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November 28, 2012

BMR Morning Market Musings…

Gold is off for the third straight day, and down sharply, with investors continuing to be risk-adverse as they grapple with the “Fiscal Cliff” and other issues…as of 7:00 am Pacific, bullion is down $33 an ounce at $1,709…$1,700 is a strong support area…Silver is 95 cents lower at $33.10…Copper is off 4 pennies at $3.49…Crude Oil has lost $1.54 a barrel to $85.64 while the U.S. Dollar Index has gained nearly one-fifth of a point at 80.52…

Holdings in Gold-backed exchange-traded products climbed 5.1 metric tons to a record 2,612.1 tons yesterday, data compiled by Bloomberg show…the U.S. Mint sold 75,500 ounces of American Eagle Gold coins so far this month, the most since January, data on its website show…

Buffett Chimes In On Fiscal Cliff

Speaking on CNBC this morning, Warren Buffett said he expects Washington lawmakers will come up with a compromise on the “fiscal cliff,” but he’s not sure that will happen by the end of the year…he doesn’t, however, think it will take several more months to come up with a fix and it won’t be the “end of the world” if a compromise comes shortly after the December 31 deadline…he stated lawmakers should not be negotiating in public…

Today’s Markets

Asian markets were lower overnight with China’s Shanghai Composite falling another 18 points to 1974…European shares are down modestly in late trading while North American markets continue to remain under pressure…as of 7:00 am Pacific, the Dow has lost 64 points, the TSX is off 86 points while the Venture Exchange has fallen just 2 points to 1204…the Venture has not been below 1200 since the beginning of August…

Venture Exchange Updated Chart

It has been a bad week so far for the Venture, plain and simple, with a combination of tax-loss selling, month-end pressures, overall Gold and equity weakness, and a general risk aversion mentality…the Index fell through support at 1215 yesterday and now the test will be to see if it can hold important support at 1165…

Mineral Mountain Resources (MMV, TSX-V)

Mineral Mountain Resources (MMV, TSX-V) has released initial drilling results from the continuing phase I exploratory and confirmation diamond drilling program at the Bismarck mine in South Dakota, part of the company’s Holy Terror Project…highlights from the first six drill holes include 11.40 g/t Au over 8 metres, 7.68 g/t Au over 4.35 metres, 10.02 g/t Au over 4.02 metres, 3.90 g/t Au over 10.02 metres, 10.59 g/t Au over 4.95 metres, and 6.92 g/t Au over 5.54 metres…this is a solid start as  this drilling has confirmed that newly identified, near-surface mineralization occurs in the hanging wall approximately 60 metres northeast of the main Bismarck Gold zone and is open in all directionss…assays from 5 more holes are pending…MMV is off 2 pennies in early trading at 34 cents…

GoldQuest Mining (GQC, TSX-V)

GoldQuest Mining (GQC, TSX-V) disappointed investors with fresh results yesterday from its Romero discovery in the Dominican Republic, another factor that is contributing to the weakness in the Venture…below is an updated chart from John that shows three support levels – 47 cents, 39 cents and 30 cents…as of 7:00 am Pacific, GQC has rebounded to 51 cents (up 2 pennies) after touching a low of 46.5 cents…

Tinka Resources (TK, TSX-V)

We first mentioned Tinka Resources (TK, TSX-V) a couple of months ago when we attended the Cambridge Resource Show in Toronto…the stock has been a solid performer this year, and closed at an all-time high yesterday of 84 cents…Tinka is working on a promising Silver-Lead-Zinc project in Peru with a current inferred resource of approximately 30 million ounces…below is an updated chart from John that shows momentum has driven the stock through resistance in the low 70’s which is now support…TK is worth watching closely but we wouldn’t recommend chasing it…there is a risk of a  pullback (perhaps to the EMA-20) given the current overbought condition…as always, perform your own due diligence…TK is off a penny at 83 cents in early trading…

Note: Jon holds a share position in GQC.

19 Comments

  1. Hurray! I got my GQC lot and I am looking for a profit of 10-15% day trade and sell them.

    Comment by Theodore — November 28, 2012 @ 7:08 am

  2. Jon,

    Does BMR follow epo at all on the venture? Encanto potash….

    It is at its all time lows, which i do not understand…

    any thoughts on it?

    Comment by Avo — November 28, 2012 @ 8:29 am

  3. any comments on greencastle news, do you think the ball might finally start rolling for Blackwater?

    Comment by Hugh — November 28, 2012 @ 9:12 am

  4. Does anyone know much about PNG GOLD CORPORATION? (PGK.V)?
    Lots of insider buying recently and it looks interesting.

    “Three diamond drills are currently on site with a fourth arriving next month. The Company has planned to complete 21 additional holes totalling 4,665 metres on the Imwauna Structure by December, 15, 2012 with plans to continue drilling over the holiday season.”

    Comment by Dave — November 28, 2012 @ 9:47 am

  5. Nice to see Deveron trading. VGN holds a large position. Not easy to do an IPO in these markets but Greencastle pulled it off. Devereon has an interesting land package just above Parlane, immediately north of the Blackwater deposit. Parlane of course is drilling now, so Deveron could get a nice lift if PPP hits. Deveron’s property is not yet drill-ready – they still have more work to do, so perhaps next summer or fall for drilling. In the meantime, I wouldn’t be surprised to see another project go into Deveron in the coming months if history is any guide with Roodenberg and his group. In terms of Greencastle, I’ve been picking up some in the .08 to .09 range as it’s currently well below its working capital position. At some point it will come to life I’m sure.

    Comment by Jon - BMR — November 28, 2012 @ 9:47 am

  6. Nov. 27 Comex December gold options expiry
    Nov. 27 Comex December silver options expiry
    Nov. 27 Comex December copper options expiry
    Nov. 28 Comex December miNY gold futures last trading day
    Nov. 28 Comex November copper futures last trading day
    Nov. 28 Comex December E-mini copper futures last trading day
    Nov. 28 Comex December miNY silver futures last trading day
    Nov. 30 Comex December gold futures first notice day
    Nov. 30 Comex December silver futures first notice day
    Nov. 30 Comex December copper futures first notice day
    Nov. 30 Nymex December palladium futures first notice day

    Comment by Hugh — November 28, 2012 @ 10:17 am

  7. Thanks for pointing this one out, will check into it for an update. In the past, John has produced some charts as EPO has had a couple of big moves. Weak at the moment but that might be an opportunity.

    Comment by Jon - BMR — November 28, 2012 @ 10:22 am

  8. no problem – i look forward to your update on EPO, because for now, it is getting slaughtered!!

    Comment by Avo — November 28, 2012 @ 11:48 am

  9. So the Dow closed over a hundred, TSX sneaked into greenzone after an entire day spending in the red – and the ventures? What did the ventures do AGAIN? Close down.

    Bullmarketrun? Really?

    Comment by terry — November 28, 2012 @ 1:07 pm

  10. Sold all GQX at 54 cents. Thank you…. Bought at 48 cents …. See what is new for tomorrow!

    Comment by Theodore — November 28, 2012 @ 1:10 pm

  11. I mean GQC not GQX…. 🙁

    Comment by Theodore — November 28, 2012 @ 3:09 pm

  12. @jon. Ok so company promises major update this week. I just email RBw ir asking if they are gona stick to their word and put it out. Reply I got was ignorant and rediculous. Ir tells me company has lots if info to go thru so they will release it whenever they are ready. I guess they must not have known they had lots if info last week when making the promise. That was the straw that broke the back right there. Then I’m given link to stock one right up saying that’s the update. Lol. If this gets up to my break even I’m out and will recommend to anyone I know that is even thinking if RBw to stay clear. You must admit this is a horrible way to gain credibility and add to it being ignorant to shareholders. !!!

    Comment by Heath stockford — November 28, 2012 @ 5:20 pm

  13. RBW, Doesn’t make sense to me, even the guy that was handling the presentation on monday said major news coming, now 2 days left in the trading week, if the news was good you would think it would come out early in the week to get the most bang?

    Comment by Greg — November 28, 2012 @ 5:59 pm

  14. Greg, IMHO I think any company with some good news to report would have wasted some bullets by putting it out in any of the last 3 trading sessions given the state of the Venture. Monday was horrible, Tuesday wasn’t much better, and today was rather blah and of course Gold was down sharply. Keep in mind that RBW has been running THREE drill programs. There is probably information flowing in like crazy to them right now, so things could change on a daily basis. Best to just relax and be patient. We’ll hear from RBW soon enough I’m sure.

    Comment by Jon - BMR — November 28, 2012 @ 6:13 pm

  15. Yes Jon prob so but you can’t keep making promises bout news. Just say soon or when we get it ready. Don’t have three presentation trying to get everyone’s eyeballs on you then fall thru in timelines once shain

    Comment by Heath stockford — November 28, 2012 @ 6:48 pm

  16. Good job theo you superstar.

    Comment by OldMan — November 28, 2012 @ 8:20 pm

  17. Some passages from Resource Investor. Two successful money managers, Adrian Day and Brian Ostroff, sat down with The Gold Report at the Hard Assets Conference to share their forecasts for 2013.
    BO: I’m still very positively inclined toward some of the juniors. The key to the juniors is that we need to see the seniors perform better. We got really bullish in the summer about the seniors, which is not usually our space, except as a catalyst for money to come back to the juniors. The seniors had a wonderful lift of 20%-30% off of their lows. A lot of that came from generalist funds as opposed to resource-specific funds. Unfortunately, what happened about three weeks ago was that just about every one of these major companies missed their numbers by a wide margin. A lot of the gains that came about from the summer have evaporated and I think a lot of the generalists’ funds have exited the sector. That has probably pushed back the timeline for some of these juniors to wake up.

    Comment by Alexandre — November 28, 2012 @ 9:13 pm

  18. TGR: Adrian, you talked earlier about companies having to dilute their stock in order to get money. Are juniors going to have any better of a time in 2013 getting capital for projects?

    AD: A lot of companies will come to market in 2013. In the last couple of weeks, a half dozen companies that didn’t actually need the money went to market for funding, which is smart. If you don’t need the money, you can demand better terms than when you are desperate. But a lot of companies are very, very low on cash.

    BO: Things are a lot worse for the juniors today than they were in 2008. In 2008, most of these stocks lost 90% but they didn’t stay down long and the window opened up for financing pretty quickly. Today, these stocks are down 70% (on average) but the window for financing has by and large been shut for 18 months and doesn’t look too encouraging for the immediate future.

    AD: And many of them had raised money in 2007, so there weren’t that many companies that were desperate.

    BO: Right. A lot of these companies are hard up for funding right now. More advanced companies with an asset are getting creative. We just provided a credit facility for one of our portfolio companies, d’Arianne. We like the asset. We believed that the share price didn’t reflect the value of the company and didn’t want to see the company issue more stock. This should take the company through a couple more milestones at which point we think they’ll be in a better position to raise money. You will see more creative debt deals like that.

    AD: Another type of deal we are seeing more of is royalty companies that for relatively little money at the pre-development stage, get a royalty on future production. That gives the company the financing it needs when it needs it. We are seeing more and more of that.
    More from Resource Investor.

    BO: The reality is that there is a limited capital pool for juniors. And it’s a shame when some of these companies that are really not deserving get money because that leaves less capital for companies that are deserving. It would be very cathartic if a lot of these companies went away, leaving capital for the ones that have a legitimate chance of success.

    TGR: So how do you determine which ones are deserving?

    BO: It really takes four pieces: the rocks, management, financing and good investor relations. If you do not have all four of those, you are not going to tenbag. Sadly, some companies have just the investor relations piece and they get the money.

    Comment by Alexandre — November 28, 2012 @ 9:20 pm

  19. Alexandre – thank you!!! very cool.. there was a piece in the Globe yesterday Commodities ‘section’ on jrs… more dire, but similar tone! we may be in for a long winter..

    Comment by Jeremy — November 29, 2012 @ 6:23 am

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