Gold is finding support as expected around $1,750, an encouraging sign…as of 8:40 am Pacific, the yellow metal is down $9 an ounce at $1,755 after dipping as low as $1,748…the next major resistance on the Gold chart is $1,800, a level we could easily see next week…Silver is off 28 cents at $34.20, Copper is essentially unchanged at $3.59, Crude Oil is down55 cents to $93.52 while the U.S. Dollar Index has climbed more than one-third of a point to 77.12…
With the Dow off 150 points and TSX down nearly 100 points, the CDNX is in negative territory but off just 6 points to 1636…the 10-day moving average (SMA), currently at 1605, has been providing excellent support during the move since October 4 and that should continue…strong secondary support exists around 1575 which also coincides, approximately, with the 20-day SMA…this market, however, continues to be very selective and volume needs to increase significantly to carry this advance beyond 1700 which is the top of the resistance band has John has illustrated…
The U.S. jobs market remained stuck in neutral during October with the economy creating just 80,000 new jobs as the stubbornly high unemployment rate nudged just slightly lower…amid few expectations that the employment picture has improved, government numbers this morning showed the unemployment rate at 9% where it’s likely to hover for many more months…the total job creation was a bit lower than the 100,000 that economists had expected…the report comes just days after the Federal Reserve delivered its own body blow, saying the unemployment rate will go no lower than 8.5% to 8.7% by the end of 2012 and will remain in the 6.8% to 7.7% range through 2014…
Greek Prime Minister George Papandreou faces a confidence vote in Parliament later today that could determine whether his country will stay in the euro zone or leave the single currency and default on its debts…meanwhile, investors are also watching developments in Italy, which has agreed to have the IMF and EU monitor its progress on long-delayed economic reforms…
John has three charts to share this morning (Lake Shore Gold, Prodigy Gold and Greencastle Resources), ones that we had intended to post yesterday…we’ve had some inquiries regarding Lake Shore (LSG, TSX) which will be releasing its third quarter results next Wednesday…the stock jumped 26 cents yesterday to $1.86 on huge volume…below is John’s take on LSG which is currently down 6 pennies to $1.83…
Prodigy Gold (PDG, TSX-V), one of our favorites, released a very positive updated resource estimate for its Magino Gold Mine Project Wednesday and the stock climbed as high as 79 cents yesterday…it has since backed off to 70 cents…below is John’s PDG chart, produced immediately prior to the trading halt, which shows resistance at 80 cents…
Greencastle Resources (VGN, TSX-V) put out some news on its Blackwater-area property and the stock closed up 2.5 pennies at 17.5 cents on over 400,000 shares, the best volume this year…as of 8:40 am Pacific, VGN is off a penny at 16.5 cents…
Thank you for the Lake Shore Gold chart.
Regards
Comment by Paul — November 4, 2011 @ 8:46 am
Thanks for the chart on Lake Shore Gold as well. I know you guys are very much into the junior stock space, but I would like to see more charts and commentary on producing gold and silver companies if you have the time.
Comment by Michael — November 4, 2011 @ 8:51 am
Jon & John do you have any comments on the VGD news release?
Visible Gold Mines announces maximum $2.5 million private placement
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
ROUYN-NORANDA, Qc, Nov. 4, 2011 /CNW Telbec/ – Visible Gold Mines Inc. (TSXV: VGD) (Frankfurt: 3V4) announces that it has entered into an engagement letter with Industrial Alliance Securities Inc. for a best-efforts private placement of “flow-through” units in a maximum amount of $2.5 million.
Visible Gold Mines will issue a maximum of 8,333,333 “flow-through” units at a price of $0.30 per unit, for maximum gross proceeds of $2.5 million. Each unit will be comprised of one “flow-through” common share and one-half of a common share purchase warrant. Each full warrant will entitle its holder to acquire one additional common share of Visible Gold Mines at a price of $0.40 for twelve months from the date of issuance.
Visible Gold Mines will use the proceeds from the private placement for exploration on its properties in Québec.
Visible Gold Mines will grant an over-allotment option to Industrial Alliance Securities, which may be exercised for 30 days following the closing of the private placement, pursuant to which Industrial Alliance Securities will have the right to sell additional flow-through units in a maximum amount equal to 15% of the number of units sold in the private placement. If the over-allotment option is exercised in full, Visible Gold Mines will raise gross proceeds of $2,875,000 from the private placement.
In connection with the private placement, Visible Gold Mines will pay a cash commission to Industrial Alliance Securities in an amount equal to 7% of the gross proceeds. Visible Gold Mines will also issue compensation options to Industrial Alliance Securities, entitling it to purchase, for a period of 18 months from the date of issuance and at a price of $0.30 per share, a number of additional common shares equal to 5% of the total number of units sold in the private placement.
The initial closing of the private placement is expected to take place on or about November 21, 2011. The private placement is subject to customary closing conditions, including the signing of an agency agreement between Visible Gold Mines and Industrial Alliance Securities, and to regulatory approval, including that of the TSX Venture Exchange.
Comment by Andrew — November 4, 2011 @ 11:22 am
Fully subscribed the pp seems to be a significant dilution and only raising $2.875m!
Comment by Andrew — November 4, 2011 @ 12:05 pm
Sorry, another VGD comment – I thought they had sufficient cash plus the rebate from the Quebec Government? Could it indicate that they need to do more field work to define zones etc.? A new release with a progress update would answer my questions. 🙂
Comment by Andrew — November 4, 2011 @ 1:23 pm
Hi Andrew, I’m as perplexed by this financing as you are. A financing with this group (Alliance Securities) shows weakness, not strength, IMHO, as we’ve seen with GBB and ABI. It’s all flow-through money, no hard cash, and smart market players cringe at this type of thing – shows no conviction which is not a good sign. Also creates more overhead resistance. Flow-through shares are always more likely to come back into the market quickly, and below the PP price, because of the tax advantages. Very puzzling indeed, and I’m extremely disappointed. Where are the big boys? Sheldon Inwentash’s selling in September holds more significance, I think, than previously thought. The fact this news has been put out now probably means we won’t be seeing an exploration update until sometime in December. Good news usually travels fast and bad news usually travels slow. I love this company’s projects, they are first-rate, but it never ceases to amaze me how so many of these juniors can just shoot themselves in the foot. They just don’t seem to understand the markets.
Comment by Jon - BMR — November 5, 2011 @ 9:04 am
I recall that GCU also had a private placement that closed a year ago with Alliance Securities. I think it’s next Spring that Mineralfields can start selling their VGD shares. Martin Dallaire after his stream of upbeat updates has now put a cloud of confusion over the Company. In the current market conditions I can only view that as taking risk over the edge – Monday will be interesting to see how investors react to this news coupled in with the mess in Greece.
Comment by Andrew — November 5, 2011 @ 2:24 pm