Gold has traded between $1,083 and $1,092 so far today…as of 9:15 am Pacific, bullion is up $6 an ounce at $1,090…Silver is 8 cents higher at $14.67…Copper is unchanged at $2.34…Crude Oil has slid 82 cents to $44.33 while the U.S. Dollar Index has retreated after pushing slightly above 98…it’s currently down one-tenth of a point at 97.76…
According to blogger and investment strategist Peter Grandich, tomorrow’s non-farm payrolls report could spark a $100 move in the Gold price…
“A break below the pennant and it’s a near certainty (in my humble opinion) we see a test of the critical $1,000 area,” Grandich stated. “Given how incredibly bearish and overcrowded the bearish camp is at the moment, I think such a test would fail and a break below $1,000 would follow,” he concluded…
Three problems, in our view, with that analysis: 1) The “smart money” commercial traders have already dramatically reduced their net short positions in Gold to extreme levels – they appear to be betting on an imminent rally in Gold and they’re seldom wrong; 2) Gold‘s recent weakness is consistent with its 2.5-year weekly chart in that the yellow metal has once again touched the bottom of the downsloping flag where it has staged significant rallies from over the last 2+ years; 3) Tomorrow’s jobs report would have to be a huge surprise (275,000+) to spark a downward spiral of Gold to $1,000 or below…that doesn’t appear to be in the cards given yesterday’s private payrolls report from ADP that fell short of expectations…
Gold-Silver Ratio
The price ratio of Gold to Silver, a widely watched gauge of the relative value of the two precious metals, is currently 75-to-1, far above the historical average of about 50-to-1 that endured during the 4 previous decades…either Gold has to drop more relative to Silver, or Silver has to rebound faster than Gold…
More Fed Speculation
HSBC looks for the Fed to hold off on hiking U.S. interest rates next month, which analysts say may remove some of the immediate pressure on Gold…HSBC Chief U.S. economist Kevin Logan cites news that the government’s estimates for U.S. economic growth over the last few years have been cut following the annual benchmark revision…the disappointing data raises questions about the economy’s underlying trend rate of growth, and whether the timing is right for a move by the Fed toward tighter monetary policy, Logan says…
Copper Update
Copper remains at a critical point – exactly at an intersection of the bottom of a downsloping flag and its long-term uptrend support going back to 2002…momentum traders are no doubt watching this carefully…Copper could really take a beating if it can’t hold this support…
U.S. Dollar Index Update
Continued speculation regarding a possible Fed rate hike next month is keeping the greenback firm…the Dollar Index cooled off as expected following its action in March and April, but it’s once again testing resistance in the high 90′s…the U.S. economy can’t afford a runaway dollar, and momentum traders will pile in again if the March high is eclipsed…a high dollar also works against the Fed’s goal of trying to jump-start inflation…the greenback will be critical to watch between now and the next Fed meeting in mid-September…
Today’s Equity Markets
Asia
China’s Shanghai Composite fell 33 points or nearly 1% overnight to close at 3662…
Europe
European stocks traded modestly lower today…the Bank of England decided to keep its key interest rate unchanged…
North America
The Dow is off 136 points as of 9:15 am Pacific…the number of Americans filing new applications for unemployment benefits rose slightly less than expected last week (270,000), suggesting labor market conditions continued to tighten but not aggressively…it’s the 22nd consecutive week that claims have held below the 300,000 threshold which is associated with a strengthening labor market…
In Toronto, the TSX has fallen 106 points while the Venture is off 5 points to 580 in yet another test of that Fib. support…
TSX 6-Year Monthly Chart
The TSX is pulling back this morning after advancing 6 straight sessions from its July 28 intra-day low of 13939…yesterday, the index came within a whisker of its declining 50-day moving average (SMA), not shown on this chart, which has provided resistance since May…
The “Big Picture” chart (6-year monthly) shows there are significant risks in this market given the increasing down momentum in the SS indicator and the bearish overall trend demonstrated by the ADX…
Richmont Mines Inc. (RIC, TSX) Update
Richmont Mines (RIC, TSX) continues to make money – 14 cents per share through the first 6 months of 2015 – and has also increased its annual Gold production guidance to 87,000 to 95,000 ounces, up from 78,000 – 88,000 previously…
RIC reported record quarterly revenues this morning of $40.6 million (CDN) on Gold production of 26,314 ounces…that lifts 6-month Gold sales to 52,173 ounces at an average price of $1,482 CDN ($1,200 U.S.)…
Q2 cash costs per ounce were $974 (CDN) while all-in-sustaining costs were $1,304 (CDN)…
Q2 2015 net earnings came in at $2.9 million, or 5 cents per share…6-month net earnings are $7.5 million or 14 cents per share…
Richmont’s cash balance as of June 30 was $77.9 million or $1.34 per share (58 million shares outstanding)…working capital was $73.2 million with long-term debt of only $6.2 million…
The company continues its ambitious plans to access the Island Gold Mine’s deep high-grade resources… Richmont anticipates that it will be able to begin production mining in the new resources above level 635 m in the 4th quarter, and subsequently initiate a 2nd production mining horizon above level 735 in the 1st half of 2016…however, the company is planning shutdowns at both the mine and the mill in the 2nd half of the year to install new electrical equipment and make important infrastructure upgrades…these plans are reflected in updated guidance and forecasts…
“We expect that these strategic investments (Island Gold Mine infrastructure) will position us to finish the year on a strong note and provide the needed solid foundation for the mine over the long-term,” explained Richmont President and CEO Renaud Adams…
Technically, Richmont continues to trade within a bullish downsloping flag…note how RIC recently touched the bottom of that flag ($3.14 last Thursday) and has climbed more than 15% since then…
RIC is up 37 cents to $3.67 as of 9:15 am Pacific…
IAMGOLD Corp. (IMG, TSX) Update
IAMGOLD (IMG, TSX) couldn’t keep out of the red in the 2nd quarter of 2015, despite higher Gold production at lower costs, according to the company’s latest operational results…late yesterday, the IMG reported an adjusted net loss, including discontinued operations attributable to equity holders, of $30.8 million or 8 cents per share for the last 3 months, down from earnings of $8.8 million or 2 cents per share reported in the same period in 2014…all-in-sustaining costs for Q2 were $1,076 U.S. per ounce…the company does have a strong balance sheet with $833 million in cash and bullion…
NexGen Energy (NXE, TSX-V) Update
Without question, one of the top exploration plays in the country is NexGen Energy’s Rook 1 Project in the Athabasca Basin where the company has made a significant high-grade discovery at depth with 5 drill rigs continuing to turn in the summer program…
This morning, the company reported fresh preliminary results (including some high gamma readings) from 5 new holes which all returned substantial mineralization on significant step-outs at the Arrow Zone…as a result, the strike lengths of the high-grade cores in the A2 and A3 shears have been tripled to at least 300 m and 295 m, respectively…the newly discovered mineralization southwest of Arrow remains open in all directions and at depth…
The Arrow zone now covers an area of 645 m by 215 m with a vertical extent of mineralization commencing from 100 to 920 m, and it remains open in all directions and at depth (a 90-second 3-D video of Arrow generated from Leapfrog is available for viewing on the company’s website)…
Technically, NXE showed excellent support in the low 60’s, as expected, and continues to follow an uptrend support line as shown in this 2+ year weekly chart…volatile overall markets have presented some opportunities here…NXE began to unwind modestly overbought conditions after it touched an all-time high of 90 cents June 29…
NXE is off a penny at 73 cents as of 9:15 am Pacific…
Note: John, Terry and Jon do not hold share positions in RIC, IMG, or NXE…
BMR, no mention of Sheslay at all today, not even in your comments. Are you feeling this could take longer to be resolved than you anticipated?
Comment by Dan — August 6, 2015 @ 8:52 am
TomUK you said
GI 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
Didn’t you say last week we would be hearing from GGI this week? If they said news soon, it could be 5 months from now.
Comment by Dan — August 6, 2015 @ 8:58 am
We’re working on a couple of pieces, Dan. Stay tuned. There’s really no reason for this to drag on much longer IMHO. The permits and the Land Use Plan are the green light; however, as everyone is speculating, I’m sure there are certain things going on behind the scenes that we just don’t know. I see the companies being in a position of strength regarding this whole matter, not weakness.
Comment by Jon - BMR — August 6, 2015 @ 9:16 am
Dan, I have a bid in at .09 to scoop more EQT. The big ask at .11 mysteriously disappeared. I also got filled on SKE at .085, lets see what happens there.
Comment by dave — August 6, 2015 @ 9:27 am
Jon, what’s your take on WRR? Do you think they will start drilling soon? Your thoughts!!
Comment by Jeff — August 6, 2015 @ 9:33 am
Jeff, we honestly haven’t had time to pursue what’s going on there, Jeff…it’s disappointing they haven’t started drilling yet given their news releases in recent months…we’ll be checking into it shortly.
Comment by Jon - BMR — August 6, 2015 @ 9:38 am
Any timeline on the 2nd part of the AME BC interview Jon?
Comment by Steve A. — August 6, 2015 @ 9:44 am
In the next 2-3 days, Steve.
Comment by Jon - BMR — August 6, 2015 @ 9:50 am
Great thanks Jon, looking forward to it.
Comment by Steve A. — August 6, 2015 @ 10:00 am
Dave, yes I noticed that as well – large ask gone at 11 cents. Maybe it will mysteriously reappear once the sp hits 10 cents again. I will be putting a bid in at 9 cents as well if one of my other holdings sells this afternoon.
Comment by Dan — August 6, 2015 @ 10:03 am
Since one month that we are stopped, still no new of the Government and DBV !
Comment by Guy Delisle — August 6, 2015 @ 3:47 pm
Yes Guy , it is concerning , the share price will not hold in this area much longer without something positive from DBV about the whole situation.
Comment by Les — August 7, 2015 @ 1:40 am
There were no last minute buys in DBV to keep share price above 10 cents. Now the bid is 9 cents. A little concerned someone will sell into this to grab EQT.
Comment by Ted — August 7, 2015 @ 2:27 am
Jon, have you heard anything with regards to Sheslay companies negotiating with Tahltan? I am wondering if there is any negotiating at all, or if the companies are crossing all their T’s and dotting their I’s to ensure that when they do resume drilling it will all be within their legal right and take the necessary precautions to ensure the safety of their crew. Like you said, talks can’t go on forever if no progression.
Comment by Dan — August 7, 2015 @ 5:49 am
Dave, I have a bid in for EQT at .095 this morning.
Comment by Dan — August 7, 2015 @ 5:57 am
Dan – I have my bid at .09. Noticing light volume on a lot of stocks I track. I guess normal for this time in August. Anxious to get August out of the way.
Comment by dave — August 7, 2015 @ 7:06 am
Day 7 with boots on the ground with EQT. I imagine the 20 person base camp is done and the ground field work is in progress. I’m betting the drill starts turning August 27th. Lets see if I’m right.
Comment by dave — August 7, 2015 @ 7:48 am
Dave, the large loop UTEM 3 geophysics can be set up in one day so I am going to agree with you on the drilling. Probably got one or two areas surveyed already. If they are high priority targets, drill bit will be turning as soon as possible. I suspect if the ground geophysics light up like the VTEM, money will be no object.
UTEM 3 Transmitter
The UTEM 3 transmitter is a high voltage (+/-200V) current-regulating EM transmitter specifically designed for large transmitter loops, providing excellent depth of exploration. Lamontagne’s UTEM 3 transmitter is designed to use light-weight 17-gauge (1mm) wire. For higher current output, a 14-gauge (1.5mm) wire can be used. Even with the heavier gauge wire it is possible for a one- or two-person crew to lay out a large loop in a single day – even in difficult terrain. This keeps survey costs low while allowing application in demanding environments.
Comment by Dan — August 7, 2015 @ 8:02 am
Dan – the money is already not an object. Keep watching.
Comment by dave — August 7, 2015 @ 8:26 am