Gold has traded between $1,082 and $1,093 so far today…as of 9:30 am Pacific, bullion is off $3 an ounce at $1,085…Silver is flat at $14.57…Copper is down a penny at $2.35…Crude Oil is 54 cents lower at $45.20 while the U.S. Dollar Index has added one-tenth of a point to 98.10…the greenback gained momentum yesterday after Federal Reserve Bank of Atlanta President Dennis Lockhart told the Wall Street Journal that it was “appropriate” to see a September interest rate hike, that there’s a “high bar right now to not acting”.
Precious metals consultancy Metals Focus estimates that as much as half of annual new mined production in their survey will be uneconomic at current prices…as Mineweb’s Lawrence Williams pointed out in an article this morning (www.mineweb.com), “Presumably extrapolating this figure across total global Gold output would thereby suggest that as much as 800 tonnes of production could currently be running at a loss. But the consultancy notes, this doesn’t mean that any of the production will fall away through closures and cutbacks, not until the Gold price downturn is more prolonged or more severe. It notes that there may be substantial costs involved in closing an operating mine down, which may mean it is less costly to keep the mine producing at some level – perhaps high grading where this is an option (which may actually increase output).”
Disappointing Private U.S. Jobs Report Offset By ISM Report Showing Service Sector Strength
American companies added fewer jobs than expected last month, according to the latest ADP private payrolls report, dragged down by the struggling energy and non-vehicle manufacturing industries…ADP said today that U.S. private employers hired 185,000 workers in July, below the 215,000 analysts had expected and lower than the downwardly revised additions of 229,000 for June…the Labor Department will announce non-farm payrolls for July on Friday…economists have been expecting the Labor Department’s figures will show jobs growth of 215,000, fewer than the 223,000 positions added in June…
However, there was some positive economic news this morning – the pace of growth in the U.S. service sector surged in July to its best level in a decade, led by sharp increases in business activity, employment and new orders…the Institute for Supply Management said its services sector index rose to 60.3, its highest reading since August 2005, a sign of confidence that the non-manufacturing sector, which accounts for more than two-thirds of U.S. economic activity, was growing swiftly…expectations were for a reading of 56.2, according to a Reuters poll…
Russia Reaches For Arctic Territory & Resources
Russia has submitted its bid for vast territories in the Arctic to the United Nations, the Foreign Ministry says, but there’s no truth to the rumor that Chad Day was consulting with Vladimir Putin on the matter…the ministry said in a statement that Russia is claiming 1.2 million square km of Arctic sea shelf extending more than 350 nautical miles about 650 km from the shore…
Russia, the U.S., Canada, Denmark and Norway have all been trying to assert jurisdiction over parts of the Arctic, which is believed to hold up to a quarter of the planet’s undiscovered Oil and gas…rivalry for Arctic resources has intensified as shrinking polar ice is opening new opportunities for exploration…
Canada has not yet wrapped up its final claim to areas of the Arctic Ocean now considered international waters, although speculation is that Ottawa’s submission will include 1.7 million sq. km of ocean, including the North Pole…
Canadian Dollar Update
Down she goes…as predicted, the Canadian dollar is gradually working its way toward the 70-cent area…it has now broken below a long-term support band between 78 and 80 cents as shown on this 20-year monthly chart, so that’s now the new resistance on any rallies…there is a strong correlation between the loonie and the Venture – the best time to go long on the Venture is when the dollar has found a bottom, like it did in 2002–2003 and again during the 2008-early 2009 financial crisis…
SPDR Gold Trust Shares (SPDR, NYSE) Chart
As reported yesterday, Gold held in trust by SPDR fell 38.74 tonnes to end July at 672.7 tonnes…the ETF’s Gold reserves are now at their lowest level since March 2008…July was also the worst month for investor redemptions in GLD since December 2014 when its reserves fell by almost 45 tonnes…that month, of course, was followed by a strong rebound in Gold prices…
This 12-year monthly chart offers hope for a near-term rally…SPDR has hit the bottom of a downsloping channel, while RSI(14) has also touched previous support at 35%…the possibility of a significant rally in SPDR is also supported by Gold’s highly favorable COT structure at the moment as commercial traders have trimmed short positions to extreme lows…
Today’s Equity Markets
Asia
China’s Shanghai Composite closed down amid a broad-based selloff, even as data showed activity in China’s services sector expanded at its fastest pace in 11 months in July…the Caixin/Markit Purchasing Managers’ Index (PMI) rose to 53.8 from June’s reading of 51.8, hitting the highest level since August 2014 and marking the 12th straight month of expansion…
The staff of the International Monetary Fund is recommending that China wait until at least October 2016 to join an exclusive club of the world’s top currencies…China wants its currency, the yuan, included in a basket of currencies used in IMF operations along with the U.S. dollar, euro, British pound and Japanese yen…it was hoping the yuan could be added this January 1…the IMF board will consider later this month the staff’s recommendation for a delay until October 1 of next year…
Europe
European markets were up sharply today following a slew of positive data and earnings…
North America
The Dow is up 9 points as of 9:30 am Pacific…in Toronto, the TSX is 47 points higher while the Venture is off 2 points at 588…the Index is struggling to get above its 10-day moving average (SMA) which it needs to do in order to show signs of a near-term turnaround or rally…
Pure Energy Minerals (PE, TSX-V) Update
The Lithium space is attractive to many investors at the moment, and another factor in Pure Energy Minerals’ (PE, TSX-V) is that is has a “tech” component to it…as announced yesterday, a wholly-owned subsidiary of PE is now collaborating with SRI International, a research and innovation centre, to develop novel cost-effective methods for Lithium extraction from geothermal brines…funded by the U.S. Department of Energy (DOE), SRI is teaming with Pure Energy’s subsidiary to develop and validate a new generation of highly selective ion exchange resins to separate metals from geothermal fluids more efficiently and at lower cost than current processes…
On July 28, Pure Energy announced a maiden resource estimate for its Clayton Valley South Lithium Brine Project…Clayton Valley is strategically located halfway between Reno and Las Vegas in one of the oldest mining areas in Nevada…
The inferred resource estimate for the project outlines 816,000 metric tonnes of Lithium Carbonate Equivalent (LCE), present as “easily-extractible brine in 2 aquifers (Main Ash Aquifer and Lower Aquifer System),” the company stated…its 8,000 acres of claims comprise 3 contiguous blocks and overlie a deep basin structure…significantly, the zones that host the brines appear to extend much deeper into the basin and extend laterally throughout the entire claim area…
The next stages of drilling will test the depth and potential extension of the deposit as well as new zones recently discovered from Pure Energy’s seismic reflection survey…
We initially introduced Pure Energy to our readers last month when it was trading in the mid-20‘s, based on favorable chart patterns and our bullishness on the Lithium sector…we would view any minor pullback as an opportunity here with strong new support in the high 30’s or the rising 10-day SMA…PE has all the ingredients to attract a wide following through the balance of the summer…
PE is off 2 cents at 43 cents as of 9:30 am Pacific…
Equitas Resources Corp. (EQT, TSX-V) Update
Equitas Resources’ (EQT, TSX-V) continues to test chart resistance at 10 cents…the uptrend line from late last year has remained intact which is particularly impressive given the recent weakness in the Venture…
Last Thursday the company announced the start of a ground exploration program that will include mapping and prospecting, a large loop (approx. 30 line km) EM survey, followed by 4,000 m of diamond drilling once final targets have been defined…
As we’ve stated previously, while there are never any guarantees with a project like this, it’s nonetheless highly interesting and should generate considerable speculative interest, especially when drilling actually starts…major Nickel camps such as Sudbury, Thompson, Norilsk and Raglan comprise clusters of deposits…to date, Voisey’s Bay stands alone…the question is, where is the rest of the system?…or is there a “rest of the system”?…
In a regional context, magnetic signatures and structural interpretations indicate Garland shares the same style and scale of structural deformation documented at Voisey’s Bay…the east-west strike of the anomalies is notable at Garland…the trend of the anomalies, up to 1 km or greater, lend further encouragement for the discovery of significant mineralized systems…
We look forward to further exploring the geological possibilities at Garland in the weeks ahead…
Technically, an overall uptrend in EQT remains firmly intact and there’s every reason to believe the strong support that’s very evident should continue to hold with a confirmed breakout above chart resistance seemingly inevitable…
Skeena Resources Ltd. (SKE, TSX-V) Update
We initially brought Skeena Resources (SKE, TSX-V) to our readers’ attention in late June when it was trading at 6.5 cents and preparing to begin a diamond drilling program at its very prospective high-grade Spectrum Gold Property southeast of the Sheslay district…late last week, after receiving some attention at a conference in Vancouver, Skeena surged as high as 12.5 cents (chart resistance) but has since retraced to new support at 8.5 cents…it’s up half a penny at 9 cents as of 9:30 am Pacific…
As of July 20, Skeena had completed 2,200 m of a planned 10,000 to 12,000 m summer drill program (50 to 60 holes) 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 is anticipated to be completed by the end of the year…this is a 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…Chairman Ron Netolitzky, of course, was recently inducted into the Canadian Mining Hall of Fame for his 2 past successes in NW B.C. – the Snip and Eskay Creek mines…
In Netolitzky’s own words, “In our business, you make it taking shots”.
PyroGenesis Canada Inc. (PYR, TSX-V) Update
A company we’ve been watching closely since it was trading in the low-to-mid 30’s has been PyroGenesis Canada (PYR,TSX-V)…PYR is clearly worthy of our readers’ due diligence, and the stock has significantly outperformed the overall market in 2015 and has been immune to the recent plunge…
The fact that PyroGenesis has become the partner of choice for the U.S. Department of Defense and other multinationals as their technology development resource for waste processing and waste-to-energy applications should be enough to grab one’s attention…
Quite simply, this company is the world leader in the design, development, manufacturing and commercialization of advanced plasma processes…it provides engineering and manufacturing expertise, cutting-edge contract research, as well as turnkey process equipment packages to the defense, metallurgical, mining, advanced materials, Oil & gas, and environmental industries…the PyroGenesis team of experienced engineers, scientists and technicians works out of a Montreal office in a 3,800 sq. m manufacturing facility…
Below is a 2-year weekly chart for PYR which has recently been flirting with a breakout above the Fib. 50% resistance level (39 cents)…PYR has been trading within a downsloping flag since the beginning of 2014, and a challenge of the top of that flag could be in the works during Q3 or Q4…as always, perform your own due diligence…
PYR is off a penny at 39 cents as of 9:30 am Pacific…
Another One Bites The Dust
Certain companies in the production stage can sometimes present a greater risk than when they were simply exploring for resources…the latest example is Banks Island Gold (BOZ, TSX-V) which took its underground mine south of Prince Rupert into production without a feasibility study…yesterday, the company announced that it has suspended all operations at its Yellow Giant mine as of July 31, and will put the mine into care and maintenance until permitting and regulatory issues at the project are resolved and the company has sufficient working capital to recommence operations…Yellow Giant provided direct employment for over 100 people and indirect employment for many more…
It’s possible Banks could suffer a similar fate as another B.C. company, Huldra Silver, which is now operating as Nicola Mining (NIM) after a major debt restructuring…
So when you see a junior promoting itself as a “mine development company”, be careful – especially when there’s no feasibility study to back it up…
Note: John holds a share position in EQT.
How long can GGI go on with no update from Mexico? If there won’t be any drilling this year at the Grizzly, why not go all guns a blazing in Mexico? They have great properties down there and can take advantage while waiting for the Sheslay mess to be resolved. Who knows how long that will take.
PS: EQT looking good today. Imagine what will happen will the drill starts turning. And imagine what will happen if they hit nickel bearing sulfides.
Comment by Dan — August 5, 2015 @ 3:56 pm
EQT – Kyler Hardy interview with Northern Miner. One of Kyler’s quotes “Right now, we’re on the cusp of a discovery,”
northernminer.com/news/equitas-seeks-voiseys-bay-style-deposits/1003697844
Comment by Dan — August 5, 2015 @ 4:07 pm
I agree with you Dan on GGI. I am not impressed with the lack of information being passed on to the shareholders. The Sheslay problem will eventually be resolved but GGI should have stuck with the Mexico discoveries as their first priority IMO. Anyway, I have cut my holding by 2/3 and if things don’t turn around soon, I will dump the remainder.
Comment by Andrew — August 5, 2015 @ 6:39 pm
Gosh Dan, you beat me to the northern miner report on EQT. EQT can hire you for IR, lol. Nice write up and It probably won’t be the last. Drilling hopefully commences last week of August. A lot going on there.
Comment by dave — August 5, 2015 @ 7:27 pm
Dan and Andrew, totally agree with your observations regarding the lack of communication regarding GGI. It’s almost seems like they are relying on BMR to get information out regarding Sheslay. However I just don’t see selling GGI at these prices unless you need the tax loss as I believe you are selling close to the bottom. I guess time will tell.
Comment by Danny — August 5, 2015 @ 9:05 pm
GGI have to spend the flow through raise in Canada. Hopefully La Patilla will provide some funds to develop their Mexico properties.
The news we can expect is:
1) how the LOI with the processing of mineralised rock is progressing
2) what plans they have in BC as an alternative to Grizzly if things are not resolved soon
3) if we are really lucky, maybe details of a JV with a major at Rodadero.
Comment by Tom UK — August 5, 2015 @ 11:17 pm
Dave, you are correct, a lot going on and that won’t be the only write up on EQT. Apparently Jeb wrote a piece for his subscribers. Anyone know how long before his write up becomes public?
Comment by Dan — August 6, 2015 @ 3:44 am
Jon, you said “Any discussions that may be happening can’t continue endlessly”. I agree with that statement as companies have much at stake here and if the drill bit does not start soon, it will mean a lost year and potentially millions of dollars for the companies and it’s shareholders. Speaking of shareholders, if this is a no go this year, is there any legal recourse? I would like to know and if there is, I would be one shareholder who would join all DBV/GGI shareholders in a legal lawsuit if the actions by the Tahltan were unjust. That would open the government and Chad Days eyes.
Comment by Dan — August 6, 2015 @ 4:03 am
Danny. I believe that you are correct as GGI is likely near the bottom and at some point it will turn around. I just decided to move some funds elsewhere.
Comment by Andrew — August 6, 2015 @ 4:14 am
Dan – Not sure on Jeb, but guessing next week. It makes sense to space them apart.
Comment by dave — August 6, 2015 @ 5:05 am
Also Dan, I suspect we break the yearly high when the drill starts turning.
Comment by dave — August 6, 2015 @ 5:06 am
Jon, any idea when we can expect the second part of the AME BC interview with Glen Wonders? I really liked what he had to say about the greenfield…curious what he has to say about the Tahltan.
Comment by Steve A. — August 6, 2015 @ 5:15 am
I agree Dave, that is why I picked up more shares of EQT at the bell this morning. Adding to my total. Looking to take some profit at higher prices and then let the rest ride in hopes of a nickel hit and something similar to Voisey.
Comment by Dan — August 6, 2015 @ 5:39 am
Jon, what is a “wet ton”, never heard that phrase.
Comment by dave — August 6, 2015 @ 5:54 am
EQT – support now at .10 with very strong support at .09. The .07’s are gone, it will take a disaster to get them now.
Comment by dave — August 6, 2015 @ 6:08 am
From Alphastox.com…..re EQT
http://us5.campaign-archive2.com/?u=95719943a1821b57689e12e4d&id=357cbd7e28&e=1f90d0c688
Comment by John BMR — August 6, 2015 @ 6:17 am
Hi Dave, what’s the context?…if the material is in its natural “wet” state, it’s referred to as a wet ton…a dry ton is where the material has been dried to a very low consistent moisture level…
Comment by Jon - BMR — August 6, 2015 @ 6:21 am
The letter writers are all conversing on EQT. This is getting very exciting. Thanks Jon.
Comment by Dan — August 6, 2015 @ 6:31 am
Hi Jon, check NR on PSE
Comment by dave — August 6, 2015 @ 6:36 am
John, nice article on EQT. I bought Diamond Fields back in the 90’s at $1.50 and sold it at $3.50. What a mistake. Not gonna happen with EQT. No trader on this one. I am very confident they hit, the only question is the grades right now. My core position is in and I will buy more shortly.
Comment by dave — August 6, 2015 @ 6:43 am
Dan, let’s hope there is a quick resolution. The Tahltan don’t strike me as being too worried about lawsuits. They obviously believe in their position or believe that they can force a good settlement for themselves. I’m of the opinion that this will take some time because the longer the drills don’t turn the better a settlement for the Tahltan. I think it is in their best interest to drag this on in hopes of a bigger pay day down the road. Like it or not, DBV is kinda trapped between a rock and a hard place. It will get resolved but not anytime soon.
Comment by Ted — August 6, 2015 @ 6:55 am
Dan, I believe you said that you were in EQT at .07 also, what a gift. They will have the money to drill the 10 to 12 holes they have planned. Keep watching. Someone posted at a different site “why the selling”, they don’t realize its what makes a market and a Chart. The same houses selling only buy right back. I am willing to bet EQT sees parabolic days ahead in that chart. I will not forget the chart on NPH earlier this year. 3 times it struggled to break thru resistance at .20, then the news came and Bam. I lost patience and wound up chasing NPH and then sold too early to boot, and I posted that on this site. You can’t get impatient with EQT cause of the potential.
Comment by dave — August 6, 2015 @ 7:26 am
Dave, yes I got the bulk of my shares at 7 cents. You are correct, this one has the potential to go parabolic. I plan to sell some to protect my capital, but like you believe they will hit and if they do, lets just say I have enough to ride into the sunset. Too many big names in on this who see the potential. Investors need to realize, it wasn’t until the deeper VTEM was used that 8 new EM anomalies lit up like a Christmas tree, some up to a km in length. Then comes King, Goldie and Makela, plus the rumors of Friedland involvement. When this moves, it could be big. Good luck Dave and all EQT investors.
Comment by Dan — August 6, 2015 @ 7:34 am
You did your DD Dan, good for you. Much more in the pipeline behind the scene.
Comment by dave — August 6, 2015 @ 7:51 am
Dan – On Tuesday near market close there was a 600k ask at .095 and 200k+ at .09 on EQT. Some people were going crazy. Look what happened yesterday. Don’t let level 2 spook you out. Go by the chart which is in an uptrend.
Comment by dave — August 6, 2015 @ 7:59 am
Thanks for the advise Dave. Appreciate it.
Comment by Dan — August 6, 2015 @ 8:10 am
Correction on my thanks to Jon re the Alphastox article on EQT. Thanks John.
Comment by Dan — August 6, 2015 @ 8:34 am