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November 26, 2012

BMR Morning Market Musings…

Gold drifted as low as $1,745 overnight but clearly the bulls are in control after Friday’s surge through important resistance at $1,740…as of 5:30 am Pacific, the yellow metal is off $1 an ounce at $1,751…Silver, which gained over 5% last week, is up 4 pennies at $34.17…Copper is unchanged at $3.51…Crude Oil is down 49 cents to $87.79 while the U.S. Dollar Index is flat at 80.27…

Strong Holiday Shopping Sales In U.S. Thursday Thru Sunday

Earlier Thanksgiving hours and shopping in both stores and online spurred an estimated 12.8% increase in U.S. retailers’ sales over the four-day holiday weekend, an industry trade group has reported…an estimated 139.4 million adults visited U.S. stores and websites from Thanksgiving through Sunday, up from 131 million last year, according to a survey from the National Retail Federation…total spending for the weekend rose to $59.1 billion from $52.4 billion last year with the average holiday shopper spending $423 this weekend, up from $398 last year…the survey, conducted Nov 23-24 by BIGinsight for NRF, polled 4,005 consumers and has a margin of error of plus or minus 1.6%…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite Index fell 10 points to 2017 but Japan’s Nikkei Index hit a 7-month high on the back of a weaker yen…European shares are lower ahead of a meeting of Greece’s international creditors with the country awaiting a decision on its next tranche of emergency funds…over the weekend, French Finance Minister Pierre Moscovici said he was confident that aid for the country worth 31.2 billion euros ($40 billion) would be finalized Monday as the troika of international lenders (the International Monetary Fund, European Central Bank and euro group of finance ministers) meet…stock index futures in New York as of 5:30 am Pacific are pointing toward a modestly lower open on Wall Street…some of the more closely followed U.S. economic data on the calendar thisweek include durable-goods orders and consumer confidence tomorrow, new home sales and Fed Beige book Wednesday, jobless claims and gross domestic product Thursday, and personal income/spending and the Chicago Purchasing Managers Index on Friday…markets will also be keeping a very close watch on some Fed speakers this week…

Updated Silver Charts

Gold broke above its 50-day moving average (SMA) and reached its highest level Friday since October 17 while Silver hit its best level since October 5…as usual, we begin the new trading week with short-term and long-term chart updates for Silver…RSI(14) shows a sharp increase in momentum on the 9-month daily chart, and a near-term challenge of resistance at $35.50 appears very likely…support is now at $33.30 (the important support band between $30.50 and $31 held nicely)…

Silver – Short-Term Chart

Silver – Long-Term Chart

Based on historical patterns, it appears Silver is gearing up for another extended period above the RSI(2) 70 level as this “Wave 5” move continues to gather steam…2013 is going to be very interesting…the long-term Fibonnaci target level remains $78…


U.S. Dollar Index Chart Update

The U.S. Dollar Index continues to look weak in our view, especially given its inability (so far) to push through important resistance at 81.50…as we’ve mentioned previously, a bearish head-and-shoulders pattern is taking shape…a weak greenback is good news of course for Gold and Silver, and the Venture Exchange…below is a 2.5-year weekly chart update for the Dollar Index…

Euro Chart Update

Another way to look at the Dollar Index is through the euro, and the euro continues to look bullish relative to the greenback…this is a very important chart as a stronger euro means higher precious metals prices and the likely return of the “risk-on” trade…

Canstar Resources (ROX, TSX-V)

Canstar Resources (ROX, TSX-V) is worthy of our readers’ due diligence and has been a strong performer during the second half of 2012, doubling in price from its July closing low of 13.5 cents…at Friday’s 29.5-cent close, ROX is just half a penny below its all-time high from 2005, so this is definitely a situation to keep an eye on…diamond drilling has commenced on Canstar’s Mary March Property in the Buchans area of Newfoundland and Labrador…this property is held via a 50/50 joint venture between Canstar and Xstrata Zinc Canada with Canstar as the operator…this first phase of exploration, to be completed before year-end, will consist of eight holes designed to test sulphide zones (high-grade base and precious metal intersections) that were discovered over a decade ago (no exploration has been carried out since 2000)…the Mary March Property is 20 kilometres northeast of the past producing Buchans mine…the Buchans mine produced 16.2 million tonnes averaging 14.5% Zn, 7.6% Pb, 1.3% Cu, 126 g/t Ag and 1.37 g/t Au over its 56-year mine life…below is a 2.5-year weekly chart from John…a “Wave 5” move appears to be in the works – the exact timing of that, of course, is not certain…

Note: John, Jon and Terry do not hold share positions in ROX.

22 Comments

  1. RBW Great day for a NR… Monday morning , stock has all week to run, silver predicted/expected to run and market ready for some good news stories…

    Comment by Brillo — November 26, 2012 @ 6:15 am

  2. BBB put out some pretty strong results and it barely moved the SP. What kind of results would RBW have to have from the International property assays to move SP significantly?

    Brixton Metals Drills Best Intercept to Date at Oban: 310m of 223 g/t AgEq Including 123m of 402 g/t AgEq (190.68 g/t Ag, 1.19 g/t Au, 3.25% Zn and 1.74% Pb)

    Comment by Paul — November 26, 2012 @ 7:52 am

  3. Whats up with the venture today. Down nearly 30 points. Tax selling? Venture broken? One thing is for sure, these markets are annoying to play!

    Comment by Tony T — November 26, 2012 @ 7:58 am

  4. I’m shaking my head on that one myself, but I’m not going to be faked out by it. AOI, the oil play with quite a big market cap, is down $2 per share this morning, so that’s part of the problem. Tomorrow is also month-end settlement, so sometimes you get weakness at that time.

    Comment by Jon - BMR — November 26, 2012 @ 8:02 am

  5. Gold Bullion Provides Mineral Potential at Depth for Granada
    VANCOUVER, Nov. 26, 2012 /CNW/ – Gold Bullion Development Corp. (TSXV: GBB) (OTCPINK: GBBFF) (the “Company” or “Gold Bullion”) is pleased to announce the potential quantity and grade ranges for the underground extensions at its Granada gold property, located on the prolific Cadillac trend in northwestern Quebec, 5 km south of the city of Rouyn-Noranda.
    Based on the resource estimate information and the deep hole program interpretation, SGS Canada Inc. has provided the following potential quantity and grade ranges:

    POTENTIAL QUANTITY AND GRADE RANGES (1)

    Zone Metric Tonnes (Million) Gold grade (g/t)
    UG extension West 7.4 to 11.1 3.40 to 4.70
    UG extension East 2.2 to 3.3 3.20 to 4.30
    Total 9.6 to 14.4 3.35 to 4.61

    (1) The potential quantity and grade is conceptual in nature as there has
    been insufficient exploration to define a mineral resource and it is
    uncertain if further exploration will result in the target being delineated
    as a mineral resource.

    The potential stated above is based on projections within the mineralized plan of two and three mineralized zones of 3 meters true width on the west and east side of the deep hole program under highly drilled surface mineralization.
    As disclosed in Gold Bullion’s press release of November 15, 2012:
    The total gold resource at Granada now stands at 1,605,000 gold ounces in the Measured and Indicated categories with 1,033,000 gold ounces in the Inferred category using a cut-off grade of 0.40 g/t. The in situ measured resource is 946,000 ounces (28.735 million tonnes grading 1.02 g/t), indicated resource is 659,000 ounces (18.740 million tonnes grading 1.09 g/t), and inferred resource is 1,033,000 ounces (29.975 million tonnes grading 1.07 g/t Au), using a cut-off grade of 0.40 g/t. Additional information can be found in the Company’s press release of November 15, 2012.
    On April 22, 2010 the Company set a target of 2.4 to 2.6 million ounces of gold as per the original preliminary block model estimate. That target has been hit as evidenced by the press release dated November 15, 2012. Based on this additional data from SGS, Frank J. Basa, Gold Bullion’s CEO, is very pleased to state “The Company is now targeting 3.6 to 4.6 million ounces of gold from the next phase of the continued exploration program at Granada with some 80% of the extended Long Bars zone remaining to be explored.”
    Claude Duplessis, Eng. is acting as the qualified person (QP) for Gold Bullion Development Corp. in compliance with National Instrument 43-101 and has reviewed the technical contents of this press release.

    Comment by Arjan — November 26, 2012 @ 8:18 am

  6. Gold Bullion Provides Mineral Potential at Depth for Granada

    VANCOUVER, Nov. 26, 2012 /CNW/ – Gold Bullion Development Corp. (TSXV: GBB) (OTCPINK: GBBFF) (the “Company” or “Gold Bullion”) is pleased to announce the potential quantity and grade ranges for the underground extensions at its Granada gold property, located on the prolific Cadillac trend in northwestern Quebec, 5 km south of the city of Rouyn-Noranda.

    Based on the resource estimate information and the deep hole program interpretation, SGS Canada Inc. has provided the following potential quantity and grade ranges:

    POTENTIAL QUANTITY AND GRADE RANGES (1)

    Zone Metric Tonnes (Million) Gold grade (g/t)
    UG extension West 7.4 to 11.1 3.40 to 4.70
    UG extension East 2.2 to 3.3 3.20 to 4.30
    Total 9.6 to 14.4 3.35 to 4.61

    (1) The potential quantity and grade is conceptual in nature as there has

    been insufficient exploration to define a mineral resource and it is

    uncertain if further exploration will result in the target being delineated

    as a mineral resource.

    The potential stated above is based on projections within the mineralized plan of two and three mineralized zones of 3 meters true width on the west and east side of the deep hole program under highly drilled surface mineralization.

    As disclosed in Gold Bullion’s press release of November 15, 2012:

    The total gold resource at Granada now stands at 1,605,000 gold ounces in the Measured and Indicated categories with 1,033,000 gold ounces in the Inferred category using a cut-off grade of 0.40 g/t. The in situ measured resource is 946,000 ounces (28.735 million tonnes grading 1.02 g/t), indicated resource is 659,000 ounces (18.740 million tonnes grading 1.09 g/t), and inferred resource is 1,033,000 ounces (29.975 million tonnes grading 1.07 g/t Au), using a cut-off grade of 0.40 g/t. Additional information can be found in the Company’s press release of November 15, 2012.

    On April 22, 2010 the Company set a target of 2.4 to 2.6 million ounces of gold as per the original preliminary block model estimate. That target has been hit as evidenced by the press release dated November 15, 2012. Based on this additional data from SGS, Frank J. Basa, Gold Bullion’s CEO, is very pleased to state “The Company is now targeting 3.6 to 4.6 million ounces of gold from the next phase of the continued exploration program at Granada with some 80% of the extended Long Bars zone remaining to be explored.”

    Claude Duplessis, Eng. is acting as the qualified person (QP) for Gold Bullion Development Corp. in compliance with National Instrument 43-101 and has reviewed the technical contents of this press release.

    About Gold Bullion Development Corp.

    Gold Bullion Development Corp. is a TSX Venture-listed junior natural resource company focusing on the exploration and development of its Granada Property near Rouyn-Noranda, Québec. Additional information on the Company’s Granada gold property is available by visiting the website at GoldBullionDevelopmentCorp.com and on SEDAR.com.

    “Frank J. Basa”

    Frank J. Basa, P.Eng.

    President and Chief Executive Officer

    Comment by Marc — November 26, 2012 @ 8:18 am

  7. Gbb puts out new estimate, does not mention the 1 billion shares that will be outstanding by the time they prove up this new estimate. Management has boasted that they don’t want a takeover, and don’t answer the phone when Osisko calls. Time to start answering that phone. Maybe making a few…. Keep the worthless castle project and let someone with 2 nickels to rub together take over Granada.

    Comment by Mike — November 26, 2012 @ 8:43 am

  8. Mike only 20% of that property is explored – 4.6mm oz’s – too early to call the big boys

    Comment by pete — November 26, 2012 @ 9:09 am

  9. Go back to stock house mike!!! No dd no meaningful logic nothing to back up the foolishness you post. Just bla bla bla. I’m waiting for a detailed post from u in gbb. Should I hold my breath.

    Comment by Heath stockford — November 26, 2012 @ 10:17 am

  10. DYG is getting more volume this morning and trading at 4 cents now. The asks are getting thin could be close to a break out. Nice grab samples from a couple days ago.

    Comment by Ed — November 26, 2012 @ 11:04 am

  11. RBw starts gain some minor traction and someone always goes and dumps into the bid. You cannot honestly tell me that isn’t blatant mm manipulation

    Comment by Heath stockford — November 26, 2012 @ 11:17 am

  12. @ Heath.. By all means start holding your breath. No logic to fearing further dillution? No logic to wanting to bring in more effective management? Maybe someone with cash but lacking ounces moving forward? Someone who does not have to dillute at multi-year lows to keep the lights on and wait for a government rebate check and twice reprice warrants that don’t get exercised? Sorry if you disagree with my frustration here. How well has this stock performed over the last 2 years, is that in depth enough DD? You can site terrible market conditions but we are valued at about 8 dollars an ounce and I think the current monthly average is over 40, in these same terrible conditions. If what I am saying still sounds like blah, blah, blah to you, well I guess it’s your lucky day because you can buy all you can afford for 10 cents right now!

    Please don’t shoot the messenger (again) if you choose to respond. No need to get all huffy.

    Comment by Mike — November 26, 2012 @ 12:45 pm

  13. No huffy. Still waiting though! Maybe you could have someone else write your post for you that possibly has something a little more intelligent to say than” diluting at these prices to keep lights on” hmmmm I suspect 90 percent if juniors will be diluting at low prices or going outa business!! Again I’m waiting. Put on your big boy pants and try sgsin

    Comment by Heath stockford — November 26, 2012 @ 1:03 pm

  14. See Heath you say not huffy then you insult my intelligence and tell me to put on my big boy pants. You’re not being very nice.

    You are happy with GBB and have no concerns, whereas I do. I’ve explained my concerns, and you have not found them to meet your standard. As far as 90% of the venture being in the same situation I was commenting on specifically on GBB, and the announcement today. I was also commenting on some of the cavalier comments that Basa has made in the past about Osisko and buyouts, both of which sound pretty good to me right now. I’m not threatened by your dissenting opinion. I hope that this turns out to be a great investment for all the people who are invested. Sorry you can’t respond without being insulting or condescending.

    Comment by Mike — November 26, 2012 @ 2:31 pm

  15. any rbw update?

    Comment by Stephan — November 26, 2012 @ 3:16 pm

  16. Stephan – apparently same old song and dance.
    Rainbows geologist pumped the company some more but they can’t seem to showcase any results. Data still being compiled – they must have hit oodles of gold and silver to take this much time to assemble the news release.
    Wishful thinking of course.

    I gotta say though this is getting beyond boring. Tight share structure, but there is endless selling at the low 20’s. Anon back at it again today. I’m not sure if anyone has access to this, but has there been a single share bought by an insider in the past few months? BMR? Heath? Avo? Somebody?

    Oh btw – ventures down another 3% – this has gotten comical and looks like 1 in a few hundred shares trading on the venture exchange actually yields you a positive return. Pretty sobering to think this is the new reality. Nobody cares about drilling in progress anymore – proof is in front of you. It’ll be a year in a couple of weeks from the time I took a position in RBW – I’m actually lucky enough to say I’m up. They’ve done a decent job keeping shareholders informed, but how many presentations can you conduct before releasing the data that actually matters to investors/speculators?

    Comment by alex — November 26, 2012 @ 4:37 pm

  17. Alex, I missed the presentation as my fiancee took ill this afternoon, but I spoke to a friend and an RBW shareholder in the last hour who had a much a much different take on the presentation as he heard all of it. You are misleading readers here when you state that “Rainbow’s geologist pumped the company some more” because according to him, Moose Mountain’s senior geologist (that’s who it was) didn’t even speak about Rainbow or reference specific Rainbow properties. He answered some general geological questions, elaborated on some geological terms, and basically provided listeners with some useful information – no matter what company they may be invested in. Which is sort of refreshing in a way. How many companies do that? And that makes sense because it’s not his job with Moose Mountain to “pump” Rainbow as you say, or comment on the company in any way, nor I’m sure would Moose Mountain ever accept such a thing. Just thought I’d clarify that. You’re right that results are important, and it looks like they’re just around the corner. You’re correct in stating management hasn’t been active recently in buying stock BUT they hold a very respectable 17%.

    Comment by Jon - BMR — November 26, 2012 @ 5:03 pm

  18. I appreciate the response BMR and perhaps I was being a bit snarky and derisive my “pump” comment but insiders holding 17% of a company that has the supposed promise it has been made out to have is meager at best. In fact, 17% of of the company’s value equates to them investing $1.36 million out of their personal equity, which between 5-6 wealthy businessmen is pretty unimpressive wouldn’t you think? If the potential was so great, they’d be gobbling up shares at a far more aggressive rate. I’m not entirely sure if there are legalities precluding them from doing this, but mega-millionaires not investing a significant % of their wealth into their own company is a bit of a head-scratcher to me. That’s all I’m saying – not trying to mislead readers.

    Hope I am more wrong than I’ve ever been in my entire life in the way I’m viewing the situation.

    I am playing the Devil’s advocate

    Comment by alex — November 26, 2012 @ 8:17 pm

  19. Hi Jon,
    Richmont has recently released some results from their Island Gold property. The drill results include (all cut grades over true widths): 26.09 g/t Au over 9.55 metres, 10.29 g/t Au over 5.19 metres, and 10.40 g/t Au over 5.06 metres. The market has reacted positively on the news. What do you think about this property and the results? TIA

    Comment by Alexandre — November 26, 2012 @ 9:48 pm

  20. Looks like Richmont has found some nice higher grade mineralization and widths below where they’re currently mining at the Island Gold Mine, so this is very positive in terms of adding resources and extending the life of that operation. It has been a rough year for Richmont with some problems at Francoeur, controlling costs at Beaufor, and a disappointing projected IRR out of Wasamac which they’re still working on. They’ll get back on track but what the market would probably like to see is Richmont getting its hands on a low cost producer somewhere. Easier said than done, and I’m sure that’s what they’re trying to do.

    Comment by Jon - BMR — November 27, 2012 @ 5:00 am

  21. I see GQC getting slaughtered this morning on very mediocre results. The shareholders are not liking these results.
    Hey Jon/John any word on when DYG is going to get drills turning on their Strike property? Thanks

    Comment by Ed — November 27, 2012 @ 6:46 am

  22. Wow…Goldquest getting killed today…Jon, your thoughts would be appreciated. Is it a buy here, or is the play dead. Thanks. odin1

    Comment by odin1 — November 27, 2012 @ 7:22 am

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