Gold traded as high as $1,604 overnight…as of 7:30 am Pacific, the yellow metal is down $3 an ounce at $1,591…Silver is off 28 cents at $28.75…Copper is unchanged at $3.55…Crude Oil is down 19 cents at $92.92 while the U.S. Dollar Index is flat at 81.86 after breaking through important resistance at 81.50 yesterday on fresh concerns regarding the euro zone after the election results in Italy…we’ll see how the Dollar Index fares the rest of this week (will the head-and-shoulders pattern put in by the Index over the past year be rendered invalid?) – a breakout by the greenback would not be a good sign for the equity markets, and we saw evidence of that yesterday when the Dow dropped over 200 points in its worst day of the year..
Traders are concerned over potential political deadlock in Italy after a stunning election that saw the anti-establishment 5-Star Movement of comic Beppe Grillo become the strongest party in the country but left no group with a clear majority in parliament…Italy is now looking a lot more like Greece…a long recession and growing disillusion with mainstream parties fed a bitter public mood that saw more than half of Italian voters back parties that rejected the austerity policies pursued by Prime Minister Mario Monti with the backing of Italy’s European partners…the voter abstention rate in Italy was alarming – a post-1945 record…this was due to much popular disgust with the entrenched political classes but it also pointed to one of Italy’s deepest social and economic problems – an ageing population…
Bernanke Begins Congressional Testimony
Fed Chairman Ben Bernanke is expected to provide soothing words about the Fed’s easy money policies today as he appears before the Senate Banking Committee (started at 7:00 am Pacific) in his first of two days of Congressional testimony on monetary policy and the economy…traders are hoping he’ll counter market concerns that some Fed members would like to end quantitative easing early…in the minutes of the last two Fed meetings, there was clear discussion about the end of easing, and it was noted that some Fed members wanted an earlier end to QE3…
Today’s Markets
Asian markets were off sharply overnight, following up on the Dow’s 216-point plunge…Japan’s Nikkei average tumbled 2.26% while China’s Shanghai Composite fell 32 points to 2293…European shares are weaker today, due to Italy’s election results, while the Dow is up nearly 70 points through the first hour of trading this morning…the Venture Exchange is off 6 points at 1135…
TSX Gold Index Chart Update
The TSX Gold Index is beginning to rebound out of the very oversold conditions we highlighted last week…the Index has advanced for three consecutive sessions after hitting its lowest level last Wednesday since the 2008 Crash…it closed yesterday at 261…below is an updated 6-month daily chart from John…there is a strong resistance band between 276 and 280 which includes the down trendline that has been in place since last fall…
Rainbow Resources (RBW, TSX-V)
The recent weakness in Rainbow Resources (RBW, TSX-V) makes a little more sense this morning with the company announcing that it has arranged a non-brokered financing of approximately $1 million in a combination of hard dollars and flow-through at 10 cents and 12 cents, respectively, with a full warrant at 15 cents for two years…management will be participating significantly in the financing which is a positive sign…on the ground, the company has made impressive progress at its Jewel Ridge Project and the Gold Viking Property following disappointing drill results from the International…Rainbow’s land package in the flake graphite region of the Slocan Valley is also one of the largest in the area with part of it bordering on privately-held Eagle Graphite’s processing facility…more drilling at Gold Viking and Jewel Ridge has the potential to build significantly on the discoveries made at each property to date…
RJK Explorations Ltd. (RJX.A, TSX-V) Update
The Blackwater West property held by RJK Explorations Ltd. (RJX.A) continues to look more interesting…this morning, the company reported that recent gridding, magnetic and IP geophysical surveying at West Grid 4 has further complemented and mostly closed out a deposit-scale-sized, high chargeability/resistivity anomaly measuring approximately 600 metres by 1,400 metres…in addition, the expanded survey has identified other interesting geophysical anomalies at West Grid 4…RJK was only able to drill two holes, at the eastern and western extremities of West Grid 4, last fall with results returning a strong base metal signature in felsic rocks – similar to the Blackwater camp Gold/Silver deposits…RJK is expected to receive an expanded drill permit from the Ministry of Mines which will allow the company to drill test this high chargeability anomaly in a systematic fashion…the stock closed yesterday at 8.5 cents…
Kaminak Gold Corporation (KAM, TSX-V)
Exploration in the Yukon has slowed to a crawl compared to 2010/2011, but the biggest players including Kaminak Gold (KAM, TSX-V) are still in the game and have potential to shine in 2013, particularly if Gold prices rebound significantly…Kaminak this morning announced an $11 million, Phase 1 drill program at its Coffee Project where a maiden resource estimate was announced in December…new incoming President and CEO Eira Thomas will add fresh energy and ideas…KAM has excellent technical support around the $1 level as the stock showed again last week…it closed yesterday at $1.16 and is up another 3 pennies in early trading today…
Adventure Gold (AGE, TSX-V) Updated Chart
Adventure Gold (AGE, TSX-V) continues to be one of our favorites in the junior exploration space…below is an updated chart from John…note the downtrend line and where it found recent support – in the low 20’s…
Note: John and Jon hold share positions in RBW while Jon also holds a share position in RJX.A.
BMR: can you look into CYP? They just closed a sale for around $2M and are cashed up and cheap at 2 cents???
Comment by STEVEN — February 26, 2013 @ 7:35 am
Thanks for pointing that out. Will look into it.
Comment by Jon - BMR — February 26, 2013 @ 8:01 am
RBW getting trounced.
Comment by sean — February 26, 2013 @ 8:05 am
what is johnston doing with his body today?
Comment by sean — February 26, 2013 @ 8:06 am
BMR, Sometimes on BNN you will hear a broker/analyst state when reviewing past picks that they clearly made a mistake recommending a certain stock. Those are the ones I have the most respect for. Yes it it is up to each investor to do their own DD, but do you ever feel you have made a mistake on one of your recommendations and have you ever admitted it on your board. I am about to join a “fee based” board for the first time and am doing so because of the transparency of its “owner” and his efforts to try and be “unbiased”. I realize you want to evolve into a fee based board. Admitting your mistakes and being a little more humble might be a good start. The market can be blamed in certain instances but not every picks failure ( i.e. SD) can be blamed on poor markets. Good luck.
Comment by Paul — February 26, 2013 @ 8:06 am
Hi BMR, Has anyone on your team sold any RBW shares in 2013. Are you accumulating? TIA
Comment by Alexandre — February 26, 2013 @ 8:30 am
Classic case of insiders ripping the investors on RBW. Thank god it was play money…which is all that should be used these kinds of play but not averaging down in this case.
Comment by Alex — February 26, 2013 @ 8:40 am
Hi Alexandre, as I’ve mentioned before I’ve sold some to participate in the the 2012 financings. Can’t speak for John or Terry, but I don’t believe Terry has ever had a position. The key for RBW at the moment is to get this financing completed, and anytime a stock gets oversold that’s obviously when opportunities arise for further accumulation. We’re all dealing with a challenging market environment. We’ll see how things play out in these markets in the coming weeks.
Comment by Jon - BMR — February 26, 2013 @ 8:46 am
Can’t believe there is still people with hopes for the P.O.S. company RBW. Do yourself a favor and move on ! There are so many juniors out there with a proven resource base and production that has been pounded by the markets. Buy them instead of only dreams. Because the dreams tends to be nightmares.
Comment by Don — February 26, 2013 @ 8:48 am
similar crap…. financing gets done… but not at this prcie.. take down n satrts, then it happens… ethical?? no… profitable?? for those… Is Johnson culpable… probable…
its always about the money…. always….
Comment by Jeremy — February 26, 2013 @ 8:54 am
This is a reflection of the current markets, Jeremy, IMHO, not any deliberate game plan. Rainbow’s first financing last year was at 15 cents and then at 18 cents (hard dollars). I’m sure they never intended to go backwards. Management is stepping up to the plate on this financing which is certainly a good sign.
Comment by Jon - BMR — February 26, 2013 @ 9:07 am
RBW. What would Rambo say in this situation? Live for nothing or die for something.
Comment by Kalkan - Sweden — February 26, 2013 @ 9:30 am
Hi Jon,
My comments were in no way directed to you or BMR. You guys provide great research and i always value you your input. It was more of a general comment when we play the pennies.
Comment by Alex — February 26, 2013 @ 10:51 am
General comment on micro cap in mining. I think the biggest problem with this sector right now is the market is starting to realize that even if a junior has a proven resource base the probability of them being taken out or getting financing is greatly reduced because of the massive cost overruns that the majors are facing with their existing projects. Because of this i just don’t see the potential of finding these 5 or 10 baggers in this space. (lol…we all like to find one of those.) The majors are being valued down not because they are not making money but because the costs on there balance sheets have exploded on the upside.
Comment by Alex — February 26, 2013 @ 10:59 am
Alex,
That is an excellent point – You never seem to disappoint me with your posts, which 99 percent of the time contain valuable information.
Any response to that Jon?
Comment by Avo — February 26, 2013 @ 11:48 am
@All… Disappointing performance…I gave up my hopes in RBW some months ago and now, it slipped below 10 cents. GBB and SFF … too many people want to sell as they bought them at a high price. GQC will continue to adjust further down … below 40 cents… one day shine will not help this one. DYG … I am still collecting and really hope to hear the news from China. 2.5 cents will be the bottom price and this one can be a 10 or 20 baggers. The overall market is poor and therefore, we cannot expect too much from any junior stocks.
Comment by Theodore — February 26, 2013 @ 2:38 pm
The current market not withstanding, there have been many orderly price takedowns and then boom, a financing… nothing new… whether it happened here or not??? whos to say… SFF basically pulled the same thing…. great hole, and financing 2 days later???? whoever believes that is normal needs some help:)
regardless, there is noone in any public company who cares about their shareholders.. Lip service maybe, and tons of excuses…
thats why the big guys always talk about management first…. its not the horse but the jockey….
and not that any of them have actually lied…..!!!!
anyhow…. no disrespect intended toward anyone…
Comment by Jeremy — February 26, 2013 @ 3:19 pm
It has been a very tough couple of years for the junior market, Jeremy, with just a few brief rallies as you know. I understand your frustration but IMHO there are a lot of good management people who DO sincerely care about their shareholders. Not enough of them, however. The industry itself is partly responsible for these difficult times.
Comment by Jon - BMR — February 26, 2013 @ 3:39 pm
According to a senior mining analyst, the joke at PDAC was sell at the start of the show, buy upon its closing. He added that this year because the valuations are so low it could be the reverse.
Comment by Alexandre — February 27, 2013 @ 1:30 am
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/27_Jim_Sinclair_-_Gold_Will_Now_Be_Released_To_The_Upside.html
Comment by Hugh — February 27, 2013 @ 2:55 am
on… I would agree… and if companies stuck to their knitting, the the SP would take care of itself. but as with most companies, the boards and management realize that they are out of butter at 11:45 just before lunch!
SFF is a great example. there is ONLY one group of peeps that their financing benefits… and it aint us!!:) apathy sets in:)
and I would say more disappointed Jon… frustration with the markets yes, but with the companies themselves.. disappointment…
oh well…..:) Happy snow day
Comment by Jeremy — February 27, 2013 @ 7:04 am