Gold has traded between $1,175 and $1,189 so far today…as of 9:00 am Pacific, bullion is down $6 an ounce at $1,180…Silver is off 7 cents at $15.93…Copper has shed 3 pennies to $2.67…Crude Oil is 98 cents lower at $60.45 (see updated chart below) while the U.S. Dollar Index has gained half a point to 95.19…

Gold remains range-bound with near-term resistance at $1,200 and a support band between $1,150 and $1,170…breach of support at $1,150 would increase the probability of a test of the bottom of a downsloping flag (around $1,100) that bullion has traded in for more than 2 years…we’ll update that chart over the weekend…keep in mind that historically, June is one of the weakest months of the year for Gold, and this is typically followed by the best quarter of the year (July to September)…

Gold prices continue to face pressure from Gold-backed ETF outflows…SPDR Gold Trust said its holdings fell 0.2% yesterday to 704.23 tonnes, the lowest since September 2008…longer-term, this is definitely a bullish contrarian indicator…

Oil Update

OPEC is producing nearly a million more barrels of Oil each day than the target the cartel set last week, and the bulk of the excess is coming from 2 countries – Saudi Arabia and Iraq…

Iraq pumped about 3.8 million barrels a day in May, according to a monthly report from OPEC, a level that if sustained would set a national record…Saudi Arabia, meanwhile, said it put out 10.3 million barrels a day, a historically high figure up almost 600,000 barrels since its pivotal decision last year to abandon its usual strategy of defending Oil prices by cutting production…it’s a shot across the bow at arch-rival Iran, plus of course the Saudis are also attempting to take market share away from marginal North American shale producers…

Overall, OPEC said its 12 nations produced 30.98 million barrels a day in May – the highest level since September 2012 and a nearly 4% increase since May last year…together, and importantly, Saudi Arabia and Iraq accounted for over three-quarters of that growth…

Iraq has made gains in Asia, and Saudi Arabia has clawed back some lost sales in the U.S. and China, while also sending Oil to state-owned refineries for domestic consumption…

WTIC 6-Month Daily Chart

WTIC gained fresh momentum once its 50-day moving average (SMA) started to reverse to the upside in late March…it’s now providing support around $57, plus a band of Fib. support exists from $52 to $57…

A confirmed breakout above $62 would be significant – that’s the key area to watch on the upside as WTIC has so far not been able to sustain a price above that level…the declining 200-day SMA is currently $64.45…

Today’s Equity Markets

Asia

Asian markets were stronger overnight with Japan’s Nikkei leading the way with a gain of 337 points or 1.7% to close at 20383…China’s benchmark Shanghai Composite added 16 points as the release of April fixed asset investment, together with May retail sales and industrial production, matched analysts’ expectations…

Europe

European markets finished slightly higher today, trimming their gains after the IMF poured some cold water on hopes that a deal between Greece and its bailout supervisors was near…according to a Reuters report, an IMF spokesperson said that “major differences” remained with Greece and that the IMF had left talks in Brussels…

North America 

The Dow is extending its big gains from yesterday, climbing another 51 points as of 9:00 am Pacific…U.S. retail sales surged in May as households boosted purchases of automobiles and a range of other goods even as they paid a bit more for gasoline, the latest sign economic growth is finally gathering steam…the Commerce Department reported today that retail sales increased 1.2% last month – in line with expectations – after an upwardly revised 0.2% gain in April…retail sales excluding autos, gasoline, building materials and food services, retail sales increased 0.7%…

The number of Americans filing new claims for unemployment benefits rose slightly more than expected last week, but remained in territory consistent with a strengthening labor market…

In Toronto, the TSX is off 54 points at 14835 as of 9:00 am Pacific…some technical weakness has crept into this 2.5-year weekly chart, and we’ll see if the 200-day SMA at 14871 is able to provide much some-needed support…

The Venture is flat at 682 as of 9:00 am Pacific…nice drill result this morning from Avnel Gold Mining (AVK, TSX-V) which continues a 30,000-m program to support a definitive feasibility study for its Kalana Main Project in southwestern Mali, West Africa…KA-SON-RC585 intersected 100.3 g/t Au over 10 m including an exceptionally high-grade 1-m interval of 844.7 g/t Au…an updated mineral resource estimate is expected in 3-4 months…

Abitibi Royalties Inc. (RZZ, TSX-V)

Interesting article in today’s Financial Post regarding Abitibi Royalties (RZZ, TSX-V)…President Ian Ball is trying to do something that is almost unheard of in the mining industry: use the Internet in a creative way (that in itself is a story)…check out their web site at www.AbitibiRoyalties.com…

The company has launched an online platform this week called the “Abitibi Royalties Search”…the web site invites cash-poor junior mining companies to submit data on their projects…if Abitibi likes what it sees, it will cover the cost of the claim fees and taxes on the project, which may be unaffordable for the struggling miners…in return, Abitibi receives a permanent royalty…

As the Post’s Peter Koven wrote, Abitibi is a small player in the mining royalty space which is dominated by Franco-Nevada, Royal Gold and Osisko Gold Royalties…those firms will always get first crack at the most promising royalties, and they have billions of dollars to spend on them…Abitibi only has about $35 million to play with, and needs to think creatively and target early-stage projects if it wants to find opportunities that the big players overlook…

The web site idea is partly inspired by the famous “Goldcorp Challenge”…in 2000, Goldcorp’s (G, TSX) then-chief executive Rob McEwen released all the company’s geological data for the Red Lake Gold mine online, and invited the public to provide advice on drilling targets…ultimately, the advice helped Goldcorp make some key discoveries at Red Lake, which is still thriving today…the prize money paid out was slightly more than $500,000, a bargain compared to what Goldcorp got…

NexGen Energy Ltd. (NXE, TSX-V) Update

Summer drilling is now underway at NexGen Energy’s 100%-owned Arrow zone (Rook I Property) in the southwest part of Saskatchewan’s Athabasca basin…the program will utilize 5 diamond drill rigs…2 rigs are currently in operation with all 5 scheduled to be turning by June 20th…

Two drill rigs will focus on testing the extent of high-grade uranium mineralization in the A2 and A3 cores as the company drives Arrow toward an initial resource estimate…a 3rd rig will test previously undrilled areas of the A1, A2 and A3 shears targeting high-grade uranium mineralization similar to that found in AR-15–44b (40.45 m of off-scale radioactivity – assays pending)…the 4th and 5th rigs will test high priority regional geophysical targets on the Rook I Property along the Patterson and Derkson Conductor Corridors…

NXE has advanced another nickel to 62 cents as of 9:00 am Pacific…looks like confirmation of a breakout today as you can see in John’s 2-year weekly chart…

PyroGenesis Canada Inc. (PYR, TSX-V)

PyroGenesis Canada (PYR, TSX-V) has come out with some interesting news in recent days, including Monday when it announced something that could be quite revolutionary…PYR has been engaged by an unnamed junior mining and metals company to evaluate the feasibility of using plasma for the purpose of refining ore into pure metal, in this case converting quartz into pure silicon metal…

“The world market for silicon metal is about 1.8 million tonnes per year and ore refining represents an interesting application of our plasma capabilities,” said Pierre Carabin, PyroGenesis’s director of engineering…

PyroGenesis is the world leader in the design, development, manufacturing and commercialization of advanced plasma processes, and its Plasma Atomization Process (PAP) is an enabling technology for 3D Printing…

Technically, PYR is gaining momentum with an RSI(14) bullish “W” and steady accumulation (CMF) since March…it has traded within a downsloping flag since late 2013 and could be gearing up for a test of resistance at the top of that flag…

PYR is up a penny at 36 cents as of 9:00 am Pacific…

Discovery Ventures Inc. (DVN, TSX-V) Update

As we pointed out yesterday, Discovery Ventures (DVN, TSX-V) has received a major boost after announcing it has signed a definitive agreement with investor Dan Omeniuk for $7 million in credit facilities to advance the company’s high-grade WillaMAX Gold-Copper Project in southeast British Columbia…Omeniuk will bring much more than just financial strength to DVN, given his business background which includes a highly successful trucking/transport company…

Technically, DVN appears to have started another one of its summer runs with a confirmed breakout above Fib. resistance at 17 cents…since the first announcement regarding Omeniuk May 29, volume in DVN has surged…it hit nearly 3 million yesterday (all exchanges)…

This is an exceptionally bullish chart, and note the measured Fib. resistance level above the 40-cent chart resistance…

DVN is up half a penny at 18.5 cents as of 9:00 am Pacific…

Kennady Diamonds (KDI, TSX-V) Update

More drill results this morning from the Kennady North diamond project in the Northwest Territories…6 of the approximate 20 drill holes planned at the Kelvin kimberlite have been completed with the latest hole intersecting 160 m of kimberlite…5 of the 6 holes have confirmed the current geological model with the 6th having delineated approximately 80 meters of kimberlite outside of the current model…meanwhile, improved ground conditions at the Faraday 2 kimberlite have enabled KDI to commence land-based exploration/delineation drilling sooner than expected there…

Processing of core samples by caustic fusion is continuing on schedule with the diamond recovery results from a 2.7- tonne Kelvin North sample expected within the next 2 weeks and the results from a 1-tonne Faraday 2 sample expected in early July…processing of the Kelvin 436 tonne bulk sample by dense-media separation is also underway with results during during the 3rd quarter…

KDI is up 17 cents at $5.27 as of 9:00 am Pacific…

Columbus Gold (CGT, TSX-V) Starts Drilling In Nevada 

Columbus Gold Corp. (CGT, TSX-V) has commenced drilling at its 100%-owned Eastside Project in Nevada…drilling will consist of 250 rotary holes with 175 of those (about 45,000 m) planned to be completed in 2015…a second rig will be added in late June…

CGT is aiming to extend the area of known Gold mineralization at the original target, and to infill gaps between widely spaced existing drill holes containing significant Gold…the 2015 drilling also includes up to 25 of the 175 holes to test new targets 4 and 6, and the northern half of new target 1…

CGT is up a penny-and-a-half at 43 cents as of 9:00 am Pacific…

CMC Metals (CMB, TSX-V)

Jack Ball’s CMC Metals (CMB, TSX-V) enjoyed a big day yesterday, gaining a penny on total volume (all exchanges) of just under 13 million shares as the company put out news regarding its Radcliffe Gold Project in California which it’s trying to advance to small-scale production…CMB turned around this morning and announced it has arranged a $550,000 financing at a discount to the market (5 cents) – 1.1 million shares at a nickel plus a full warrant, exercisable at 7 cents per share for a 2-year period…

Technically, CMB has broken above a downtrend line and we’ll see if previous resistance at 6 cents can now hold as new support…next Fib. resistance is 7.5 cents…CMB has good possibilities over the summer if the company can finally get some of the high-grade material at Radcliffe processed, either at its Bishop mill or a nearby smelter…

CMB is off a penny at 6.5 cents as of 9:00 am Pacific…

Note:  John, Terry and Jon do not hold share positions in RZZ, NXE, PYR, KDI, CGT, and CMB.

Gold has traded between $1,174 and $1,193 so far today…as of 9:15 am Pacific, bullion is up $11 an ounce at $1,187…Silver is 18 cents higher at $16.11…Copper has climbed 3 cents to $2.72…Crude Oil met resistance again near $62 this morning and is currently up 41 cents at $60.55…meanwhile, the U.S. Dollar Index has slid one-third of a point to 94.77…

The euro rose to a 3-week high today of just above 1.13 while the dollar fell to a 2-week low against the yen after Bank of Japan Governor Haruhiko Kuroda said the real effective exchange rate showed the Japanese currency is “very weak”…President Obama on Monday denied expressing concern about the greenback’s strength in private conversations at last weekend’s G-7 meeting, which means he probably did…

Gold faces strong technical resistance at $1,200 but is underpinned by solid support between $1,150 and $1,170…

Holdings in the SPDR Gold Trust fell to their lowest since January at 705.72 tonnes yesterday…in India, worries about a poor monsoon and a lack of wedding-related buying are holding down demand…

Government bond yields in the world’s most advanced countries rose to fresh yearly highs today, deepening the bond market rout since late April…money managers and analysts say the abrupt turn of the bond markets suggests investors are adjusting their investments amid improving sentiment toward growth in the U.S. and the euro zone, receding fears over deflation risks and a shift by the Federal Reserve into tightening monetary policy later this year…

Oil Update

Oil futures gave back some gains after initially jumping today after data showed U.S. Crude stocks fell the most since July last week as refineries hiked output…

Canada’s Crude Oil output will continue to grow over the long-term but at a slower pace than previously projected, reflecting many project postponements resulting from the slump in Oil prices, the country’s main energy trade group says…the Canadian Association of Petroleum Producers said yesterday it expects Canadian Crude output, mostly from Alberta’s Oil sands, to reach 4.96 million barrels a day by 2025…that forecast is less than the previous estimate of 5.6 million barrels a day and the 6.0 million barrels a day it had forecast back in 2013…

Today’s Equity Markets

Asia

China’s Shanghai Composite fell 8 points overnight to close at 5106…the U.S. index provider MSCI’s decision to delay the inclusion of mainland-listed A-shares in its emerging market index weighed on the red-hot Shanghai today, while the rest of Asia put up a mixed performance amid choppy trading…

China’s central bank has lowered its 2015 economic growth forecast to 7.0%…that’s down slightly from its last forecast, but still a hefty figure by world standards…the central bank also lowered China’s inflation forecast to 1.4% in 2015, from 2.2% in the last forecast…

Europe

European markets were up strongly today on hopes regarding Greece…a Bloomberg report this morning said that Germany is considering offering Greek Prime Minister Alexis Tsipras aid in return for committing to one economic reform…meanwhile, Reuters reported that the ECB had raised the cap on emergency liquidity that Greek banks could draw from Greece’s central bank…

North America

The Dow has surged 252 points as of 9:15 am Pacific…the Index is now back in positive territory again for the year…in Toronto, the TSX has gained 117 points while the Venture has added 3 points to 685…CMC Metals (CMB, TSX-V), advancing its Radcliff high-grade Gold project in California, is the volume leader among junior resource companies this morning, up half a penny at 7 cents…John will have a chart update tomorrow with breaking out above resistance at 6 cents…

Discovery Ventures Inc. (DVN, TSX-V) Update

Discovery Ventures (DVN, TSX-V) has solidified a deal for $7 million in credit facilities with Winnipeg entrepreneur Dan Omeniuk who owns Trappers Transport…he’s also be appointed a director, President and CEO of Discovery in the near future…this is a significant development for DVN as it gives the company the access to capital it needs to move its promising Willa-Max high-grade Gold-Copper Project in southeastern British Columbia toward production…

Willa-Max already has a lot of synergies with the mill facilities located only about 130 km north of the deposit…importantly, Omeniuk will bring additional dynamics to the project – beyond his financial strength – given his business contacts, access to equipment, services and key labour…seems like a very strategic fit for DVN…

As we pointed out other day, DVN has started a big run in each of the last 3 summers – so the upcoming 3rd quarter could be quite interesting…DVN is up a penny at 17.5 cents as of 9:15 am Pacific on volume of more than 2 million shares…

Garibaldi Resources Corp. (GGI, TSX-V) Update

Yesterday’s volume in Garibaldi Resources (GGI, TSX-V) was the highest for a single day since July of 2013 when the stock began a major move to the upside that culminated in last summer’s multi-year high…technically, as shown in John’s 2-year weekly chart, GGI is showing signs of an imminent reversal after hovering at a 52-week low between 9 and 10 cents over the last 20 trading sessions…between Mexico and the Grizzly, there are plenty of potential catalysts to once again give GGI a strong 3rd quarter like it enjoyed in each of the past 2 years – perhaps even a phenomenal summer if a drilling discovery is made at the Grizzly which appears to be a very real possibility given the quality of targets there and the district “hit” ratio…

GGI is off half a penny at 9.5 cents as of 9:15 am Pacific on volume of more than 200,000 shares…

Roxgold Inc. (ROG, TSX-V) Update

Roxgold (ROG, TSX-V) announced the signing yesterday of a credit agreement with Societe Generale Corporate & Investment Banking and BNP Paribas with respect to its previously announced $75-million (U.S.) senior debt facility…the company is aiming to put its high-grade (>10 g/t) Yaramoko Gold Project in Burkina Faso, West Africa, into production by the the middle of next year…

Last month, ROG released the latest results from its development infill drilling program at the 55 Zone which included 200.7 g/t Au Gold over 5.9 m (4.8 m estimated true width) in YRM-15-DD-316…the 55 Zone was fully permitted for construction in January of this year…a positive Feasibility Study was released a year ago and envisions an underground mining operation with an initial life of mine of over 7 years, and production of 99,500 ounces per year…

Technically, Roxgold is challenging resistance in the mid-70’s…note that the 50-day SMA has crossed above the 200-day, while RSI(14) continues to climb its uptrend line that goes back to late last year…

ROG is up a penny at 73 cents as of 9:15 am Pacific…

Terrax Minerals Inc. (TXR, TSX-V) Update 

Terrax Minerals Inc. (TXR, TSX-V) has started fieldwork on its Yellowknife City Gold Project with the assistance of technical staff from Osisko Gold Royalties (OR, TSX)…this co-operative work follows Osisko’s agreement to invest $2.5-million in Terrax by way of a non-brokered flow-through private placement currently being finalized…

Terrax broke above a downtrend line in January and has been trading in a horizontal channel since then…this is a company to watch closely over the summer as activity at the Yellowknife Project intensifies…

Note:  John and Jon both hold share positions in GGI.

Gold has traded between $1,174 and $1,184 so far this morning…as of 9:00 am Pacific, bullion is up $4 an ounce at $1,178…Silver has added a nickel to $16.00…Copper is up a penny to $2.70…Crude Oil has surged $1.90 a barrel to $60.04 while the U.S. Dollar Index has slipped one-tenth of a point to 95.12…

Although demand has been lackluster for Gold recently, HSBC analysts say they expect it to strengthen if the metal’s price continues to fall. “In light of the recent bullion price decline, we have noticed a continued absence of Asian physical demand, which traditionally materializes on declining price,” they noted in a research note yesterday.   “We believe demand may resurface if Gold drops below $1,150 and increases if bullion falls closer to the psychological $1,100 level,” they added. However, they said that “until this buying surfaces”, Gold will remain weak in the near-term…HSBC analysts did point to two other factors that may provide relief for the metal – stabilization in the Crude Oil market as well as potential delays in U.S. rate hikes…

Oil Update

Higher seasonal demand in developed economies and expectations of falling U.S. shale production are giving Crude a lift today…Oil production declines from the largest U.S. shale plays are forecast to deepen for a 3rd consecutive month in July even as rig productivity remains high, according to monthly drilling data from the U.S. Energy Information Administration yesterday…however, there’s still a massive U.S. Crude inventory mountain to deal with…

Two major Canadian Oil sands operators said yesterday they have resumed output at sites that had been shut down by a more than 2-week old wildfire in northern Alberta, which exports much of its Crude Oil production to the U.S….the blaze had shut-in nearly 10% of Canada’s Oil sands output, or about 233,000 barrels a day, since it was first detected on May 22…

The Tim Hortons “Enbridge Error”

We’re not sure we’d say Tim Hortons has declared “war” on Canada’s energy industry, but the company has certainly shown poor judgement in addition to disrespect for a critical industry and another great Canadian company, Enbridge (ENB, TSX)…last week, Tim Hortons allowed itself to be manipulated by radical groups who organized tweet and web campaigns into announcing it would stop running Oil-related Enbridge commercials on video screens in some of its locations…rather than standing up for Canada, as it should have, Tim Hortons sided with a bunch of Oil-haters from down south…shame on Tim Hortons…you insulted many of your own customers…

Ezra Levant, now at therebel.media, went a little further in his condemnation of Tim Hortons and is gaining traction with a “Boycott Tims” campaign on “The Rebel” web site…we do need more Ezras – more “rebels” – to  counter extremists who continue to ramp up their campaigns against the Canadian Oil industry that provides so many jobs and has helped build this great country…

Ezra:  “A U.S.-based lobby group called ForestEthics pressured Tim Hortons to rip up an advertising contract they had with a Canadian pipeline company. And Tim Hortons agreed.

Tim Hortons has no problem doing business in OPEC dictatorships. They have stores in Kuwait. In the United Arab Emirates. In Qatar. In Oman. Those are all dictatorships. Tim Hortons happily takes their money.

But they think Canadian oil and gas workers are too unethical.

Fine. If Tim Hortons doesn’t want Canadian oil money, let’s not give it to them. Boycott Tims.

Please sign our petition, demanding that they reverse their anti-Canadian decision.

And if you’re as mad as me, please chip in to help pay for radio ads. You can hear the ads right here.

This is about self-respect. How can we shop at a store that doesn’t respect us?

And if Tim Hortons does this today – and gets away with it – who will do it to us tomorrow?”

http://www.therebel.media/boycotttims

Today’s Equity Markets

Asia

Asian markets were weak overnight…China’s consumer price inflation for May came in 1.2% year-on-year, versus 1.5% in April…producer prices, meanwhile, fell 4.6% in May, year-on-year…this data has deflationary tones and will put more pressure on China’s central bank to inject further stimulus into the economy…

Europe

European markets were down moderately today…the EU’s Q1 GDP rose just 0.4% vs. the last quarter of 2014…

North America

The Dow is up 22 points as of 9:00 am Pacific while the NASDAQ is off 10 points at 5011…

NASDAQ Updated Chart

Regardless of how accommodating the Fed continues to be, the NASDAQ is battling very stiff resistance just above 5000…this 20-year monthly chart puts the current situation in good perspective with the index having reached the top of two upsloping channels, one of them going back to 2004…the RSI(14) divergence with price is also a concern…

In Toronto, the TSX, which fell 403 points the last 3 sessions, has recovered 64 points as of 9:00 am Pacific while the Venture is down a point at 685…

More Industry Consolidation

A merger of 5 companies was announced this morning – Oban Mining Corp. (OBM, TSX), with $10 million in cash at the end of March and 120 million shares outstanding, has entered into binding letter agreements providing for the launching of supported share exchange takeover bids with each of Eagle Hill Exploration Corp. (EAG, TSX-V), Temex Resources Corp. (TME, TSX-V), Ryan Gold Corp. (RYG, TSX-V) and Corona Gold Corp. (CRG, TSX)…Oban says the combination of these 5 companies will create a leading Canadian-focused Gold exploration and development company..all are up in trading this morning with Eagle Hill enjoying the biggest price jump, adding 43 cents to 77 cents..this kind of merger activity is another sign of a bottom in the junior resource market…

Walker River Resources Corp. (WRR, TSX-V) Update

Walker River Resources (WRR, TSX-V) continues to prepare for drilling at its 100%-owned Lapon Canyon Gold Project in Nevada…drill access roads and all drill pad construction are complete, including the sourcing of sufficient water on site for drilling purposes…6 holes have been spotted, with planned lengths varying from 150 to 400 m…during exploration work that began in April, visible Gold was noted in 2 different locations in the upper adit of the Lapon Rose Zone (1 of at least 4 shear zones at Lapon Canyon), the site of underground development…this shear zone shows a minimum strike length of 4 km, has a width of over 60 m and a vertical extent of at least 650 m…high-grade Gold is hosted in what appears to be a quartz monzonite intrusive…

WRR is up a penny at 3.5 cents as of 9:00 am Pacific…

North Arrow Minerals (NAR, TSX-V) Update

Investors are expressing their disappointment with news this morning from North Arrow Minerals (NAR, TSX-V)…the company provided results of a valuation completed on a diamond parcel recovered from the Qilalugaq Project bulk sample…the parcel of 383.55 carats of diamonds greater than +1 DTC (approximately 1 mm) was valued at $13,795 or $36 per carat and a modeled range of possible values was also produced with a “possible low” model price of $43 per carat and a “possible high” model price of $92 per carat (U.S.) – 2 or 3 times that value would have prevented this morning’s sell-off but this is still early in the game…panic-selling drove NAR down to as low as 37.5 cents in early trading…the diamond valuation exercise was conducted by WWW International Diamond Consultants, an international diamond consultancy that specializes in the valuation and modelling of diamond parcels of this type…

Ken Armstrong, NAR President and CEO noted, “The diamond parcel recovered from the Q1–4 bulk sample is very small and, as a result, the primary conclusion reached by WWW is that these valuation results and modeled values should be treated with considerable caution when it comes to assessing the Qilalugaq Project.  The valuation of this small diamond parcel is further challenged by the presence of two distinct diamond populations, including a population of rare Type Ib yellows diamonds. The occurrence of two identifiable diamond populations within a single deposit is unusual and was not known to exist at Q1–4 when the 2014 sample program was conceived. Additional evaluation of the project will require the recovery of a larger diamond parcel including sufficient carats from each of the two populations to allow for a more confident assessment.”

NAR is off 44 cents to 51 cents as of 9:00 am Pacific…

Kennady Diamonds (KDI, TSX-V)

Diamond enthusiasts are seeing hope in Kennady Diamonds (KDI, TSX-V) which continues to report encouraging drill results from its Kennady North…the project is immediately adjacent to the new Gahcho Kue diamond mine currently under development by De Beers Canada and Mountain Province Diamonds (MPV, TSX)…

Technically, KDI is looking quite favorable at the moment, supported by a now-rising 50-day SMA while the stock has also pushed above its 200-day SMA for the first time since late last year…

KDI is off a nickel at $5.20 as of 9:00 am Pacific…

Sign Of The Times

Facing the imminent possibility of seeking bankruptcy protection, NWM Mining Corp. (NWM, TSX-V) has received a half-cent takeover offer…it has entered into a definitive arrangement with GFM Minera SAPI de CV (GFMM), and one if its affiliates, and the company’s lender, Global Resource Fund, pursuant to which GFMM will acquire, for cash, all of the issued and outstanding shares of NWM subject to a court-approved plan of arrangement under the Business Corporations Act (Ontario)…

Although NWM has produced Gold at an annualized rate of approximately 20,000 ounces over the last 2 years, a decline in Gold prices combined with an inability to raise the additional capital required to expand production has left the company in a severely distressed position…NWM currently owes Global in excess of $25 million (U.S.) – principal plus accrued interest…going to production and generating cash flow is often riskier than exploration…

Mezzi Holdings Inc. (MZI, TSX-V) Update

In early May, John noted Mezzi Holdings‘ (MZI, TSX-V) breakout above a downsloping channel, and the uptrend has continued since then…a near-term challenge of the next Fib. resistance level appears to be in the works…

MZI is up half a penny at 29 cents as of 9:00 am Pacific…

Gold has traded between $1,169 and $1,177 so far today…as of 9:00 am Pacific, bullion is flat at $1,172…Silver is off 18 cents at $15.95…Copper is up 2 pennies at $2.70…Crude Oil is 92 cents lower at $58.21 while the U.S. Dollar Index has slid three-quarters of a point to 95.68…

Retail sales of Gold by the Perth Mint and the U.S. Mint have been declining as investors have been chasing returns in the stock market…this has also affected Gold holdings in the largest U.S. Gold ETF…assets in the SPDR Gold Trust have fallen to 6-year lows, pulling the fund out of the top 10 largest ETFs in America…

In a recent note, Macquarie Research analysts concluded that the biggest winners in the Gold sector going forward could be the intermediates.  “As opposed to their larger peers, our intermediate producers are not faced with challenging leveraged balance sheets,” the analysts wrote…they also noted that free cash flow is set to grow more strongly for intermediates in their universe…they favor Detour Gold (DGC, TSX) and B2Gold (BTO, TSX)…among junior producers, Macquarie likes Richmont Mines (RIC, TSX), Teranga Gold (TGZ, TSX) and Kirkland Lake Gold (KGI, TSX)…

Oil Update

China, the world’s biggest net Oil importer, bought nearly a quarter less Crude in May than it did in the previous month, official data show…China’s imports of Oil products also fell by more than 6% while Oil product exports slipped 10%…the Chinese data came after OPEC agreed Friday to maintain Oil output at levels well above current demand, exacerbating a glut where millions of barrels of Crude are stored without a buyer…

The U.S. Oil rig count fell by 4 to 642 in the latest week, according to Baker Hughes Inc., marking the 26th straight week of declines…the number of rigs, a proxy for activity in the Oil industry, has fallen sharply since prices headed south last year…there are now about 60% fewer rigs working since a peak of 1,609 in October…

Euro Update

The euro has been gradually recovering from its early March low, and the key potential technical event to keep an eye on over the near future is a euro breakout above the downtrend line shown in this 1.5-year weekly chart…if this were to occur, the U.S. Dollar Index would come under further pressure which has important implications for commodities and the Venture…the euro could certainly surprise to the upside over the second half of the year…

The euro is up 1% this morning to 1.12…

Today’s Equity Markets

Asia

China’s Shanghai Composite soared another 109 points or 2.2% overnight to a new 7-year high…traders interpreted the mixed bag of trade data as impetus for further policy easing…the mainland’s yuan-denominated imports tumbled 17.9% in May from a year earlier, while exports fell by a smaller-than-expected 2.5%…also helping to support the index was expectations for China ‘A’ shares to be included in the MSCI Emerging Markets Index, which MSCI will announce tomorrow…blue-chips such as banking stocks, which are seen to be largest beneficiaries if the inclusion comes true, were on a tear today…

China will release economic data related to Fixed Asset Investment and Industrial Production this week…

Europe

European markets were down moderately today…leaders from the G-7 meeting in Germany over the weekend decided to keep sanctions against Russia in place until its President Vladimir Putin and Moscow-backed separatists fully implement the terms of a peace deal for Ukraine…meanwhile, complex negotiations between Greece and its international creditors over a reform package are expected to continue this week with Greece facing a June 30 deadline for a large payment to the IMF…

North America

The Dow is off 49 points as of 9:00 am Pacific…Thursday’s retail sales will be an important number this week to gauge the latest trends in consumer spending…bond markets have stabilized this morning after the 10-year Treasury yield jumped by more than 28 basis points last week to close at 2.40% on Friday, the largest weekly advance since early February…the 10-year Treasury yield has broken above some important resistance which is potentially short-term problematic for Gold given the strong inverse relationship between the two so far this year…

In Toronto, the TSX has tumbled 205 points as of 9:00 am Pacific while the Venture has declined 4 points to 686…North American Nickel (NAN, TSX-V) has arranged a $10 million financing (“in the context of the market”) through a syndicate of agents co-led by Paradigm Capital Inc. and Edgecrest Securities Corp., as announced this morning…net proceeds of the financing will be used for the company’s summer exploration and drilling programs at its 100%-owned Maniitsoq Nickel Project in southwestern Greenland…

Venture 6-Month Daily Chart

What’s encouraging about this chart is the Venture’s strong support around 680, defined by Fibonacci analysis and the uptrend line from the December all-time low…

Sell pressure, dominant for the month of May, has been replaced with buy pressure, a pattern that’s typically a prelude to gains in the Index…

Tribute Pharmaceuticals Inc. (TRX, TSX-V) Update

Tribute Pharmaceuticals (TRX, TSX-V) was halted just prior to the open but has resumed trading following the announcement that Pozen Inc. will acquire Tribute in a transaction valued at approximately $146 million (U.S.)…upon completion of the acquisition, which is expected to occur in the 4th quarter of 2015, the combined company will be named Aralez Pharmaceuticals plc and domiciled in Ireland…upon closing, Aralez is expected to trade on the TSX and NASDAQ…

The acquisition is aimed at creating a premier specialty pharmaceutical company with a broad portfolio of commercial products and a growth plan focused on innovative products and acquisitions and the commercialization of portfolio products in the U.S. and Canada…

TRX is up 22 cents to $1.52 as of 9:00 am Pacific after climbing as high as $1.62…

NexGen Energy Ltd. (NXE, TSX-V) Update

Drilling has commenced at NexGen Energy’s 100%-owned Arrow zone (Rook I Property) in the southwest part of Saskatchewan’s Athabasca basin…the summer program will utilize 5 diamond drill rigs…2 rigs are currently in operation with all 5 scheduled to be turning by June 20th…

Two drill rigs will focus on testing the extent of high-grade uranium mineralization in the A2 and A3 cores as the company drives Arrow toward an initial resource estimate…a 3rd rig will test previously undrilled areas of the A1, A2 and A3 shears targeting high-grade uranium mineralization similar to that found in AR-15–44b (40.45 m of off-scale radioactivity – assays pending)…the 4th and 5th rigs will test high priority regional geophysical targets on the Rook I Property along the Patterson and Derkson Conductor Corridors…

NXE is up a penny at 52 cents as of 9:00 am Pacific…

Discovery Ventures Inc. (DVN, TSX-V) Update

Interesting developments with Discovery Ventures (DVN, TSX-V) as we pointed out last week…the company has arranged credit facilities totaling $7 million to advance its Willa-Max high-grade Gold-Copper Project in southeast British Columbia, subject to satisfactory due diligence by investor Dan Omeniuk and Venture Exchange approval…

Discovery jumped 4.5 cents or 31% last week on strong volume…it’s digesting those gains today, backing off 2 pennies to 17 cents (previous Fib. resistance, now new support) as of 9:00 am Pacific…DVN has started strong upside moves over each of the last 3 summers as you can see on this 3-year weekly chart…

Silver Short-Term Chart

As expected, Silver is now testing support at the top of the downtrend line (dotted blue, $16) where it broke out from in May…it’ll be interesting to see if this holds…if not, next support is around $15.65…

Silver Long-Term Chart

An explosive push higher (eventually) – is this actually a scenario that could unfold in Silver over the next couple of years?…quite possibly, given the look of this 34-year monthly chart, though at the moment it’s hard to understand all the factors that could come into play to generate the kind of “Wave 5” move that appears to be in the works here…

It seems quite possible that the bottom of “Wave 4” came late last year when Silver briefly plunged to just above $14 an ounce…RSI(14) has managed to hold support which goes back to 2001…

Sell pressure continues to remain strong, however, as shown by the CMF – amazingly, at levels not seen in nearly 25 years since the low of $3.51…this intense sell pressure at the moment, which could continue for a while yet, should therefore be viewed in a larger context as a bullish contrarian indicator…

Note:  John, Terry and Jon do not hold share positions in NAN, TRX, NXE or DVN.

New discoveries.  Higher grades.  Bigger stakes.

It comes as no surprise that after recent news regarding Doubleview Capital’s (DBV, TSX-V) Hat Property, including game-changing hole 23 and compelling evidence that the Lisle Zone discovery is merely a southeastern portion of a much larger NW trending Cu-Au porphyry system, major stakeholders are now making their voices heard regarding this important project and the entire Sheslay district in general.

An inevitable development and a highly encouraging sign, actually, because no deposit goes into production in mining-friendly British Columbia without this kind of noise, posturing and lively interaction among industry, government and First Nations.  The Red Chris is the latest example, and that new producer rests on a prolific trend that includes the Sheslay district just 100 km to the northwest.

A Fresh Stamp Of Value Lifts The Sheslay District To A New Level

Significantly, as we outline in this BMR exclusive, a huge stamp of value and urgency has just been placed on a region that holds enormous wealth creation potential for all stakeholders, now that numerous geologists and others in the know are in agreement that the Sheslay district is showing all the characteristics associated with a potential world class series of Gold-rich Copper porphyry deposits throughout 375 sq. km of claims held by the area’s 3 biggest players – Doubleview, Prosper Gold (PGX, TSX-V) and Garibaldi Resources (GGI, TSX-V).  Garibaldi is the largest landholder now with 286 sq. km following Friday’s news, and the Grizzly is screaming to be drilled with funds in place as a potential third discovery.

This is one of the most important exploration areas in the entire country – by itself, it could light a spark in the coming weeks that rekindles a struggling junior resource market.  Keep in mind, it was Doubleview’s drilling discovery in early 2014 that ignited an immediate staking rush, one of the few we’ve seen in Canada in recent years.  Approximately $10 million has been spent on exploration in this district since 2013, and much, much more could be poured into the area in the years ahead for both exploration and development.

Money isn’t all that’s on the line here, though it’s a common thread connecting all parties.  The Sheslay district is in Tahltan territory.  Not only, of course, do the Tahltan have critical economic interests at stake (Tahltan Drilling, for example, completed each of Doubleview’s first 23 holes – they currently have 8 rigs sitting idle, and Tahltan are looking for other work as well), but they also have legitimate concerns regarding how exploration and potential resource development proceed at the Hat and throughout the district – just like at Red Chris and key projects elsewhere.  The Tahltan must be respected.  This means close consultation and no surprises.

Doubleview, Prosper and Garibaldi have each been granted multi-year exploration/drilling permits from the B.C. Ministry of Energy and Mines.  The Tahltan were not excluded from that process and voiced no major objections.  But regular consultation/dialogue between each company and the Tahltan is essential, plus of course there’s the broader issue of ongoing negotiations between the Tahltan Central Council and the provincial government over a long-term approach to land issues. It’s in the best interests of all stakeholders to work closely and respectfully with each other.

A Rich History Of Exploration

Exploration in the Sheslay district goes back decades, and in the late 1980’s a 160-km access road was built through part of this area to link with the Golden Bear high-grade Gold mine approximately 25 km west of the Sheslay River (in 2005, B.C. Minister of Mines Bill Bennett presented Goldcorp Inc. (G, TSX) with the Jake MacDonald Mine Reclamation Award for the Golden Bear).

Only in the last 2 years has it become obvious – increasingly so over the last 6–9 months – that the Sheslay district is very “pregnant” – deposits appear likely from one end to the other along a series of NW/SE parallel trends over a widening mineralized corridor that’s known at the moment to stretch for as much 30 km.   One important geological theory is that the catalyst for all of this – the “heat engine” – is Mount Kaketsa, a pluton that rests mostly along the far western side of Garibaldi’s Grizzly.  The rocks in this district have been “cooked up” in a very serious way – that’s the conclusion of every geologist we’ve spoken to.

What these companies will need to prove, of course, are the existence of economic deposits.  The right geological mix appears to be there, however, and already some major producers are closely monitoring exploration and drilling results from the area.  The district is clearly just 1 or a few more drill holes away from something very big.  All things considered, it makes perfect sense that Chad Norman Day has suddenly entered the picture – interestingly, following DBV hole 23 and just before more drilling at the Hat and first-ever drilling at the Grizzly.

Chad Norman Day – Tahltan Central Council President

“Chad Day is a reasonable guy who you can do business with,” a source within the B.C. Ministry of Energy and Mines told BMR as we conducted due diligence regarding a letter that was recently posted on the Tahltan web site, directed at 3 unnamed companies (we’ve learned they are Doubleview, Prosper and Garibaldi).  Teck Resources (TCK.B, TSX), Ashburton Ventures (ABR, TSX-V), Alix Resources (AIX, TSX-V), and others with ground in the Sheslay district, were ignored.

“This is about the Tahltan resetting the relationship in the Sheslay district, not about stopping exploration,” a source close to the Tahltan, wishing to remain anonymous, told BMR. 

A front page story in the Saturday, May 30, edition of the Vancouver Sun spoke volumes about the “seismic shift” – First Nations managing wealth instead of managing poverty – that has occurred in British Columbia.

“First Nations are emerging as economic power brokers in B.C.,” the page 1 headline read, “signing settlements and partnerships with industry and government worth billions.” 

The 28-year old Day, who was elected President of the Tahltan Central Council in July of last year after serving as an elected Councillor of the Tahltan Band from 2012 and honing his skills at law school in Victoria, is a rising star in the Tahltan Nation.  He was born in Vancouver and moved to Telegraph Creek when he was young, followed by Smithers.  By all accounts, he’s bright, athletic, and has earned income from the mining industry.  He delivered a powerful video message to his people recently regarding the benefits of the Tahltan deal with Imperial Metals (III, TSX) on Red Chris, and Tahltan voters overwhelmingly accepted the agreement in the April referendum.  BMR has attempted to contact Day for an interview as he’s somebody the industry and investors need to know better.

“Government and industry understand that the First Nations people need to benefit when these things are built,” Day was quoted in the Vancouver Sun article.  “But with the Tahltan, it actually makes a lot of sense to partner with us because we have the capacity, we have the work ethic, we have the experience.”

“Tahltan Act To Protect Sheslay”

Below is a recent screen shot from the Tahltan home page.  What we’re illustrating here with the blue dashed lines that we’ve added is the irony of the “Protect Sheslay” letter adjacent to “Tahltan Approve Management And Revenue Deal For Red Chris Mine.” 

What this symbolizes, in other words, are the deep connections between the Sheslay district and the Red Chris – not only are they on the same geological trend, of course, but both are very much about protecting economic opportunity for the Tahltan.

There is nothing wrong with that.  This is Tahltan territory and Day, standing up for all of his people, is also the first to argue that many parts of this vast area the size of Portugal are of highly significant cultural, spiritual and social value to the Tahltan.

This includes the Sheslay River itself (west of the Grizzly, Star and Hat) which has never been disturbed from decades of exploration and never would be disturbed by any future mining operations – B.C. ‘s laws already ensure that.

And Now The Letter…

Indeed, after hole 23 and the impressive rise of the Hat Project from a grassroots property just 2 years ago, combined with what’s now known about hundreds of sq. km of district claims in general, this letter underscores just how richly endowed the Sheslay district likely is.  It wouldn’t be getting this attention if it wasn’t.  It’s a message for the companies and the government.

In Chad Day’s own words, “With the Tahltan, it actually makes a lot of sense to partner with us because we have the capacity, we have the work ethic, we have the experience.”

Doubleview, Garibaldi, Prosper…a major?  Get ready to “partner up”.

Note:  John and Jon both hold share positions in DBV and GGI.

TSX Venture Exchange and Gold

The Venture finished the week on a positive note, climbing 6 points Friday while the broader markets and Gold all declined.  For the week, the Index gave up just 2 points to finish at 690.

Interestingly, despite the dramatic late 2014 sell-off and the challenges the junior resource market has faced since, the Venture has been able to hold critical support at the 680 level on a monthly basis.  This support, as you can see in the chart below, is now stronger than ever.

A key market to watch, of course, is the U.S. Dollar Index which rallied during the last half of May – certainly not unexpected after it sold down to temporary support.  The Dollar Index faces considerable resistance in the upper 90’s given the double top pattern that formed in March and April, in addition to some other bearish indicators – very positive for the Venture as long as that trend continues.

Some strength in the CRB Index over the next few months seems likely, as John has shown in recent charts, and Copper (a reliable leading indicator) is looking very interesting as well from a broad perspective, despite its recent pullback.  Crude Oil probably found its bottom in the low $40’s while resilience in Gold producers suggests a 3-year correction in the yellow metal may indeed have ended last November.  So the Venture’s upside potential as this quarter progresses, and looking ahead to Q3, definitely appears to exceed its downside risk, a very different scenario than the one that existed last September when the Index simply fell apart technically, driven largely by the collapse in Crude prices.  Yes, the resistance just above 700 is frustrating but the Venture has also been building a strong base this year.  Non-resource issues of course have performed the best.

6-Month Daily Venture Chart

What’s encouraging about this chart is that sell pressure, dominant for the month of May, has been replaced by increasing buy pressure, and this pattern is typically a prelude to gains in the Index.  In addition, a bullish engulfing reversal candle pattern has formed with the Index nearing touching strong support at the uptrend line from last December’s all-time low.  As we pointed out last weekend, the Venture’s current technical posture is such that the chances of a near-term breakout above 707 are better now than they were in mid-April.  Exact timing of a breakout, however, is the issue, and what would the catalyst be?

U.S. Dollar Index Updated Chart

The bearish double top pattern that formed in the U.S. Dollar Index during March-April is supportive of the Venture which typically moves in the opposite direction of the greenback.  Notice how the recent Dollar Index rally met strong resistance, as expected, at the uptrend trend where it broke down from in late April.

The Seeds Have Been Planted (And Continue To Be Planted) For The Next Big Run In Gold Stocks

There’s no better cure for low prices than low prices. The great benefit of the collapse in Gold prices in 2013 is that it forced producers (at least most of them) to start to become much more lean in terms of their cost structures. Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their overall operations. Exploration budgets among both producers and juniors have also been cut sharply. In addition, government policies across much of the globe are making it more difficult (sometimes impossible) for mining companies to carry out exploration or put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists (technology has made it easier for groups opposing mining projects to organize and disseminate information, even in remote areas around the globe). Ultimately, all of these factors are going to eventually create a supply problem and therefore great opportunities in Gold and quality Gold stocks.  Think about it, where are the next major Gold deposits going to come from?  On top of that, grades have fallen significantly just over the past decade.

Gold

Despite a softer U.S. dollar, Gold declined for the 3rd straight week, falling $16 an ounce to $1,172.  On the 20-year monthly chart, as we showed last Monday, bullion finished May at its uptrend support line going back to the beginning of the bull market in 2001.

On the 2.5-year weekly chart, which has also proven to be a very reliable guide, Gold appears destined to test the $1,150 support.  Notice that the right hand of the downsloping flag forms a bearish descending triangle with the base at $1,150.  Thus, the $1,150 area is critical.  If $1,150 fails, the first line of support is at the bottom of the flag.

Encouragingly, RSI(14) has continued to climb a gently sloping uptrend since last fall and is very close to support.

Historically, June is one of Gold’s most challenging months of the year – but this is also followed by the strongest 3-month period which is July-August-September.

Silver fell 52 cents last week to close at $16.65.  Copper lost another nickel to $2.69.  Crude Oil dropped $1.42 a barrel to slightly to $58.88 while the U.S. Dollar Index slipped more than half a point to 96.35.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, the long-term bull market in Gold has been driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, has had a huge impact on bullion and will continue to support prices.   Despite Gold’s largest annual drop in 3 decades in 2013, the fundamental long-term case for the metal remains solidly intact based on the following factors: