I remember at the last highs in the venture and gold, everyone wanted to own shares in these mining companies….it was shortly after that when the bear market began. Now, you can hardly even give shares of these mining companies away. That should tell you something. We may not be at a commodity bottom yet, but it can’t be far away. Once a true real good discovery play comes along….everyone will suddenly remember why we all play the resource stocks. The homeruns, and when they happen they are amazing to watch.
Comment by weatheritout — November 7, 2015 @ 11:08 am
The other thing to keep in mind is you do not have to advertise a discovery. It may help your share price in the intern or if exploration doesn’t pan out but believe me if something is a true discovery the miners will come looking. This period of time with GGI reminds me of Aurelian resources just prior to discovery. They had been releasing some interesting exploration models and what they were finding but the market just yawned. It wasn’t until after assays that the price started to go up. I wasn’t a shareholder of them but I remember after their news and the price had climbed to near the $3 mark. I said this is crazy, I could have bought in at 50-60 cents there’s no way I’m going to invest now. As we know it continued up to $40. Anyways we are still to early in the game to truly know if GGI is sitting on a discovery but they sure are giving lots of clues and I totally agree with Jon as he said “this is a speculative buy if we’ve ever seen one.”
Comment by weatheritout — November 7, 2015 @ 11:22 am
Ddd4, good decision.
Comment by Tombc — November 7, 2015 @ 11:34 am
Jon, not sure if read my question earlier but will the entire Regoci interview be available?
Comment by Treb — November 7, 2015 @ 11:50 am
Yes, Treb, we’re putting it all together in several excerpts.
Comment by Jon - BMR — November 7, 2015 @ 11:54 am
EQT – ddd4, you can bet they have an XRF analyzer on site. No company drills without them anymore.
Comment by Dan — November 7, 2015 @ 1:20 pm
GGI – working on hole 4, 1+2 are on way to the lab, takes a wk to get em prepped and out it seems, then likely a 2 wk turnaround and followed by some time putting them in order
the rig will be left on site if the results bear fruit. good news hopefully translates into 30 cent wts (3mm wts) being exercised
Comment by david — November 7, 2015 @ 2:48 pm
If things are going well, and it appears they are, I anticipate we’ll hear from GGI early in the week with a fresh update.
Comment by Jon - BMR — November 7, 2015 @ 3:10 pm
Thanks for the reply Jon. I look forward to hearing the rest of the interview.
Comment by Treb — November 8, 2015 @ 5:44 am
PE – post from Stockhouse – Meeting with Albemarle this Friday. This could be huge.
stockhouse.com/companies/bullboard/v.pe/pure-energy-minerals-limited?postid=24270392
Comment by vepper — November 8, 2015 @ 8:04 am
Thanks, Vepper. We do have an updated PE chart for later today or tomorrow.
Comment by Jon - BMR — November 8, 2015 @ 8:35 am
Thanks guys (comments 31, 32). Hoping for a big 2016 for all of us Sheslay longs.
Comment by ConcernedCitizen — November 8, 2015 @ 10:57 am