Gold traded in a narrow range overnight despite the election results in Greece and France…ultimately, Gold could benefit if Europe veers from austerity toward more stimulus in the coming weeks and months, which now seems likely, and particularly if the ECB were to cut interest rates and resume its LTRO program (long-term refinancing operation) to promote stability in the euro zone…yes, the end result of yesterday’s elections is probably more money-printing one way or the other…as of 6:00 am Pacific, the yellow metal is down $4 an ounce at $1,638…Silver is off 13 cents at $30.21…Copper is up 2 pennies at $3.77…Crude Oil is 69 cents lower at $97.80 while the U.S. Dollar Index has retreated one-third of a point to 79.73…
Greece, France Election Results
Election results in France and Greece yesterday reflected failing public support for the euro zone, costly bailouts and austerity measures implemented across the currency bloc…Greece faces political turmoil after yesterday’s inconclusive general election in which both mainstream pro-Europe parties saw a dramatic collapse in support and anti-austerity groups increased their share of the vote…with hardline parties from the left and right making big gains, it’s now highly likely that the formation of any Greek coalition government will involve a renegotiation of bailout terms for that country…
In France, socialist Francois Hollande swept to victory in the presidential election, ousting Nicolas Sarkozy who had played a key role in structuring bailout schemes for indebted euro zone members and pushed for strict fiscal policies aimed at managing huge debts (Sarkozy was also the champion of a Canada-European free trade agreement which now could be put on the backburner)…
Hollandeâs victory also may signal an end to an awkward compromise among the leaders of Germany, France and other European states around debt-cutting, rather than growth promotion, as the solution to the euro-zone crisis…
âEurope is watching us,â Hollande declared in a victory speech…âIn many European countries there is now relief…austerity is no longer the only option”…
French corporations and banks have been surprisingly calm about the prospect of a Socialist Party presidency, and in private they say theyâre not expecting a major break from the French norm…
Election Results Ultimately Market-Positive?
Jim OâNeil, the chairman of Goldman Sachs Asset Management, says the change in European sentiment could be a market positive as investors and politicians face up to new risks…
âIf the Greek results reintroduce additional risks and fears of financial contagion across weaker euro zone countries, then this might also presumably weaken the euro because of the perception that it may force the ECB to be more accommodative,â said OâNeil in a report in which he joked that the U.S. Federal Reserve may quicker to act than the ECB…âIt would be ironic, if not improbable, that a major escalation of Euro area financial contagion influenced the Fed more than the ECB,â said OâNeil…
Today’s Markets
Asian markets were down sharply overnight (Japan’s Nikkei is now at a 3-month low) with the exception of China as the Shanghai Composite was essentially unchanged at 2452…European shares are weaker this morning but off their lows (London is closed for a public holiday)…stock index futures in New York as of 6:00 am Pacific are pointing toward a slightly lower open on Wall Street…
This week will be an important test of support around 1400 for the Venture Exchange…the Index held up impressively well over the final three trading days last week when the broader markets tanked…
Silver Chart Update
We haven’t updated the Silver chart for a while, so below is John’s latest take on what’s happening technically with this market…Silver has been in a downsloping consolidation channel for a year now and must make a decision soon on which direction it’s going…we favor the bullish scenario as we believe Silver could easily emerge as the investment of the decade…it has been out-performing Gold and that trend can be expected to continue as it’s the “poor man’s Gold” and the historical Gold-Silver ratio is 16 to 1…demand for Silver is reportedly soaring in the Gulf region which is interesting, and the opening of the Pan Asia Gold Exchange (PAGE) in China next month could turn out to be hugely significant of terms of bringing potential new buyers into the Silver market…the Silver chart looks solid and the last half of this year could turn out to be quite spectacular…
The China Securities Regulatory Commission on Friday announced the approval of the trading of Silver futures contracts on the Shanghai Futures Exchange (SHFE)…the SHFE said in a statement published on its website that the trading will begin later this week (Thursday, May 10)…the Silver futures will become the second noble metal futures on the domestic market after the Gold futures…the trading unit of Silver futures is set at 15 kg per hand, with the minimum trading margin at 14% of the value of the contract on the first day of trading and 7% thereafter…the SHFE is also considering carrying out night trading for noble metals…
U.S. Dollar Index
The U.S. Dollar Index showed some strength last week, climbing each day, but the greenback is still facing some major technical hurdles as John’s chart below shows…the Dollar Index does have strong support at 78, however, so look for either a breakdown below that support or a breakout through the down trendline…
The Volatility Index (VIX)
Below is John’s 5-year monthly chart of the important Volatility Index which shows the VIX is currently well within the zone that is considered generally positive for stocks…the next VIX “peak” may not come until much later this year…
Prodigy Gold (PDG, TSX-V)
Prodigy Gold (PDG, TSX-V) continues to make impressive progress in developing its Magino Gold Mine Project in Ontario…Prodigy has held up very well over the last couple of months under challenging overall market conditions, so the outlook for the balance of the year has to be considered very positive…below is an updated 6-month daily chart for PDG with the Chaikin Money Flow (CMF) indicator showing strong accumulation since the beginning of April…
Note: John, Jon and Terry do not hold positions in PDG…
Focus Metals and Hydro-Quebec’s IREQ Sign Graphite Purification Technology Agreement and Anode Production Agreement for Li-Ion Batteries
MONTRĂAL, QUEBEC and OTTAWA, ONTARIO–(Marketwire – May 7, 2012) – Focus Metals Inc. (TSX VENTURE:FMS)(OTCQX: FCSMF)(FRANKFURT:FKC) and Hydro-QuĂ©bec’s world-leading research institute, IREQ, today announced the signing of a licensing agreement enabling Focus Metals to develop a graphite purification facility and a graphite anode production facility for lithium-ion (Li-ion) batteries.
A new, Focus-owned facility will transform first-production graphite sourced from Focus Metals’ Lac Knife (QuĂ©bec) high-grade deposit to battery-grade material.
The licensing agreement is in two parts. The first part is related to Focus Metals’ development of a graphite purification process that brings Lac Knife’s processed graphite to 99.95% carbon for use in lithium battery applications. The processing includes spherical shaping as well as thermal and chemical purification. The second part of the agreement provides for the production of anodes for Li-ion batteries.
IREQ will provide technical support and cooperate in future material and processing technology improvements.
Focus Metals’ President and CEO, Gary Economo, said the new purification and production facilities will be built in QuĂ©bec and will be owned and managed by Focus Metals. The new purification facility will be designed, subject to positive economic analysis, to produce 15,000 tons of spherical battery-grade flake graphite at peak, by 2015, whereas the anode production facility will be designed to produce up to 5,000 tons of anodes. The exact cost of the facilities and the financing required have yet to be determined.
In exchange for the technology licence, technological support and future processing improvements, IREQ will receive a licensing fee that will be paid in cash over a three-year period, representing less than 10% of the current working capital, as well as a royalty fee based on a percentage of future sales.
“This agreement represents a huge and significant milestone for us as we move through pre-development to production of our Lac Knife technology graphite deposit,” said Mr. Economo. “Moreover, the marriage of Focus’s QuĂ©bec-based, world-class graphite deposit to the QuĂ©bec-based global leader in processing technologies-especially in battery anode production-will leave Focus Metals well-positioned to secure its place as a quality supplier to the fast-growing lithium battery manufacturing sector.”
“In particular, this agreement reinforces our goal of becoming the lowest-cost technology graphite producer in the world,” Mr. Economo added. “To have an all-QuĂ©bec technology agreement with a world leader in graphite anode development and patenting bodes well for our shareholders.”
Mr. Economo went on to say that the battery-grade process will be incorporated into the Lac Knife Preliminary Economic Assessment due in June 2012.
Focus Metals is the 100% owner of the Lac Knife deposit, which contains 4.9 million tons of measured and indicated resource grading 16% Carbon as graphite (Cgr) and 3.0 million tons of inferred resource grading 16% Cgr (see NI 43-101-compliant Technical Report on the mineral resource estimate filed on SEDAR), the bulk of which is intended for use in technology applications.
IREQ is recognized globally as a leading technology source for renewable energy solutions.
“We believe that the high-grade graphite of the Lac Knife property, associated with our graphite purification and shaping technologies, will yield a quality product for Li-ion battery applications,” said Karim Zaghib, Director – Energy Storage and Conversion at IREQ.
About IREQ
Hydro-QuĂ©bec’s research institute, IREQ, is a global leader in the development of advanced materials for battery manufacturing and designs cutting-edge processes in its state-of-the-art facilities. IREQ holds more than 100 patent rights and 15 licences for battery materials that are used by some of the world’s most successful battery manufacturers and materials suppliers. Its contributions are helping to develop safe, high-performance lithium-ion batteries that can be charged more quickly and a greater number of times. IREQ also acts as lead partner with private-sector companies based in QuĂ©bec to build EV and HEV charging stations in support of its technology developments. It promotes open innovation and partners with private firms, universities, government agencies and research centres, both in QuĂ©bec and abroad. These partnerships allow IREQ to develop, industrialize and market the technologies resulting from its innovation projects.
About Hydro- Québec
Hydro-QuĂ©bec is Canada’s largest electricity producer and ranks among the world’s leading hydropower producers. It also transmits and distributes electricity. Its sole shareholder is the QuĂ©bec government. It uses mainly renewable generating options, in particular hydropower, and supports the development of wind energy through purchases from independent power producers. Its research institute, IREQ, conducts R&D in energy efficiency, energy storage and other energy-related fields. Hydro-QuĂ©bec invests $100 million per year in research.
About Focus Metals
Focus Metals Inc. is an emerging mid-tier junior mining company, a technology solutions supplier and a business innovator. It is the owner of the highest-grade (16%) technology graphite resource in the world. The company’s goal is to assume a dominant industry leadership position by becoming the lowest-cost producer of technology-grade graphite. As a technology-oriented enterprise with a view to building long-term, sustainable shareholder value, Focus Metals is invested in the development of graphene applications and patents through Grafoid Inc.
Forward-Looking Statements
This News Release may contain or refer to “forward-looking statements” that reflect Management’s expectations regarding Focus Metals’ future growth, results of operations, performance, and business prospects and opportunities. These statements reflect Management’s current beliefs at the time of this news release and are based on information currently available to Management. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of the Company, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Management’s expectations are exploration risks detailed herein and from time to time in the filings made by the Company with securities regulators. While the Company anticipates that subsequent events and developments may cause its views to change, it specifically disclaims any obligation to update these forward-looking statements, except in accordance with applicable securities laws. Accordingly, readers are advised not to place undue reliance on forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Source: Marketwire Canada (May 7, 2012 – 8:30 AM EDT)
News by QuoteMedia
Comment by pete — May 7, 2012 @ 5:51 am
so FMS drops 10% for the most obvious and logic reason that if any of you guys and gals cant see it, well then… I dont know what to say…:)
and of COURSE I’m kidding…. it hit its head on the 50 day.. then dropped thru the day like the venture did…. and how does the NR mean that FMS… will not be worth what it was tomorrow as it was yesterday… so we are still being driven by emotion, idiotic reactions, and a ‘sell in may’ mindset…
while I think they will be proven wrong, we simply have to put all sharp objects away…
John… while the CDNX closed under 1400 by a whisper, and only in the last 10 minutes…did we violate anything technical??? TIA…
Comment by Jeremy — May 7, 2012 @ 2:39 pm
also CQX news…. first tranche a 20 cents is approved and drilling starts….
Comment by Jeremy — May 7, 2012 @ 3:26 pm
Jeremy
Remember every breakout and breakdown must be confirmed…. Tomorrow will tell.
Hope this helps.
Comment by John - BMR — May 7, 2012 @ 4:26 pm
Si senor:) thx
Comment by Jeremy — May 7, 2012 @ 6:17 pm
GBB… the 10 cents lot is going to be filled slowly…. next level will be 8.5 cents
Comment by Theodore — May 8, 2012 @ 5:08 am
GBB insider Roger Thomas just bought 3.2MM shares at $.15 – $488K worth. It may drop some more but I would say that they are pretty confident it won’t last down in the dumps for too long.
Purchase price: 15 cents per flow-through common share
Insider: Roger Thomas, 3,256,666
Comment by pete — May 8, 2012 @ 5:38 am