We have little confidence in communist or socialist regimes, which is one reason – along with some very obvious technical signals – that we grew very nervous about the parabolic move in China’s Shanghai Composite that peaked in June just above the 5000 level. John’s charts were screaming that it was time for a correction in the Shanghai while millions of unsophisticated Chinese investors, encouraged by their government, were jumping on the bandwagon and borrowing heavily to grab shares of already overbought equities. If there’s any lesson to be learned from that, pay attention to what the crowd is ignoring or hates (that’s why we see some historic opportunities at the moment among select high-quality junior exploration companies and certain producers who have good control over their cost structures). Billionaire Carl Icahn certainly understands that concept which is why he recently became a major shareholder of Freeport-McMoRan Inc. (FCX, NYSE), one of the world’s largest producers of Copper and Gold.
Despite its many flaws, China is still the “800-pound gorilla” as far as commodities are concerned with a population of nearly 1.4 billion. It’s important to note that China’s economy, while certainly in need of further structural reforms, is still growing at an impressive clip, though obviously not at the accelerated rate it was earlier. Resource companies around the world will need to find new mineral deposits and put them into production in the years ahead just to serve China’s growing needs.
Getting back to the Shanghai, which historically has been very speculative and often disconnected from trends in the economy, John’s long-term chart gives us a very good idea of the “range” this market is currently in.
You’ll notice the extreme overbought RSI(14) conditions that emerged late last year and continued for about 6 months. This occurred as the index hit resistance at the top of a channel in June, just above 5000, while the +DI indicator also touched a previous high. This was a really dangerous time to be chasing this market.
At the moment, strong resistance exists around the 3400 level, just below the 200-day SMA shown on this chart (currently 3686 and likely to reverse to the downside soon), while support is at the bottom of the “pitchfork tine” at 2650.
Over the weekend, People’s Bank of China Governor Zhou Xiaochuan (a puppet of the state) said at the G-20 meeting in Turkey that China’s stock market has almost completed its correction after a bubble formed in the first half of the year. He’s actually probably not that far off in his prediction given how the RSI(14) has unwound to 53%, nearing support, while the bottom of the channel is 430 points or 14% below today’s close on the Shanghai of 3080 (a 2.6% decline after the 4-day holiday).
@BigRig_Trader #BigRigAlert $EQT.V $GGI.V $MQ.C $MZI.V $CRS.V $AAO.V $CMB.V $UMB.C $PSP.V $IBC.V $VID.V $NPH.V $MSD.V $BKI.V $DBV.V What’s on your list?
Comment by BigRig — September 7, 2015 @ 8:32 am
My team is DBV PE TE MMA FCX let’s see if I can retire on these one day FCX is just amazing what they have under Grasberg Pit.
Comment by Eddie Mucha — September 7, 2015 @ 8:51 am
Aw geez, just a basic guy, Jon, can you at least tell me if that light at the end of the tunnel is getting much brighter. Encourageing??
Comment by Laddy — September 7, 2015 @ 10:15 am
Looking good, Laddy.
Comment by Jon - BMR — September 7, 2015 @ 10:25 am
Rite on, thanks Jon.
Comment by Tombc — September 7, 2015 @ 10:37 am
BMR
Wow you guys really outdid yourselves on the write up on the Shesley situation above
Thanks for all the good work and info !
Comment by GREGH — September 7, 2015 @ 11:56 am
I think my decision to join BMR will prove to be a good one. I’ve been hemming and hawing about a speculative bet on Garibaldi for a few weeks now, not being able to find the free time to give it the serious look that this play deserves. Just this write up alone speeds up the process and saves me a considerable amount of time … a most rare commodity these days.
Thank you.
Comment by Treb — September 7, 2015 @ 1:59 pm
How can you be certain the grizzly won’t disappear down a black hole the way Rodadero has?
Comment by Ivan Borzinsky — September 7, 2015 @ 2:13 pm
Ivan, first off, Rodadero has hardly disappeared down a black hole, even though GGI has been quiet with regard to this project in recent months. Given the visits to Rodadero that have occurred by some major players, as confirmed by GGI, it’s possible they could be in sensitive discussions regarding a potential JV – it’s a large package with district scale possibilities. The high-grade results are fantastic. And it’s an ideal project to drill aggressively over the winter.
With regard to the Grizzly, GGI is currently executing a fully-funded program through flow-through dollars which MUST be spent by year-end. So that’s your answer. Expect GGI to go very hard at the Grizzly, as they are now, drill, keep drilling if they indeed make a discovery, and ramp things up in Mexico again with Rodadero and La Patilla.
The map in our report today says it all – the features over Grizzly Central North and Grizzly Central South match with successful drill hole hits at the adjoining Hat and Star properties. Personally, I would go after the area in Grizzly Central north just off the mag high, bounded by the faults, as shown on the map. And with DBV, not only is Anomaly A looking really interesting, but Anomaly E is screaming to be drilled as per that map.
Comment by Jon - BMR — September 7, 2015 @ 3:35 pm
Just noticed an interesting new pic in Grizzly photo gallery. NICE looking rock! Can anyone interpret what this is?
garibaldiresources.com/s/Photo_Gallery.asp?ReportID=604184
Comment by Bucky — September 7, 2015 @ 4:21 pm
Nice Pic. Thanks Bucky. That looks like an extremely well mineralized outcrop rock!
Comment by Dan — September 7, 2015 @ 4:26 pm
@ post 10 and 11. You forget about the big rock rbw’s president was walking around with?? Assays are the only true determine factor!
Comment by tony t — September 7, 2015 @ 4:40 pm
Jon
How much can really be determined by the rock samples that are on the GGI website , especially the most recent one? Is that recent sample on the surface or from a couple of feet down, I remember the ceo of another co holding a rock in the past and that did not end up too well …. so how much does that really tell the geo’s?
Thanks
Comment by GREGH — September 7, 2015 @ 4:59 pm
You’re 100% correct, Tony t. And you know what’s different here? 90 drill holes. 90 drill holes with an incredible 75% hit ratio on 2 adjoining properties, and the geological, geochemical and geophysical signatures which led to DBV’s discovery holes are almost identical over areas of Grizzly Central. Same Stuhini Group rock package. As detailed in our report, which took several weeks of investigation and consultation with independent geologists, the consensus opinion at this point is that the Grizzly North Central area has a high probability of hosting a mineralized system – an excellent area to target would be adjacent to the mag high within the bounded faults as shown on the map. There are also critical cross-cutting structures here – another district pattern for higher-grade mineralization.
There is little outcropping at Grizzly Central. It is mostly covered by overburden which “masked” this area historically. Remember Blackwater? A different deposit type, but we got on to that one almost from the beginning after Richfield figured out there was quite possibly a major deposit hidden by overburden. Ultimately that turned into 10 million ounces of Gold and massive amounts of Silver.
If GGI is finding further strong geochem responses at Grizzly Central, look out. The district model for Sheslay suggests there is no reason why there are not multiple deposits over a broad area. Somewhere, there could be a “motherlode”. This district is robust and keep in mind that the Association for Mineral Exploration British Columbia is calling the district B.C.’s #1 greenfield project. So don’t just take our word for it.
You can expand this line of geological thinking to EQT’s Garland Project where they are looking at the “next slice” of rocks below 75 meters. Others in the past couldn’t see that “next slice” and abandoned exploration when they shouldn’t have.
Comment by Jon - BMR — September 7, 2015 @ 5:04 pm
Jon, you are correct, GGI is embarking on an area that hasn’t been systematically explored. Grizzly central because of the overburden was overlooked but there was previous airborne geophysics that gave clues that Grizzly Central may host a deposit/s.
Just like EQT, finding 9 nine anomolies, 8 of them never detected before because of the limited ability of the older VTEM only penetrating 70 meters deep. I believe what EQT has uncovered given the size of the anomolies, has the potential to rival, if not dwarf Voisey’s if there are multiple economic mineralized systems on the Garland.
Back to GGI. They have to drill soon if they want to get ahead of the weather and make drilling go much smoother and faster, than having to deal with inclement weather later on.
Comment by Dan — September 7, 2015 @ 5:26 pm
Dan, we all agree, EQT could hit it really big given the expertise involved here and what the new technology has been able to show. It’s going to be an exciting September as drilling begins.
One important difference though pertaining to the Sheslay district – that critical second deposit (Hat) has already been found, about 10 km from the first one. After a second deposit in a district has been discovered, that greatly increases the odds of a cluster of deposits throughout the entire district. About 90 holes have been drilled over a broad area with astonishing success, so GGI just needs to follow the same signatures. And those signatures are present at Grizzly Central.
Just the one deposit has so far been uncovered at Voisey’s Bay, though it’s a very prolific mine. Normally, one would expect clusters of deposits as seen at other nickel camps. Let’s hope EQT can be that company that makes this critical second discovery.
Comment by Jon - BMR — September 7, 2015 @ 6:02 pm
For the moment Sheslay with Hat is only a potential as long as the hole 23 is not being released, it will remain of the potential, for the moment we have no discovery we have potential !
Comment by Guy Delisle — September 7, 2015 @ 6:29 pm
Of course there’s a discovery at the Hat, Guy, and it’s called the Lisle Zone and it started with hole 6 and then was confirmed to the east with holes 8 and 11, and then reconfirmed with another dozen holes. Those are the facts. Do the math on the back of an envelope – 500 m x 1000 m, based on the grades and intersections…could be 250 million tonnes, very easily. The Lisle Zone discovery doesn’t hinge on what’s below 400 m on hole #23. Would be great if there’s another big section of even higher grades there, but the Lisle Zone has been well defined and remains open in all directions including depth. The real key now for DBV is to step-out in a big way and connect. That’s what’s going to give this the big volume it needs in excess of 1 billion tonnes. A high-grade potential starter pit area is also critical. Often those emerge as drilling continues, on tighter spacing, and the structural fabric of the deposit is better understood. The alteration footprint at the Hat is huge and suggests the Lisle Zone is part of a much bigger system. Geology 101.
Comment by Jon - BMR — September 7, 2015 @ 6:40 pm
Jon,
how awesome would that be to see EQT hit and also GGI too over the next 2-3 months, wonder what the Venture would do? Trying to keep my expectations in check, but sure is fun speculating…
Comment by Greg — September 7, 2015 @ 6:42 pm
Jon – Nice write up, and pic of Grizzly rock on GGI site.
Greg – It would be something to have 2 major discoveries before the year is out. The odds are higher than not, so greater then 50% in my view.
Comment by dave — September 7, 2015 @ 7:32 pm
Jon
I was reading thru GGI website this evening and looking over the GGI team and their qualifications and all of the teams experience seems to be in Mexico, do you know if GGI has any plans to bring on any other experts like Dbv did with Dr Razique for their Grizzly properties…
Comment by GREGH — September 7, 2015 @ 7:39 pm
Greg, GGI doesn’t make much noise about this – I think they should – but they have a fabulous team that’s working on the Grizzly, and their lead technical group is C.J. Greig & Associates Ltd. Charlie Greig’s other big project is Brucejack (Pretium). I’ve met and spoken with Charlie, he’s one of the best in the business, an awesome guy who really knows his stuff, and that’s why he’s also with Pretium. Jeff Rowe, also part of C.J. Greig, is outstanding in his field. C.J. Greig & Associates is also preparing the Grizzly NI-43-101 report. I guess they’ve come up so much new information recently, they keep adding to it. The Grizzly is in highly capable geological hands. From a geophysics standpoint, GGI has contracted that part out to the best in the biz in B.C. Garibaldi should emphasize this more IMHO.
Comment by Jon - BMR — September 7, 2015 @ 7:45 pm
Jon
Thank you for that info, I do not see that info on their website anywhere.
Thanks
Comment by GREGH — September 7, 2015 @ 7:51 pm
Greg, they’ve mentioned C.J. Greig & Associates in some news releases, pertaining to the Grizzly, and Steve has commented about the quality of the Grizzly team in past interviews. As they ramp up this month, it’s likely I would guess that they would start emphasizing this more.
Comment by Jon - BMR — September 7, 2015 @ 7:57 pm
Jon, How far are those Grizzly central targets from the heat engine.
Comment by dave — September 7, 2015 @ 8:02 pm
Jon, nevermind. Looked at it again and saw the scale. Great map Jon.
Comment by dave — September 7, 2015 @ 8:03 pm
Greg, I’ve had a chance to look at that sample tonight and quickly checked with our geo consultant. Keep in mind, it’s the geochem and the geophysics that will determine the quality of the targets at Grizzly Central. What is interesting, however, about this sample is the fact that it’s showing multi-phases of mineralization (in what looks like volcanic breccia) that is characteristic of the district, and historically very little outcropping has been seen at Grizzly Central due to the overburden cover. Obviously they have stumbled on some outcropping in a particular area. That could provide some clues as to where they could be in the system at Grizzly Central. Would be nice to know what part of Grizzly Central this is from. No question it’s a nice sample.
Again, I cannot emphasize how important this is – you’ve got a district with about 90 drill holes and very specific signatures associated with those holes, 75% of which have “hit”. The same Stuhini Group rocks that underlie the Grizzly extend north. If the geochem and geophysical signatures at Grizzly Central are the same as those over the discovery holes elsewhere in the district, what the heck does that tell you??? Why do u think AME BC calls this the #1 greenfield project in the province??? That’s not a pump, that was stated emphatically by a 3rd party with great knowledge of B.C. and the Sheslay district. There are probably deposits throughout this district. Also helps explain Chad Day’s power-play.
It would be almost impossible to believe that there are deposits on 2 adjoining properties and none at the Grizzly which is nearly 3 times the size of the other two combined, and also hosts the Kaketsa heat engine (given the commonality of structures).
The challenge for GGI is to hone in on the best target to get a hit right off the bat. It appears they’re making excellent progress in that regard, so get ready for some action.
Comment by Jon - BMR — September 7, 2015 @ 8:11 pm
Thanks Jon
Gonna be fun to watch this all unfold, hopefully soon too…
Comment by GREGH — September 7, 2015 @ 8:22 pm
HOw close is.the nearest power supply should Ggi make a discovery?
Comment by tony t — September 8, 2015 @ 3:49 am
The Northwest Transmission Line has been extended up to the Iskut area, Tony, which is about 120 km east of the Sheslay district, and that’s why the Red Chris is now in production…the NTL will likely be extended to Dease Lake, which is even closer…if economic deposits are proven up in the Sheslay district, it wouldn’t be difficult at all to run an extension of the NTL to that area…the NTL has been a game-changer for much of NW B.C….anyway, that’s for the future….the key now will be to expand deposits at the Hat and the Star, and find something big at the Grizzly…
Comment by Jon - BMR — September 8, 2015 @ 4:45 am
Jon the key is to finalize the situation with Chad Day !
Comment by Guy Delisle — September 8, 2015 @ 4:53 am
What exactly is there to “finalize” with Chad Day, Guy?
Comment by Jon - BMR — September 8, 2015 @ 5:11 am
Permission to drill in Sheslay during negotiations
Comment by Guy Delisle — September 8, 2015 @ 5:37 am
Pure Energy showing more strength this am. Just powering its way up higher and higher each day. News imminent or just spec buying on Tesla rumours? Would be nice to see it consolidate here for a bit and take a breather.
Comment by Roger — September 8, 2015 @ 5:46 am
PE- .76 cents up 10 percent
Comment by Roger — September 8, 2015 @ 5:48 am
No, Guy, that’s not the case…
Comment by Jon - BMR — September 8, 2015 @ 5:49 am
PE is on a roll, Roger, but I’m going with John’s chart given the Fib. resistance at 75 cents. Important to watch those Fib. levels. But that’s just a short-term perspective.
Comment by Jon - BMR — September 8, 2015 @ 5:51 am
Todays DBV news once again shows Farshad cleaning up option agreements. This will make the company much cleaner in the event of future buyouts as well as increasing Farshads stake in DBV. I see this housekeeping as being an interesting and positive sign.
Doubleview amendment to Mt. Milligan North agreement
2015-09-04 19:56 ET – Property Agreement
The TSX Venture Exchange has accepted for filing an amendment agreement between Doubleview Capital Corp. and 0895277 B.C. Ltd. (the optionor) dated Aug. 13, 2015, pursuant to which the parties agreed to amend the terms of an option agreement dated Feb. 21, 2011. Under the agreement, the optionor agreed to remove the remaining exploration expenditure requirements on the Mt. Milligan North property in the amount of $300,000 in consideration of the issuance of one million share purchase warrants by Doubleview each exercisable to acquire one common share at an exercise price of 10 cents per share for a period of five years from the date of issue. As a result of the amendment, Doubleview will have exercised its option to acquire a 100-per-cent interest in the Mt. Milligan North property, subject to a 2-per-cent net smelter royalty.
Insider participation: Farshad Shirvani is the chief executive officer and a director of Doubleview and is the sole director and shareholder of the optionor.
Comment by Jamie — September 8, 2015 @ 5:54 am
Sorry was Sept 4th news not todays!
Comment by Jamie — September 8, 2015 @ 5:55 am
Thanks Jon, yes, seeing John’s chart I am considering taking a little off the table and cashing in some profits.
Comment by Roger — September 8, 2015 @ 5:56 am
The important thing today is the Venture getting thru its 20-day SMA…we’ll see if that can be confirmed…also, nice high-grade results this morning from NXE at Rook 1…
Comment by Jon - BMR — September 8, 2015 @ 5:58 am
Still expecting positive news from farshad this week?
Comment by Sam — September 8, 2015 @ 6:00 am
Quite possible, Sam – we expanded on the GGI and DBV situation in our report yesterday…have to be drawing very close to news on both fronts…of course it can never come fast enough for anyone…
Comment by Jon - BMR — September 8, 2015 @ 6:14 am
I don’t know the first thing about fib resistance levels, but it looks like it was no match for the power wanting in V.PE!!
Dave – PE is crushing EQT!!! I’m sad because I put more money in EQT, but happy because I have a position in PE!!
Comment by Paul — September 8, 2015 @ 6:32 am
Fib. analysis is a very useful tool, Paul, and what’s important is not an intra-day move above a Fib. or other resistance level, but the close…and then confirmation…
Comment by Jon - BMR — September 8, 2015 @ 6:38 am
Thanks Jon – will keep studying!! I may have got a little excited seeing .78 on V.PE’s board!!
Comment by Paul — September 8, 2015 @ 6:40 am
If you have a situation, Paul, where PE closes above Fib. resistance (75 cents) today, then one would look for confirmation of another potential breakout tomorrow…we saw PE back off temporarily from Fib. resistance at 47 cents previously (into the upper 30’s), then it pushed through that level as we suspected it would…now we’ll see how it handles this Fib. resistance…many investors have trading positions and core positions – that’s a good way to go IMHO…bottom line, this has tripled since we introduced it in July…for those who got in below .30 or .40, if you haven’t locked in some profits by now, you might be getting a little greedy…
Comment by Jon - BMR — September 8, 2015 @ 7:06 am
Paul
All Resis lines on a chart should not be considered as lines but general areas. The 75c FIB. level is based on probability and should be considered as a nominal value representing an area. When the SP reaches or is near to a measured FIB resis. it is a warning to investors that there is a high probability that it will meet resis. around that area. PE did meet resis around 75c and its strength and momentum carried it above 75c.Lets see where it closes today.
If you remember when DBV had a run. It went as high as 40c even though the FIB Resis was around 36c, but it came back down rather quickly.
Hope this helps.
Comment by John - BMR — September 8, 2015 @ 7:06 am
Dave, what are your thoughts on the PP? Think it will close today? I know one thing, if they start the drill before the PP closes it may jeopardize the closing as it will surely run higher when the drill starts turning. With their IR person on site it won’t be much longer before the drill starts spinning.
Comment by Dan — September 8, 2015 @ 7:18 am
Thanks guys – it all definitely helps. I appreciate the sharing of info here. Still looking to trade between PE and EQT in order to strengthen my position in DBV. Although GGI seems to be the darling of the Sheslay these days (by discussion volume only).
Comment by Paul — September 8, 2015 @ 7:18 am
Dan – I expect the PP closing anytime. Could come before, after, or even during market.
Paul, I would not be sad buying more EQT if you have a position in PE. If PE comes out with powerful news, it will propell it over a buck and make that double I talked about to $1.06. However, EQT is an explosion waiting to happen. Either way you win.
I took some off the table with PE.
Comment by dave — September 8, 2015 @ 7:55 am
As we speak, GMP dumping for the PP and EQT just shot through the .14 ask and now large on .14 bid. I sense something is close.
Comment by dave — September 8, 2015 @ 7:57 am
Keep in mind, the market will know of the closing before we do, I suspect that’s why EQT getting strong again. However you view this, it doesn’t take a rocket scientist to see the trading back and forth and to see the strength here.
Comment by dave — September 8, 2015 @ 8:00 am