Gold has traded between $1,238 and $1,256 so far today…as of 7:50 am Pacific, bullion is up $3 an ounce at $1,246…Silver is 7 cents higher at $19.21…Copper is off 2 pennies at $3.22…Crude Oil is down 54 cents at $97.69 while the U.S. Dollar Index is up one-quarter of a point at 81.27…
Volumes on the Shanghai Gold Exchange fell noticeably ahead of the Chinese Lunar New Year holiday festivities as the premium hit a three-month low, so the fact that Gold is holding up well today despite a drop-off in key Chinese buying is encouraging…still, Gold’s 5-week winning streak – its longest since September 2012 – is in serious jeopardy today, and action this week showed how key the resistance is around $1,275…how bullion performs next week during a period of quieter physical demand due to the China factor will be interesting…Gold needs to overcome that $1,275 resistance in the near future or the bears will sense weakness…
India has the potential to bring fresh physical demand into the Gold market as the first quarter progresses if import restrictions are eased, as some reports are suggesting could occur, prior to that country’s elections in May…
Today’s Markets
Asia
Trading was quiet in Asia overnight as the Shanghai, Hong Kong and South Korea markets were all closed…Japan’s Nikkei lost 93 points to close down 8% for the month, its worst monthly performance since 2012 (the Shanghai was down 4% for January)…
Europe
European stocks, heading for their worst start to the year since 2010, are down significantly in late trading overseas…”deflationary concerns” are resurfacing in the euro zone…consumer prices rose by just 0.7% year-on-year in January, according to official statistics released by Eurostat – below the 0.9% expected by economists…
North America
A shaky month of January is ending on a bad note for the Dow…it’s off 181 points on emerging market concerns as of 7:50 am Pacific…
What does a losing January on the Dow mean for the market for the rest of 2014?…“Since World War II, whenever the market was down in January, the average price change was usually flat in the remaining 11 months,” according to Sam Stovall, chief equity strategist with S&P Capital IQ (source: CNBC)…“It was a gain of 0.1% on average. It was basically a coin toss as to whether the market rose or fell for the year.”
In Toronto, the TSX is off its lows and down just 86 points now (as of 7:50 am Pacific) while the Venture has fallen 6 points to 947…
TSX Updated 9-Month Daily Chart
The TSX, which is actually up for the month of January entering today’s trading, has strong support around the 13600 level as shown in this 9-month daily chart from John…we saw that area hold in early trading today…a bullish RSI(14) pattern has actually been forming in recent days which is interesting…
Garibaldi Resources Corp. (GGI, TSX-V) Expands The Grizzly, Covers Three Sides Of Doubleview
Exactly what this market needs – the Sheslay Valley Cu-Au porphyry play has become a fast-moving, exciting story with sudden twists and turns and prolific possibilities…Doubleview Capital Corp. (DBV, TSX-V) shot up nearly 50% yesterday as investors are increasingly grasping the significance of DBV’s recently announced drilling discovery at the Hat Property…
This morning, Garibaldi Resources Corp. (GGI, TSX-V) pulled its own “rabbit out of the hat” by announcing a major expansion of its Grizzly Property including the very interesting acquisition of the Hat East and Hat East 2 claims from a private landholder…how Garibaldi was able to pull that one off, we may not know until the book is written on the Sheslay Valley Copper-Gold Rush…in any event, besides also announcing an “aggressive” 2014 exploration program including drilling at the Grizzly, Garibaldi has now positioned itself just 1 km to the east of the Hat Property, and of course the Grizzly was already contiguous to the southern border of the Hat and the lower parts of the western border…
Garibaldi’s acquisition of the Hat East and Hat East 2 claims will “stir up the pot” in the Sheslay Valley and accelerate the land grab in what could easily develop into a multi-deposit scenario over many kilometres given what appears to be a very “pregnant” district featuring all the classic geological and geophysical signatures seen in other major systems to the south and southeast…
If It Looks Like A Duck, Quacks Like A Duck, It’s A Duck
The Sheslay Valley is right on trend with world class deposits, current and past producing mines in the prolific northwest portion of this mineral-rich province…what’s amazing is that it has taken this long for the Sheslay Valley to start to shine…but the main property of interest up until last year (the Sheslay) was under the control for a decade of Firesteel Resources Inc. (FTR, TSX-V) which simply didn’t have the resources it needed or the vision to effectively accelerate the project, holding back exploration activity in the region…of course that all changed last summer when Bernier’s Brigade arrived on the scene and optioned the Sheslay from Firesteel…
We’ve written extensively about the quality of Prosper Gold Corp.’s (PGX, TSX-V) Sheslay Property where five porphyry targets have been identified to date, four of them within a 12 sq. km area; recently, we emphasized the significance of Doubleview’s discovery holes at the Hat (widely spaced, continuity of mineralization and increasing grades at depth) about 9 km southeast of Prosper’s most advanced target (the Star)…DBV President and CEO Farshad Shirvani showed courage, conviction and vision by drilling a series of holes during challenging market (and weather) conditions, and making a discovery that could turn the company into a magical “rags to riches” story – he is to be congratulated; this morning, Garibaldi stepped up to the plate again to remind investors that it’s about to take a big swing at what could be the monster in this whole system, the Grizzly (in reality, any one of these three companies could be sitting on the “motherlode” – drilling will determine that of course)…
1. Scale does matter and the Grizzly is huge – now 262 sq. km, nearly four times the size of the Sheslay and seven times the size of the Hat;
2. The Grizzly hosts an important “heat engine” – the Mount Kaketsa pluton, and rests in the middle of an apparently robust system in between Teck Resources Ltd., Prosper Gold and Doubleview;
3. “Multiple targets” (known mineral occurrences with coincident anomalies) have been identified over a whopping 15 km corridor stretching from Grizzly West to Grizzly Central;
4. Garibaldi has been systematically exploring the Grizzly for several years in preparation for the right drill program at the right time – their odds of success are unusually high, in our view, given their intimate knowledge of the Grizzly and the fact they’ve been able to assess drilling and other data from adjoining properties.
Knowing how prolific the Stikine Arch is, the question regarding the Sheslay Valley in our view is not whether it hosts a Cu-Au porphyry deposit – the question is how many might there be, how big and where exactly are they?…some important clues are beginning to emerge, but it’s still very early in the game…we’re convinced this is going to become an old-fashioned, rip-roaring, British Columbia area play that will breathe new life into the junior exploration market after three very difficult years…much more next week in a special updated report we’re preparing…
Sheslay Valley Updated Area Map
This is the latest Area Map of the Sheslay Valley, released this morning by Garibaldi Resources. Expect more staking and "deal making" by existing and potential new players in the coming days.
Doubleview Capital Corp. (DBV, TSX-V) Updated Chart
Doubleview is in all-time high territory, which can create some special dynamics, and closed above a Fib. resistance level at 23 cents yesterday as shown in this 3-year weekly chart from John…from a technical perspective, it’ll be revealing to see how DBV reacts around that Fib. level the rest of today and if it becomes new support…DBV is off half a penny at 24.5 cents as of 7:50 am Pacific after dipping as low as 22 cents…
Barisan Gold Corp. (BG, TSX-V)
Barisan Gold Corp. (BG, TSX-V) has its own Cu-Au porphyry discovery it’s working on in Indonesia – not our favorite jurisdiction, but it’s an important discovery nonetheless…as announced by the company Wednesday, drilling has resumed with hole UTD-005 at the Upper Tengkering Project…
Technically, BG has unwound an overbought condition with critical support holding – very positive…below is a 2+ year weekly chart from John…
CRB Index Updated Chart
Commodities are holding up well despite emerging market concerns at the moment, as evidenced by this 1-year weekly CRB chart…the Index broke above a downtrend line last month, a strong base has been formed and up momentum is increasing…
Note: John and Jon both hold share positions in GGI and BG. Jon also holds share positions in DBV and PGX.
What is going on in this region is exciting for investors, however it should be born in mind that the Sheslay property is currently 100% owned by Firesteel. At present Prosper is the operator not the owner. Fortunately they are great operators and the future looks promising for all parties involved. Their option will enable them to own up to 80% should a resource worth mining be discovered.
Comment by michael hepworth — January 31, 2014 @ 11:01 am
Hi Michael, thank you for your comments, you bring up a valid point. Personally, I like FTR a lot at its current price, and you are positioning this company for a turnaround. The market is generally assuming that Prosper will carry out its full commitments under the option agreement to earn its 80% controlling interest in Sheslay, but if Firesteel is left with 20% – 20% of something potentially very big is highly significant. I have a question for you, though. In terms of the arrangement between Prosper and your company, the former must incur exploration expenditures totaling $5 million over a 4-year period, plus of course there are some shares and cash involved. At that moment, at the 80% earn-in stage if that’s achieved, I believe the two parties would then form a JV. My concern is that Firesteel’s 20% interest at that point could then be gradually diluted to less than 20%, perhaps much less, if they’re not able to keep up with their portion of the exploration expenditures under a JV agreement. This Sheslay Project could ramp up very quickly and I can see the potential for Prosper to earn its 80% interest by the end of this year. Will Firesteel have the financial strength to keep pace with Prosper at that moment under a JV agreement to maintain a 20% interest in the project? In other words, do you see any possible risks in ending up with much less than 20%?
Comment by Jon - BMR — February 1, 2014 @ 6:50 am
WAS THE VOLUME 312M ON FRIDAY ON THE TSX VENTURE BMR???
tmxmoney.com/HttpController?GetPage=ClosingSummary&MarketView=MostActive&DetailedView=DetailedPrices&Market=V&Language=en
Comment by STEVEN — February 2, 2014 @ 8:15 am
The total weekly volume for the venture was 308 million. Hope this helps.
Comment by Tony T — February 2, 2014 @ 2:09 pm