Gold is weak today but don’t let that be discouraging…this consolidation phase is necessary in our view in order to set the table for higher prices during the fourth quarter…as of 11:35 am Eastern, Gold is off $44 an ounce at $1,777…Silver is $1.30 lower at $39.45, Copper has gained 4 pennies to $3.95, Crude Oil is 68 cents higher at $89.59 while the U.S. Dollar Index has lost half a point to 76.40…according to a London-based metals consultancy, Gold could reach $2,000 by year-end…in its report titled Gold Survey 2011 Update 1, Thomas-Reuters GMFS stated that investment growth is expected to rise further in the second half of this year with investment demand of all types forecast to reach a record of just over 1,000 metric tons…using an average price forecast of $1,815 an ounce, that means it would equate to a value of $60 billion, the consultancy said…in the first half of 2011, the group put investment demand at 624 tons, a value of $29 billion…
Global central banks have joined forces to provide dollar liquidity to the market, a move that could ease funding pressure on European banks…the European Central Bank said today it would lend euro zone banks dollars in three separate three-month loans to ensure they had sufficient funding until the end of the year….“The Governing Council of the European Central Bank has decided, in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three U.S. dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year,” the ECB said in a statement…the central banks are certainly going to be put to the test in the coming weeks…
President Obama’s American Jobs Act includes an attempt to block Canadian firms from bidding on government infrastructure contracts, a typical Democrat-style protectionist move (in this instance coming directly from the White House) that is foolish and extremely short-sighted…Obama’s Jobs Act contains measures that require all “iron, steel and manufactured goods” used in public buildings or works to be supplied by American firms…the Harper government plans to address this issue vigorously and attempt to gain an exemption for Canadian firms…
As of 11:35 am Eastern, the CDNX, after starting out higher this morning, is off 6 points at 1748…the Dow and TSX are both up but the TSX Gold Index has declined 11 points to 417 in sympathy with the drop in Gold…the Index has strong support around the 400 area, above the rising 100-day moving average (SMA) and just below the rising 50-day SMA…as John has noted, a drop in Gold to $1,700 is certainly possible during this consolidation…volatility is high…
We have made a visit to Adventure Gold’s (AGE, TSX-V) very promising Pascalis-Colombiere Property, adjacent to Richmont Mines‘ (RIC, TSX) Beaufor Mine near Val-d’Or, and we’ll be going into some detail in the coming days on what we see shaping up there…AGE came out with initial Phase 2 drill results Monday which were very supportive of the contention that there are considerable extensions to the former L.C. Beliveau Mine which produced nearly 170,000 ounces of Gold for Cambior between 1989 and 1993…Pascalis is coming together very nicely and it has to considered AGE’s flagship property at the moment even though the company has many other high quality projects…AGE is up 2 pennies at the moment at 57 cents…
Some of the Adventure Gold crew (including President and CEO Marco Gagnon in the middle) at drill rig at Pascalis. Phase 2 drilling is now complete and more assay results are pending.
Tomorrow, we’ll be sitting down with the President and CEO of Richmont Mines, Martin Rivard…that interview should shed an enormous amount of light on what’s happening at Richmont’s Wasamac Property as well as the immediate area around it…we’ve been bullish on Richmont all year and RIC has been one of the best-performing stocks on the entire Toronto Stock Exchange…we’ve spoken with several geologists from different companies during this northwest Quebec visit so far…the consensus is this: not just one but several new gold deposits – perhaps even a large massive sulphide deposit – are likely to be discovered in the previously under-explored Wasamac area west of Rouyn-Noranda…just a few companies have tied up most of that ground…besides Richmont, the most aggressive explorer in this area is Visible Gold Mines (VGD, TSX-V)…it actually fell 3.5 cents yesterday to 39.5 cents on a technical pullback…a close examination of the fundamentals and the technicals for VGD tells us it makes sense to buy into any weakness with this play at the moment..in fact, no matter what the overall markets do, Visible Gold Mines has the potential to explode to the upside because this company is drawing closer to a possible significant discovery, and at more than just one property, as each day passes…yes, there are no guarantees in the exploration business and there is always a high degree of risk which is important to understand…at the moment, however, the risk-reward ratio with VGD looks particularly attractive…understanding structure is critical in nailing down a potential deposit…there is no one better in our view at understanding structure than Robert Sansfacon, VGD’s senior geologist, who has spent most of his life working on the Cadillac Trend…Monday’s news from VGD was remarkable in the sense that in just three short months, the company’s understanding of what’s happening at Wasa Creek has grown exponentially…the right ingredients are there for the discovery of a new deposit in the area…Wasa Creek is displaying some classic geological “signatures”…geologists believe there is an important “bend” in the Cadillac Fault that runs directly underneath the property…it goes in a northeast direction and then it bends to the east…this has created intense heat, pressure and fracturing – the perfect recipe for producing a concentration of mineralization…in addition, secondary north-south faults have been identified at Wasa Creek…some chalcopyrite mineralization has also been observed in drill core…in fact, significant pyrite mineralization (same mineralogy as the Wasamac deposit) was discovered in the first hole drilled at Wasa Creek (LBWC-11-03, assays released August 11) and has been observed over a wide area at the property from LBWC-11-05 in the west to LBWC-11-11 in the east – a distance of 2300 metres…more assay results are pending…but structure is critical and the impressive structural patterns observed at Wasa Creek are valuable clues that this property’s potential is much, much greater than previously thought…that’s why Visible Gold Mines has already committed to an aggressive Phase 2 drill program before assays on 12 of the 13 holes drilled in Phase 1 have even been received…as of 11:35 am Eastern, VGD is up half a penny at 40 cents…
Kaminak Gold Corp. (KAM, TSX-V) continues to make excellent progress with its Coffee Project in the White Gold District of the Yukon…drilling this year has more than doubled the strike length of the Latte Zone to at least 1,350 metres and it now reaches 275 metres vertically below surface…assay results from 44 diamond drill holes from the Latte zone were released yesterday…many holes host multiple intercepts and mineralization remains open in all directions…assay highlights include 31 metres grading 2.6 g/t Au in CFD-87 and 2.1 g/t Au over 59 metres in CFD-115A…of particular significance, it’s apparent that mineralization at Latte West becomes wider and higher grade at depth, implying a west plunge along the Latte structural zone…additional drilling is planned this season to test the down-plunge depth extent of Latte west mineralization…KAM is currently off 8 cents at $4.07…
Wildcat Silver (WS, TSX) reported more solid drill results this morning from its Hermosa Property in Arizona…drill hole HDS-184, located in an area of sparse drilling within the resource area, cut two significant zones of silver/manganese mineralization…the lower zone intersected 19.8 metres of 420.6 g/t silver, 15.8% manganese, 2.8% zinc, 2.3% lead and 0.3% copper… the upper zone returned 27.4 metres of 289.0 g/t silver, 10.9% manganese, 4.1% zinc, 2.0% lead and 0.1% copper…meanwhile, drill hole HDS-174, which helps expand the Hermosa mineralization to the north and east, encountered four zones of silver mineralization…of note, the two lower zones contained significant silver, manganese and base metals…they returned 23.9 metres of 127.3 g/t silver, 21.14% manganese, 2.88% zinc,1.02% lead and 0.06% copper, and 3.0 metres of 379.0 g/t silver, 3.93% manganese, 5.35% zinc, 2.95% lead and 0.17% copper, respectively…WS currently has five rigs at Hermosa and an updated resource estimate is expected prior to year-end…WS is up a penny at 58 cents…
Prodigy Gold (PDG, TSX-V) has received strong results from metallurgical testing on representative Gold mineralized samples from its 100% cent-owned Magino Mine Project in Ontario…a total of 20 samples were subjected to the testing program…for the 10 samples with feed grades greater than 0.35 g/t Au (cut-off grade for the resource), combined gravity and cyanide Gold recovery was 95% (range was 86% to 99%)…average Gold recovery for all 20 samples in the test program was 92%…for the 10 samples with grades less than cut-off, average recovery was 89%, ranging from 63% to 99%…the data shows that potential Gold recoveries in a conventional milling circuit at Magino are excellent, especially for Gold mineralized rock above the cut-off grade for the deposit..the fact that mineralized rock below the current cut-off grade also exhibits good Gold recoveries provides future operational flexibility…PDG is expected to deliver an updated Preliminary Economic Assessment for Magino within a couple of months…PDG has gained 2 pennies to 55 cents…
The Dave Keon Arena in Rouyn-Noranda, home of the Quebec Major Junior Hockey League franchise in this community. However, the team is forced to play out of a smaller 2,000 seat facility in the city at the new season begins as construction work has been delayed. Corporate suites and additional seating are among the revovations at the Dave Keon Arena, named after the former Leafs' star and Hall of Famer who was born in Rouyn-Noranda.
I am a bit tired of your reflexive bashing of everything a Democrat in the US does. I know many many Republicans very closely, as family members, in the US midwest and I can’t see them jumping to Canada’s defence in any “buy American” campaign. In fact, I could easily see the same push from a Republican administration there. Patriotism is never a bad political move in any country. Canadian interests rank very low relative to domestic ones in the US no matter which of the two parties are in power.
My main concern is that you have proved to be very astute at weighing subtle things in the marketplace but when it comes to politics you move to what seems to me to be a laughably simplistic way of looking at the dynamics of the currently deadlocked US political system. I respect the historically pragmatic and straightforward viewpoint of the Republican party but I don’t see that in evidence currently. On both sides I see lots and lots of bickering and childish insistence on winning political points at the expense of jobs and the economy. I see deadlock. You may feel that what is needed in the US is a Republican administration, but I feel that what is needed is pragmatism and most importantly, compromise, and I don’t see that happening on either side any time soon. If the Republicans come into power in the next election they will certainly do things differently but their solutions will not result in a lowering of the debt; they will just find different ways of messing things up. The US, Canada, and Europe are in a position of losing our historical top-of-the-world status and we haven’t figured out how to regain it or at least where we can fit in and do well in the world as it exists today. Instead we are all pointing fingers anywhere but at ourselves instead of looking at the situation and coming up with a practical solution that may or may not go against dogma.
I like your site and will continue reading it despite my disagreements. Thank-you for your hard work and for sharing your insights about investments.
Comment by Ian — September 15, 2011 @ 8:24 am
Ian, politics aside, I agree with your view on the current state of affairs in the US. The country sinks further economically while the average American, who looks to the government for support and guidance, is left wondering what they are indeed doing to help the situation. The future is grim globally, especially for indebted nations (most of them) and those that can’t compete economically. More than ever we, as citizens and individuals, are forced to look out for our own welfare. And as time goes by this will become more evident.
As investors we must do our own due diligence. I, personally, am thankful for Terry, John and Jon (and staff) for all the work they do that we are able to access for free. Many BMR readers have watched their investments grow, often based on the work of BMR.
John’s opinion of the American scene is his own and yours is yours. We all at times agree to disagree but we get along. The tone and demeanor on this board is to be commended. Many boards are nowhere near as civil. You are to be commended for, although disagreeing, the courtesy shown towards BMR (John).
Wayne
Comment by Wayne — September 15, 2011 @ 9:10 am
BER had some nice bouncing today but not good enough as it closed at 25.5 cents, up 2.5 cents. My sixth sense selling price remains unchanged – 39 cents. GBB may become a weak stock as my sixth sense tells me, it will close lower than 30 cents. I have adjusted my buy low price to 26 cents and sell high price to 33 cents. VGD continued adjustment, down 2 cents. Buy low price is 35 cents and sell high will be 45 cents. SFF down another half cent to 21.5 cents. It should be a good price to buy in and sell price will be 28.5 cents. TYP lost one cent to 73 cents – still pending the jump.
Comment by Theodore — September 15, 2011 @ 1:17 pm
THEODORE,
your sixth sense said GBB was going to 45 cents last week, what happened?
Comment by GREG H — September 15, 2011 @ 1:54 pm
Theodore whats your sixth sense take on mdw Iam making money on this stock .Take a look at the one year chart
Comment by gil — September 15, 2011 @ 2:45 pm
It is true… but after reading the news from GBB…. I sold all my GBB at 35.5 cents. I knew that the news will come but it was not a nice one for short term investors, like me…. My sixth sense will definitely change … I will be poorly wrong if I stick to the price. A lot of times, we may want to think positively but we cannot beat the reality. In the case of BER, I still think big for this one and this stock should be more reasonable in the mid 30s. It dropped below my buying point – 25 cents but I still scooped some at low 20s. My buying/ selling point will change after the news. For VGD, even it fell to 37.5 cents but still, I like this one better than GBB now… it can climb back to mid 40s soon. Just like NAR, I do not like their recent news/ annoucement, the price plunged to 13.5 cents even though I collected 15 cents…. I dumped it all… losing a little bite as I did not get much at 15- 15.5 cents. I believe that BMR has a different view in looking at GBB but I believe that it is hard for this one to go higher … at least not now.
Comment by Theodore — September 15, 2011 @ 2:47 pm
Carpathian Gold (TSX:CPN) just got approval for their mine in Brazil. Might want to have a look at it this morning.
marketwire.com/press-release/carpathian-receives-government-go-ahead-to-build-the-rdm-mine-brazil-tsx-cpn-1562016.htm
Enjoy!
Comment by Tim — September 16, 2011 @ 5:04 am
Gil… congratulations … MDW and my sixth sense tells me that it can still go a little bite higher…. probably will not be beyond $3.1 … There will be swings during this period of time, buy low price $2.5 and sell high price $3 . Current market price may have some adjustments soon.
Comment by Theodore — September 16, 2011 @ 1:06 pm
Roy Baril…
I appreciate you sharing this blog post.Thanks Again. Cool….
Trackback by Roy Baril — November 21, 2011 @ 12:20 pm