Gold has traded in a range between $1,273 and $1,291 so far today…as of 7:15 am Pacific, bullion is down $6 an ounce at $1,277…Silver, so far holding support at $19.50, is off 2 cents at $19.67…Copper has gained 3 pennies to $3.06…Crude Oil is down 19 cents at $94.99 while the U.S. Dollar Index has climbed one-third of a point to 82.65…the 10-year Treasury yield hit an intra-day high of 2.66% yesterday before easing off an obvious coordinated communications effort by some Federal Reserve officials to calm markets…an increase of nearly 1 percentage point in 2 months is highly unusual in the fixed-income market and that is what has occurred in the bellwether 10-year Treasury, a move that accelerated after Bernanke signaled last week that the Fed would start scaling back QE3 later in the year…bond yields and prices of course move in opposite directions, so the rise in yields has led to huge losses in bonds and makes Gold and stocks less attractive…retail investors have sold a record $48 billion worth of shares in bond mutual funds so far in June, according to the data company TrimTabs…but hedge funds and other big institutional investors have also been closing out positions or stepping back from the bond market…the flight out of fixed income investments has probably been overdone for now – the Fed clearly jumped in yesterday with a communications strategy – and markets should begin to stabilize…keep in mind that the volatility we’ve witnessed in markets in recent sessions has been exacerbated by month-end and quarter-end re-balancing of portfolios…
Gold remains on track for its biggest quarterly loss in more than 30 years…the SPDR Gold Trust reported another 4.2 tonne outflow yesterday…a raft of banks, including Goldman Sachs, Morgan Stanley, Credit Suisse, Deutsche Bank and HSBC have cut their Gold forecasts this week after its slide…keep in mind, though, that these same firms were all jumping on the Gold bandwagon throughout 2011 and around the time Gold peaked at just over $1,900 an ounce in September of that year…Credit Suisse has cut its Gold price forecast for 2013 to $1,400 an ounce from $1,580 an ounce, while HSBC has cut its price view this year to $1,396 an ounce from $1,542…Morgan Stanley has reduced its 2013 forecast to $1,313 from $1,409…”With investor demand for safe-haven assets waning against the backdrop of a strengthening U.S. dollar and rising U.S. bond yields, market conditions for Gold and Silver have become markedly less favourable,” Morgan Stanley said in a report…”Our price profile for these two metals now acknowledges that the annual average peak in the price for these two metals was achieved in 2012 with minimal prospect for recovery”…
“Minimal prospect for recovery” – sounds like Morgan Stanley has thrown in the towel for Gold and Silver…
Reuters reported yesterday that India’s largest jewelers’ association – the All India Gems and Jewelry Trade Federation, representing about 90% of jewelers, asked members to stop selling Gold bars and coins, adding to the government’s efforts to cut Gold imports and stem a growing current account deficit…
Today’s Markets
China’s Shanghai Composite plunged another 5% during trading overnight, hitting a low of 1850, before rebounding to close essentially unchanged at 1964…after the market closed, the People’s Bank of China (PBOC) attempted to ease concerns of a cash squeeze by saying that “seasonal factors” leading to tight liquidity would fade…officials also added that the central bank would guide interbank rates…what the Chinese are attempting to do is reign in the “shadow banking” system, part of their attempts at necessary structural reforms…Japan’s Nikkei average lost 94 points to close at 12969…European shares are rallying in late trading overseas…the Dow has gained 81 points through the first 45 minutes of trading…U.S. home prices took a major leap in April, setting a new monthly record for gains…from March to April, home price gained 2.6% and 2.5% for the top ten and top 20 U.S. markets, respectively, according to the latest S&P/Case-Shiller Home Price Indices…average prices rose 11.6% and 12.1% in April from a year ago…the TSX is up 84 points while the Venture has added 2 points to 882 as of 7:15 am Pacific…
The TSX found support at its November low yesterday around 11750 and then rebounded somewhat to close at 11834…if support around 11750 cannot hold, then a test of the 11250 – 11500 area is likely as John shows in the 2.5-year weekly TSX chart below…as far as the Venture is concerned, we’ve already pointed out the important nearest support levels which are 860 and 800…what’s necessary with the Venture is a disciplined focus on value, discovery plays and special situations…
Alpha Minerals (AMW, TSX-V)
Alpha Minerals (AMW, TSX-V) got hit hard very late in Friday’s trading session – the final 15 minutes – by an aggressive seller (perhaps a fund that needed to raise cash?) but rebounded yesterday on some interesting news…Alpha and joint-venture partner Fission Uranium (FCU, TSX-V) reported significant Gold-bearing intercepts in all 3 zones at the Patterson Lake South (PLS) uranium discovery…the best result was 63.5 metres grading 1.58 g/t Au from the easternmost hole drilled on the R390E zone…future work to establish patterns of Gold distribution is required, particularly to determine if and how Gold-enriched domains can enhance the potential of the project…Gold has been found elsewhere in the Western Athabasca basin uranium deposits, notably at nearby Cluff Lake (greater than 60 million pounds of U3O8 produced) and Shea Creek…AMW is up 3 pennies in early trading at $3.71…below is a 6-month daily chart from John…
Huldra Silver (HDA, TSX-V) Update
For those investors who think it’s safer to invest in companies that are in production and have cash flow, Huldra Silver (HDA, TSX-V) is one of many examples that debunks that theory…in fact, the onset of actual mining is usually when the problems just begin…
After a masterful job of quickly putting its high-grade Treasure Mountain Silver Property into production, it has been a tough year for B.C. miner Huldra Silver (HDA, TSX-V) which has lost about 80% of its market value due to some production hiccups, the slump in Silver prices, and heavy institutional selling…about 85% of Huldra shares were held by institutions last year and that percentage has plummeted in 2013, which shows how important it is for companies to build a loyal following of retail investors…Huldra does have some important debt issues it needs to address but they aren’t hugely overwhelming, especially when viewed in the context of its considerable assets…yesterday, the company reported that it is significantly increasing the throughput capacity of its Merritt mill to 300 tonnes per day from the current maximum of 250 tonnes per day…they’ve temporarily suspended milling operations to make the necessary adjustments and perform other maintenance work that will improve mill efficiency…the logistics of transporting ore from Treasure Mountain have also been improved…
Meanwhile, Huldra is gearing up to drill two highly prospective targets that are a significant distance from the current mine workings…if they hit on one or both of these targets, the scope of the Treasure Mountain Project will be greatly enhanced…the M.B. zone in particular is very interesting and could lead to a major reinterpretation of the Treasure Mountain mineralized system…
Huldra’s recent decision to lower its non-flow-through private placement price from 30 cents to 25 cents reflected current overall market conditions but was unfortunate as it put the financing below important technical support for the stock (28 to 30 cents)…as a result, traders pushed HDA all the way down to 21 cents last week before it recovered slightly to close at 24 cents yesterday….there are clearly risks for Huldra, especially if Silver were to collapse below a critical support band which is from $19.50 to $17.50…nonetheless, John’s 4-month daily chart through yesterday showed that the HDA storm appeared to be subsiding – until this morning’s news…if the 21-cent level can’t hold on a closing basis, then HDA will almost surely test long-term support at 15 cents…as always, perform your own due diligence…HDA is highly leveraged to the Silver price, so a sudden reversal to the upside in the metal would likely translate into a big move in the share price…that’s the optimistic view…
Huldra announced this morning that it has completed the first tranche ($1.43 million) of its planned $5 million financing (FT and non-FT at 30 cents and 25 cents, respectively)…however, the company also announced that, “Given currently depressed Silver prices, it will be required to complete its previously announced financing of up to $5 million in order to continue its operations in the normal course and may require additional debt or equity in the future“…HDA has come to an agreement in principle with Waterton Global Value Fund, L.P. to eliminate all monthly payment obligations and delay the payment of all obligations under the credit facility until October 31, 2013…Huldra will be required, however, to pay a lump sum of $7,241,210 on October 31, 2013… the company has agreed to issue an additional 2.55 million warrants at market price and can repurchase such warrants on terms to be agreed upon…HDA is clearly hoping for a better second half of 2013 – the Silver price could be the deciding factor…things aren’t looking good this morning, though, as HDA has fallen another 4.5 cents in early trading to 19.5 cents…we’ve met President and CEO Ryan Sharp, and he’s a class act and a smart guy who has done has a fantastic job in developing this project…he and his family hold a large share position…unfortunately, Silver took a wrong turn…
HDA 4-Month Daily Chart- Through Yesterday
Note: John, Jon and Terry do not hold share positions in AMW or HDA.
Concerns Over High-Frequency Trading Provides Impetus For New Canadian Exchange
From this morning’s Globe and Mail in an article by Boyd Berman…
Canada is getting a new stock exchange.
A group including Royal Bank of Canada and five other large investment firms is launching a competitor to the Toronto Stock Exchange, which handles the most trading in Canada.
The new market is designed to attract investors who are upset with what they see as unfair competition from high-frequency traders, who use ultrafast computers to exploit market quirks or to try to get ahead of other investors. The success of the new exchange may hinge on how much discontent there is with high-frequency trading (HFT) activity.
The project is dubbed Aequitas, from the Latin for fairness. The plan is the product of months of work by RBC and a group of supporters including mutual fund giants IGM Financial Inc. and CI Financial Corp., Canadian pension fund PSP Investments and international brokerages ITG and Barclays. The official announcement is expected Tuesday, with a planned start date in late 2014, after a lengthy regulatory approval process.
BMR: DO YOU GUYS SEE A ‘SUMMER RALLY’ IN THE WORKS THIS YEAR? THX
Comment by STEVEN — June 25, 2013 @ 6:29 am
The kind of overwhelming negativity we’re seeing in both the junior resource space and producers (TSX Gold Index has been even a worse performer this year and is almost at its 2008 Crash low) is the kind of dynamic you typically see near a bottom, and it has been downhill since last September…this is like stretching an elastic band – sooner or later, it snaps…so yes, I think you can make a strong case for a powerful reversal beginning at some point this summer…perhaps a little more pain first but an historic buying opportunity is probably not far off…regardless, there are special situations that will attract interest and do well, no matter how the overall market is performing…
Comment by Jon - BMR — June 25, 2013 @ 7:08 am
Hey guys and gals.. GIL’s list is no where to be found .. can someone guide me?? thx in advance..
Comment by JeremY — June 25, 2013 @ 7:08 am
Hi BMR,
Any news on Global Met Coal?
Comment by Toby — June 25, 2013 @ 9:49 am
Zenyatta Clarifies Geology, Metallurgy of Graphite Discovery Tuesday June 25, 2013, 4:15am PDT By Andrew Topf – Exclusive to Graphite Investing News
Graphite Investing News (GIN) recently published a video interview with Mickey Fulp of mercenarygeologist.com in which Fulp explains to investors the criteria he uses to evaluate a graphite deposit. In the interview, Fulp mentions three companies in the graphite sector, including Zenyatta Ventures (TSXV: ZEN), which is developing a graphite deposit in Ontario, Canada. In the interview below, INN Senior Editor Andrew Topf asks Aubrey Eveleigh, Zenyatta’s CEO, to clarify the geology of the Albany discovery and how the company plans to process the graphite to nearly 100-percent purity.
GIN: On your website you describe the Albany deposit as a “vein-type graphite breccia.” How is this deposit different from other graphite deposits that have been found in the world?
Aubrey Eveleigh: What we’ve discovered is a hydrothermal, or a vein style. We prefer to use hydrothermal because vein suggests a smaller body when in fact what we have is a large breccia pipe with intersections of 200 to 300 meters. We’ve been referring to it as hydrothermal. That’s volcanic in origin, derived from the upper mantle of the earth, whereas flake or amorphous is sedimentary in origin. It’s derived from organic material. It’s a totally different style, formed differently, a totally different geological deposit.
GIN: Can you also distinguish between this deposit and Sri Lankan vein graphite, which your deposit has often been compared to?
AE: The Sri Lankan is formed in the same manner, it is hydrothermal, but they refer to it as “vein style.” It is volcanic in nature, except the Sri Lankan vein is very narrow; they’re mining a vein that is 5 to 10 centimeters wide, whereas what we’ve intersected is 200 to 300 meters wide.
GIN: It’s a different thickness.
AE: It’s a different size. We have a breccia, they have strictly a vein. Now we do have some veins in the system, but for the most part it’s a breccia pipe. So think of it like a kimberlite pipe where you find diamonds. They come from the upper mantle. It’s much like that.
GIN: You say that the vein is ultra-high purity at 99.96-percent carbon, but the drill results only show 5 to 7 percent carbon; how do you account for that discrepancy?
AE: It’s not a discrepancy. When you drill and you test for the grade, it comes out at 5 percent because what you’re testing is all the material in here. You cut it, you sample it, you send it in for analysis and you’re also diluting it with the granitic clasts that are in the breccia pipe. The key is not the grade on the front end, it’s the purity on the back end. When we put that through a metallurgical test, and we’ve done this on several occasions at SGS Lakefield, we put in the 5-percent grade, we grind and we do a flotation and a caustic bake. A caustic bake is sodium hydroxide. It’s not an acid as some people are suggesting; it’s sodium hydroxide, 25 percent by weight, and we can recycle that material. After you go through that process it comes out at 99.99 percent. What I’ve been told is that we’re the only company globally that can use caustic bake to get to 99.99 percent. I’m getting it third hand from a good source and we haven’t confirmed that, but I’ve been told that.
GIN: I’ve been told by geologists that graphite can be easily purified using acid leaching. Is that not true?
AE: Yes. You can upgrade flake thermally and with acid. It’s a little more expensive. When somebody says that they can do that I would simply ask, “what is the cost?” We know from our processing that we can do it with a caustic bake fairly cheaply.
GIN: You released some beneficiation test results in April that show that high-purity graphite can be produced using the caustic baking leach process. Can you describe that process in a little more detail? Secondly, do you have any estimates as to the cost? You mentioned that acid leaching is expensive; so do you have any cost numbers you can share with us?
AE: When a flake graphite deposit talks about leaching, they’re usually using hydrofluoric acid. Now, we don’t use that —hydrofluoric acid is a pretty dangerous material and it’s very expensive. That’s related to the infrastructure that you have to set up because you have to set up an entire safety infrastructure. In our case, we’re using sodium hydroxide. It’s safer. It’s a base, not an acid. We use 25 percent by weight, and we can recycle the material. It’s much cheaper and obviously we’ve got extremely high grades from it, and with good recoveries.
GIN: Are you able to compare it? Like you say, it’s cheaper, but how much cheaper? Can you give us an indication?
AE: I can’t throw numbers because we haven’t done a prefeasibility or an economic assessment yet. As you know, the Ontario Securities Commission does not allow us to talk about economics and numbers without going through that process.
GIN: Fair enough. Your critics have said that the graphite at Albany can’t compete with synthetic graphite which, as you know, commands the highest price per tonne. How do you respond to that criticism?
AE: I don’t know what they’re talking about exactly, which application?
GIN: On your website you say you can compete with synthetic graphite, but that has been questioned, so I just wondered what your response to that criticism is.
AE: The first thing you’ve got to do when you have a graphite deposit is determine the purity. That’s the first step. We’ve determined the purity and it’s extremely high grade, high purity; we can get to 99.99. The next step is to determine the properties of the graphite, which we’re doing right now. We’re actually doing it in a couple of universities in Canada, and we should have that information in the following weeks. Depending on the specs of your graphite, it will go into various applications, and that’s yet to be determined. But for someone to say now, without knowing what the specs of our graphite is, that it couldn’t be applied to high-purity synthetic applications is wrong. How do they know that? On what basis are they saying that?
GIN: I think the criticism has been over this percentage issue, of whether you’re able to actually bring it up to the purity that you’re suggesting.
AE: We’ve proven that. I mean that was already proven by SGS Lakefield. Why would somebody question that? We’ve already released that information.
GIN: If you listen to the interview with Mickey Fulp, that was questioned.
AE: Yes, but I don’t think you should take that as gospel. There were so many wrongs in that interview — I’m here to correct that. For one, he referred to our deposit as amorphous, which is totally wrong. It’s a sedimentary process; we’re volcanic and hydrothermal. The other thing that was said in that interview is that we use acid. That’s totally wrong. We don’t use acid. It’s a base, sodium hydroxide. The other thing I think he said was it’s “infrastructurally challenged.” Anybody that goes around the world to look at mining projects would find that the infrastructure that’s around us is probably some of the best you can find. You can see that on our website and in our presentation.
GIN: As a reminder, and in brief, where are you in terms of access to rail and power?
AE: The project is about 30 kilometers north of the Trans-Canada Highway. It’s also 30 kilometers north of the hydro line and the gas pipeline. We’re within 4 to 5 kilometers of a logging road. There’s a new hydro project going in about 20 kilometers away and the rail line is about 70 kilometers away.
GIN: Talking about the stock price now, Zenyatta has enjoyed a really great run in its stock price: almost a 700-percent gain from a year ago, and it was named Ontario’s Discovery of the Year. But I also notice that there aren’t any analysts covering the stock. Why do you think that is?
AE: We’ve talked to many analysts. There’s one analyst that does cover it in the US. A lot of these companies are looking for the 43-101 resource and they’re waiting for that. We should be able to deliver that in September, October. So a lot of people are waiting for that next catalyst, which is a very important step. People look at it now and say, “yes, you can come up with the purity and the quality looks good. You still have to do some steps there, but how big is this thing?” That’s what everybody is asking right now. We’ll deliver that very soon. You saw probably a few days ago, we announced we’re bringing on the engineering firm RPA, which is a highly qualified independent firm, to look at the data and determine a resource estimate for September or October.
GIN: On a more personal level, reading the comments from our video, you’ve obviously got some passionate and committed followers. Do you feel some personal responsibility to those people to keep the good news going?
AE: Absolutely. I’m in management, I’m the president and CEO. I simply work for the shareholders; they’re all part owners of this company, and of course I feel a responsibility. That’s my job. We all have to work hard to make sure we realize the maximum value for the shareholders, and that’s what we’re doing. The shareholders of any company are passionate; the reason they own it and buy it is that they love it. Otherwise they wouldn’t be there. I would expect anybody that owns a stock to be passionate about it.
GIN: Absolutely. Just on a concluding note, what are your plans for the rest of the year?
AE: As you know, we’re drilling presently until the end of August. At that point, that’s when RPA will start to do their estimate on the size. Shortly after the resource is out we’re going to start our preliminary economic assessment (PEA) and that will be out the first quarter of 2014. In the meantime, we’ll continue to work on the properties of the graphite crystals. We’ll be touring various downstream companies to the site and we’ll be signing confidentiality agreements with various downstream companies as well. We’re also going to be doing another metallurgical test. We’ll scale it up and do a bulk sample and we’ll be testing that as well.
GIN: It sounds like you’ve got a busy year ahead of you.
AE: It is busy. We’re fully financed, all the warrants have been exercised. We have $10 million in the bank and our program costs about $7 million, so we should still have some money left over at the end of the PEA.
GIN: Excellent. I really appreciate you taking the time to talk about your deposit and get some clarity on it. Thanks a lot.
AE: You’re welcome. Thank you as well.
Securities Disclosure: I, Andrew Topf, hold no investment interest in any of the companies mentioned.
Interviews conducted by the Investing News Network are edited for clarity. The Investing News Network does not guarantee the accuracy or thoroughness of the information reported. The opinions expressed in these interviews do not reflect the opinions of INN and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Comment by bob — June 25, 2013 @ 9:58 am
Gils list ftr,shi,pst,dbv,rhr,vvn,tuo,rz,abr,emt,tj,ggi
Comment by gil — June 25, 2013 @ 10:59 am
Jeremy although I do appreciate your sarcastic humor I’m wondering if you have a positive side to your personality!?
Comment by Heath — June 25, 2013 @ 5:15 pm
CRU… if you can get 15% back from SD last close – sell it… 0.06 will be max. My forecast on May 23, CRU would come back within 60 days and my forecast was to conservative… Anyways, this one is finished at this point.
Comment by Theodore — June 25, 2013 @ 5:55 pm
RBW insiders have acquired 1,469,666 shares in the past 6 month through the public market or privately.
I speculate that they do not dislike what their mineral claims are siiting on.
Jon, is this a correct speculation? What do you think? Is a chart possible?
Comment by Alexandre — June 25, 2013 @ 8:34 pm
Roger Wiegand Predicts a Brand New World for Gold;
“In the short term, gold and silver shares will follow the futures and cash markets. We are still in a corrective phase, which can last for another six weeks. But once gold and silver start to climb, the shares will follow. It’s a big mistake right now for people to unload shares in good junior companies just because the stock has been beaten down. The companies with good fundamentals and enough cash to sustain operations for the next two to three years are going to do better. Look for good management with a project next door to a senior that is going to buy out reserves. Cash-starved greenfield juniors out in the middle of nowhere with no senior around to buy them out will not make it. It is like the salmon going upstream—some fish fall by the streamside, some make it home to nest.”
Comment by Alexandre — June 26, 2013 @ 4:25 am
Sounds like Roger Wiegand is Describing Newstrike Capital, has a 43-101 high grade deposit, plenty of cash and right next door is Goldcorp, NES has really been beaten down like everyone else. Great buy at these levels, how about a chart Jon?
thanks
Comment by Greg — June 26, 2013 @ 6:56 am