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Gold is trending higher today…as of 5:45 am Pacific, the yellow metal is up $6 an ounce at $1,739 after climbing as high as $1,748…Silver is 22 cents higher at $33.70…Copper is up 2 pennies at $3.67…Crude Oil is flat at $97.20 while the struggling U.S. Dollar Index has fallen another one-fifth of a point to 79.73…

Rainbow Resources (RBW, TSX-V) Update – RBW Is Finding The International Vein System

The tone in David W. Johnston’s voice was very upbeat yesterday after BMR conducted a short interview with him following yesterday’s news release, and there’s no question he’s very pleased with how drilling has been proceeding at the International Silver Property where the company is aiming for a discovery…

“We’re hitting the vein system in every hole and that’s why we’re at 10 holes and counting,” Johnston declared…”As we’ve been stating all along, the International is an exceptional project that deserved to be drilled a long time ago if it weren’t for access issues…with Silver doing what it’s doing, we’re more excited than ever by the prospect of delineating a near-surface, high-grade deposit that can easily be extracted”…

Folks, the near-surface, high-grade nature of mineralization at the International has been well documented in historical reports and Rainbow’s own sampling has delivered impressive results as high as 33.5 ounces per ton…they are drilling right into the heart of an exposed quartz dominated structure featuring disseminated to massive galena, pyrite and sphalerite, so the fact these angled and vertical holes are actually intersecting the vein system gives us increased confidence that a discovery could be in the making…great-looking core of course doesn’t always translate into great assays, which is probably why Rainbow has been conservative in its statements so far as they continue to wait for results from the lab, but our interpretation of the news issued to date is that they are seeing the type of mineralization they were hoping to hit…

Between the International and other quality projects in the West Kootenays, and the soon-to-be-drilled Jewel Ridge Property in Nevada where Rainbow will be following up on a fabulous result (2.1 g/t Au over 40 metres near-surface), this is a company with exceptional potential…despite the recent market turnaround, there are few companies on the Venture with rising 50, 100, 200 and 300-day moving averages but RBW is one of them…

Parlane Resource Corp. (PPP, TSX-V) & RJK Explorations (RJX.A, TSX-V):  New Gold Takeover Targets?

“We Want To Control Everything In The Area” – New Gold Inc. Executive Chairman Randall Oliphant

Buried in the depths of New Gold Inc’s (NGD, TSX) web site is a very juicy piece of audio from a speech just the other day that clearly underscores some no-brainer opportunities for investors centered around the prolific Blackwater district in central British Columbia…as regular BMR readers know, we were very early to the Blackwater story (late 2009) and Richfield Ventures became a 10-bagger for some of our readers after it got taken out by New Gold just over a year ago…New Gold also swallowed up Silver Quest Resources and Geo Minerals, and then paid $6 million earlier this year to Gold Reach Ventures for its Auro and Auro South claims at Blackwater…

But New Gold, which has already built up a land position of 1,000 square kilometres in the area, is likely far from finished in terms of acquisitions based on comments made by Executive Chairman Randall Oliphant at the recent Bank of America Merrill Lynch 18th Annual Canada Mining Conference in Toronto…while he didn’t of course single out Parlane Resource Corp. (PPP, TSX-V) or RJK Explorations (RJX.A., TSX-V), it goes without saying that those two companies both hold very strategic and sizable land packages at Blackwater that have to be of strong interest to New Gold…

And both Parlane and RJK are gearing up for the start of drill programs – RJK is going back to its Blackwater East and Northeast properties, where it made an interesting Silver discovery earlier this year (3.3 metres near-surface grading 79 opt), and will also conduct initial drilling at its Blackwater West and Dave 2 properties…Parlane has a 10,000-metre drill permit in hand and is almost ready to begin tackling its very promising 14,000-hectare Big Bear Project strategically located between the Capoose and Blackwater deposits…Parlane has just 28 million shares outstanding with a current market cap of only $5 million…

New Gold has an incredible 18 rigs in operation at Blackwater where it has greatly expanded the resource since acquiring Richfield… recent assays demonstrate strong continuity of Gold mineralization as the resource continues to expand, particularly to the north and northwest…what’s especially interesting is that beyond the positive Gold-related results, recent assays have also returned some of the highest Silver grades found on the deposit to date…as a result, the inferred Silver grades have increased by 103% to 7.7 g/t when compared with the March, 2012, resource estimate…these results occur within a zone of higher grade Silver mineralization along the outer northwestern portion of the mineral resource…this zone offers excellent potential for expanding the Silver resource at Blackwater and is an area of strong exploration focus for the company…

Below are excerpts of Oliphant’s speech the other day (highlighted areas, our emphasis) – how long will it take for New Gold to take a run at Parlane and/or RJK?…

“The resource continues to expand and this is probably the largest pure Gold discovery ever found west of Ontario…it’s not a well understood area…nobody knows where all this Gold came from…we have a Capoose property that’s 25 kilometers away, that’s already 800,000 ounces of Gold and 56 million ounces of silver…these deposits never seem to statistically happen in isolation where you have a 10 million ounce deposit, and nothing else around, whether it’s a 2 or 4 million or 5 million ounce deposit as well”…

“So what we’ve done is we’ve worked to try and increase our land position and we’re now up to about 1,000 square kilometers, because frankly the geologists don’t know what the source was of all this gold…we want to control everything in the area from the perspective of dealing with First Nations, of having complete flexibility of where we put tailing stands, waste, dumps, not having to lay that on other people’s ground…our drilling is remarkably aggressive this year…we’re going to drill about 250 kilometers of drilling…I read somewhere that this could be the most extensive drilling program going on in mining right now, but we’re both trying to upgrade our resource and also expand the size of it”…

“The cost of building Blackwater, we can fund internally with the cash flows that we have”…

“We just announced that we’re actually going to have a breakfast to bring out the preliminary economic assessment of Blackwater, here in Toronto, on September 20″…

“One of the calling cards of our company and one of the reasons why we thought that we wanted to get involved in Blackwater was our teams in British Columbia have an outstanding relationship with all the First Nations groups…in fact our local chief was at PDAC here in Toronto, about a year and a half ago, talking about the model that we have and he’d like to see it rolled out all across Canada…that’s made things a lot easier for us in dealing with First Nations in British Columbia…we already have, and they weren’t even required, letters of support, to support our multi-year exploration permits”…

Parlane has been firming up just recently on increased volume and is looking quite bullish on the charts with 50 and 200-day moving averages just reversing to the upside…it closed yesterday at 18.5 cents…RJK likely hit bottom in May at 8.5 cents and closed yesterday at 10.5 cents…

Germany’s Highest Court Clears Way For Euro Zone’s Permanent Bailout Mechanism To Go Ahead

Germany’s highest court Wednesday threw out attempts to delay the country’s ratification of the European Stability Mechanism and the so-called “Fiscal Pact” but placed strict conditions on expanding it beyond its foreseen limits…the ruling, which was broadly as expected, removes a major question mark over two crucial elements of the euro zone’s plan to manage its debt crisis…itt paves the way for the creation of a permanent bailout mechanism in the region that will be able to provide large-scale financial assistance to heavily indebted euro-zone economies…

Today’s Markets

Asian markets were higher overnight with the Nikkei climbing nearly 2% while China’s Shanghai Composite Index gained 6 points to 2127…European shares are up modestly this morning while stock index futures in New York as of 6:00 am Pacific are pointing toward a positive open on Wall Street…

The Venture Exchange closed up 4 points yesterday at 1275 and should respond well today to fresh advances in Gold and Silver and commodities in general…

It’s hard not be bullish regarding commodities when one examines John’s long-term CRB Index chart this morning…the Index appears to have started a powerful Wave 5 move that could take it well beyond the 2011 high…note that the RSI(14) is now above 50 while the Slow Stochastics indicator (%K) is rising rapidly…

Gold, CRB, Venture Exchange Comparative Chart

John has another interesting chart this morning, a 2.5-year weekly CDNX comparison with Gold and the CRB Index…note how both Gold and the CRB Index have recently broken above their downtrend lines while the Venture is stirring but still has some catching up to do, though we expect it will follow suit and break above its downtrend line in the coming weeks…

Euro Reversal – Bullish For Gold

The euro’s reversal has been confirmed on the charts, and that’s bullish for Gold and Silver and bearish for the U.S. Dollar…note how the euro, in relation to the greenback, has broken above a downtrend line in place since last summer…this is highly significant and strongly suggests the building blocks are coming together to tackle the euro zone debt crisis in a much more effective way…

Canadian Dollar Update

Given the renewed strength in the euro, and a powerful-looking Canadian Dollar, the outlook for the U.S. Dollar Index is rather grim to say the least…it’s also our expectation, though not our wish, that Barack Obama will get re-elected in November and the market’s perception of that result won’t be positive for the U.S. Dollar…Obama, of course, embraces Big Government and that means the Americans will simply kick the can further down the road as far as their debt problem is concerned, particularly if the Democrats also control at least the Senate or the House (or worse yet, both)…

The Canadian Dollar is strong in part because of Canada’s healthy fiscal position, relative to most other countries, and the continuing long-term bull market in commodities…a healthy loonie is also bullish for the Venture Exchange as the correlation between the two is quite high…

Richmont Mines (RIC, TSX-V) Chart Update

Richmont Mines (RIC, TSX) brutal 2012 decline has come to an end as shown in John’s chart below…

Note: John, Jon and Terry do not hold positions in RIC.