Gold surged to another record level overnight as it pushed $64 higher to $1,781 before pulling back to $1,720…as of 8:45 am Pacific, the yellow metal is up $22 an ounce to $1,739…all eyes are on the Fed today as policymakers are meeting with a statement due at 11:15 am Pacific…equity markets are up in early trading on hopes the Fed will offer some reassuring words…Silver is off 94 cents to $38.09…Crude Oil has gained 34 cents to $81.65, Copper is unchanged at $3.98 a pound while the U.S. Dollar Index is down one-fifth of a point to 74.63…investors bought 950,000 ounces of Gold through exchange-traded funds yesterday, the largest inflow since February, 2009, according to Edel Tully, precious metals strategist at UBS…dealers said sales of coins and small bars to European investors yesterday were the highest so far this year…“Everything the Gold bulls predicted is coming true,” said Matthew Turner, precious metals strategist at Mitsubishi…”The euro zone is under severe stress, government debt from Greece to the U.S. is being called into question and most central banks see the solution as expanding the money supply”…Gold has jumped by as much as 20% since the beginning of July…adjusted for inflation, however, Gold’s record remains well below its 1980 peak, which translates to nearly $2,500 in today’s money…analysts have revised up their forecasts in the wake of recent events…JP Morgan is predicting Gold could reach $2,500 by the end of this year…at the moment, as we see it, Gold is unquestionably technically overbought…however, there do appear to be new dynamics at play in Gold as it has broken out of a long-term trend channel…the top of Gold’s previous upsloping channel can now be expected to provide support – in otherwords, we could very well see $1,670 before $1,800 but the overall “big picture” for Gold remains exceptionally bullish…
One of the companies that will benefit tremendously from higher Gold prices is Richmont Mines (RIC, TSX), one of our favorite smaller producers, which reported strong second quarter earnings this morning of 16 cents per share based on an average Gold price of $1,460 CDN during Q2…an average Gold price of $1,600 CDN over the second half of this year should give Richmont the potential to earn anywhere from 80 cents to $1.00 per share for 2011…the company reaffirmed its 2011 production target of 80,000 to 85,000 ounces…commercial production at the company’s Francoeur Mine, 25 kilometres west of Rouyn-Noranda, is expected to begin by early next year…Francoeur will add 3,000 ounces per month to Richmont’s production, lifting RIC over the 100,000 ounce mark in Gold sales for 2012…meanwhile, the company has five drill rigs now operating at Wasamac, a rapidly growing deposit between Rouyn-Noranda and the Francoeur Mine…we’ll have more on Wasamac tomorrow…Wasamac is unquestionably one of the busiest areas along the Cadillac Trend at the moment…Visible Gold Mines (VGD, TSX-V) has three rigs on its optioned Wasa Creek Property in the immediate vicinity of the Wasamac deposit, so this is definitely an area to watch closely…VGD, like Richmont, has held up well during this market weakness with strong support at its rising 50-day moving average (SMA) of 27 cents…the CDNX dropped as low as 1676 yesterday where it has support…as of 8:45 am Pacific, the Venture has gained 40 points to 1722…John updates the CDNX chart for us this morning and shows the various near-term support and resistance levels…
Currie Rose Resources (CUI, TSX-V) is up half a penny at 16 cents…this stock has shown great support in the mid-teens this year and the company is in the process of drilling its two major projects (Sekenke and Mabale Hills) in Tanzania…both hold excellent potential…CUI has pulled some stellar results before out of Mabale Hills and that’s where the current program started early last month…drill targets are being finalized for Sekenke which surrounds and runs in between two former high grade Gold mines…this promising property has never been drilled by Currie Rose…Silver Quest Resources (SQI, TSX-V) is up 8 cents to 92 cents…the company, in conjunction with operator New Gold Inc. (NGD, TSX), released results this morning from 11 holes on the Davidson claims (northern portion of the Blackwater deposit)…hole #179 was outstanding (278 metres grading 2.78 g/t Au) while hole #176 returned a 35-metre section grading 2.37 g/t Au…drilling continues in an effort to build on the 43-101 indicated and inferred resources at Davidson totaling 1,360,000 ounces…SQI has a 25% interest in that project and of course is also very active in the Yukon…Adventure Gold (AGE, TSX-V) is off a penny-and-a-half at 43.5 cents…AGE’s yearly low is 36 cents and given how its Pascalis-Colombiere Gold Property is shaping up, we see tremendous support for this play – and a great opportunity – around current levels…the company has approximately $3 million in working capital at the moment and several other projects on the go…
You guys may want to keep an eye out on LYD. Gold explorer in Armenia (former Soviet Union) with a low strip-ratio. They just completed a PEA with a $1000 gold price, showing they would be making a nice profit at those prices. I think this is an excellent entry point. Analysts with $3.85, and $5.50 price targets, though I doubt the majors will let the company grow that far before taking them out.
Comment by George — August 9, 2011 @ 7:57 am
Which Major?
Is it just me, or doe some other BMR readers balk at the total absence of take overs in the last 2 years?
there has only been a handful of notable ones….
Comment by Kennedy — August 9, 2011 @ 8:06 am
John & Jon, thanks for the charts. The CDNX chart is currently showing that SS (14) & (3) and RSI are off their bottoms, i.e they have reversed. There is not going to be a bull hammer because there was not a drop this morning, although I suppose we could always see a drop after Bernanke speaks. Is a bull hammer essential for confirmation of a bottom having been put in? Thanks
Comment by Andrew — August 9, 2011 @ 8:39 am
Bert – thx for the smile… and I am trying to stop pulling stumps!!:) days like today help with that!!
Comment by Jeremy — August 9, 2011 @ 8:48 am
Andrew
A bull hammer is not essential for a bullish reversal. It does not matter which bullish reversal candle pattern occurs there must be confirmation.
Bullish confirmation means further upside follow through and can come as a gap up, long white candlestick or high volume advance. Because candlestick patterns are short-term and usually effective for only 1 or 2 weeks, bullish confirmation should come within 1 to 3 days after the pattern.
Hope this helps
Comment by John - BMR — August 9, 2011 @ 8:59 am
Thanks John – it does help. 🙂
Comment by Andrew — August 9, 2011 @ 9:02 am
BMR
what’s the deal with silver, what is it going to take for silver to take off, what concerns me is if and when gold corrects which i think it will, silver could really get killed. My timing sure sucks, most of my holdings were gold stocks when silver was running and now gold is running and i have silver stocks and not enough gold stocks, running in circles, sheesh.
Comment by GREG — August 9, 2011 @ 9:17 am
Greg
Sorry but I cannot resist suggesting you put yourself into reverse……..
Comment by John - BMR — August 9, 2011 @ 9:38 am
lol, unfortunately my wife tells me my timing sucks too., lol
Comment by GREG — August 9, 2011 @ 9:53 am
You guys ever look at Trueclaim -TRM. Scadding Gold Project in mining friendly jurisdiction of Ontario is compiling au ounces with each drill hole. The big storm is brewing in Arizona property which is silver & copper -gold now. Lots of work going on and it shouldn’t be long before a drill hole goes down on this new discovery ( see website trueclaimexploration.com ) and the silver prospects.
As Bob Barker says ” the price is right “. Should be lots of news Q4.
Comment by George Pesut — August 9, 2011 @ 9:56 am
NES. Newstrike Capital – the largest land holder in the Guerrero Gold Belt in Mexico, next to Torex Gold and Goldcorp.
Torex Gold has a market cap of $700 + million with 3.8 Moz of gold at their deposit, Newstrike started making its discoveries just this year and over 30 % of shares are held by the Lundin Family through Zebra and Lorito Holdings, they have also added shares on the open market. Here`s an idea of the results:
The share structure is only 100 million shares outstanding and 110 million fully diluted, the share price at $2.62 represents a market cap of roughly $263 million dollars. Newstrike has over $15 M cash in the bank as well as 3 drills on their Ana Paula property which is a 1 km X 2 km geochemical anomaly of which already a 1000 X 700 m area of mineralization has been found. Originally NES was known for it`s mid to low grade bulk tonnage at Ana Paula as it acquired the property from Goldcorp last year for quite a bargain. Since the sale Newstrike has found a new breccia with dimensions of roughly 300 metres by 250 metres with over 300 metre depths tested and an average of close to 200 m depths on most holes.
You can scan these holes quickly if you`d like and pretend these are nothing out of the ordinary but I believe these holes to be as good as Ventana`s or close to who were bought out last year when gold was at $1200 / oz for over $1.3 billion – over 5 X Newstrike’s market cap.
Here are the results released this year alone:
1. 113 m @ 2.51 g/t au
2. 282 m @ 1.4 g/t au
3. 214 m @ 3.00 g/t au
4. 190 m @ 3.52 g/t au
5. 116 m @ 4.71 g/t au
6. 317 m @ 5.8 g/t au
7. 52 m @ 6.9 g/t au
8. 271 m @ 1.43 g/t au
9. 259 m @ 2.57 g/t au
Plus all these results have high-grade silver as well which shouldhelp incredibly with cash costs, the deposit is also only 22 kmnorthwest of Goldcorp’s 320,000 oz producing Los Filos project.
Newstrike is a bargain at these prices and with great technicals, great management (the ones who discovered Torex’s deposit of 3.8 Moz 5 km southwest) and one of the highest grade discoveries to date.
Newstrike in my opinion is close to ATAC Resources’ like results and I cannot believe it has pulled back again with the recent surge in gold. Do yourselves a favour and take a look at NES now while it’s still cheap, it hit $3.10 last week on more great results of 120 metres of 4.6 g/t au in the same area as the breccia yet the market managed to punish the stock by close.
I believe in the breccia alone based on the dimensions they currently have of 300 metres by 250 metres width and 200 metres depth @ 3 g/t au – close to or over 3 million ounces of gold. Based on Torex’s market cap of $700 + million they are receiving right next door to NES over $170 / oz of gold. With NES market cap of $260 million they are receiving $65/oz as the highest grade find in the junior market based on 4 million ounces of gold.
I think 4 million ounces at Ana Paula alone is conservative as the low grade bulk tonnage is easily over 1.5 million ounces alone with the defined strike length, nevermind the super high-grade starter pit breccia located in the middle of the deposit with a potential for over 4 million ounces with the latest drill results reported since February.
Comment by Taylor — August 9, 2011 @ 1:46 pm
GBB remains week in light volume. As I said before, the private placement stocks are coming into play and therefore, it is not easy to go up and even 40 cents level has a lot of pressure. If you can get it from 32-35 cents, you are pretty good. SD today is still silent and closed at 3.5 cents. Nothing I can play here… just wait for the news. I removed my buy order at 3 cents… quite unlikely to get it. However, my holding position seems good enough. BER has gone up by 1.5 cents and volume stays low…. I am thinking this share should stay in 15 cents range…. NAR … I put a buy at 16 cents but cannot make it… I want to accumulate more at a price 17 cents or lower…. and I have scooped some already lower price. The overall market will still be volatile and certain junior stocks may be a star a day… About 3 weeks ago, I talked about GBB and SD… I chose to hold SD… my sixth sense is correct…. I would have lost 20% if I hold GBB but SD with no changes…. My forecast this month, SD will out perform GBB for sure …. see what happens…. . SFF has a nice day but I am still worry about the market condition… selling pressure will increase at 24-25 cents level…. The stock is very active and it means there are lots of buying and selling….
Comment by Theodore — August 9, 2011 @ 4:28 pm
Whats the next support for ISD.v?? .15 ouch!
Comment by john — August 10, 2011 @ 7:28 am