It was a horrible month of June for the CDNX which lost 190 points or a whopping 9.1% after finishing May at 2094. That was the worst monthly performance for the CDNX since November 2008 when the Index plunged 13% (the CDNX fell 8.7% in May of last year).
So what can we expect in July? While some weakness is likely in Gold (it could test $1,425 as John detailed earlier this week), a trend reversal we expect to see develop this month is an outperformance of Gold by the CDNX. So don’t be alarmed by Gold’s drop this morning – it’s down $20 an ounce to $1,480 as of 10:05 am Pacific. Seasonally, this is a traditionally weak period for Gold with the yellow metal typically firming up by sometime in August. Physical demand is very strong which will help support prices during a period of short-term technical weakness.
Are the summer “doldrums” upon us? Not necessarily. Intense exploration in the Yukon, northern B.C., Quebec, the western U.S. and elsewhere around the globe should produce some very positive results over the summer – possibly even a major discovery – and provide the CDNX with important support and the lift it needs. While a drop to the 1800 area can’t be ruled out, we see a good chance for a potentially robust market from mid-August through the balance of the year, a pattern we’ve seen often in the CDNX over the past decade. The last half of the year likely won’t be as robust as the July to December period last year but should be strong enough to produce some decent gains and get the Index back within shouting distance at least of its 2010 close just below 2300.
John’s updated CDNX chart below is certainly reason for encouragement.
Threegold Phase 1 Drill Results
AD 09-01 – 1.5 m @ 0.22 g/t au
AD 09-02 – 3.8 m @ 0.26 g/t au
AD 09-04 – 2.1 m @ 0.41 g/t au
AD 09-05 – 29 m @ 0.23 g/t au
AD 09-06 – 3.5 m @ 0.31 g/t au
AD 09-07 – 2.0 m @ 0.27 g/t au
AD 09-08 – 5.7 m @ 0.44 g/t au
AD 09-09 – 30 m @ 0.24 g/t au
AD 09-11 – 14 m @ 0.2 g/t au
AD 09-13 – 3.4 m @ 0.21 g.t au
Based on these results testing shallow depths of the Adanac property the company did not manage to log one drill hole above ½ a gram per tonne gold.
Gold Bullion Phase 1 Drill Results
GR 09-01 – 62 m @ 0.56 g/t au
GR 09-02 – 32 m @ 1.75 g/t au
GR 09-03 – 52 m @ 1.78 g/t au
GR 09-04 – 14 m @ 1.7 g/t au
GR 09-05 – 55 m @ 1.3 g/t au
GR 09-06 – 14 m @ 0.2 g/t au
GR 09-07 – 17 m @ 1.3 g/t au
GR-09-08 – 51 m @ 0.93 g/t au
GR 10-17 – 99 m @ 0.95 g/t au
Based on these results testing medium depths at the Granada property the company hit mineralization in every hole shown by consistent drill results over 1 gram per tonne gold.
Sean Roosen, CEO of Osisko Mining knows the Cadillac Trend well as does he economic gold values in drill results. The decision to option the Adanac property from Threegold Resources could not possibly be based on drill results as the Granada property not only has much higher grades but these grades are over much larger intervals than that of Threegolds’.
The reason I believe Osisko has moved in next door to Gold Bullion is due to a potential 10 km strike length being confirmed from the Preliminary Block Model on the Granada property to the Adanac property which has already shown a 1.8 km gold trend despite mild gold values. Gold Bullion is just currently testing the Aukeko Shaft 2 km east of their Preliminary Block Model which would be the third confirmation of gold values along the 10 X 2 km gold trend. What’s most interesting about Osisko’s May 26th news released optioning the Adanac property from Threegold is that it came only two weeks after Gold Bullion’s statement that they would be testing Aukeko to 450 metres vertical. All of the outstanding results from Threegold’s Phase One drill program were reported as of February 2010 and there has been no work on the property since therefore it is confusing to say the least as to what catalyst of THG’s caused Osisko so suddenly on the property. What did they see now that they didn’t see over a year ago when no work has been done on the property? Osisko likely saw another low grade bulk tonnage gold deposit on strike with them emerging at Granada and wanted a foot in the door in the area before another major began sniffing around or made a move, especially as junior mining shares were being pummelled risking M & A hostility.
Comment by Taylor — July 2, 2011 @ 7:50 pm
Taylor, you’re most likely right. I think by the end of the year, there will be purchase transactions on some junior companies. Indeed, companies that produce gold accumulate huge profits on their sale will position themselves on some junior companies that have demonstrated a measured and indicated resources.
Comment by Sylvain — July 3, 2011 @ 5:33 pm
Nothing but EXCITING times ahead for GBB and some of the other mining juniours, come this fall.
Hang on for the ride 🙂
Comment by alec — July 4, 2011 @ 12:45 pm
Dear Readers:
Exciting news ahead for CUI. better now to grab then regret.
Comment by Eric Benson — July 5, 2011 @ 5:56 am
Hello Eric, Isn’t the only news anticipated from CUI that they have commended their drill programme? That would be unlikely to have anything other than a brief affect on the sp – probably giving an opportunity to sell for those that bought around .135 and then buy back when the sp drops?
Comment by Andrew — July 5, 2011 @ 6:28 am
commenced not “commended” – sorry 🙂
Comment by Andrew — July 5, 2011 @ 6:55 am
Eric, your psychic – CUI just made a nr: 3 holes completed at Sisu river. Fieldwork at Sekenke to identify targets. Not sure that this will impact the sp by much but hoping it does.
Comment by Andrew — July 5, 2011 @ 7:22 am