Gold has traded between $1,146 and $1,165 so far today…as of 8:15 am Pacific, bullion is down $13 an ounce at $1,148…Silver has retreated 31 cents at $15.31…Copper is off a penny at $2.62…Crude Oil has slipped 54 cents a barrel to $47.74 while the U.S. Dollar Index continues to surge, up another full point to 99.52 (see updated charts below)…
Investors clearly seem to be preparing for a hawkish Federal Reserve monetary policy statement following the central bank’s meeting next week, which has driven the Dollar Index to a 12-year high and put downward pressure on Gold and commodities…at the very least, a “sell on news” scenario could unfold next week with the Dollar pulling back to cleanse temporarily overbought technical conditions (more on the Dollar Index below and its correlation well with the Venture)…in other words, the volatility leading up to next week’s Fed meeting may indeed create some very attractive buying opportunities for astute investors in select situations…
The head of commodities research at Capital Economics, Julian Jessop, stated in a report yesterday: “To be clear, a stronger dollar, in isolation, will usually undermine commodity prices. But other factors can be more important and the implications for individual commodities may vary considerably.
“While the price of Gold has recently fallen back again, it has held up much better than the surge in the dollar might have implied. This illustrates the scope for individual commodities to decouple at least partially from the U.S. currency, reflecting specific fundamentals of demand and supply,” he added.
Markets seem to be paying little attention, but Russian tanks and heavy military equipment have crossed the Ukrainian border in the last few days in breach of the recent European-brokered ceasefire, according to a senior U.S. State Department official in a report carried by Reuters…
The Bank of Thailand made a surprise move to cut its interest rates today in the latest of numerous central bank moves this year to deflate their currencies and stimulate their economies…
U.S. Dollar Index – A Dominant Market Theme Since Last Summer
The Dollar Index broke out aggressively last Friday from important resistance at the 96 level, thanks to a better-than-expected U.S. jobs report that heightened investors’ expectations for a rate hike from the Fed as early as June or certainly during the second half of 2015…the consensus seems to be that the Fed will remove a barrier to raising short-term interest rates by dropping its promise to be “patient” before acting…we’ll see…
Keep in mind that Fed Chair Janet Yellen, in her recent testimony before Congress, stated that she wanted to be “reasonably confident” inflation will return to 2% before raising rates…the surging greenback is clearly counter-productive to the Fed’s goal of kick-starting inflation…the year-over-year change in the Fed’s favored measure of inflation – the Commerce Department’s personal consumption expenditures price index – has run below the central bank’s 2% target in 52 of the 68 months of the current expansion, including the past 34 consecutive months…the weakness in Oil prices is likely not just temporary, further restraining inflation along with the high dollar, and the greenback at current levels – on speculation the Fed will raise rates – certainly has the potential of slowing down any momentum that could be building in the U.S. economy…
Dollar Index 2.5 Year Weekly Chart
It’s becoming a crowded arena for traders/investors in the Dollar Index with the RSI(14) on this 2.5-year weekly chart remaining in overbought territory (above 70%) for 6 full months…this speeding train will eventually suddenly stop and go into reverse, the only question is when (perhaps when the news is out on the first rate hike)…
The Dollar Index has cleared 1 Fib. resistance level after another following its low of just under 79 in the 2nd quarter of last year, and the next measured Fib. resistance on this longer-term chart is 106…how soon it may get there is anyone’s guess, but strong support now exists at 96 and that’s where the rapidly rising 50-day moving average (SMA) is approaching…
Dollar Index 4-Month Daily Chart
The psychological 100 level for the Dollar Index is akin to the 5000 level for the Nasdaq…this shorter-term chart also shows Fib. resistance immediately underneath 100 at 99.89…RSI(14) is in overbought territory at 80%, so a near-term pullback does appear likely but perhaps not until the magic 100 level is touched…
Dollar Index-Venture Comparative Chart
The reason we focus so much on the Dollar Index is this: It can be argued that the Dollar Index is the single most important influence on the direction, near-term and longer-term, of the Venture Exchange…almost always, they move in opposite directions as demonstrated in this comparative chart…
A strong Dollar Index is negative for the Venture; a declining or stable Dollar Index is positive for the Venture…this pattern goes back to the Venture’s beginnings and has been clearly evident in just the last 6 months given the huge jump in the Dollar Index and the plunge in the Venture from above 1000 to below 700…
Quite simply, the Venture will gain some traction when the Dollar Index slows down…at the moment, the Dollar Index is approaching an important resistance area (100) while the Venture is holding key support…
Today’s Markets
Asia
Main indices in China and Japan were up slightly overnight…
Europe
European markets are generally strong in late trading overseas…the euro plunged to a near 12-year low against the greenback this morning (1.0561) and is now trying to stabilize…
North America
The Dow has gained 38 points as of 8:15 am Pacific…the TSX has added 74 points while the Venture is off a point at 668…
Walker River Resources Corp. (WRR, TSX-V) Update
Softness in the overall markets always creates opportunities, and 1 special situation with exciting near-term potential as drilling gets set to begin is Walker River Resources (WRR, TSX-V)…Walker announced the completion of a financing March 4, which has also now been approved by the Exchange, so the next step is to drill some holes into high-grade targets at the Lapon Canyon Gold Property along the prolific Walker trend in Nevada…
There is no disputing the fact that there is high-grade Gold at Lapon Canyon – the only question is, how much?…in our view, the odds of drilling into impressive mineralization right off the bat have to be considered unusually good, especially given the bulls-eye targets that are apparent…this will help drive speculative interest in Walker through the initial drilling stage…as far as the broader picture is concerned, does Lapon Canyon have “legs” to it – can it truly develop into a significant early-stage discovery?…geologists we’ve spoken to as part of our due diligence believe it can…circumstances have come together to take this project to the next level…
Walker Lane is a structural belt that extends more than 700 km through western Nevada and into California…numerous major Gold and precious metals deposits have formed along this belt including of course the rich Comstock Lode, on the northwest part of this trend, which essentially made mining in Nevada…
As geologist Thomas Schuster pointed out, in an independent report last year on Walker prior to when he became a director of the company due to his excitement over the project, “The structure (faulting and fracturing of rock), alteration (color changes in rock), and quartz flooding at Lapon Canyon looks similar to what is seen at Comstock Lode.”
That’s a significant statement from someone who should know…we have great respect for Schuster who’s a successful independent geologist and mining analyst based out of Vancouver with a broad range of industry contacts…
We did our own due diligence on Walker about a year ago, in part through discussions with President and CEO Michel David, but timing is everything…with the claim package assembled, drill permits now in hand and money in the till to move forward, Walker should be able to generate some near-term excitement as the geological team appears to have an excellent early understanding of the steeply dipping cross fault structures that strike in an east-west direction across this past producer…these faults are heavily sheared and altered with abundant silica, and they vary in width from 60 m to 300 m…
In this Google Earth view, you can see, among other features, the 3 historical adits…typically, in situations like this, the old-timers left a lot behind…given the overall structure of this system, which is more understood and much more extensive than what previous explorers and miners realized, the door is wide open for Walker to intersect potential high-grade mineralization down-dip of the old mine workings…
Google Earth image of alteration zones that are believed to be part of a more extensive cross fault system (from a “Rocks to Riches” report based on a Nov. 2013 site visit by geologist Thomas Schuster). Four of these structures can be seen in the Lapon Canyon and 2 of them can be traced to the base of the Wassuk Range to the west for a strike length of over 4 km, according to the report.
Below is a close-up look at the old workings at the Lapon Canyon Gold mine…we caution that this is an historical report, but notice how a 1985 sample from the end of Tunnel A was reported to assay 20.6 opt Au (Gruenwald, 1994, National Instrument 43–101 report dated Feb. 15, 2004, by Dr. J.H. Montgomery, P.Eng., and N. Barr, BSc) as reported by WRR March 27, 2014…
This makes for a highly prospective initial target zone…
Walker River will clearly be drilling into structures considered extremely favorable for hosting high-grade mineralization…given WRR‘s current market cap of less than $2 million, the risk-reward ratio is attractive, to say the least, and we’ll be following this story closely in the weeks ahead…the market needs some excitement and Walker is in an excellent position to leverage its geological knowledge of Lapon Canyon into a high-grade hit of significance…
WRR is unchanged at 3.5 cents as of 8:15 am Pacific…
Noront Resources Inc. (NOT, TSX-V) Update
Noront Resources (NOT, TSX-V) has performed well recently and this stock historically has been a reliable leading indicator for the Venture, so that’s an encouraging sign that perhaps March will end better than it has started for the Venture…
One can’t look at Noront without considering the state of the Nickel market…prices of Nickel hit their lowest levels in more than a year last week, suggesting it’s just another metal suffering from weaker Chinese demand growth and a strong dollar…but a Wall Street Journal report this morning stated that many traders and analysts think the long decline in Nickel’s price is reaching an end, as China’s drive to produce more of a substitute product – Nickel pig iron (NPI) – shows signs of cracking…NPI is commonly used in China as a cheaper alternative to pure Nickel for producing stainless steel…
Technically, NOT is looking stronger than it has in a while…the downtrend that started last summer ended in mid-December, and the stock is now trying to make a clear break above resistance in the mid-40’s…the overall “Big Picture” pattern suggest that NOT could be in the early stages of a long-term turnaround, and that has to be considered positive for the Venture…
NOT is off a penny at 45 cents as of 8:15 am Pacific…
Note: John and Jon both hold share positions in WRR.
Here are some more reasons to like WRR.
High Grade gold in 600 feet of underground workings
Tunnels can be upgraded at low cost and the Mine put back into production
Immediate Production can be achieved by shipping ore to nearby processing facilities
Mine could be cash positive almost immediately
Permitting in this area is simple
Lapon has significant exploration and expansion potential
Permits are in place.
Comment by Ed — March 11, 2015 @ 8:06 am
Good points, Ed, and volume is one of the best indicators of all, often a precursor to price increases as the pattern in BLO clearly demonstrated…record volume recently in WRR, and very strong accumulation…going into a drill program, with an excellent chance for a high-grade hit, this will gather a lot of steam IMHO with potential for huge gains on a significant hit. Like BLO was in the teens and 20’s, accumulate low or chase at much higher levels later. It’s always better not to have to chase, but many investors often do. Let the Johnnys-come-lately chase WRR.
Comment by Jon - BMR — March 11, 2015 @ 8:21 am
WRR – nice map Jon. The mines that GRE sells to the public out there puts the same maps up for the buyer to see. Like I said, this is a sleeping giant.
Comment by dave — March 11, 2015 @ 8:27 am
WRR – there is only one concern that I have with it and it is just an immediate temporary concern. It has nothing to do with the WRR and its property. The concern I have is that it is an area play to VGD. I wonder how much of that volume earlier was attributed to the VGD play. The way VGD is trading has me concerned if they hit or not and is there a news leak. Would this cause a sell off in WRR and how much. But then again, any sell off would be great for when they start thier project. Time will tell as VGD has to be close to some news of assays.
Comment by dave — March 11, 2015 @ 8:46 am
I believe it was Chris who said that the mining sector wasn’t going to move much and he was staying in none mining stocks. After watching the action in GGI and VGD lately, one has to wonder. I see so many tech and pharma stocks performing well. I do believe anything between .03 and .04 on WRR is safe though. This could be a very huge story with a hit.
Comment by dave — March 11, 2015 @ 8:54 am
Ed, Jon & Dave
Hope everything works out with WRR, but having an unprofessional
phone answering service, in my mind, leaves something to be desired.
As far as the Johnnys-come-lately chansing WRR Jon, that’s precisely
what you want isn’t it ? otherwise the stock don’t go up. Good luck !
Comment by Bert — March 11, 2015 @ 8:56 am
Funny, Bert…I don’t invest in stocks based on the shortness of the greeting on the answering machine. Their message is quick and to the point, perhaps an example for others…they don’t need something long-winded and flashy to impress me and waste my time. Yes, we predict the Johnnys-come-lately will chase WRR – based on a growing awareness of the geology of this play, and the anticipated results. We say that because we’re encouraging our readers to do their DD now and avoid “jumping on the bandwagon” and potentially paying much more for this one as the month progresses. There aren’t a lot of companies drilling these days. When you see the kind of fault structures that exist at Lapon Canyon, and the intense alteration, combined with the known historical information, that’s why geologists are excited about the possibilities here. WRR has a great chance of delivering some very nice intercepts. It doesn’t take a rocket scientist to figure out that interest in this play will ratchet up to a whole new level as soon as the drill is turning…conditions are ideal to score handsomely on this one. The volume the last few weeks speaks to that.
Comment by Jon - BMR — March 11, 2015 @ 10:26 am
Dave, forgive me, but isn’t VGD in Quebec? I don’t get the correlation between WRR and VGD, and how the drill results from Quebec would affect a Nevada play. Still waiting to pull the trigger on some WRR…!!!
Comment by Paul — March 11, 2015 @ 10:45 am
Hi Jon… Just wondering if you plan to re-visit Granada, as part of your next trip to N/W Quebec?
Comment by Bob — March 11, 2015 @ 10:47 am
Jon
I appreciate your reply, but you know, we, including some of
the readers of BMR., have taken a beating & are now stock shy.
If someone on this board asks me a question, i do everything
in my power to get an answer, otherwise by not doing the right
thing, i deserve to be considered unreliable, thus any company
not doing the right thing, that is, not being able to answer
shareholders calls to their satisfaction, must be deemed
unreliable. I am still a shareholder & may be hurting my cause,
but you must realize by now, that i find it very difficult to hold
back. These are not poetic words, nor is it a joke, this is about hard
earned cash & i will do my best to find out if our cash is secure.
Volume was mentioned as being positive for WRR, already Dave is questioning
whether or not WRR has traded on real value, or on the back of VGD.
Anyway, i appreciate what your are doing & your determination to
hang in there, considering the bad market, for such an extended period
of time.
Comment by Bert — March 11, 2015 @ 11:04 am
Level 2 looks pretty good on WRR. Not much at 4.5 cents and then a bit of a wall at 5 and 6 cents and then it opens up quite a bit up to 10 plus cents. I agree Bert that a stock like GBB is dangerous to invest into with its huge amount of shares and the fact that a few years ago it had a big run. But the way I see WRR is the way I saw GBB back when they were a good investment at 5 cents and then it ran to 96 cents I believe within a short amount of time. I see the same potential in WRR now.
I have also been investing about 20 years and have seen a lot of situations and I think that I am much more careful investor now then what I was. ( that’s for sure). I like to watch outstanding shares, money in the bank, volume, and bid and ask sizes for entry into a stock. Other things as well those are the main ones for me.
Comment by Ed — March 11, 2015 @ 11:27 am
Dave, if you’re confident in your stocks, stay with them. You mentioned GGI and WRR…I think both companies are great and I have written them down in my notebook as my “priority stocks” once I decide to re-enter the market. WRR still has a lot of work to do, but they have a good property and have a chance of hitting one out of the park. GGI- this stock should be north of 0.50 with the amount of work done, and, in my opinion, very good results. Momentum and sentiment is just not here at the moment. Will it come back- yes. When is the bigger question.
I am expecting a little pullback in the U.S. dollar; that train is getting crowded and it’s time for some people to get off. That being said, I think we have one major leg up in the dollar before we see a significant correction.
Keep an eye on the EU- I have a gut feeling we will see a capital flight; that money will enter the U.S. market which will push it even higher.
Allied Nevada filing for chapter 11 is what you want to see in this bear market. I don’t like seeing honest investors lose money, but in order for the bull market to come back with force, it needs to get rid of all the deadweight. Too many companies in bad financial shape are still around. And don’t get me started on a lot of the Venture companies….
Comment by chris — March 11, 2015 @ 11:33 am
Gold Bullion to spin out Castle Silver to Takara
2015-03-11 17:42 ET – News Release
Also News Release (C-TKK) Takara Resources Inc (3)
Mr. Frank Basa of Gold Bullion reports
GOLD BULLION ENTERS INTO LOI WITH TAKARA RESOURCES INC. TO SPIN OUT CASTLE SILVER MINES INC.
Gold Bullion Development Corp. has signed a letter of intent (LOI) with Takara Resources Inc. aimed at unlocking the value of the assets held by Gold Bullion’s wholly owned subsidiary, Castle Silver Mines Inc. (CSM). These assets feature the 3,300-hectare Castle Silver Mine Property, a past producer located near the northern Ontario community of Gowganda and 85 km northwest of the historic Cobalt silver mining camp.
Under the terms of the non-binding LOI, which establishes the broad framework of a potential near-term agreement between the two parties, Gold Bullion can elect to sell CSM to Takara for a total of 10,000,000 units of Takara equally staged over a 4-year period (each unit would consist of one common share of Takara and one common share purchase warrant). Gold Bullion has the option of entering into a definitive agreement with Takara within 15 days after a 30-day due diligence period, commencing immediately.
Mr. Frank J. Basa, Gold Bullion President and CEO, commented: “Given the recent important discovery of gold and copper in channel sampling and trenching at the past producing Castle Silver Mine, following our high-grade drill intercept of 188.8 oz/ton silver over 10.1 feet (core length) in CA11-08 in 2011, this is a very strategic time to leverage this asset for the immediate and longer-term benefit of our shareholders. The aim is to produce a win-win scenario for both Gold Bullion and Takara.”
“The development of Castle in a prolific mineral area can be fast-tracked through a separate vehicle with an attractive share structure while we focus on the exciting next stage of the Granada Gold mine,” Basa concluded.
Should Gold Bullion proceed with the definitive agreement, completion of the transaction would be subject to all requisite regulatory approvals relating to the transaction, including TSX Venture Exchange approval.
Castle Silver Mine Property
Distinct trains of strongly altered, sulphide-rich, rusty, angular boulders were discovered late last year on the Castle Property (see Gold Bullion news release December 8, 2014), just a few hundred meters from 2011 drill hole CA11-08 that returned the exceptionally high-grade silver intersection. CSM continues to investigate the source of these mineralized boulders which may represent a separate gold system at Castle overlooked by previous explorers and operators.
The Castle Mine produced over 20 million ounces of silver between 1917 and 1989 when Agnico Eagle, the last operator, closed the mine due to low metal prices. Further information regarding the property can be found in Gold Bullion’s 43-101 Technical Report dated August 15, 2011 filed on SEDAR website
Qualified Person
The technical information in this news release was prepared under the supervision of Mr. Frank J. Basa, P. Eng., Gold Bullion’s President and CEO, who is a member of the Ontario Association of Professional Engineers and a “Qualified Person” in accordance with National Instrument 43-101.
We seek Safe Harbor.
Comment by John BMR — March 11, 2015 @ 2:58 pm
GBB sells castle silver to a 1 cent venture company. Looking for a positive spin here….
Comment by mike — March 11, 2015 @ 3:38 pm
What I find interesting, Mike, is the timing (and not just a 1-cent company but what looks like a shell). Just speculation, but this could be part of some forward thinking strategy on the part of GBB in the event of a potential takeover of GBB…they could be safely tucking away the Castle asset in a separate vehicle for a reason. This news kind of comes out of left field. That’s my best guess.
Comment by Jon - BMR — March 11, 2015 @ 4:09 pm
Thanks Jon, I guess time will tell.
Comment by mike — March 11, 2015 @ 4:43 pm
Yes, the other consideration is property-related; all GBB resources need to be focused on Granada. If they’re convinced they’re onto something at Castle, with these gold and copper showings, spinning out the asset and immediately funding it thru a separate vehicle would make sense.
Comment by Jon - BMR — March 11, 2015 @ 5:08 pm
Just wondering why they would choose to take 4 yrs to move the asset into the new co., if the purpose is to protect it from a takeover.
Comment by Bob — March 11, 2015 @ 5:20 pm
Jon & John,
I’ve got BMR as part of my blog role and I like some of your bigger picture charts.
Some of the stocks though, I would not touch. In fact I’d run away from them.
Take Walker River Resources. Very interesting story that I’ve never heard of, might be a great deposit. I’m intrigued..
BUT….
Who runs this?
Michel Davis
Read on Walker River Resources Site… Management & Directors…
So I go and Google “Michel Davis” and see what this guy has been up to since he just writes “…Mr. David has been a director and officer of several mining exploration companies based in Val d’Or, Quebec. Under his guidance a number of these companies made significant gold discoveries exploring and developing both from surface and underground.”
Why no company names?
Hmmm, yep, the very successful mining company in Val D’Or ***Northern Star Mining**.. complete shit show… Oh, and he’s seems like an upstanding citizen (sarcasm):
Read on Lautorite Site –> NR —> 2011 —> September 7 …
Then I see another winner of his , Trinity Valley Energy (TSXV:TE), nice! (sarcasm)..
Just please Google people and see who’s running things – (“Michel David” + mining):
In mining its not so much the deposit, but who is running it.
Matthew
Comment by Matthew — March 11, 2015 @ 6:36 pm
Paul, WRR has land close to VGD and is an area play. I was wondering if the WRR volume a few weeks ago was due to the area play. ELO and FLX also had high volume. I am still high on WRR because I know the land they are sitting on. The last few days I have mentioned about VGD trading pattern. It is very suspicious and is acting like the news may be not what is expected. I then started to think about other stocks (mining) that are not moving or do not have the volume, DBV being one of them. The mining sector is just not moving, and it is a dead market right now. It does make me wonder that even with steller news on WRR, just how much will get noticed in the market. Hopefully, WRR goes up enough on speculation to make some coin.
Chris, I do own WRR and GGI. But I agree with ya. The mining stocks are flat. The bio-med, social media and pharma’s are rocking the Venture right now.
Comment by dave — March 11, 2015 @ 7:00 pm
Bob, good question but here are the reasons I believe…GBB is closer than ever to the production stage, the LONG Bars Zone has room to grow quite a bit more, M&A activity in the sector has picked up considerably in recent months, and Castle is showing some interesting signs with the Gold and Copper showings…that camp may have been overlooked previously for gold and copper, could be a separate system in addition to the silver…timing is everything in this business…who knows all the reasons why, but those could could be some…
Comment by Jon - BMR — March 12, 2015 @ 3:35 am
Jon, the announcement by GBB serves to protect the Castle project from getting no value in a hostile takeover bid. The deal with Takara gets GBB a very cheap shell that they control. My take is that Frank is aware of either vultures lining up to try to grab GBB cheap or at the very least suitors lining up to enter into a bidding war. Other possibility is that Frank is setting up a landing spot for himself should a large mining company buy GBB. In all cases, this stock is a bargain at 4 cents.
Comment by Ted — March 12, 2015 @ 6:11 am
That’s what makes sense to me, Ted. TKK is getting some interest, could gain some traction.
Comment by Jon - BMR — March 12, 2015 @ 6:20 am