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An Established Daily Source For Analysis of Commodities,
the Venture Exchange & Speculative Opportunities

January 22, 2013

BMR Morning Market Musings…

Gold has traded between $1,690 and $1,696 so far today…as of 7:40 am Pacific, the yellow metal is flat at $1,690…Silver is also unchanged at $32.01…Copper is up 3 pennies at $3.66…Crude Oil has gained a nickel to $95.61 while the U.S. Dollar Index is off its lows of the day but still down slightly at 79.99…

Analysts at Citigroup have taken a slight bearish turn on the precious metal, cutting their forecasts for this year (by 4.2% to $1,653) and next year (by 0.2% to $1,653)…their Silver price forecasts remain unchanged…”Gold’s recent struggle to sustain itself beyond the $1,800 technical resistance level despite seemingly conducive conditions such as record low interest rates and fiscal uncertainty has cast doubt onto the bullish case for Gold among the investor community,” said the analysts in a note…this contrasts sharply with many other views including those of Frank Holmes (www.usfunds.com) who presented another powerful case for Gold at the Vancouver Resource Show the last two days…(we’ll review some of his comments later this week)…some downers pointed out by Citigroup:  Central bank net purchases for Gold have fallen from their 2009 peak, jewelry demand continues to fall and private-sector demand may be set to follow…public and private net investment into Gold was positive in 2012…

Bank of Japan Embraces Limitless Stimulus

The Bank of Japan has moved to open-ended monetary easing, while yielding to the government’s call for a higher, harder target for inflation, in its strongest show of commitment to ending years of corrosive deflation…today the central bank said it would aim to achieve a rate of 2% inflation -  up from its current goal of 1% – “at the earliest possible time” by shifting to the kind of limitless stimulus embraced the U.S. Federal Reserve…from January next year, when its current round of asset purchases had been set to expire, the bank will begin buying Y13tn ($146 billion) of mostly short-term government debt each month until that inflation target is met…it also produced a statement vowing to strengthen the co-operation between the bank and the government to overcome deflation and achieve “sustainable economic growth”…

Updated Euro Chart

The euro continues to show strength which is negative for the U.S. dollar and bullish for Gold…John correctly called a bottom in the euro last summer, and a move to the 140 level seems highly probable after a breakout above the cup-with-handle pattern…

Today’s Markets

Asian markets were mixed overnight with China’s Shanghai Composite falling 13 points to 2315…European shares are moderately weaker while the Dow as of 7:30 am Pacific is off 11 points at 13639…

Below is a 2.5-year weekly chart comparing the CDNX with Gold and the CRB…the Venture, importantly, has now broken above a down trendline in place since early 2011…while this market at the moment resembles a very “slow moving train”, the technical evidence suggests it’s now going in the right direction and a pick-up in momentum is likely not far off – especially after the 1240 resistance area is cleared…as of 7:40 am Pacific, the Venture is up 3 points at 1240 as it continues to flirt with that important level…

Parlane Resource Corp. (PPP, TSX-V)

The Blackwater district in British Columbia is one of the biggest Gold discoveries in Canadian history, but the process of uncovering mineralization there is often time consuming due to a lack of historical information, limited outcropping and the need to rely heavily on tools such as IP surveying and soil sampling to identify drill targets…Parlane Resource Corp. (PPP, TSX-V) has wisely taken a cautious, systematic approach to exploration at its large Big Bear Project (14,000 hectares) in between New Gold Inc.’s (NGD, TSX) Blackwater and Capoose deposits, and that strategy is now paying dividends after the company reported a significant discovery hole after the market close last Friday, and two holes in total out of six that intersected mineralizaton…this is an excellent start…the company can now “follow the science” and an important trail of mineralization that is right on strike between Blackwater and Capoose…what’s also critical to understand is that industrially and now geologically, the Big Bear Property is a key strategic area for New Gold as it prepares for production by 2017…Big Bear is in a flat part of the valley that includes a major logging road that runs right through the middle of the property…hole BB-12-04 returned three significant mineralized intervals at different depths including 9 metres grading 2.14 g/t Au and 12.64 g/t Ag between 195 and 204 metres…mineralization at Big Bear is hosted in thick units of intermediate to felsic lapilli and crystal tuff, a volcanic package that has similar geological signatures to Blackwater and is believed to dip moderately to the northeast…CEO Robert Edie was in high demand at the Resource Show the last couple of days, fielding many questions from curious investors, and we have every reason to believe that Parlane is planning to follow-up on these highly encouraging initial results with a major second round of drilling starting this spring…at some point, either in the near future or further down the road, we can’t help but think New Gold will resume its area consolidation by swallowing Parlane, and the price for that could be far greater than PPP’s current market cap of $7.7 million…below is a map of the Big Bear Property showing the location of BB-12-04 which suggests that Big Bear could be an extension of Blackwater…PPP responded well to the news yesterday, climbing as high as 31 cents before closing up a penny at 26 cents on over half a million shares…it’s up half a penny on light volume in early trading today…

Discovery Ventures (DVM, TSX-V) Chart Update

Discovery Ventures (DVN, TSX-V) continues to consolidate with very strong support at two Fibonacci levels – 32 cents and 35-36 cents…the performance of this stock over the last several months has been impressive, both in terms of volume and price appreciation, so it’s not surprising that’s it has been taking a “breather” recently after more than tripling in value from September to December…DVN closed yesterday at 35 cents and is up a penny-and-half on light volume so far today…

Carpathain Gold (CPN, TSX-V)

As requested by a reader this morning, below is a chart for near-term producer Carpathian Gold (CPN, TSX) which is trading down a penny at 33.5 cents in early trading today…as always, perform your own due diligence…

Note: John, Jon and Terry do not hold share positions in DVN or CPN.  Jon holds a share position in PPP.

17 Comments »

  1. hoping to have some help… CAN was halted and there is banter about the NR… but I cant find any NR for the reason for the halt… has anyone seen it??
    TIA:)

    Comment by Jeremy — January 22, 2013 @ 1:33 pm

  2. Well, venture closed above 1240 today. Let’s hope you buys at bmr are correct and this is the beginning of our bull run. We have lot of catching up to do with other markets :)

    Comment by Tony T — January 22, 2013 @ 2:50 pm

  3. Jeremy, if you have not found the CAN news release yet, it is on their website.

    http://canaco.mwnewsroom.com/press-releases/canaco-receives-initial-drill-results-from-shark-f-tsx-venture-can-201301220848097003

    Comment by Bev — January 22, 2013 @ 3:46 pm

  4. Bev… thank you … I saw the Shark NR on Stockhouse… didnt realize that Canaco had entered into the agreement…. I have a cold for over 5 weeks… my excuse and my story!!!!:) thx again Bev

    Comment by Jeremy — January 22, 2013 @ 4:20 pm

  5. This does need confirmation, so closing a point above 1240 today is encouraging but not necessarily the “magical moment”. A couple of consecutive closes above 1240 and some increased volume is what we’d like to see. The Venture needs to clear this 1240 area with some conviction. There’s more resistance at 1260 as well. Patience is the name of the game right now. The train is going in the right direction but not as fast as everyone would like at the moment.

    Comment by Jon - BMR — January 22, 2013 @ 4:21 pm

  6. @jeremy Go to BEAT THE STREET WITH SI TRADERS and blog no. 108060 to find more info on rollback of can shares. richard l

    Comment by richard l — January 22, 2013 @ 4:27 pm

  7. thx Richard.. will do…. is it just me but does something seem fishy tho..????? just going on what I read on SH… not that means anything!:) thx mate

    Comment by Jeremy — January 22, 2013 @ 7:40 pm

  8. Thanks for the chart on CPN!

    Comment by Tim — January 22, 2013 @ 10:46 pm

  9. An American Company USA Grapphite has announced its intentions of selecting the location of a high-quality Canadian project for a potential acquisition. Furthermore they say that they have identified the West Coast of Canada as the ideal location to acquire a project that would significantly augment the Company’s operations. Eagle Graphite, which is a privately held Canadian corporation, is located on the West Coast of Canada and is one of only two natural flake graphite mines operating in North America. The Company believes that this district would be an ideal location for an acquisition.

    What is crazy is that USA Graphite has only 2 graphite claims in Nevada which are still at an exploration and definition stage. With 130 million shares outstandind and a SP of 80 cents USA Graphite has a market capitalisation of 104 million $US. Carzy!

    Comment by Alexandre — January 23, 2013 @ 2:09 am

  10. Jon,
    Can this American acquisition have anything to do with RBW?
    Thanks

    Comment by Alexandre — January 23, 2013 @ 2:24 am

  11. Lets hope PPP’s news is eventually good for Deveron and VGN.

    Comment by Hugh — January 23, 2013 @ 2:49 am

  12. There are a lot of interesting rumors flying around the Slocan Valley right now, flake graphite being just one of them (new participants and increased activity at Eagle Graphite’s processing facility, and I think that partly explains what RBW may be up to. I’m sure they’re fielding inquiries and they are the second largest landholder in this area). From what I’ve picked up, Asian money is also believed to be coming in with regard to silver-gold development. Things are heating up. Rainbow has a very legitimate discovery on its hands at Gold Viking and a huge land package around the area. I’m very confident everyone will realize soon enough why we have been so bullish on this play for over a year now, and then of course they also have Nevada and Jewel Ridge has excellent prospects for turning into a mine.

    Comment by Jon - BMR — January 23, 2013 @ 5:23 am

  13. @jon. Do you read what you write before posting? Your talking about RBw property turning into a mine!!!!????? They cant even release a drill hole and your talking about mines.

    Comment by Heath — January 23, 2013 @ 6:23 am

  14. Heath, it doesn’t take a rocket scientist to figure out, based on geology and historical information, that Jewel Ridge has excellent prospects to become an open-pit operation. You didn’t complain when I stated the same thing about Granada before GBB started producing drill results.

    Comment by Jon - BMR — January 23, 2013 @ 7:01 am

  15. John…. CDNX gapped up, came down to tag 1240, then turned up in the first 1/2 hr….. how this happens is beyond me, but is it not a good sign that the trend and sentiment MAY have turned a corner….. true???

    Comment by Jeremy — January 23, 2013 @ 7:03 am

  16. Gbb had completed huge bulk sample. And you never did talk about a mine before results. You see unlike RBw gbb actually drilled and in turn released results. RBw drills then after long delays starts pumping other properties only to say that assays need sent back when they finally are released. Keep it real Johnny

    Comment by Heath — January 23, 2013 @ 7:17 am

  17. Hmm, didn’t talk about a future mine at Granada? Yes, GBB did a bulk sample but there are more historical holes to go with at Jewel Ridge and a very obvious north-south mineralized trend that right now contains over 4 million ounces of 43-101 resources immediately to the north and the south. I would say the odds are excellent for a potential mining operation at Jewel Ridge which is why geological modeling of a deposit, which is believed to exist given historical information, is well underway. Lots more data needs to be seen from Jewel Ridge, while GBB needs to find ways to improve the economics at Granada. Let’s hope both succeed.

    Comment by Jon - BMR — January 23, 2013 @ 7:53 am

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