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February 19, 2016

BMR Morning Market Musings…

Gold has traded between $1,219 and $1,236 so far today…as of 10:00 am Pacific, bullion is flat at $1,231 after a sharp run yesterday…Silver is also unchanged at $15.38…Copper is up a penny at $2.08…Crude Oil has slipped $1.23 a barrel to $29.54 while the U.S. Dollar Index is down one-fifth of a point at 96.64

Gold continues to flow into global exchange-traded funds, with the total for 2016 already exceeding the exodus from all of last year, according to Commerzbank.  “The Gold price once again found support from substantial inflows into the ETFs, yesterday again seeing 5.3 tonnes,” Commerzbank says. “Since the beginning of the year, holdings in the Gold ETFs tracked by Bloomberg have been increased by 154 tonnes. Thus inflows into ETFs this year have already exceeded the total outflows of last year – 138 tonnes. Gold therefore remains in demand in the current market environment, characterized as it continues to be by high levels of uncertainty.”

Do not expect to see a significant uptick in growth this year, warns the Organization for Economic Cooperation and Development (OECD), adding that governments should abandon austerity measures (Canada is a wonderful example!), which should be positive for the Gold market…the OECD released an update today of its economic projections for 2016, downgrading its outlook from November…the international organization now sees the global economy expanding by only 3.0% this year, the same rate as 2015, which was the slowest growth rate in 5 years…

The market for initial public offerings is foundering, and that’s not a great sign for broader equity markets…of the almost 175 companies that made their U.S. stock-market debuts in 2015, more than 70% are now trading below their debut prices according to a report this morning in the Wall Street Journal…in late 2015, several highly valued companies privately filed to go public in the first few months of 2016, but have since delayed their plans because of the stock market’s swoon…there were no U.S. IPO’s in January, and so far in February there have been only 4 new listings, all of which fell below their offer price within about a week…

In today’s Morning Musings

1.   Why the HGU is pointing to further gains in Gold stocks…

2.   What Rambo may do for Garibaldi Resources (GGI, TSX-V) in the hunt for a 2nd high-grade discovery at Rodadero in central Sonora State…

3.   Updated charts for CRJ, KAM, TGM and NEV

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…

38 Comments

  1. Great write up on GGI’s Mexico properties Jon. Can hardly wait for the drill to start turning at Rambo.

    Comment by pole — February 19, 2016 @ 11:04 am

  2. This means we have 2 companies drilling into high grade PMs….GGI and WRR….It does not get any better than that.

    Comment by John - BMR — February 19, 2016 @ 11:43 am

  3. GGI – I am glad I bought more this morning at 0.095

    Comment by George — February 19, 2016 @ 12:04 pm

  4. EQT – todays is the wishful thinking day to close up that gold mine in Brazil del. not holding my breath, the exchange etc will likely draw this out to at least the end of the month

    Comment by david — February 19, 2016 @ 12:10 pm

  5. I bought back in too George. Too good to resist at that level.

    I am giving one of my picks now. the symbol is XMG. Start your research. They are doing an un-announced pp for $100k, thus the reason of the drop to .11 and TD being the seller. The PP is for .10 and it is possible that it may touch .10 or .11 again Monday. I am putting this out now because it looks like the crosses are done and it may be complete. I can talk for hours on this one but I will keep it simple. You do more DD. They have 8 million alone just in the Magnesium that they are going to be extracting this year. Their market cap is around 3 mil or so. The lithium numbers of what they acquired blow away PE’s numbers. Cheers.

    Comment by dave — February 19, 2016 @ 12:12 pm

  6. David – EQT, don’t hold your breath. Don’t let the .06’s get away. Bid .055.

    XMG – Don’t expect a lot of shares. All I got was peanuts today and this is all you will get. My contact has access to level 2 and said only 100k to .30 – He is in at .16 if it makes anyone feel better. It is tightly held. The candle for the day looks to be a hammer at the bottom, you know what that means. This one can fly up as fast as it flew down. It was .70 in September.

    Comment by dave — February 19, 2016 @ 12:24 pm

  7. Very good news on GGI. Managed to get some more to-day.Waiting on WRR also. charleybarley

    Comment by charleybarley — February 19, 2016 @ 12:49 pm

  8. My second pick will not be Sunday. I sit here in total frustration as it is not correcting to a level it should. It is a bull. They have a PP going on much lower than the share price and I am really hoping for the market to shake some trees, well a lot of trees to get this one down some for good bottom entry. This one is going to be a BULL. Be patient.

    Comment by dave — February 19, 2016 @ 1:18 pm

  9. LAD- New Carolin Gold Corp
    Very interesting story.
    I loaded up a few weeks ago and am sitting just under a double.
    newcarolingold.com/s/Home.asp

    youtube.com/watch?v=Ab4qCyu1Kdk&app=desktop

    Comment by MURF — February 19, 2016 @ 1:35 pm

  10. LAD – AOTH pick. good work
    GGI – new video about Rocking posted on their home page. fwiw

    Comment by david — February 19, 2016 @ 1:45 pm

  11. Same video as last year. They just changed the date on it. Hope they drill the heck out of it this time because talk and no action is getting old regarding some properties.

    Comment by Dan1 — February 19, 2016 @ 1:58 pm

  12. I see more than a date change on this, Dan1. They’re also showing the “Don Ese” man at Rodadero on this video, geologist Ray Oripaugh who has come into the Rodadero project for the first time. We’ll see what kind of difference that makes. Oripaugh is the one who founded Don Ese. He’s apparently big on Rambo and some fresh approaches at Silver Eagle. Oripaugh could give things a real kick-start at Rodadero given his known style.

    Comment by Jon - BMR — February 19, 2016 @ 2:13 pm

  13. RE:GGI Don’t hold your breath on anything that GGI claims they are going to do, still no results from August at La Patilla…Im just so frustrated with Regoci, even when we do get something of real substance that may drive the stock you will probably have a lot of frustrated investors selling at 14-18 cents to get out while they can, especially if we don’t hear anything more from them until May or June which is very likely with the way Regoci operates, I just don’t get it… I truly hope I am wrong as I have been in this stock from the beginning

    VANCOUVER, Aug. 14, 2015 /CNW/ – Garibaldi Resources Corp. (TSX.V: GGI) (the “Company” or “Garibaldi”) is pleased to report that seven RC holes have been completed by Layne Drilling at the Company’s 100%-owned La Patilla Gold Property in Sinaloa State, Mexico. Assays are pending, and results will guide the next phase of exploration at this property where a shallow high-grade zone was discovered last year (10.4 g/t Au over 8.5 meters in LP-14).

    Comment by GREGH — February 19, 2016 @ 2:16 pm

  14. Coulda woulda shoulda, if my aunt had…… well you all know the rest…

    Comment by GREGH — February 19, 2016 @ 2:17 pm

  15. I Jon and John, have been buying share off WRR recently. I know you guys have been covering this stock for a number of mouth now. My thought is we can be in for a big surprise here. Could you start some kind off in depth coverage of this one as i see great value here.

    Thanks in advance!

    Comment by Sylvain — February 19, 2016 @ 2:22 pm

  16. The Venture closed at 530.76 breaking the last high . Can anyone elaborate as to what sectors that the money is going to . I suspect the mining sector..

    Comment by Lester — February 19, 2016 @ 3:01 pm

  17. Always seems to be a knee jerk reaction of some to sell GGI on any news. This is one in my opinion where you need a trading position and a core position. I liked the news, the reason I bought this stock is because they have more than 1 iron in the fire. It might take some time but the future looks good.

    Also PGM is making a real nice move, thanks to BMR for bringing that one to our attention. Should be a big winner with a rising gold price. Now, we just need to get ELT moving.

    Comment by Danny — February 19, 2016 @ 3:06 pm

  18. I have followed the LAD story for a while, looks like they might be finally turning a corner there, it has taken them a while to get things moving forward. The Rockford team is sure pumping the heck out of it on Stockhouse.

    Comment by Danny — February 19, 2016 @ 3:23 pm

  19. PGM has been on fire, Danny…that’s what drilling and a higher Gold price can do in a quality situation like that. We’ll have an updated chart on PGM in the coming days.

    Comment by Jon - BMR — February 19, 2016 @ 5:13 pm

  20. Jon

    sounds like your voice on the GGI video there at the end? Looks like all the focus is now on Mexico…. if things don’t go well there then I guess they jump back to Grizzly….does anyone know for sure that the camp is still winterized?

    Comment by GREGH — February 19, 2016 @ 9:43 pm

  21. Wrong, Gregh. That is Jared Slingerland of MarketSmart.

    On another point, I certainly don’t assume that GGI’s focus is “all on Mexico now”. Why? Just because they put out news on Mexico, which is what everyone has been asking for and waiting for? Obviously they’re beginning to attack Mexico vigorously which is great – Rambo (Gold) could easily be the next Silver Eagle – but they have lots on their plate with the Grizzly. And plenty of incentive to push ahead, not to mention a responsibility to investors to fully capture this opportunity. And, rest assured, we will judge them on how they handle that.

    At Grizzly Central, they have hit something highly unusual with the Ultra 1 Zone that no other company in fact has drilled into in this country as far as we have been able to tell – a Scandium, Magnesium (Magnesium Oxide), Nickel deposit.

    Common sense tells you, given the nature of this unique deposit, that the immediate thing to do here is to fully understand the metallurgy and potential recoveries, and then finalize a plan of attack. You’re critcizing GGI for actually being successful here. They didn’t ask for this type of deposit but they’ve been blessed with it IMHO. FACT – any geological and business teams worth their salt would insist on metallurgical data in an unusual situation like this prior to determining the next exploration steps and where to drill the next hole.

    The early indications are very encouraging on the metallurgical front given the fact the Nickel appears to be in sulfides. This work is ongoing and the Magnesium is being tested for its metallurgical properties and high purity potential
    (critical). The Scandium is being investigated as well of course. If Kaketsa has produced a clean product, then GGI has something huge on its hands because the tonnage is enormous based on the widely spaced holes and the geophysical signatures stretching 3 km N-S and up to 1 km wide (back of the envelope calculations over those dimensions suggest around 2 billion tonnes to 300 m depth if the black unit is present throughout the area). Geophysics define the shape and size of this deposit type, unlike the Cu-Au porphyry models at the Hat and Star.

    The value of this deposit is going to hinge on its chemical composition. There’s large tonnage with this and the conceptual metal value per tonne is high, but what’s key right now is the chemical composition/metallurgical purity.

    2-3 weeks of lab testing should provide a lot of answers. We know from the Feb. 11 news that testing was in progress at that point – I’m assuming that this will be completed within the next week to 10 days.

    Comment by Jon - BMR — February 20, 2016 @ 7:51 am

  22. Just listened to GGI video again for the 2nd time. Man does it get me excited for the drill to get turning at Rambo.

    Comment by pole — February 20, 2016 @ 11:09 am

  23. What’s particularly interesting about Rambo, pole, are the porphyritic andesite rocks that underlie it (these are excellent hosts for high-grade Gold, CXB for example in Nicaragua has found very nice Gold numbers in this type of rock), and the fact it borders the Progreso claims where high-grade gold and silver are being extracted. The historical report in the Mines Handbook we posted yesterday (we found it online) gives an excellent overview. I would have liked to have seen GGI drill this target earlier, but I’m guessing that the reason for their delay has been due to discussions with the private group holding the inlier claims immediately below Rambo. They’re both on the same structure. This is what increases the probability of a discovery at Rambo from a geological standpoint, everyone needs to understand that (the system could indeed begin at Rambo or extend from Progreso to Rambo). This is central Sonora – one of the best places in the entire world to find deposits.

    Regoci’s earlier hesitation about drilling Rambo probably had to do with the fact that they may have been negotiating with the family that holds the Progreso operation. A big hit at Rambo, and all of a sudden the price for Progreso increases – makes sense. At some point you just have to put that aside and drill. That’s what he’s doing now, and that’s definitely in the best interests of shareholders IMHO. Roll the dice and see what happens. If there’s an important new discovery at Rambo, that’s what matters. Even if that inflates the price for Progreso. The fact GGI has brought back the same geo that found the Don Ese deposit (Ray Oripaugh) speaks volumes about what’s going on with regard to Rambo and Rodadero at the moment. Everyone’s patience has a great chance of paying off big-time here. Yes, GGI may appear to move slowly at times but (more importantly I would argue) they move thoughtfully and strategically at first, then decisively – and no one can argue against their drill hole success rate. It’s one of the best around.

    Comment by Jon - BMR — February 20, 2016 @ 11:37 am

  24. Thanks for that Jon. I was feeling pretty good before your comment, now I am feeling “great”. Sounds like they can’t miss (hopefully) at Rambo.

    Comment by pole — February 20, 2016 @ 1:31 pm

  25. Jon,while I think the Magnesium and Scandium are great finds at the Grizzly,and the Mexican properties could show something exceptional in this pending stock market crash environment,I wouldn’t call the nickel seen in the samples at the Grizzly a deposit.
    I can’t recall ever hearing they have pentlandite or pyrrotite as indicator minerals.Just pyrite and chalcopyrite.Imo,the nickel could end up being very minor and not minable and should be taken in the same grain as background PGMs and gold.
    Only deeper drilling and possibly wider drilling will show whether nickel shows up as a dominant metal.
    Eventually,maybe we hear the words pentlandite and pyrrotite,but until then I doubt they will find enough nickel to ever throw a shovel at.
    The next Grizzly drilling will be interesting.Jmo.

    Comment by robinandthe7hoods — February 20, 2016 @ 2:14 pm

  26. robinandthe7hoods, the Magnesium (oxide) and the Scandium are the key focus of interest at the moment, I agree with that. However, the Nickel may enter into the equation at some point, depending on how things evolve in the Ultra 1 Zone and in the district as a whole. The fact the Nickel is in sulfides makes potential recovery a much easier issue (if it were bound up in silicates, for example, it would be impossible to recover concurrently with the Magnesium). Potentially, though this will require much more investigation, the Nickel could come into play here at least as a by-product. There is certainly lots of it. Keep in mind, the Dumont Nickel deposit in Quebec is a primary Nickel deposit at about 0.25% Ni but with a concentrate grade higher than the Voisey’s Bay deposit. The other point, of course, is that higher-grade zones of Nickel are possible within this ultramafic system. Rich Nickel sulfide deposits often have a small footprint—as opposed to a very large footprint that you would see for a porphyry deposit. The very fact that Nickel has been found in the Sheslay district for the first time is highly significant in my view and again points to the fact that all things are on the table there – nothing can be ruled out on any of the properties. That’s a very fair assessment.

    Comment by Jon - BMR — February 20, 2016 @ 2:38 pm

  27. I agree.Nothing can be ruled out at the Grizzly.The potential is endless now it seems.Too bad they have the wrong guy as the CEO.
    Not in the sense of ability to find good properties and have success drilling,but anything to do with promotion and urgency to get results out to drive the stock.Regoci has no clue….and SO MUCH to work with.Makes a person shake their head.
    And this may never change or improve the share price.This could easily be trading at .30-40 with the right guy at the helm.

    Comment by robinandthe7hoods — February 20, 2016 @ 6:59 pm

  28. BMR – I can’t remember what day you recently re posted the link to top 50 ideas.

    Comment by George — February 20, 2016 @ 7:22 pm

  29. We’ll be providing a full performance update and review tomorrow, George (below is a link to the Dec. 4 portfolio).

    Combined, BMR’s Top 50 Opportunities List has generated a robust return of 20.7% since Dec. 4 which equates to an annual return of better than 80%. This doesn’t include the ETF side where we closed out the recommended HGU position during this period for a nearly 50% gain.

    How does this compare with the markets? Since Dec. 4, the Venture is up just 2.7%, the TSX is down 4% while the Dow is off 8.2%. Would be interested in knowing of another newsletter that was bold enough to put out a Top 50 List with that list gaining 21% in value in less than 3 months in shaky overall markets. We must be doing something right.

    https://bullmarketrun.com/?p=35007

    Comment by Jon - BMR — February 20, 2016 @ 7:42 pm

  30. I’d say that’s pretty darn good.Really,if everyone would have played anything but GGI,they would have done very well…anything.That’s a strong track record.
    And let’s be honest,GGI had the goods to run hard also,but the CEO is a dunce at promotion.Can’t blame that on BMR.Sorry,Jon,but I couldn’t hold that back.

    Comment by robinandthe7hoods — February 20, 2016 @ 8:00 pm

  31. No problem, robinandthe7hoods. No one was calling Regoci a dunce at promotion in 2014, though. When you look at our Top 50 list with nearly 40% of those companies up 30% or more since Dec. 4, and one of them up 147%, needless to say I’m not pleased with the performance of a few of the stocks on that list that have under-performed. I’ve let Regoci, for one, know that GGI at 11 cents is unacceptable in our view from a valuation standpoint. He’s feeling the heat and I suspect this is going to be addressed. On the ground, however, they showed impressive execution at Grizzly Central because if you took a poll of most investors last summer after the uprising in the district, most were saying – even in this forum – that GGI would not be able to drill. Regoci managed that situation highly effectively and the fruits of that labor – including the relationship that has been built with the Tahltan – will pay dividends in 2016. If you’re going to criticize over something, that’s fine. But also give credit where credit is due.

    Comment by Jon - BMR — February 20, 2016 @ 8:08 pm

  32. I can agree with you there,Jon.And if you got on his case about the stock price,I tip my cap to you.Hopefully he addresses that as he goes along.
    As I say,as far as the rest of his work goes,you can’t argue with the successful hits.He may have to hire a promotional team,imo.Most companies eventually do if they have anything worthwhile to promote.They are at that point now.People who can guide him through the process to drive the stock price.
    It would only benefit the company,as it is easier to raise cash in PPs if investors see the company can pop the stock so they can sell into the rise at some point.

    Comment by robinandthe7hoods — February 20, 2016 @ 8:44 pm

  33. GGI – the news releases can be the most well written of any company and they could have released 13+ ground work related releases but shareholders buy for the price to go up so the market is saying something right now….

    Comment by George — February 21, 2016 @ 6:46 am

  34. What stock is up 147%, LIX? BMR did you actually recommend buying LIX, or did you just mention it and say kinda take a look at it but maybe buy it if it pulls back which I don’t believe it did…just curious…

    Comment by George — February 21, 2016 @ 6:48 am

  35. George, LIX was put on our list of Top 50 for a reason. Our job is to research the best opportunities and put them in front of our subscribers and that’s what we’re doing. We’ve mentioned LIX numerous times over the last 2 months and our Jan. 31 Sunday Sizzler stated the following (with a chart):

    Lithium Energy Corp. (LIX, TSX-V)

    Lithium Energy (LIX, TSX-V) backed off the last 2 sessions to close at 57 cents Friday. Any further weakness is clearly an accumulation opportunity, especially if you missed this one while it was available in the low-to-mid-40’s in December through the middle of January.

    We’ve been bullish on LIX since it first started trading on the Venture after an RTO at the end of November, given the players involved and the amount of money this company has been able to raise. Powered by Frank Giustra, Brian Paes-Braga and Paul Matysek, LIX further bolstered its cash position at the end of December by completing a $3.2 million financing at 30 cents. This should be a very interesting play in 2016 given the individuals involved, the sector (Lithium), and the address. Paes-Braga is a very bright, aggressive go-getter with a lot of contacts (we met him during his time at Jordan Capital in Vancouver). With someone like him involved, this deal has a much better chance than most at succeeding in a major way – he brings high energy to Lithium Energy.

    Fib. support levels on the pullback from the recent high of 69 cents are 57 cents down to 45 cents.

    Comment by Jon - BMR — February 21, 2016 @ 7:11 am

  36. Wonder if Trudeau realizes that three-quarters of the world’s mining companies are incorporated in Canada. In his speech at the World Economic Forum in Davos recently, he implied that somehow the resource industry and the tech sector are somehow completely separate, not related, yet technology of course is playing an ever-increasing role in resource extraction. He missed a golden opportunity to highlight simultaneously Canada’s expertise in resources and tech, rather than talking up the tech sector at the expense of the resource sector.

    Excellent article below on mining in space – and what Canada should be doing.

    “Why Canada risks losing out on minerals in space” – Global and Mail website

    Comment by Jon - BMR — February 21, 2016 @ 7:14 am

  37. “BMR’s Top 50 Opportunities List has generated a robust return of 20.7%”

    As for me I’m down a ton of money on DBV and GGI and I do not want to renew my pro membership until these two stocks deliver, hopefully soon. Then I will renew.

    Comment by ConcernedCitizen — February 21, 2016 @ 9:52 am

  38. We definitely want to see those 2 companies perform better in the market as well, CC, and I believe that will happen. Timing with regard to individual penny stocks can sometimes be tricky, and BLO was a great example. We were very bullish on BLO when it started trading on the CSE in June 2014 and it quickly soared into the 30’s. Then it had a sharp pullback to a nickel but we kept the faith because we had the vision for how that would develop. In less than 4 months it was at 75 cents (then it retraced again, now it’s another great buy). So sometimes you can have the right pick for the right reasons, but patience is needed to see a play fulfill its potential.

    Comment by Jon - BMR — February 21, 2016 @ 10:01 am

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