Gold is pushing higher this morning in advance of a Fed statement in a few hours…as of 7:20 am Pacific, bullion is up $13 an ounce at $1,357…Silver is 50 cents higher at $23.02…Copper has surged 4 cents to $3.30…Crude Oil is off $1.02 at $97.17 while the U.S. Dollar Index has slid one-tenth of a point to 79.52…
Mineweb’s Lawrence Williams pointed out this morning that the latest Societe Generale GFMS Global hedge book analysis, covering the 2nd quarter of this year, shows that the global Gold miners’ hedge book continues to fall – by 16 tonnes over the quarter…while the period being covered obviously pre-dates a recommendation by Goldman Sachs that producers should hedge their output, the consultancy also comments that it sees only limited evidence of any new hedging activity subsequent to the end of the 2nd quarter with producers instead seeking to protect margins through cost-containment measures…
Today’s Markets
The Dow and S&P 500 have both hit new record highs in early trading today…as of 7:20 am Pacific, the Dow is up 5 points…U.S. job growth faltered in October, with the private sector adding just 130,000 new positions, according to the latest report from ADP and Moody’s Analytics…economists expected ADP to show private business created 150,000 new jobs in October, down from 166,000 in September…almost all the new jobs were in services which added 107,000 positions…meanwhile, the delayed CPI for September had inflation up a benign 0.2%…the Fed will likely see no reason to begin scaling back its bond purchases anytime soon…its 2-day meeting ends later this morning with its usual statement around 11:00 am Pacific…the central bank is expected to maintain its $85-billion-a-month bond-purchasing program until April 2014, according to the latest CNBC survey of economists, strategists and money managers…
The TSX is down 15 points through the first 50 minutes of trading while the Venture is up a point at 969…
Asian markets were higher overnight with China’s Shanghai Composite rebounding 32 points to close at 2160 after hitting an 8-week low yesterday…Japan’s Nikkei average climbed 176 points to finish at 14502…European shares were up modestly today…
Sheslay Trend Expands Significantly
In early 2010, following its initial reported discovery, Richfield Ventures rocketed to more than $2 a share…by mid-year, though, the stock had tanked by about 60% as it briefly fell below $1 a share…at BMR, we stuck with the story – despite impatient and cranky investors at times – because the geology at Blackwater made sense and the people behind the company knew what they were doing…and we’re glad we stuck with the story because Richfield ultimately increased by 10-fold by the spring of the following year thanks to the confirmation of a multi-million ounce Gold deposit followed by a $550 million takeover by New Gold Inc. (NGD, TSX)…the same Richfield team is now at the helm of Prosper Gold (PGX, TSX-V), and history could every easily repeat itself…many investors were kicking themselves for not scooping up Richfield for a paltry $1 when weakness in the stock gave them that opportunity…you make money in the market by buying into weakness when the company fundamentals are solid…and Prosper’s fundamentals are solid as a rock…
Prosper took a 30% haircut yesterday in a silly sell-off that was likely triggered, we believe, by some shareholders who decided it was an ideal time to lock in profits on some 6-cent seed stock… most of that cheap stock had been cleaned up in the market, but obviously not all of it…some panicky shareholders who didn’t have enough time to absorb the news release (it came out just before the opening bell) and thought the results for some reason must have been poor due to the market’s reaction, also hit the sell button which compounded the problem…so PGX opened 13 cents lower at 48 cents and dipped as low as 37.5 cents intra-day before stabilizing…it closed the session at 41.5 cents…
With porphyry systems in the prolific Stikine Arch, you don’t see the consistency and the quality of grades and intersections like the Sheslay is producing without a major deposit or a producing mine…what many investors may also have overlooked is the fact that extensive airborne and IP surveys carried out by Prosper, in addition to regional soil sampling, have more than doubled the potential mineralized footprint of the Star target…based on historical geophysical, geochemical and drill data, the Star target was believed to cover an approximate 700 m x 500 m area as reported by Prosper over the summer…that has now expanded to 1500 m x 1500 m based on yesterday’s news…
“Drill holes S024 to S029 cover an area of approximately 300 metres by 300 metres of the Star porphyry body,” Prosper reported. “They confirm consistency of grade for all 6 drill holes. Mineralization is open for extension in all directions. DDH S027 shows the mineralized system is deep rooted with depth potential to at least 598 metres from surface. Based on historical drill results, new geophysical chargeability and magnetic data, and soil geochemistry and highly mineralized trenches 500 metres to the south, less than 20% of the Star Copper-Gold porphyry body has been drill tested to date.”
What’s more, Prosper is now saying that the North Star and East Star targets (approximately 800 metres to the northeast and the east, respectively, “appear to have similar size potential to the main Star porphyry discovery, with similar associated geophysical and anomalous geochemical signatures”…the North Star and East Star have never been drill-tested…there’s a growing likelihood that these 3 targets (Star, North Star, East Star) could link up…if the grades and intersections are roughly the same, Prosper will have a world class deposit on its hands…
Prosper has greatly expanded its knowledge of the Sheslay system with all the work it has completed in recent months beyond the 6 drill holes that were completed at the advanced Star target over an area 300 m x 300 m…
In short, this is shaping up to be exactly the kind of massive system that Dr. Dirk Tempelman-Kluit, one of the brightest geologists in the country, envisioned when he carefully weighed this property against the 150 or so other properties he and Pete Bernier investigated…we’re sure Tempelman-Kluit will emphasize this when he makes a major presentation on the property before investors, brokers and analysts next Tuesday in the Discovery Centre of the Geological Survey of Canada office in downtown Vancouver…
When drilling a porphyry system, it’s never easy to stay in mineralization (Colorado Resources – CXO, TSX-V – is a great example)…and that’s one of the other amazing things about the Sheslay…the 29 holes drilled at the Star target so far, including 23 historical holes, have shown remarkable grade and width consistency…
Below is a recap of the 6 holes drilled by Prosper this year…no “glory holes” here, which hurt the stock yesterday, but these are nonetheless the type of grades and intersections that help build an economic deposit…the numbers compare very favorably with other major Cu-Au porphyry deposits in the Stikine Arch…
Prosper’s challenge now is not only to tell the Sheslay story effectively, but to keep investors engaged over the next several months before drilling resumes at the property in the spring…on that note, President and CEO Pete Bernier stated in yesterday’s news release that the company intends to “expand on its current project base with a focus in North and South America”…we take that to mean Prosper may have a 2nd property lined up that they intend to work on over the winter…
With a market cap of just $10 million, a lead project (Sheslay) that’s showing every indication of becoming B.C.’s next major Cu-Au porphyry deposit, and a top-notch management and geological team with a proven track record of success, we can’t help but think Prosper is one of the most attractive opportunities on the Venture at the moment for investors who are serious about building wealth over the next 12 months…Prosper could easily command a market cap in excess of $100 million by this time next year through an aggressive 2014 drill program that links the Star with 1 or 2 more of the other porphyry targets with similar grades and intersections as drilled to date…in the southwest corner of the Sheslay, the Pyrrhotite Creek Porphyry appears to be a 2nd distinct major system connected with Garibaldi Resources’ (GGI, TSX-V) Grizzly Property…the Grizzly itself has big scale possibilities with multiple targets already outlined over a distance of 15 km from Grizzly West to Grizzly Central…
Speaking of Garibaldi, we’ll have more on GGI later this week…it fell in sympathy with PGX yesterday…if PGX went down in part because some investors were concerned about a potential lack of activity on the ground over the next few months from PGX, they needn’t worry about that with regard to GGI…Garibaldi has been busy in northwest B.C., but they’re also ready to ramp up drilling in Mexico where the company has some exceptional targets and is even generating monthly royalty income from a pilot program at the Tonichi Project…given all of its pillars of strength, the outlook for GGI is as positive as ever with a very modest market cap just slightly above the company’s working capital position…
Probe Mines Ltd. (PRB, TSX-V) Updated Chart
Here’s another story we’ve stuck with for many months, and it’s paying off…Probe Mines‘ (PRB, TSX-V) Borden Lake deposit in northern Ontario is looking exceptionally good as the company continues to expand a high-grade zone to the southeast of the original lower-grade, bulk tonnage deposit…PRB has consistently out-performed Gold since the spring, and its 50-day moving average (SMA) – currently at $2.16 – has been providing consistent support since the early summer…a confirmed breakout through resistance at $2.20 should set PRB up for a run toward John’s Fib. target…as always, perform your own due diligence…as of 7:20 am Pacific, PRB is off a penny at $2.20…
GoldQuest Mining Corp. (GQC, TSX-V)
GoldQuest Mining (GQC, TSX-V) enjoyed a strong day yesterday following release of its maiden NI-43-101 resource estimate for its Romero and Romero South deposits in the Dominican Republic…like with PGX, patient investors could be rewarded handsomely with GQC over the course of the next year…there is certainly excellent potential for additional mineralization between the 2 bodies based on limited drilling and favorable geophysical data…GQC will be examining the economics and technical aspects of mining at both deposits as well as testing the mineral potential adjacent to the resources outlined at Romero and Romero South…
Technically, GQC has strong support in the high 20’s and considerable resistance in the upper 30’s…it climbed 8 cents yesterday on total volume (all exchanges) of 1.8 million shares, the best single-day volume in several months…as of 7:20 am Pacific, GQC is off a penny at 35 cents…
B2Gold Corp. (BTO, TSX)
B2Gold (BTO, TSX), a rapidly growing intermediate Gold producer, appears to have picked up a valuable asset for cheap in its proposed all-share friendly takeover of Volta Resources Inc. (VTR, TSX) announced Monday…cash-rich BTO appears to be on the rebound, technically and fundamentally, after touching a 2+ year low of $1.87 in late June…BTO has a chance to accelerate quickly if it can overcome resistance around $2.80 as shown in John’s 3-year weekly chart…BTO is up a nickel at $2.77 through the first 50 minutes of trading…
Radius Gold Inc. (RDU, TSX-V)
Radius Gold, which holds a large share position in BTO, is looking a lot better after breaking above a long-term down trendline over the summer…since then, the down trendline has provided support along with the now-rising 100-day moving average (SMA) which is currently at 11 cents…earlier this month, RDU announced the start of a drill program at its Santa Brigida epithermal silver-Gold Property in Mexico (an initial 8-hole, 1,500 m program)…as of 7:20 am Pacific, RDU is up a penny at 12 cents…
Note: Both John and Jon hold share positions in PGX and GGI.
IS GGI SUPPOSED TO HAVE THEIR OWN RESULTS SHORTLY TOO?
Comment by STEVEN1 — October 30, 2013 @ 7:23 am
You can’t compare pgx with Richfield for a number of reasons. First, the market conditions were a hell of a lot better then. Secondly, big companies were looking for takeovers. Third, the grades were much different. Richfield had WAY better gold credits. The problem I see with pgx even if all the holes are connected is that the grade is just really low. To call this world class is really off the mark
Comment by OldMan — October 30, 2013 @ 7:35 am
Steven, GGI of course is very busy with both Mexico and the Grizzly, so it’s safe to assume there are updates coming soon – plenty of drilling in this 4th quarter in Mexico. Again, the key in this market is to focus on companies that have the working capital, the management and geological expertise, the right properties in the right areas, attractive share structures, and the drive to build shareholder value, and those are the key pillars that support GGI – and PGX – and put them in the top 10% vs. the “other” 90%. When these quality opportunities bounce around, it makes sense to accumulate on any weakness. Keep the big picture and the long-term in focus.
Comment by Jon - BMR — October 30, 2013 @ 8:08 am
Keep focus? Just like your rbw advice? Come on, the drill spoke and the market is speaking.
Comment by OldMan — October 30, 2013 @ 8:44 am
I am curious, Jon, why you or no one else on this board mentions DBV? At 6 cents, 28,000,000 o/s and results within several weeks, it seems like the most reasonable short term investment. After all, DBV is adjacent to PGX.
Comment by kdcdoggy — October 30, 2013 @ 10:06 am
The sad truth (for PGX and all mining stocks in general) is, no glory hole = no share price increase. In fact, if you do not provide the “Glory Hole” in your results, you get punished mercilessly. Apparently, there is no “in between” for the market these days (which is very short-sighted and stupid), but nonetheless, there is your explanation for the hit v.PGX took yesterday. There are some exceptions to this rule of course, but they are few and far between.
Comment by Steven — October 30, 2013 @ 11:20 am
HEADS UP. ACN.V Asher resources.This stock has very low,low float.Possible high, high grade gold in Nevada. Assys due possibly next week.Coffin recommended yesterday, Do your own D.D. Read article by Ron Struthers. This stock could hit !.00 very quickly. Richard l
Comment by Richard l — October 30, 2013 @ 5:01 pm
Bank of America analyst thinks gold looks good here http://finance.yahoo.com/blogs/talking-numbers/gold-looks-scary-good-bank-america-merrill-lynch-194835583.html
Comment by Justin — October 30, 2013 @ 5:27 pm
Quite frankly, DBV doesn’t meet all the conditions we look for in a Venture company which are as follows: 1) Strong working capital position; 2) Management and geological expertise; 3) The right properties in the right area; 4) Attractive share structure; and 5) The drive to succeed both in the market and on the ground. We like the potential of the Hat Property, but DBV doesn’t meet conditions 1, 2 and 4. As simple as that. We just don’t have a lot of confidence in their management team. Being contiguous to the Grizzly and the Sheslay is wonderful – but DBV’s ability to execute is constrained, and a lot of cheap financing stock has seriously diluted this deal. Of course that’s not to say they won’t get lucky on a hole. That’s entirely possible, and we hope to see that. The property is certainly prospective, but in our view they simply don’t have the same geological expertise as PGX or GGI. At some point down the road, I expect another group to get its hands on that property.
Comment by Jon - BMR — October 31, 2013 @ 6:57 am
Jon, I agree,as it stands DBV does not have a strong Working Capital but that could change pending this latest round of drilling. Im not sure how much research you’ve put into Mr. Farshad but apparently he knows enough to have picked a property that PGX wanted prior to taking over firesteel, which can be confiremd if you ask Peter, and that fact the Peter is interested in taking them over. So even though Mr. FARSHAD may not have the big dicovery behind his belt dont sell him short that he may not have the expertise to find a discovery because Peter sure doesnt feel that way. As far as the share structure, I’ve mentioned it on here previously, Mr. Farshad is involved in most of the finances,the current market shares is 28 million, Mr Farshad according to Sedi.ca holds 14 million, he currently did a PP at .06 where he participated again. So in fact they do have a tight share structure and that fact that most of the shares are held by the CEO. You have pushed PGX based on their epxertise but for now they haven’t proven anything better than what DBV has.In the end DBV may prove you wrong on you assumptions, or not!
Comment by Paul — October 31, 2013 @ 7:21 am
I hope you are right,Paul,because I hold DBV.i think all Jon is saying,is that they have 5 criteria for pushing a stock,and DBV doesn’t meet all of them,so they won’t cover them.That’s fine.
But to that I say,”Who was Pete Bernier before the last project?”I never heard of him.You need success to become known.Farshad has an opportunity to make a name for himself here.Based on the IP of the area,he has the best property of the three.Not the biggest,but the best.Now he needs something that stands out in his drill holes,because if not,the money is not there to continue.
I don’t disagree with Jon.While he expects someone else to take over at some stage,I expect a j/v,for sure if they don’t wow the market,and possibly even if they do.But if they j/v because of a super program,they will be well rewarded for it.Farshad is not here to build a mine,only to prove the ore is there,then possibly prove it up.Selling is the goal.
Comment by Jim Niles — October 31, 2013 @ 9:53 am