Gold has traded in a range of $1,521 to $1,534 so far today…as of 8:20 am Pacific, the yellow metal is down $2 an ounce at $1,529…Silver is off its lows but down 23 cents to $35.58…crude oil, which took a pounding yesterday, is now up 25 cents a barrel to $95.06…the U.S. Dollar Index continues to rally and is up another one-quarter of a point at the moment to 75.74…the greenback, fueled by debt problems in the euro zone, has a good chance of hitting the high 70’s on the Dollar Index according to John’s latest chart…what’s interesting over the last few days is that we haven’t seen the usual inverse relationship between the Dollar and Gold…
Greek Prime Minister George Papandreou was planning to form a new cabinet today and seek a vote of confidence from his fractious Socialist party to try to push through an austerity package and avoid default…he’s facing an uphill battle, however, and may not be able to forge a political consensus…Greece must pass a new round of tax increases and spending cuts to receive a new EU/IMF bailout and a $17 billion aid tranche in order to pay back sovereign debt that matures at the end of next month…interest is growing in one-year credit default swaps that would give investors large returns if indeed there is a hard default on the part of Greece, an outcome that European policymakers will try to avoid at all costs even it means delaying the inevitable…some interesting words from Bank of Canada Governor Mark Carney…without using the word “bubble” to describe a housing market where prices are now 13% above their pre-recession peaks, and without saying the Bank of Canada will take specific measures to cool the red-hot sector, Carney has left little doubt that he’s concerned…“The risk is that expectations become extrapolative, prompting the classic market emotions of fear and greed – greed among speculators and investors, and fear among households that getting a foot on the property ladder is a now-or-never proposition,” he said in a speech to the Vancouver Board of Trade…tellingly, Carney noted that in Vancouver, the country’s priciest market, as in other “globalized” markets like Sydney and Hong Kong, Asian wealth is coming in as investors diversify and look for hard assets, fueling valuations that in some cases are “extreme”…his warning about the housing market comes a day after a report from the Certified General Accountants Association of Canada showed household debt has hit a troubling $1.5-trillion, sparking new fears that the heavy burden on Canadian consumers could curtail spending and hurt the economy…if household debt were distributed evenly across all Canadians, the report said, a two-child household would owe an estimated $176,461, including mortgage costs…the CDNX is off 8 points at 1916…we’re expecting a very strong summer for Gold Bullion Development (GBB, TSX-V), so it’s pullback over the last two days to the 40-cent area presents a clear opportunity in our view…that’s only a nickel above the March and May lows and it makes no fundamental sense that GBB could dip below those levels considering the multi-million ounce potential of the LONG Bars Zone…at 40 cents, GBB’s market cap is only $67 million with an initial 43-101 resource estimate expected sometime during this upcoming quarter…many more assay results are still pending from GBB…more solid numbers from the northern part of the Eastern Extension and a “hit” in LONG Bars Zone 2 at the Aukeko target could send GBB flying through resistance in the mid-50’s…as of 8:20 am Pacific, GBB is unchanged at 39.5 cents…interesting results were reported this morning from Adventure Gold (AGE, TSX-V) and Mazorro Resources Inc. (MZO, TSX-V) from the Lapaska Gold Property 20 kilometres east of Val d’Or…MZO has an option to earn a 70% interest in the project…the property is located along the Cadillac-Larder Lake Gold Break and the first two holes of shallow returned solid results at shallow depths…LP-11-16 returned an interval of 1 g/t Au over 103.4 metres (from 45.3 to 148.7 metres), including 10.3 g/t Au over 3.8 metres, while LP-11-17 returned 1.2 g/t Au over a 156.9-metre interval (25.2 to 182.1 metres)… LP-11-16 included a Gold halo of 564.1 metres grading 0.3 g/t while LP-11-17 featured a Gold halo of 245.5 metres grading 0.8 g/t, providing evidence of a potentially strong Gold system…Mazorro is up a penny at 23 cents while AGE is 2 cents higher at 54 cents…we remain very bullish on the prospects for Seafield Resources (SFF, TSX-V) in Colombia but there are a couple of other companies exploring in that country whose share prices have dropped to quite attractive levels in our view…perform your own due diligence…Batero Gold (BAT, TSX-V) is trading at support at $2.80, less than half its value in early March, while Colombian Mines (CMJ-TSX-V) has to be one of the most technically oversold stocks on the Venture at the moment if you look at its chart…CMJ, which is well-financed and has extensive holdings in Colombia, has had only two “up” days over the last 25 sessions since trading as high as 80 cents May 10…it’s currently unchanged at 54 cents where there is support going back to late 2009…
Hey Jon
Thanks for the ‘Mining Explained’ book recommendation – certainly helping me and would recommend to anyone who is not from a geology background.
Comment by Hugh — June 16, 2011 @ 10:13 am
Hi Jon
As a GBB shareholder, I share your optimism, but the market sees it differently at present. Technically,
we have lost the “cup and handle”, the 50 day is weakening, and this time last year the stock was higher
by .20c and trading much higher volumes.I’m just hoping the market is incorrect, and that the 43-101 will
bring renewed interest…
Comment by Bob — June 16, 2011 @ 10:34 am
You’re right about the technicals at the moment but we have a situation where the fundamentals are strong, the overall market is very weak but likely nearing a bottom, so I’m a buyer…this reminds me of early last July with GBB when the CDNX was bottoming out just below the 300-day SMA and GBB had dropped some 40% over a short period of time….we’re very close to a bottom in this market IMHO or at the very least a significant rebound off support near the 300-day…….
Comment by Jon - BMR — June 16, 2011 @ 11:01 am
With Bill Gross Tweeting QE to infinity you may well be right although I remain on the side of caution
Comment by Hugh — June 16, 2011 @ 11:36 am
Not a good news release from VGD. Assays still pending but so far the results indicate that Joutel is the only hope for VGD. VAX had a news release the other day and that too was poor and drove the sp down significantly. Only 6.8m in the bank so they will have to do a financing for Joutel – the outlook for VGD share price is surely bleak? Please tell me I’m wrong.
Comment by Andrew — June 16, 2011 @ 12:21 pm
I am still very positive in GBB as this will be an unique opportunity to scoop more below 40 cents level. I don’t see the issue at this low volume as some impatient investors start to sell high and buy low. You can still make money out of it as long as you are selling them at the right price. I sold some at 46 cents and bought back at 39.5 cents. In fact, I increase my share portfolio by 15%. For example: 40,000 shares and now becme 46,000 shares with almost no change in total stock value.
Comment by Theodore — June 16, 2011 @ 12:53 pm
Andrew, you’re wrong…………Joutel is a superb project and the interview with Dallaire, which we hope to post by tonight, will lay out that case……also, they don’t need to do a financing for Joutel – the money is there now to do what needs to be done through the rest of the year……..I thought the news was very good in the sense it’s great their focus is going to be on Joutel – former producer, 10 x the size of the Granada land package and with 3 past producing zones on it………
Comment by Jon - BMR — June 16, 2011 @ 1:54 pm
Phew! Thanks Jon – I’ll purchase the book that Hugh mentioned. I thought the grades were good but the widths were all small. Appreciate your quick response and will look forward to the interview.
Comment by Andrew — June 16, 2011 @ 2:17 pm
Forget about Silidor, Andrew. The story with VGD is Joutel – it is an absolute jewel. We’ve stated all along it’s their flagship project, and it’s great to see they’re now starting to tackle it in a major way. Joutel is not only exciting from a geological perspective, but it has all the ingredients of being just a great story with a lot of flair – I suspect they are going to do a major promo push on Joutel…….
Comment by Jon - BMR — June 16, 2011 @ 2:52 pm
BMR-Jon
when you speak of VGD doing a major promo push on Joutel, do you think investors are going to buy in based on the potential?, it seems like the only stocks that are holding up are the ones that have already found gold in the ground, or are close to a 43-101,I doubt stocks like CQX GQC will ever get back to the price that I bought them at, I am considering just taking the loss and putting what is left into GBB, or GCU. I think after what has happened with these juniors that alot of investors are going to be much more cautious going forward, alot of investors are down 50-60 percent. thanks for all the info you guys provide, I have learned alot, unfortunately it has been a very expensive lesson so far.
Comment by GREG H — June 16, 2011 @ 8:47 pm
Jon
another question, why wouldn’t agnico eagle just explore the joutel property themselves, especially if it has such great potential for a major discovery?
Comment by GREG H — June 16, 2011 @ 8:49 pm
Greg, investors are often too caught up in what’s happening today and just don’t see the bigger long-term picture. Everyone’s negative right now regarding the CDNX which is down more than 20% from the March high. But that’s a normal major correction, and if you look back over the last decade – the 300-day SMA has always provided rock-solid support during a bull market. Important market bottoms have always occurred when the Index has hit the 300-day or fallen slightly below. My point is there are better days ahead, and companies with great properties like VGD, CQX, GQC and others are going to do extremely well. Patience is the key. There are of course always risks in this game but even though the share prices have come down, the fundamentals for VGD, CQX, GQC and others we follow closely have remained strong or have even improved. Market sentiment is all that has changed and that’s always a temporary thing.
Comment by Jon - BMR — June 16, 2011 @ 9:16 pm
Good question….first, Agnico-Eagle is busy. They have a lot on their plate. Their primary focus is being a producer, not an explorer. Joutel is a huge land package – some 500 square miles. Second, they hold a great deal of respect for Sansfacon. He knows his stuff. They believe if anyone can bring value out of Joutel, it’s him. Third, it’s of course a joint-venture and both parties win if something big is found at Joutel and it becomes a producer again. VGD does the heavy lifting right now with its exploration work, AEM steps in later to bring it into production (if an economic deposit is discovered) for a majority interest.
Comment by Jon - BMR — June 16, 2011 @ 9:23 pm
Thanks Jon
Comment by GREG H — June 16, 2011 @ 10:15 pm