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Commodities, and Economic & Political Trends Impacting
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July 13, 2015

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Independent Research and Analysis of Gold & Commodities, the TSX Venture Exchange and Emerging Junior Resource Companies: Speculative Opportunities in Today’s Markets

Welcome to our site, or at least the initial version of it!  BMR has been online for nearly 6 years and strictly through word-of-mouth we have built a loyal following.  We encourage reader feedback and the exchange of helpful opinions and ideas among investors in our forum.

We’re continuing with our plans to ultimately construct a very unique investment and money-management resource site that goes considerably beyond what we have now.  We focus a great deal on the Gold, Silver, Copper and Oil markets as well as trends in the global economy, in addition of course to the technical health of the TSX Venture Exchange.  An important component of this site, as well, will always be original research on high quality junior exploration companies or small producers that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity, and we are being more selective than ever in the current market environment.  We look for companies with the ability to execute both on the ground and in the market, who are determined to build shareholder value, which actually excludes most Venture stocks.  However, investors must understand that the companies we do put forward for our readers’ due diligence are still highly speculative situations and entail considerable risk, volatility and unpredictability.

Our intent is to provide you with information that you can use as part of your own due diligence.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. Always perform your own due diligence and please read our disclaimer at the bottom.

We use a combination of fundamental and technical factors in determining the value and potential of a stock.  In terms of fundamentals we look for a company with a superb project supported by strong management.  Management must possess integrity, solid ethics and a determination to succeed and build shareholder value.

At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop. The Bible teaches so much about money and how to handle it and invest it – there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.  By examining the life of Jesus and reading the Word of God, we can all become fully equipped to be successful investors and handle money wisely.  We have a God who thinks big – He created the universe – and He wants us to think big  in every area of our lives.  When we handle money from a Biblical perspective (His money that we have been given stewardship of), He will bless you.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com (BMR) is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company. We strongly recommend that you consult with a qualified investment adviser, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions. The stocks we cover, by definition, are highly speculative and potentially very volatile. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

July 12, 2015

The Week In Review And A Look Ahead

TSX Venture Exchange and Gold

It was a volatile week in global markets, dominated by events in China and Greece.  This weighed on the Venture which fell 30 points or 4.5% to close at 641.  Technical pressure increased after Fib. support in the low 650‘s did not hold.  The Index started to stabilize Thursday and Friday, as Chinese markets rebounded and concerns regarding Greece eased,  but overall volume for the week was low.  There’s a strong correlation between the Venture and Crude prices, so the 11.5% drop in WTIC over the past 2 weeks has not helped the junior resource sector.

Venture 7-Month Daily Chart

As we mentioned last weekend, the Venture’s breakdown below its uptrend line from December was disconcerting, and as a result we saw a quick test of the important 654 Fib. support which failed, followed by a test of the December low which so far has managed to hold.  SS (Slow Stochastics) is at an extreme level, consistent with the March and December lows in the Index.  Stabilization this week will be important.  Beneath 637, there is chart support at 628 which we’ll show in a long-term view of the Venture tomorrow.

The healing process from the 4-month 40% crash late last year, on top of the previous declines from 2011 through 2013, will take time.  That said, investors who are highly selective have found some excellent undervalued opportunities in recent months and more of these certainly exist.

CDNX11(5)

U.S. Dollar Index

What hurt the Venture and the commodities sector severely from last September through December was the almost unprecedented upside move in the U.S. Dollar Index.  The odds don’t favor a repeat performance during the last half of this year, especially with the Dollar Index having broken its uptrend from last summer with stiff new resistance now in the upper 90‘s.

The Dollar Index bounced around last week but once again ran into resistance above 97, though it did close Friday above its 50-day moving average (SMA), currently 95.45.  SS shows up momentum is weakening.  Our contention remains that the Dollar Index formed an important double top for 2015 during the March-April period.

Fundamentally, the U.S. economy cannot afford another dollar surge at any point during the rest of this year (the affects of last year’s surge are still rippling through the economy), and such an event would definitely postpone a Fed rate until sometime in 2016.

USD10(2)

Gold

Gold settled lower again, losing $5 an ounce to finish at $1,163 after previous weekly drops of $6 and $26 an ounce, respectively.

One encouraging aspect regarding this 2.5-year weekly chart remains the fact that RSI(14) continues to climb a gently sloping uptrend since last fall.

Overall, Gold continues to meander within a downsloping flag on this chart which has proven to be quite reliable.  A breakout above or a breakdown below this flag would certainly be significant, whenever that occurs.  Important chart support exists at $1,150, which was tested and held last week.  If it fails, the first line of support is at the bottom of the flag (around $1,100).

On the bright side, seasonality factors are in Gold‘s favor as Q3 traditionally is the metal’s strongest quarter of the year (it generally starts to gather momentum in August).  The equity sell-off in China has also probably convinced more Chinese, who are already big believers in Gold, that there is safety and real long-term value in the yellow metal.

Keep in mind, Gold continues to perform very well in currencies other than the U.S. dollar.  We’ll have an update on that tomorrow.  This is a good environment for Canadian Gold producers who are benefiting from a low loonie and weak Oil prices.

GOLD9(2)

Producer Hedging Update

The global Gold producer hedge book contracted by 800,000 ounces (2.6 metric tons) in the 1st quarter of 2015, according to a report put out this month by the GFMS team at Thomson Reuters and Societe Generale.

This occurred after 1.45 million ounces (45 tons) of net hedging in the final quarter of 2014, the report said.

Overall, the global hedge book remains small compared to at one time, standing at 6.21 million ounces (193 tons) at the end of the Q1.  Back around 2000, it was in the neighborhood of 3,000 tons.

During Q1 2015, 29 companies were net de-hedgers, with 16 adding to their delta-adjusted hedge positions. The largest de-hedger was Polyus Gold (the largest Gold producer in Russia and one of the top 10 Gold miners globally by ounces produced) through deliveries against the large hedge position entered into last year, the report said.

Silver Holds Up, Copper and Oil Tumble

During the week, Silver briefly fell slightly below $15 an ounce but recovered to end the week around strong support at $15.62.  Copper tumbled 9 cents to $2.51, thanks to troubles in China.  Same with Crude Oil as it slipped another $3.42 a barrel to $52.81 (important support band between $52 and $54).  Over the past 2 weeks, WTIC has lost 11.5%. The Dollar Index was off marginally to 95.78.

The “Big Picture” For 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:

  • Growing geopolitical tensions, fueled in part by the ISIS and al Qaeda, and a highly dangerous and expansionist Russia under Vladimir Putin, have put world security in the most precarious state since World War II;
  • Weak leadership in the United States and Europe is emboldening enemies of the West;
  • Currency instability and an overall lack of confidence in fiat currencies;
  • Historically low interest rates/highly accommodating central banks around the world;
  • Continued strong accumulation of Gold by China which intends to back up its currency with bullion;
  • Massive government debt from the United States to Europe – a “day of reckoning” will come;
  • Continued net buying of Gold by central banks around the world;
  • Mine closings, a sharp reduction in exploration and a lack of major new discoveries – these factors should contribute to a noticeable tightening of supply over the next couple of years.

July 10, 2015

BMR Morning Market Musings…

Gold has traded between $1,157 and $1,166 so far today…as of 10:50 am Pacific, bullion is off $1 an ounce at $1,158…Silver is 12 cents higher at $15.50…Copper is off 3 pennies at $2.50…Crude Oil is 28 cents lower at $52.50 while the U.S. Dollar Index has fallen one-third of a point to 96.03

“Bullion has been trading in lockstep with the euro despite the yellow metal’s appeal as a safe-haven asset,”  stated a research note from HSBC metals analyst Jim Steel. “Consequently, a rally in the euro vs. U.S. dollar under the ‘no Grexit’ scenario may provide support for Gold, in our view.”

Copper is on track for a 3.5% weekly fall but has managed to bounce off a critical long-term uptrend support line…commodities have been under pressure this week as concerns about the health of China’s economy have intensified…

Crude Oil Update

Worries about oversupply and slowing demand offset support from a rebound in Chinese stock prices and hopes of a breakthrough in the Greek debt crisis…the International Energy Agency (IEA) said today that Oil prices are set to come under further pressure from easing global demand and an expanding glut of crude, while a re-balancing of the Oil markets may last well into next year…

Critical technical support for WTIC is $52

Canadian Dollar Updated Chart

The situation with Crude Oil and commodities in general continues to put pressure on the Canadian dollar which has now hit key support, as we anticipated it would, at the 78.5 cent level…

Where to from here?…

The Canadian dollar likely still has further to go on the downside (the 70-cent area seems very possible) given its current technical posture in addition to fundamental factors…any further slump in Crude Oil, which could easily occur, would be a major factor influencing fresh weakness in the loonie…

What’s interesting about this chart is not only the loonie’s critical support around 78.5 cents, but how Gold (in U.S. dollars) has significantly outperformed the currency over the last few years, particularly since the beginning of 2014…in Canadian dollar terms, Gold continues to do very well (over $1,400 CDN) and that’s clearly bullish for Canadian Gold producers…lower Oil prices from here would also be positive for these producers…

CAD2(4)

Claude Resources Inc. (CRJ, TSX) Update 

Speaking of Canadian Gold producers, a quality one worthy of our readers’ due diligence, as we’ve mentioned before, is Claude Resources (CRJ, TSX) which earlier this week reported record-breaking 1st half production of 41,686 ounces from its operations in northeastern Saskatchewan…this has resulted in the company increasing its Gold production guidance to 68,000 to 72,000 ounces in 2015 from its original guidance of 60,000 to 65,000 ounces…over the last 4 quarters, the company has produced 74,584 ounces of Gold…the strong production performance and grades are a result of increased contribution from the higher-grade Santoy Gap deposit and from the implementation of the Alimak mining method at the Seabee mine…Q2 financial results will be reported in mid-August…

CRJ reported 1st quarter net profit of $5.1-million, or 3 cents per share, a $10.2 million improvement from the same period last year…this was due to improvements in Gold production, sales volumes, ore grades and operational efficiencies…

Technically, CRJ continues to hug an uptrend support line..a bullish “W” has also formed in the RSI(14) which has been trending higher since mid-2013…recently temporarily overbought conditions in the RSI(14), which emerged during the stock’s move to Fib. resistance at 80 cents, have been cleansed…

CRJ is off 2 pennies at 67 cents as of 10:50 am Pacific

CRJ4

Today’s Markets

Asia

China’s Shanghai Composite jumped another 170 points overnight to close at 3879 following a flurry of fresh regulatory support from Beijing…Japan’s Nikkei average was off slightly…

Europe

European markets were up sharply again today after investors took heart from a rebound in China and reforms proposed by Greece to its creditors…Greece is asking for 53.5 billion euros as part of a new bailout package…the Greek parliament will vote on the measures today…euro zone finance ministers will have their say tomorrow…for now, at least, it appears the likelihood of a Grexit has diminished significantly…

North America

The Dow has surged 184 points as of 10:50 am PacificApple Inc. (AAPL, NYSE and NASDAQ) has jumped nearly 3%, reversing yesterday’s 2% drop that took the stock close to its rising 200-day moving average (SMA)…China has provided over half of Apple’s recent growth in revenue according to a report from UBS yesterday…according to Factset, the country makes up 16.2% of Apple’s total revenue…the success of the iPhone 6 has been driven largely in part by China…

In Toronto, the TSX is up 96 points while the Venture has added 4 points to 641 as of 10:50 am Pacific

Doubleview Capital Corp. (DBV, TSX-V) Update

An eventful week, to say the least, for Doubleview Capital (DBV, TSX-V) which had to endure an illegal Tahltan blockade at the Hat Property in the Sheslay district – a Tahltan blockade against not only DBV, but Tahltan as well given that Tahltan Drilling was doing the work on holes H-24 and H-253 of the 4 men working the rig were Tahltan, BMR has confirmed…interestingly, as DBV reported Wednesday, the blockade started while hole H-25 was in a zone of Gold-Copper porphyry mineralization at a depth of 270 meters in the A-2 area, a whopping 1 km step-out northwest of the Lisle Discovery Zone…we’ll have more on the potential geological significance of that by Monday…

Meanwhile, we were able to reach DBV President and CEO Farshad Shirvani last night at the Hat Property and he offered these comments:

“We clearly stated our position in our news that was issued yesterday.  My only commitment to Chad Day was that we would send him a notice prior to the resumption of drilling, so that he is not surprised. I also reminded him that I sent him a letter a few weeks ago stating our intentions to commence this new drill program and he never objected to that,” Shirvani stated. 

“We have a multi-year drill permit for an area where exploration has been conducted without a single incident like this in more than half a century. We are excited more than ever by what we see at the Hat Property. Our aim is to resume drilling as quickly as possible and prove up a world-class deposit for our shareholders. The outpouring of support we’ve received from many shareholders and others is greatly appreciated,” he concluded. 

Farshad June 20

Doubleview President and CEO Farshad Shirvani with his “Golden Hat”.

Over the weekend, after conducting additional research and interviews the past couple of days, we’ll have much more on the Tahltan Tantrum at the Hat Property/Sheslay district…

DBV 2-Year Weekly Chart

Technically, DBV has shown exceptional support during this volatile week, suggesting that paper has been moving from weak hands into strong hands the last couple of days…recently, there has been a “Golden Cross” – the 50-day SMA has moved above the 200-day SMA, typically a bullish sign…

Note how the 11-cent Fib. level has held which is also at the bottom of a horizontal trading channel the stock has been in for an extended period…the 500-day SMA at 15 cents (not shown on this chart) continues to rise…

DBV9(2)

BitGold Inc. (XAU, TSX-V) Update

Our last BitGold (XAU, TSX-V) chart July 3 showed how extreme overbought conditions had emerged in the RSI(2) with XAU trading as high as $6.72 the previous day…that was a warning sign, as John indicated, and since then RSI(2) has slipped to just 35%…

There’s important Fib. resistance at $5.84, a key area to watch…XAU is off 4 pennies at $5.81 as of 10:50 am Pacific

XAU2(1)

Natcore Technology Inc. (NXT, TSX-V)

Big move yesterday in Natcore Technology (NXT, TSX-V) which interestingly announced yesterday that it has developed a new solar cell structure that will simplify the production process, significantly lower costs and speed the path toward ultra-high efficiency cells…this new cell structure, according to the company, has the potential to completely eliminate high-cost Silver from mass-manufactured silicon solar cells, an achievement that has been a long-time goal of solar science…

Technically, this 3-year weekly chart shows how NXT yesterday hit the top of a downtrend line…what would be significant would be a confirmed breakout above the Fib. 50% resistance level and that downtrend line…worth watching closely…as always, perform your own due diligence…

NXT is unchanged at 75 cents as of 10:50 am Pacific

NXT1

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

July 9, 2015

BMR Morning Market Musings…

Gold has traded between $1,156 and $1,168 so far today…as of 11:00 am Pacific, bullion is up $2 an ounce at $1,160…Silver has climbed 28 cents to $15.40…Copper is up 3 pennies to $2.52…Crude Oil is $1.19 higher at $52.84 while the U.S. Dollar Index has added nearly half a point to 96.69

Growing indications that the Fed may not increase rates in September have to be considered supportive of Gold as Q3 progresses…the number of Americans filing for first-time unemployment benefits rose more than expected last week, data from the Labor Department showed this morning…weeks of uneven U.S. economic data, market turmoil in China and uncertainty over the effects of that, along with a Greek debt crisis in the euro zone, have convinced many investors that the time isn’t right for the Fed to tighten monetary policy…

Chinese authorities stepped in and did everything they could overnight to prevent the Shanghai from collapsing below critical support at 3400…their efforts succeeded, at least for now, and the index actually enjoyed its biggest single day gain in 6 years…the Shanghai soared 203 points or 5.8% to close at 3709 after losses in 8 of the previous 10 trading days…still, both indexes in China – the Shanghai and the smaller Shenzhen market – have lost about a third of their value in the past month…

Incredibly, however, a total of 1,473 companies, or 51% of all stocks on the Shanghai and Shenzhen markets, remain suspended…companies can request a trading halt under special circumstances (mainly takeovers or restructuring, but companies in China can find creative ways to get a halt and attempt to “ride out” market turmoil), or a stock exchange can impose a suspension if it sees a need to….

2-Year Shanghai Weekly Chart Update

Interestingly, the Shanghai on an intra-day basis hit the important Fib. support level bang-on yesterday at 3390…despite today’s bounce, with resistance very apparent just above 4000, this chart suggests there’s a strong likelihood of at least a re-test of the 3400 level – and perhaps a further sell-off to the next major support around 2650…everything will depend on how Chinese authorities handle matters and if they’re able to restore shaky investor confidence…

SSEC8

NASDAQ 1-Year Weekly Chart

The NASDAQ is once again just shy of the 5000 level after a 34-point advance as of 11:00 am Pacific…what this 1-year weekly chart shows is a strong band of Fib. and chart support between 4600 and 4800…note the rising MA(50) which is the 250-day SMA underpinning this market – it was a solid floor during last October’s mini-panic…

NASDAQ4

VIX 3-Year Weekly Chart

The VIX (in a comparative with the S&P 500) demonstrates that we’re clearly in a period of increased market volatility which could continue for at least a little while yet…this comes after months of low volatility…occasional spikes in the VIX have repeatedly met resistance in the low 20‘s…

The action in the S&P, however, is of some concern as the index has fallen below an uptrend line in place since late 2012 – a warning signal that should not be overlooked…

VIX2(2)

Today’s Equity Markets

Asia

As China surged, Japan’s Nikkei average moved up a modest 118 points overnight to close at 19856

Europe

European markets finished strongly higher today on renewed hopes regarding Greece…international creditors expect to receive concrete reform proposals from the debt-stricken country imminently (within a couple of hours according to a Reuters report)…

North America

The Dow has added 94 points as of 11:00 am Pacific…in Toronto, the TSX is down 34 points while the Venture, after touching its December low of 637 intra-day yesterday, is flat at 638

Doubleview Capital Corp. (DBV, TSX-V) Update

Not unexpectedly, Doubleview Capital (DBV, TSX-V) came under pressure immediately after resuming trading this morning following yesterday’s all-day halt triggered by an illegal blockade of the Hat Property by members of the Tahltan Nation including TCC President Chad Day…

Investors must understand, no important discovery in B.C. has ever turned into a mine without going through this type of First Nations “noise” and posturing, and that’s exactly what this is from the Tahltan…rumor has it, they are now planning to target Skenna Resources‘ (SKE, TSX-V) very promising high-grade Gold project less than 100 km southeast of the Sheslay District…Skenna, whose chairman is recent Canadian Mining Hall of Fame inductee Ron Netolitzky (Eskay Creek, Snip), announced this morning that drilling is underway at its Spectrum Project with 2 rigs on location and a total of 12,000 meters planned this summer…

The Sheslay District and Spectrum are the top 2 exploration plays in northwest British Columbia…Day’s agenda clearly appears to be to use these projects as “bargaining chips” with the B.C. government as discussions continue between the Tahltan and the province over a broad land management deal along the lines of what was worked out between the government and the Taku Nation in 2011

The Tahltan’s claim in its news release yesterday that “Sheslay mining exploration is unwanted” by its people damages Day’s credibility, especially considering the Tahltan’s own drilling company (and other related exploration services companies) have been intimately involved in the district since Doubleview started drilling the Hat for the first time ever in the spring of 2013…exploration in the Sheslay region has a rich history, and Doubleview, Garibaldi Resources (GGI, TSX-V) and Prosper Gold (PGX, TSX-V) were all granted multi-year permits from the B.C. Ministry of Energy and Mines with no objections from the Tahltan who were included in those permitting processes…

Not coincidentally, everything changed after DBV hole H-23

Doubleview asserted its rights this morning and also reported that the Tahltan blockade started when hole H-25, collared roughly 1 km from the Lisle Discovery area, was in a zone of Gold-Copper porphyry mineralization at 275 meters…that’s interesting information as a “hit” at Anomaly “A” will help confirm the robust new model for the Hat – specifically, that Anomalies “A”, “B” and “E” – spread over a wide area – are part of a single Gold-rich alkalic Copper porphyry system within a much larger Hat Complex…

A dramatic summer in the Sheslay district, in more ways than one, could be just beginning…much more on the Tahltan uprising and the stakes involved here in the coming days…

Defiance Silver Corp. (DEF, TSX-V) Update 

High-grade drill results from Mexico can still generate investor interest, even with the Venture just above an all-time low, as Defiance Silver (DEF, TSX-V) demonstrated yesterday…results from a further 3 holes drilled at the company’s San Acacio deposit have extended the wide, high-grade mineralization encountered in the first 3 holes eastward by 100 meters…results included 674 g/t AgEq over a width of 7.25 m in SAD1508

DEF climbed a penny-and-a-half yesterday to 14.5 cents on one of its best volume days ever (687,000 shares)…

This 3-year weekly chart shows a gradual uptrend for DEF since a 2.5-cent low in early 2015…promising chart, especially considering current overall market conditions…as always, perform your own due diligence…

DEF1

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

July 8, 2015

Tahltan Blockading Tahltan In A Sheslay Circus: Chad Day’s Big Gamble

A Tahltan protest is underway at Doubleview Capital’s (DBV, TSX-V) Hat Property in the Sheslay District, creating a highly unusual situation where members of the Tahltan Nation are trying to shut down a drilling operation being carried out by their own company – Tahltan Drilling Services – which has a contract with Doubleview.

In effect, the Tahltan are blockading Tahltan – their own people.  Strange, indeed, and the timing couldn’t be more interesting as Doubleview has increasingly shown that the Hat Property is an emerging world class Gold-Copper porphyry system in a district that numerous geologists now believe has enormous wealth-creation potential for northwest B.C., and the entire province for that matter, given its minimum 30-km mineralized corridor where multiple deposits could exist.

We’ve yet to hear Doubleview’s side of the story – the stock was halted prior to market open this morning, and the company hasn’t yet released news.  But Doubleview, like other Sheslay district players, has a multi-year exploration and drilling permit from the B.C. Ministry of Energy & Mines that was approved with no objections from the Tahltan.

Keep in mind, as well, that the Tahltan have been complicit in a rapid increase in exploration in the district over the last two years through Tahltan Drilling (they have completed all Doubleview drill holes to date) and other Tahltan-related exploration services.

It’s estimated that approximately $10 million has been invested in the Sheslay district by several companies since 2013 (a significant portion of that going into the pockets of the Tahltan).  Exploration in the area dates back more than 60 years, and the Tahltan also helped build the Golden Bear mine access road in the late 1980‘s that traverses through part of the region.

In another interesting twist, BMR has learned that the Tahltan’s long-time manager of land management issues, Nalaine Morin (Project Manager for THREAT, a division of the Tahltan Central Council), abruptly resigned just recently (this was actually made known on the Tahltan website).

“I was not aware any action (at the Hat) was going to take place,” Morin told BMR when we reached her by phone this afternoon.  She didn’t give specific reasons for her resignation; however, other Tahltan sources we have contacted, who wish to remain anonymous, have stated there are “internal divisions” within the Tahltan over the approach to land management.

So what are investors to make out of all of this?

Money, politics and power are at the heart of what’s occurring here as we stated previously when Tahltan Central Council President Chad Norman Day, leading elders in the protest at the Hat right now, issued an initial letter May 21 directed at Doubleview, Garibaldi Resources (GGI, TSX-V) and Prosper Gold (PGX, TSX-V).

Essentially, as we see it, given increasingly robust drill results from the Hat, Day is using this highly promising and very visible project and the Sheslay district as a whole as a bargaining chip with the provincial government to expedite a broader land management deal covering Tahltan territory in time for fresh Tahltan elections next summer (if you recall, the Taku Nation negotiated a landmark agreement with the government in 2011, and now Day is gunning for something even better).

The question is, has Day overplayed his hand here?  Has he thoroughly considered the potential ramifications of his actions, including possible damage to the Tahltan brand, by using one of Canada’s premier exploration hotspots like a pile of casino chips?

Just two mining executives we spoke to this afternoon referred to Day’s strategy as “chaotic” and “very risky.”

The 28 year-old Day, as most 28 year-olds would, is brimming with confidence after recently securing a major agreement with Imperial Metals (III, TSX) on the Red Chris mine, just over 100 km southeast of the Sheslay District.

The Red Chris has also been the subject of Tahltan protests and blockades.

In fact, it would be extremely unusual for any major discovery in British Columbia to get to the mine stage without the kind of First Nations noise we’re now seeing surrounding the Sheslay district.

This is sure to become even more interesting in the days ahead, and how will Doubleview AND the B.C. government respond?

More in the am.

BMR Morning Market Musings…

Gold has reversed modestly higher after dipping as low as $1,145 overnight…as of 9:30 am Pacific, bullion is up $6 an ounce at $1,161…Silver has added a dime to $15.14…Copper has recovered 7 cents to $2.50 (see updated chart below)…Crude Oil is up off $1.11 a barrel to $51.22 while the U.S. Dollar Index has slid more than one-third of a point to 96.29

Goldman Sachs says it continues to expect more U.S. dollar strength, weaker Gold prices and a gradual increase in U.S. real rates – based on their questionable assumption that U.S. economic growth will gradually pick up after a disappointing 1st quarter, and that the Fed will finally initiate a rate hike later this year…

Gold prices remained in a relatively tight range in June and early July, with concerns over ‘Grexit,’ a weakening of the U.S. dollar against the euro, and rising U.S. real rates having little overall impact on pricing,” Goldman stated in a commodities report today. “Our Gold price forecasts remain $1,180 in 3 months, $1,150 in 6 months and $1,050 in 12 months.”

Goldman says it also looks for Silver to fall since it tends to track Gold, although the bank also looks for the Silver/Gold ratio to “normalize” as global economic growth begins to recover…

China Teeters Some More

China announced a flurry of new moves overnight to halt a stock market slide, but the result was another big dive in share prices…the government told state companies and executives to buy shares, raised the amount of equities insurance companies can hold and promised more credit to finance trading…the Shanghai Composite lost another 5.9% overnight despite the new measures (or because of them – the actions of Chinese authorities are looking increasingly desperate and bizarre)…quite simply, investors within China and overseas are losing confidence in Beijing’s ability to stem the slide in the country’s equity markets and manage its economic reforms…that’s potentially extremely dangerous to global financial markets…

The problems in China at the moment aren’t just confined to equities…the yield on China’s benchmark government bonds rose sharply overnight, while investors unloaded billions worth of dollar-denominated debt issued by Chinese companies…meanwhile, the yuan has fallen to a 4-month low in offshore markets…

Shanghai Composite Updated Chart

This chart shows how the Shanghai’s RSI(14) and +DI indicators on this 20-year monthly became dangerously overbought as the Index flirted with key resistance around the 5000 level in mid-June…the greed factor had clearly taken hold with margin levels ballooning as investors kept chasing prices higher, encouraged in part by a government strategy aimed at creating a “wealth effect” from a rising market…unfortunately, what goes up can come back down even more quickly…

The 3400 area is key support as we’ve already shown in a previous chart…if 3400 fails, it’s quite possible the Shanghai will ultimately test the 2650 level for a correction of nearly 50%…based on previous patterns, RSI(14) still has quite a bit further to drop – at a minimum, likely to support around 50%, probably lower…keep in mind, this is a long-term monthly chart…

SSEC7

Copper Update

Directly related to the plunge in Chinese stocks is a big drop in Copper prices which hit a 6-year low yesterday…investors fear a faster-than-expected retrenchment in the country’s economic growth and weaker demand for the metal…China of course is the world’s top Copper consumer, accounting for roughly 40% of global demand, and its economic health is often directly reflected in the price of metal…

The metal’s rout has been part of a broader sell-off in commodities which stems from long-running worries about Chinese growth…China’s economy has been slowing and new construction has dropped this year while manufacturing has contracted…now the country may feel the impact of a plunging stock market which, if not immediately stemmed, could lead to a decline in consumer confidence and spending…that’s why Chinese authorities are acting so aggressively in trying to prop up the market…

Copper 20-Year Monthly Chart

Technically, this chart is important because it shows how Copper yesterday touched its long-term uptrend support line as well as the bottom of a downsloping channel…it has bounced back this morning…

A break below that key support obviously would be very bearish…so Copper has taken a few hard blows but hasn’t been knocked out yet…over the past 2 decades, bottoms in Copper have occurred at RSI(14) lows at 30% on this long-term monthly chart…

COPPER2(3)

CRB Index Updated Chart

The CRB Index appeared to put in an important bottom in March at 207 when historically extreme RSI(14) conditions also emerged…a critical support band exists between 200 (2009 low) and 220

The Index is off slightly at 215 as of 9:30 am Pacific

CRB3(3)

Today’s Equity Markets

Asia

As mentioned, China’s Shanghai took another hit overnight, losing 220 points to close just 107 points above key support at 3400…the woes in China also spread to Japan where the Nikkei fell 3% to close below the 20000 level…

Europe

European markets rebounded and finished up moderately today after Greek Prime Minister Alexis Tsipras said he had submitted reform proposals to creditors, with “concrete” plans hopefully due in the coming days…George Osborne has delivered Britain’s first truly conservative budget in nearly 20 years, announcing huge welfare cuts offset by a higher minimum wage in a bid to create a “high wage, low tax, lower welfare” economy…growth forecasts were largely unchanged, with a small downward revision to 2015 to 2.4% and upward revisions in 2017 and beyond…

North America

Volatility continues in North American markets…NYSE trading was suspended at 8:32 am Pacific due to technical glitches…the Dow was down more than 200 points at the time…the NASDAQ is functioning normally but down 74 points or nearly 2% as of 9:30 am Pacific…minutes from the last Fed meeting are due shortly…in Toronto, the TSX has shed 200 points while the Venture is down 11 points at 642

Venture 7-Month Daily Chart

Venture support at 654 has given way, barring a dramatic turnaround before day’s end…next support is the December 637 low followed by the 600 level…

CDNX9(5)

Doubleview Capital Corp. (DBV, TSX-V) Update

Doubleview Capital (DBV, TSX-V) was halted prior to this morning’s open, pending news following the company’s recent re-starting of drilling at the Hat Project in the Sheslay district…

Make sure you’re a subscriber to our BMR eAlert system (free sign-up, check the top right corner of our homepage)  eAlert subscribers by tomorrow will receive an important excerpt (raw footage) from our recent video interview with Dr. Razique…this will be very educational in terms of understanding the Hat system and how a world class Gold-Copper porphyry deposit comes together…

bmr video July 2

Skeena Resources Ltd. (SKE, TSX-V) Update 

Not far and on trend from the Sheslay district – about 75 km to the southeast – keep an eye on Ron Netolitzky’s Skeena Resources (SKE, TSX-V) which has mobilized 2 drills to its Spectrum high-grade Gold Project…the company has received a 3-year drilling permit and has started fieldwork and camp construction…the company reported June 29 that drilling was expected to begin within several days…

A total of 10,000 to 12,000 m of drilling in 50 to 60 holes is planned with holes averaging 200 m and varying from 50 to 350 m in depth…the program has been designed to expand the historic resource at the 500 Colour and Central zones, the latter of which includes the QC 1, QC 2, Porphyry 1, and Porphyry 2 structures…other holes will test the East Creek Zone, believed to be a possible extension of the Central Zone, and other outlying targets…a 43-101 resource estimate will be completed by the end of the year…this is property with not only a high-grade Gold system, but strong potential for Cu-Au porphyry deposits as well…

Skeena closed $8.1 million in financings in March, more than originally anticipated, to be directed primarily toward advancing the Spectrum Project…Netolitzky, of course, was recently inducted into the Canadian Mining Hall of Fame for his two past successes in NW B.C. – the Snip and Eskay Creek mines…

SKE is off half a penny at 6 cents as of 9:30 am Pacific…excellent support between 5.5 and 6 cents, with 5.5 cents the bottom of a downsloping channel on this 2-year weekly chart…

SKE2

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

July 7, 2015

BMR Morning Market Musings…

Gold has traded between $1,147 and $1,170 so far today as it hit the $1,150 target area…as of 9:00 am Pacific, bullion is down $14 an ounce at $1,156…if $1,150 support doesn’t hold, bullion will likely test the bottom of a downsloping channel around $1,100…Silver is off 75 cents to $15.00…Copper has tumbled 13 cents to $2.40…Crude Oil is 87 cents lower at $51.66 while the U.S. Dollar Index has surged two-thirds of a point to 96.98

Not that the problems in Greece should be minimized, but the mainstream media’s fixation on Athens is overshadowing more important issues…keep in mind that the population of that country is slightly less than the state of Ohio’s, while its GDP is just a little bit bigger than the economies of Kazakhstan, Algeria and Qatar…investors should be more concerned about what’s happening in China as developments there (slowing economy, troubled equity markets) could have major reverberations across the globe which is why Crude Oil and Copper are suffering this week…Fed policy is likely to be impacted – i.e., no rate hike in 2015…central banks may have to bring out even bigger fire hoses…

The Shanghai Composite (home to many larger, established Chinese companies) and the riskier Shenzhen Composite have both plunged about 30% from their highs due to legitimate concerns that Chinese stocks – thanks in large part to government actions/manipulations – got caught up in a bubble like the NASDAQ did in 1999-2000…what’s worse, perhaps, is how Chinese authorities are now handling the market turmoil…they are looking increasingly desperate but maybe they’ll pull off some magic…

John’s charts correctly called a market top for the Shanghai just above 5000, and flashed a huge warning signal recently when that index fell below an upsloping channel in place since last summer…where the bottom will be is hard to predict but the Shanghai is going lower, and that in turn could also negatively impact the Chinese economy…there seems to be little doubt that Chinese authorities were fueling the stock rally in hopes of creating a broad-based “wealth effect” to give the economy a lift – now things have gone into reverse and they’re scrambling…how effective they’ll be at “fixing” things remains to be seen…

On Saturday, Beijing took its most decisive action yet, suspending initial public offerings and establishing a market-stabilization fund to spur stock purchases…the Chinese central bank also pledged to provide funding to support brokerages’ margin finance operations that allow investors to borrow cash to buy stocks – exactly what investors shouldn’t be doing…the Shanghai index responded with a 2.4% gain on Monday but backed off a little in volatile trading today…

To what extent will China go to prop up its economy and save its equity markets from further declines?…we’ll soon find out…

Margin buying more than doubled this year as the Shanghai surged nearly 2000 points or more than 50%…outstanding margin loans reached a record 2.27 trillion yuan as of June 18, before dropping to 1.91 trillion yuan as of Friday, July 3…margin loans stood at 1.03 trillion yuan at the start of this year…more “unwinding” of margin debt likely needs to occur…

Some Chinese companies have simply decided it’s easier to try and ride out the market storm by asking for a trading halt for supposedly “valid” reasons…can you imagine that happening in North America?…over 700 firms listed in Shanghai and Shenzhen – equivalent to around a quarter of the companies on the 2 exchanges – have issued requests to suspend trading or extend trading halts in the past few weeks…unbelievable…

These aren’t welcome developments at a time when China is trying to further increase its stature in the global economy and expand the use of its currency, increasingly backed by Gold

Crude Oil Update

The problems in China, coupled with the ongoing global Oil glut, caused WTIC to break below an important support band this morning between $52 and $54, though this was intra-day and requires confirmation…the 50-day moving average (SMA) is starting to roll over after climbing since late March – not a positive sign…what this all means is that we could see Crude prices again test the low-to-mid $40‘s (significant stimulus for Oil-importing nations)…WTIC is definitely vulnerable at the moment…notice how the nearly 50% rally failed repeatedly to get through the low $60‘s, just beneath the still-declining 200-day SMA…$52 is a key level the market must hold…

WTIC5(6)

Canada’s “Greece” – Ontario Gets Credit-Rating Downgrade

Ontario’s long-term credit rating has been downgraded by Standard and Poor’s after years of warnings that the province needed to control its spending…

The long-term rating was lowered from AA- to A+, but Ontario’s short-term A-1+ rating was affirmed and its outlook remains stable…that means there will be few short-term costs to the provincial treasury but in the long-run the downgrade could drive up Ontario’s borrowing rate when interest payments already eat up the third largest chunk  of its $132-billion budget (servicing that debt this fiscal year – just the interest on the debt – will cost Ontario a whopping $11.4 billion)…

“Ontario has been slow to fully roll out the spending controls and revenue measures needed to eliminate its structural operating deficit, which has caused its tax-supported debt level to approximately double since fiscal 2008,” S&P’s ratings release states, suggesting the government has not been aggressive enough in cutting spending. It also notes that “Ontario is a sustained and projected under-performer on its budgetary performance and debt burden versus domestic and international peers.”

Today’s Equity Markets

Asia

China’s Shanghai Composite closed 48 points lower overnight at 3728…nearest Fib. and chart support is 3400 (very important area)…Japan’s Nikkei performed well, climbing 264 points or 1.3% to finish at 20377

Europe

European markets closed sharply lower today due to China concerns and the perception that Greece’s negotiations with its creditors will drag on…

Euro Chart Update

The euro is at a critical point after not being able to sustain a breakout (so far at least) on this 1.5-year weekly chart…the next few days could be pivotal…Fib. support is 109.68, almost exactly where the euro is trading at this morning…

EURO5(1)

North America

The Dow has fallen 117 points as of 9:00 am Pacific…in Toronto, the TSX, weighed down by lower commodity prices, is off 119 points while the Venture has tumbled 12 points to 651 and an RSI(2) low extreme…Fission Uranium (FCU, TSX-V) is merging with Denison Mines Corp. (DML, TSX) in a deal that creates a clear-cut leader among the emerging companies operating in Saskatchewan’s Athabasca Basin…under the terms of the deal, Denison will exchange 1.26 of its shares for each Fission share, valuing Fission at $425 million (or $1.10 a share) based on yesterday’s closing prices…Denison and Fission shareholders will each own half the company after the merger, which will be named Denison Energy Corp. with mining tycoon Lukas Lundin as chairman…FCU is up 2 pennies at 99 cents as of 9:00 am Pacific

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

NexGen Energy (NXE, TSX-V) is developing its own world class Uranium asset with a growing high-grade discovery at its Rook 1 Project where 5 rigs are now turning as part of a 25,000-m, $9 million summer drill program that commenced 1 month ago…current overall market weakness is opening new opportunities here with NXE now trading in the mid-70‘s after hitting a recent all-time high of 90 cents (June 29)…exceptional support at 60 cents but whether that kind of a bargain will materialize is very wishful thinking, though certainly possible in the event of a “market panic”…

NXE is unchanged at 75 cents as of 9:00 am Pacific

NXE7

TSX Gold Index Update

The TSX Gold Index is under pressure this morning, trading around 150, but investors may seek safety in strong Gold producers in the coming weeks – especially Canadian-based ones who are benefiting from fresh weakness in the loonie and Crude prices (certain smaller producers like Richmont Mines (RIC, TSX) and Claude Resources (CRJ, TSX), which came out with positive news this morning, are looking particularly attractive)…

Below is an updated 5-year weekly TSX Gold Index chart that shows a bullish rounding bottom pattern along with higher lows in the RSI(14)…this is a favorable set-up for a potentially powerful move to the upside (surprising many) at some point during this 2nd half of 2015

SPTGD14(1)

Note:  John, Terry and Jon do not hold share positions in FCU, DML, NXE, RIC or CRJ.

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