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It was a tough 2nd quarter in the market for Garibaldi Resources (GGI, TSX-V) which tumbled from 15.5 cents at the end of March to a low of 6 cents by late June – an event triggered primarily by indiscriminate fund selling.  Sprott Securities unloaded millions of GGI shares (and its holdings in nearly 100 other companies) as part of its new mandate to invest more in non-resource sectors.

Garibaldi President and CEO Steve Regoci, a former broker, looked at the positive side of the fund liquidation in a wide-ranging interview with BMR.

“With what we have in Mexico and what’s about to unfold in B.C., it’s exciting for us to know that there’s not a huge overhang out there by one particular fund as existed in prior years.  It has all been cleaned up, and we’re going to have a healthier market, a broader-based market with more liquidity.  Importantly, through all of this we’ve kept focused on our projects and our mission which is to consistently move forward and build value, regardless of market conditions.  Investors will see that more clearly as we get back into the news flow cycle,” Regoci stated.  

That cycle got interrupted in Q2 as funds got aggressive and GGI went uncharacteristically quiet on the news front.

The second half of 2015 for GGI should have a much different “tone” than the first 6 months, according to Regoci.  The key, as always for any junior, will be Garibaldi‘s ability to “seize the moment” and execute effectively on the ground and in the market.  That means GGI must reassert its strengths and recapture the rhythm that led to its success in 2014.  We believe it will, which means the sharp pullback since April has very possibly created the kind of opportunity investors had during 2013 when the stock was trading around current levels before a steady climb to a multi-year high of 32 cents.  Few companies have such a quality mix of properties in two favorable jurisdictions, Mexico and British Columbia.

Sheslay District Developments

Regoci’s comment about B.C. (“what’s about to unfold”) refers primarily to developments in the Sheslay district which has heated up considerably, and not just because of record-setting temperatures. 

Given the increasing possibilities for the discovery of multiple world class deposits, the district is attracting much more attention from the Tahltan Nation (a stamp of value) as Doubleview Capital (DBV, TSX-V) aims for a “home run” at its Hat Project while Garibaldi continues to advance toward first-ever drilling at the 284 sq. km Grizzly. 

The district has been explored intermittently for more than half a century, but never before has it been this close to “breaking out on the ground” as Regoci described it.

“As excited as we are about Doubleview’s success, and as much as we are rooting for them and vice-versa, I remind investors that we control more than half of the known Sheslay mineralized corridor with the largest land position and a multitude of high-quality, advanced targets,” stated Regoci. 

“We have financial strength and a proven team with a mandate to produce a discovery hole for our shareholders in the most cost-effective manner possible.  It’s a strategy that has worked for us in Mexico.  We were first on the ground this winter in the Sheslay district.  We’ve expanded our land package, recently adding a very high-grade Gold showing.  We’ve accumulated a lot of data.  As far as we’re concerned, the Grizzly is where this all begins.  Stay tuned.”

Regoci has much to say about the merits of the Grizzly, but in our interview he humbly opted first to give a “tip of the Hat” to Dr. Abdul Razique, Doubleview’s chief geoscientist who appears to have connected important “dots” that could produce some imminent, game-changing drill holes about 1 km northwest of the Lisle Discovery Zone.

Click on the arrow below to view Part 1 of our feature on GGI with Regoci discussing the Sheslay district in general.

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

Gold has been relatively quiet so far today, brushing off Greece’s deepening debt crisis…the yellow metal has traded between $1,162 and $1,170 despite yesterday’s referendum in Greece which resulted in a resounding rejection of lenders’ terms…as of 9:30 am Pacific, bullion is up $1 at $1,167…Silver has added 3 pennies to $15.71…Copper has tumbled 6 cents to $2.54…Crude Oil has slipped $2.85 a barrel to a 3-month low of $54.08 on worries about China and the possibility that more Oil from Iran could hit the market…nuclear talks are to be completed this week…The Wall Street Journal reported that Iran wants to double Oil exports to 2.3 million barrels a day if a deal is reached and sanctions are lifted…the U.S. Dollar Index is relatively unchanged at 96.13…

Greece’s outspoken Finance Minister Yanis Varoufakis resigned today under pressure from his government and his country’s creditors, who identified him as an obstacle to productive talks about a potential new bailout deal…Varoufakis, a far-left economist who irritated euro zone partners with his unconventional style and constant lecturing, had campaigned vigorously for yesterday’s sweeping ‘No’ vote, accusing Greece’s creditors of “terrorism”…that was clearly over-the-top rhetoric – it worked well on the streets of Greece but the country’s euro zone partners decided they had enough of this avowed “erratic Marxist”…

Euro zone leaders will meet at an emergency summit on Greece tomorrow…yesterday’s vote has put Greece in unknown political and economic territory, with a potential exit from the single currency now more possible than ever…last week, it became the first developed nation to default on a major loan from the IMF…banks in Greece will remain closed through at least Wednesday…

Today’s Equity Markets

Asia

China’s Shanghai Composite bucked the regional trend overnight, climbing 89 points or 2.4% to close at 3776…however, that modest gain took a raft of support measures over the weekend (some of them very unusual) that were aimed to calm jittery sentiment which sparked a 30% correction over the past 2 weeks…

This can’t be viewed as good – China’s central bank is indirectly helping investors borrow to buy shares in a market that had already seen a rapid buildup in debt from margin financing…in a statement late yesterday, the top securities regulator said the People’s Bank of China will “provide liquidity assistance” to China Securities Finance Corp., a company owned by the stock regulator…the company will use the money to lend to brokerages, which could then make loans to investors to buy stocks…this is the first time that funds from the central bank will be directed to institutions other than banks, a dramatic move that indicates leaders’ deep concern over a brewing stock market crisis…

Shanghai 2-Year Weekly Chart

The parabolic move in the Shanghai ended at the 5132 Fib. level, and this market has now broken below its upsloping channel in place since last summer…nearest Fib. support is 3400, a level that seems increasingly likely to be tested no matter what Chinese authorities attempt to do…

Europe

No panic in European markets today which declined modestly…the euro is relatively stable, holding just below 1.11…

North America

The Dow opened 150 points lower on a knee-jerk reaction from the vote in Greece…it has overcome that early weakness and is now down just 27 points as of 9:30 am Pacific…

In Toronto, the TSX is off 59 points, though the Gold Index is showing strength…the Venture has slipped 5 points to 666 through the first 3 hours of trading…

Volatility Index (VIX) 3-Year Weekly Chart 

The VIX continues to make higher lows and is showing increased up momentum…this suggests we can expect more volatility in equity markets in the weeks ahead…John has also plotted the S&P 500 on this chart…notice how it’s starting to struggle…the trend points toward a higher VIX and a further slump in the S&P, a dynamic that could be Gold-bullish…

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

As we’ll explore in more detail this week, Doubleview Capital’s (DBV, TSX-V) bold step-out from H-23 and the Lisle Discovery Zone at the Hat Project in the Sheslay district has a strong probability of success given a much greater understanding of the geometry of this growing deposit and the controls on mineralization…

This Gold-rich Copper porphyry system covers a footprint of 3 km x 2 km from the Lisle Zone north and northwest through anomalies “A” (A-1, A-2, & A-3) and “E” (E-1 & E-2)…

The volume potential within those confines is enormous, and that doesn’t include 2 newly discovered target areas north of the “A” and “E” zones, plus anomalies “C”, “D”, and the Hoey and Gossan Creek prospects southeast of the Lisle Zone…

This has “world class” written all over it if DBV can confirm through drilling that the Lisle Zone, where 18 holes have been completed, is indeed just a southeastern expression of a much larger single alkalic system that begins a few kilometers to the northwest – and if grades continue to improve as they have in each round of drilling so far…

Geologists like the odds, considering the following:

• The host rock is exactly the same in each and every anomaly
• Strong correlation of geochem anomalies as well as NW-SE oriented dykes with the linear magnetic anomalies
• Systematic pattern of NW-SE structures and shear zones have provided pathways for mineralizing fluids
• Abundant hydrothermal magnetite points toward a Gold-rich porphyry system
• Similar alteration footprint throughout the Hat Complex
• Early-stage sulphide mineralization is associated with intense calc-potassic alteration and shear zones
• Late-stage sulphides appear as a series of sub-parallel sheeted veins along the contact and shear zones
• Geochem signatures intensify to the north and west of the Lisle Discovery Zone

DBV 2.5-Year Weekly Chart

Technically, Doubleview is looking strong both on the ground and in the market…note the change that occurred in late April when buy pressure (CMF) increased and DBV broke above a downsloping channel in place since last year on this 2.5-year weekly chart…RSI(14) has formed a bullish “W”…the Fib. resistance band between 19 and 23 cents appears ready to be tested…

DBV is up half a penny at 17.5 cents as of 9:30 am Pacific…

Niogold Mining Corp. (NOX, TSX-V) Update

With Sean Roosen and Robert Wares at the helm, it’s hard to believe that Niogold Mining (NOX, TSX-V) won’t remain a leader in this market…drilling continues to uncover high-grade shoots surrounded by lower-grade halos that characterize the wider, mineralized shear zones at Niogold’s 100%-owned Marban deposit in northwest Quebec…this morning, the company announced preliminary leach test results showing average recoveries around 88% to 89%, comparable to Canadian Malartic ore under similar leach times and cyanide consumption levels…

Technically, NOX has performed exceptionally well in turbulent markets since the beginning of last year…look at the steady uptrend in the 2+ yearly chart below…consistently, NOX has found strong support at its rising 200-day moving average (SMA), currently 33 cents…

Excellent possibilities here for the balance of 2015 – likely just a matter of time before NOX overcomes resistance at 44 cents as a more robust resource model for Marban appears to be on track for later this year…

NOX is up a penny at 40 cents as of 9:30 am Pacific…

Silver Short-Term Chart

As expected, Silver has been testing new support at a downtrend line (dotted blue) where it broke out from in mid-May…

Silver is about to enter a traditionally strong period of the year, so it’s reasonable to expect the downtrend line support and chart support in the mid-$15.50‘s to hold…

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…

Several fundamental factors are currently in Silver’s favor…industrial demand for the metal is growing, and global supplies are poised for a deficit of 57.7 million ounces this year, according to Thomson Reuters…

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

TSX Venture Exchange and Gold

It was a particularly light volume week for the Venture given the Canadian and U.S. holidays.  The Index fell 9 points to 671 but remains within a band of strong Fib. support that stretches from 654 to 681.

Markets across the board will be more active this coming week with the potential for increased volatility given the situation in Greece where voters in a critical referendum today have voted a resounding “NO” to the demands of the country’s international lenders, an outcome that could set the country on a collision course with the rest of the euro zone.  It’ll be fascinating to see how this plays out in the political arena and in the markets. 

For the month of June, the Venture fell 21 points or 3% – almost exactly in line with historical averages as you can in the seasonality chart below.  The July-August-September period is typically significantly better than Q2 which is normally the weakest quarter of the year.

While July can be slow, a general turnaround often kicks in by the middle of August, aided by summer exploration results.  There’s no question the junior resource market is in dire need of a success story beyond the one (Uranium) that has been unfolding in the Athabasca Basin.

Venture 7-Month Daily Chart

The Venture’s breakdown below its uptrend line from December is disconcerting, and this increases the possibility of a near-term test of Fib. support at 654 which held in March.  Overall, the Index has been trading in a very narrow range since the beginning of the year but longer-term charts suggest December’s low of 637 was an important cyclical bottom given extreme and record oversold conditions.

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 exist.

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.

Thursday’s weaker than expected U.S. jobs report, which also showed lack of wage inflation, supports the theory that the Fed may further delay a rate hike until the 1st half of next year.  Any sudden surge in the greenback, for whatever reason, will only increase the likelihood of no rate hike until 2016 given the negative economic affects of a high dollar combined with poor fiscal policy in Washington.

Gold

Gold settled lower again last week, losing $6 an ounce to finish at $1,168 after a $26 tumble the previous week.

One encouraging aspect regarding this 2.5-year weekly chart is that RSI(14) has continued to climb a gently sloping uptrend since last fall.

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 and there’s certainly a good chance this level could be tested again in the immediate future.  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.  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.

Silver fell 8 cents last week to close at $15.68 as it continues to hover around strong support.  Copper was unchanged at $2.60.  Crude Oil tumbled $4.13 a barrel to $55.52 (important support is $52 to $54) while the U.S. Dollar Index added three-quarters of a point to 96.19.

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:

If you have not already done so, be sure to subscribe to our free BMR eAlerts as eAlert subscribers only will soon be receiving the next video segment (unedited version) with Doubleview Capital (DBV, TSX-V) chief geoscientist Dr. Abdul Razique.

Click on the icon in the top right corner of our homepage and you’ll be able to sign up in less than 10 seconds.

In that segment, Dr. Razique illustrates why the DBV technical team believes areas A, B (Lisle Zone) and E comprise a single large Gold-rich alkalic Copper porphyry system within a much broader Hat Complex that includes several other highly promising potential new discoveries over a mineralized corridor now in excess of 3 km x 4 km.

Meanwhile, by later today or early tomorrow we expect to post on BMR the first excerpt of an exclusive interview with Garibaldi Resources’ (GGI, TSX-V) President and CEO Steve Regoci.  More from Regoci during the coming week, both on the BMR site and exclusively to BMR eAlert subscribers.

 

 

Gold has traded in a narrow range between $1,165 and $1,171…as of 9:15 am Pacific, bullion is up $2 an ounce at $1,168 on this U.S. holiday (we wish our American friends a safe and happy 4th of July long weekend)…Silver is unchanged at $15.68…Copper has retreated 2 cents to $2.60…Crude Oil has tumbled $1.43 a barrel to $55.50 while the U.S. Dollar Index is off one-tenth of a point at 95.98…despite chaos in Greece, the euro is up slightly at 1.11…

As the 2nd quarter came to an end, and metals prices remain range-bound, Gold and Silver coin sales have seen a surge this past month, up over 100% in June after dismal May sales, according to one bank…

“Sales of Gold coins by the U.S. Mint have now risen by 150% m/m for the 4 weeks of June,” said analysts from Barclays in the bank’s Gold Delta report released this week.  “Total sales have now turned positive for a y/y basis, rising by 20%.”

Zinc Market Flips Into Surplus

The world Zinc market is flipping into surplus for the first time in 3 years…Japan will join China in boosting Zinc exports as domestic demand weakens, worsening a global glut, according to the top Japanese producer of the metal…shipments from Japan may rise 24% to more than 100,000 metric tons this year, the highest since 2013, according to Osamu Saito, general manager of Tokyo-based Mitsui Mining & Smelting Co.’s metals sales group…domestic demand may shrink to a 6-year low, he said…Zinc futures on the London Metal Exchange are down 7% this year as cooling Asian demand has outweighed mine closures elsewhere…

Confusion In Greece Ahead of Sunday Referendum

Supporters of Greece’s bailout terms have taken a razor-thin opinion poll lead over the ‘No’ vote backed by the far left government, 48 hours before a referendum that may determine the country’s future in the euro zone…the poll by the respected ALCO institute, published in the Ethnos newspaper today, put the ‘Yes’ camp at 44.8 vs. 43.4% for the ‘No’ side…but the ‘Yes’ lead was well within the pollster’s 3.1 percentage point margin of error, with 11.8% saying they are still undecided…given a volatile public mood and a string of recent election results that ran counter to opinion poll predictions, the result is in effect completely open…

A ‘Yes’ vote could end (hopefully) the political career of Prime Minister Prime Minister Alexis Tsipras, who has already alienated euro zone leaders…he has urged Greeks to reject the “humiliating” terms offered last week by international creditors in a deal that is no longer on the table, and accused lenders of “blackmail” by withholding credit…

Tsipras, who was a member of the Young Communist Society in the 1980‘s, is a reckless, delusional, unpredictable individual who swayed naive Greece voters in Obama fashion earlier this year with his telegenic looks and promises of “social deliverance”, whatever that means…Greece put the Syriza party into power based on the “personality power” of Tsipras without much thought with regard to his policies or his team and what they stood for (doesn’t that sound just like what happened in Alberta?)…

The outcome of the referendum should help the European Central Bank decide whether to raise its assistance to the Greek banking sector…its emergency funding has helped to keep the banks afloat as capital bled out of them, but has been capped since talks between Greece and its international creditors broke down…

Yanis Varoufakis, the country’s finance minister, said in an interview with Bloomberg yesterday that he thinks the banks will re-open on Tuesday…however, there are not many who share his optimism…the country is in complete disarray at the moment…

Crude Oil Update

Some technical weakness has crept into our 6-month daily WTIC chart with RSI(14) falling below previous support, buy pressure reversing to sell pressure, and -DI crossing above +DI…WTIC is also now trading below its 50-day moving average (SMA) for the first time since early April…

Despite repeated attempts, WTIC was not able to sustain a price above $62…it may try again later this quarter…for now, Fib. support between $52 and $54 is critical and needs to hold…

Fundamentally, traders have reacted negatively to an increase in the U.S. Oil rig count (by 12 to 64) after that number fell for 6 straight months…according to ANZ Bank, U.S. share producers have brought down their break-even cost from $35 to $20 per barrel…

Meanwhile, Goldman Sachs stated this morning, “The current U.S. horizontal and vertical rig count across the Permian, Eagle Ford, Bakken and Niobrara shale plays implies that U.S. Oil production growth will reach 135,000 barrels per day year-on-year by Q4 2015.”

The rising U.S. rig count adds to near record production by OPEC and Russia…

Today’s Equity Markets

Asia

Another bad day for China’s Shanghai Composite, which has broken below its uptrend line from last summer and will now likely test Fib. support around 3400…the Shanghai ended down another 5.8% today…it lost 12.1% this week and has lost more than a quarter of its value since a high on June 12…

After Thursday’s sell-off, the China Securities Regulatory Commission (CSRC) said it would launch an investigation into suspected manipulation of shares and futures, adding it has tracked irregularities in trading and it would transfer any criminal cases to the police…according to data provider FactSet, 125 stocks in the Shanghai Composite and 352 stocks in the Shenzhen Composite were halted today…

Over the past week, Chinese officials have dug deep for measures to stop the equity sell-off…still, the array of attempts – from lifting restrictions on investing with borrowed funds to cutting interest rates – so far have failed to encourage investors to buy…

Europe

European markets were down modestly today ahead of Sunday’s referendum in Greece…

North America

U.S. markets are of course closed to celebrate Independence Day…as a result, it’s a light trading day in Canada with the TSX up 16 points at 14654 while the Venture flat at 671…

S&P 500 Long-Term Weekly Chart

On this U.S. holiday, we take a look at a 20-year weekly chart for the S&P 500 which closed yesterday at 2077…what’s concerning about this chart is the divergence between price and RSI…

RSI has been trending lower while the market has risen to new highs…it’s important to point out, however, that this could continue for a while longer, as it did from 1997 through 2000, so a substantial decline isn’t necessarily imminent – especially with the Fed seemingly reluctant to hike interest rates…but this bull market is clearly aging and may not last the full final term of Obama’s Presidency (trouble probably on the horizon at some point in 2016)…

TSX 6-Month Daily Chart

The TSX has been in a clearly defined downsloping channel since early May, with Fib. resistance at 14700 and 14900…Wednesday’s intra-day low 14482 was the bottom of the downsloping channel…a break below the channel would suggest a test of base support around 14000…

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

At BMR, sometimes our readers say it best…

“Farshad has the biggest balls in the North American mining industry.  Put simply, if this hits like they obviously think it will, these guys will be rock stars at next year’s PDAC and I mean rock stars.”  (Don)

Indeed…in a bold move but one driven by an acute understanding of the Hat’s geological, geophysical and geochemical dynamics, Doubleview has stepped out a whopping 1 km from H-23 and the Lisle Discovery Zone with hole 24 currently being drilled in an area where a strong anomaly (magnetic, chargeability, potassium, Copper and Gold geochemical) has been outlined…

We’ll have much more next week on how the A-1, A-2, A-3, B (Lisle Zone) and E areas at the Hat appear to form a single and very large Gold-rich alkalic porphyry system, as postulated by DBV‘s technical team led by chief geoscientist Dr. Abdul Razique…after his critical involvement over several years with one of the world’s largest porphyry deposits (Reko Diq) with Copper giant Antofagasta, Dr. Razique knows how these systems form and how to prove them up…

At the Hat Complex, there are also areas C, D, F, G and the Hoey and Gossan Creek prospects, so this is truly shaping up to be a world class discovery that may also have a clone at the adjoining Grizzly Property where Garibaldi Resources (GGI, TSX-V) has identified multiple targets with similar signatures…first-ever drilling this summer at the Grizzly could easily result in another discovery given the expanded knowledge of the entire district and the specific signatures that ought to be drilled…

Technically, DBV is showing increased momentum and an imminent challenge of the Fib. resistance band between 19 and 23 cents appears to be in the works…DBV is up a penny at 17 cents as of 9:15 am Pacific…

BitGold Inc. (XAU, TSX-V) Update

BitGold (XAU, TSX-V) responded well yesterday to news of its June performance indicators…this is a volatile play, so it’s important to understand the resistance and support levels as XAU swings from overbought to oversold conditions…

RSI(2) is currently at 95%…keep an eye on the uptrend line (as support, safer entry point) and the Fib. levels…

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

Another dramatic turn in the Sheslay district.

Just weeks after a Tahltan uprising following the best-ever drill results from Doubleview Capital’s (DBV, TSX-V) Hat Project (perception of value in the ground always creates dynamics involving money, politics and power), the Tahltan are at work drilling what is certainly one of the most important holes in B.C. exploration in recent years.  In fact, an independent geologist with no connections to the Sheslay district told us this afternoon, “If this (hole) hits, all of B.C. will hear a booming thunder.”

A 1,000-m step-out from the Lisle Discovery Zone and H-23 is a very bold move on the part of Doubleview.  It’s a decision that reflects a high level of confidence in a deposit model that has impressively come together in recent months under the leadership of Dr. Abdul Razique, wisely recruited by President and CEO Farshad Shirvani early this year.  Dr. Razique is a porphyry specialist who honed his skills with Copper giant Antofagasta, which is also known to be looking closely at potential projects in British Columbia.

Dr. Razique’s excitement over the Hat stems from his belief that this project – at the grassroots stage only two years ago – is a major new Canadian discovery in the making, and he’s determined to prove that with the next few holes.

All the clues are there.  The similar alteration footprint throughout the entire Hat Complex.  The systematic pattern of NW/SE structures and shear zones.  The same host rock at all target areas.  The “ocean of hydrothermal magnetite”.  The strong correlation of geochem anomalies as well as NW-SE oriented dykes with the linear magnetic anomalies.  The list goes on.

Make sure you’re a subscriber to our BMR eAlert system (free sign-up, check the top right corner of our homepage) because in a few days, eAlert subscribers 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.

The Scale Of The Hat  

One of the final paragraphs of today’s news release from Doubleview underscores the scale of what’s unfolding here.

“After reinterpreting geological, geochemical, geophysical and analytical data from an updated database that incorporates all historical data from the 1960′s up to the recent property information, the Doubleview technical team, led by chief geoscientist Dr. Abdul Razique, believes that anomalies A, B (Lisle Zone) and E collectively comprise a single alkalic Gold-rich Copper porphyry system within a much larger Hat Complex that also includes anomalies C, D, and the Hoey and Gossan Creek prospects southeast of the Lisle zone. The studies have also identified two new exploration targets, F and G. Target A2 is the focus of this initial 2015 drilling campaign.”

Wow.  If areas “A”, “B” and “E” comprise a single alkalic Gold-rich Copper-porphyry system, the volume of such a deposit would be huge – at least 2 billion tonnes?  That’s just an unofficial back-of-the-envelope calculation (needed to be proven up, obviously) and of course what’s also critical is grade.  Each round of drilling, however, has delivered better grades at the Hat as the understanding of this system (the geometry of it, the controls on mineralization) grows.

Then there’s also areas “C”, “D”, “F”, “G”, and the Hoey and Gossan Creek prospects.

Potentially MASSIVE is no understatement.

Add to that the scale of the Grizzly as Garibaldi Resources (GGI, TSX-V) prepares for first-ever drilling and another potential major discovery along the Sheslay district’s 30-km long NW-SE mineralized corridor.

No wonder the Tahltan are paying much closer attention.

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

Gold has traded between $1,155 and $1,169 so far today…as of 8:30 am Pacific, bullion is down $4 an ounce at $1,164, recovering after a modestly weaker than expected U.S. jobs report…Silver is up 7 cents at $15.62…Copper has added a penny to $2.62…Crude Oil is up 80 cents at $57.76 while the U.S. Dollar Index has fallen one-third of a point to 96.02…

The first half of 2015 was characterized by small moves in Gold, with prices stuck in a 6% or $70 trading range since March…bullion declined 1% in the first half, the smallest move since 2005…holdings in Gold-backed EFT products dropped for a third day on Tuesday, bringing the 2nd-quarter decline to 1.8%, data compiled by Bloomberg show…

U.S. employers steadily added jobs in June, but wages were flat and the participation rate fell, suggesting pockets of weakness remain in the labor market…non-farm payrolls rose a seasonally adjusted 223,000 in June, the Labor Department reported this morning ahead of tomorrow’s U.S. holiday…that was slightly below expectations…in addition, revisions to the prior months showed weaker job creation this spring than initially estimated…employers added 254,000 jobs in May, down from an initially reported 280,000…April’s gain was revised to only 187,000 from a previously reported 221,000…

Fed rate hike in September?…don’t bet on that with those numbers…meanwhile, average hourly earnings of private-sector workers was unchanged last month at $24.95 while the share of Americans participating in the labor force fell to 62.6% in June from 62.9% in May…that’s the lowest rate since Jimmy Carter was President in 1977…

June marked the 57th consecutive month of U.S. job gains, the longest stretch on record…however, the pace of payroll expansion has slowed…employers have added an average 208,000 jobs a month, down from last year’s monthly average of 260,000…

Futures contracts show that traders now see January as the first Fed meeting when a rate hike is more likely than not, based on CME FedWatch, which tracks expectations using its Fed funds futures contracts…

Oil Update

Saudi Arabia is poised to break records for Oil production this summer, analysts are saying, but domestic energy needs are threatening its ability to ramp up exports…Saudi Arabia has said it produced a near-record 10.3 million barrels a day in May, a mark that industry observers said could increase to 11 million barrels this summer as air-conditioning use increases with temperatures reaching 110 degrees Fahrenheit…the country has the ability to produce 12.3 million barrels a day for 90 days, but it has never pumped that much…Saudi output averaged 9.22 million barrels a day from 2006 to 2014, according to the U.S. Energy Information Administration…most of its oil is exported…interestingly, for the past 3 years Saudi domestic energy demand has been rising by about 8% annually due to an expanding population and new construction and large-scale projects…the kingdom’s population has also increased 17% since 2005, faster than most developed countries…Citigroup has predicted that continued rising domestic demand, if left unchecked, may force Saudi Arabia to start importing Oil by 2030…

Buyers’ Remorse In Alberta

Not surprisingly, the honeymoon for the socialists in Alberta appears to be over already after a series of initial decisions that have hiked taxes and spending, and punished the business sector with added costs – all in the name, of course, of “social justice”…having a convicted criminal as a chief of staff doesn’t help, either…a Mainstreet/Postmedia poll released this morning found that if an election were held immediately, more voters would cast votes for the Wildrose Party than the governing NDP…among all voters, the poll shows the Wildrose in the lead with 40% support, ahead of the NDP with 31%, the PC Party with 24%, the Liberals with 3% and the Alberta Party with 2%…

The Greek Tragedy

A defiant Prime Minister Alexis Tsipras urged Greeks today to reject an international bailout deal, wrecking any prospect of repairing broken relations with EU partners before a referendum on Sunday that may decide Greece’s future in Europe…

This is a reckless, delusional, unpredictable individual whose country deserves to be thrown out of the euro zone just for electing him and his far-left party…less than 24 hours after he wrote a conciliatory letter to creditors asking for a new bailout that would accept many of their terms, this strident socialist abruptly switched back into combative mode in a television address…

Greece was being “blackmailed”, he said, quashing talk that he might delay the vote, call it off or urge Greeks to vote “Yes“…

Keep in mind that Tsipras was a member of the Young Communist Society in the late 1980’s…he swayed naive Greece voters in Obama fashion with his telegenic looks and promises of “social deliverance”, whatever that means, and believes in nationalizing public services (including the banking system, which he argues should be operated for the public good and not for profits)…on the night he was elected in late January, he stated, “Today the Greek people have written history.  The Greek people have given a clear, indisputable mandate for Greece to leave behind austerity.”

Greek voters are almost evenly split heading into a referendum in 3 days that European leaders said could plunge the country into economic darkness…one poll showed that 47% leaned toward a “yes” vote, an endorsement of austerity and the international bailout…the “no” camp, the government’s position rejecting those terms, was 43%…the margin of error in the survey of 1,000 people was 3.1 percentage points…

Gold 34-Year Monthly Chart

What the bears should be concerned about regarding this 34-year monthly chart is that it’s quite possible Gold is on the verge of powerful “Wave 5” move that could carry it to much higher levels over the next few years…the bottom could be anywhere from $1,000 to last November’s $1,130 low…

Gold’s “Wave 1” move took it from the $260’s at the beginning of the decade to a high of just above $1,000 in 2008, a gain of nearly 300%…

“Wave 3” started during the 2008 financial crisis just below $700 an ounce and took Gold to an all-time high of $1,924 in the late summer of 2011, a gain of 183%…

Wave “2” was the pullback in late 2008…”Wave 4” was the correction from 2011 to a potential low of $1,130 early last November…”Wave 5“, according to Elliott theory, could produce a dramatic rise to nearly $3,000 an ounce, though we might not like the world we live in at that point…

A few critical things to keep an eye on in this chart…first, RSI(14) is has been holding a support area and is at an appropriate level for a move up…sell pressure (CMF) is the most intense we’ve seen since 1997 (prior to that, 1982 just months before bullion took off to the upside)…an important clue that Gold is ready to take off will come when the +DI indicator crosses above the -DI…the last bullish crossover occurred in 1999 and that stayed intact until early 2013…

There are better days ahead for Gold but patience is key…

Seasonality Factors Now In Gold’s Favor

Gold has now entered what has been its best quarter of the year going back 2 decades…July, August and September have shown gains each month totaling 4.8%…if we’re going to see a significant rally in bullion, it’s likely to be this quarter – especially if traders perceive that the Fed may not act on an interest rate hike at all this year…

Venture 6-Month Daily Chart

The Venture broke below an uptrend line in place since the December low, which is not what we wanted to see, but very strong support exists between 654 and 664 as we’ve repeatedly pointed out…the Fib. 654 level must hold on a closing basis, and that’s almost 20 points below where the Index is now…RSI(14) has bounced off support at 30%…

Like Gold, the Venture has been trading in a narrow range and that pattern may not change until the last half of this quarter when the market usually breaks in one direction or the other…a key indicator to watch will be the U.S. dollar…

Venture Seasonality Chart

The Venture has survived what historically has been its worst quarter of the year…the April-May-June period has produced an average decline of 6.1%…this year’s Q2 drop was only 1.3%…that’s a significant out-performance…there’s normally a turnaround in August to look forward to…

Today’s Equity Markets

Asia

China’s Shanghai Composite tumbled as much as 6% overnight but rebounded to close down 141 points or 3.5% at 3912…news of easier margin rules did little to lift trading sentiment…Japan’s Nikkei went the opposite direction, adding 193 points to finish at 20523…

Europe

European markets were mixed today with the standoff in Greece causing hesitation among traders…

North America

The Dow is down 26 points as of 8:30 am Pacific following this morning’s jobs report…in Toronto, the TSX has added 39 points while the Venture is 2 points higher at 673…

Cannabix Technologies Inc. (BLO, CSE) Update

This 6-month daily chart for Cannabix Technologies (BLO, CSE) illustrates why it’s so important to keep a close eye on the “technicals” as the principals of TA apply to any stocks with volume…

“Decision time” for BLO came in late May and what occurred was a breakdown as opposed to a breakout…first, BLO fell below a symmetrical triangle, and then it broke support at 30 cents…we have little doubt that BLO will recover strongly, as the company makes further progress with its marijuana breathalyzer prototype now advancing to the beta stage…technically, the turnaround will need some time to develop as was the case last year after the stock crashed from the low 30‘s to a nickel…this is a volatile play and the best time to accumulate, of course, has been during periods of weakness such as now…

Strong support exists in the mid-teens with near-term resistance around 20 cents (CDN) at the bottom of the downsloping channel (this chart is in U.S. dollars, based on the OTC listing)…an important intra-day reversal took place June 24 at 13 cents…

BLO is off a penny at 18.5 cents on the CSE through the first 2 hours of trading today…

Sillitoe 1990 Report on Gold-Rich Porphyry Deposits

As one of our readers requested yesterday, below is a link to Sillitoe’s 1990 report on Gold-rich porphyry deposits that makes for good bedtime reading…there’s helpful information in here with regard to what’s coming together in the Sheslay district…

Sillitoe-2000-Gold-Rich-Porphyry-Deposits

Canadian markets are closed today due to Canada Day.  Regular BMR Musings resumes tomorrow, the final trading day of the week in the U.S. which of course celebrates Independence Day Friday.

Happy Canada Day to our many Canadian readers!  This great nation is celebrating its 148th birthday today. 

Prime Minister Stephen Harper says Canadians are “blessed to live in the best country in the world.”  In his annual statement marking Canada Day, he emphasized that good fortune is not an accident – it’s the result of visionary leaders, courageous men and women in uniform, waves of industrious immigrants, and decorated athletes who unite us and Canada’s families.

God bless Canada, and may you have a safe and enjoyable Canada Day!