BullMarketRun.com

4:45 am Pacific – updated version at approximately 9:00 am Pacific

Gold has traded between $1,384 and $1,400 so far today…as of 4:45 am Pacific, bullion is off $3 an ounce at $1,394…Silver continues to out-perform Gold, typically a positive sign for precious metals…Silver has jumped 62 cents to $24.15 (John has updated Silver charts in this morning’s report)…Copper is down 2 pennies to $3.25…Crude Oil is 50 cents lower at $107.15 while the U.S. Dollar Index is up nearly one-tenth of a point at 82.37…

Bullion holdings through exchange-traded products climbed 0.1% last week, according to Bloomberg, the 3rd straight advance and the longest run of increases this year…the drying up of ETP selling, strong Asian demand, short-covering, firm Oil prices, some weaker-than-expected U.S. economic data, and geopolitical concerns are key factors that have fueled Gold’s rise over the past couple of months…historically, September is bullion’s best month of the year, especially during bull markets, and continued bullishness in the weeks ahead may convince traders/investors that Gold indeed put in an important bottom in late June at $1,180…but Gold still has significant hurdles to climb including very strong resistance around $1,475 as well as the previous support band between $1,550 and $1,600…it’s likely that a minor scaling back of the Fed’s bond-buying program (by no means a certainty this month) has already been baked into the Gold price, so bullion may go up no matter what the Fed does at its September 17-18 meeting…the upcoming debate over the U.S. debt ceiling and the outcome of that could prove to be very positive for Gold…in terms of Syria, as CNN’s David Bergen pointed out in a piece yesterday, history strongly favors congressional backing for a military strike…over the past 2 centuries, presidents have asked Congress to approve the use of force before a coordinated military engagement on 18 occasions…every time, the answer has been at least a qualified yes…if Obama loses the vote, it will be a serious blow to his presidency…

Money managers boosted their net-long positions in Gold significantly last week and are now the most bullish since January 22, according to the latest available data from U.S. Commodity Futures Trading Commission…

“Investors have sobered up with their perceptions of Gold,” money manager Michael Cuggino told Bloomberg…Cuggino manages $12 billion of assets at Permanent Portfolio Family of Funds Inc. in San Francisco.  “You have people talking about it as an investment again.  Physical demand never really tailed off.”

Russia and Kazakhstan expanded their Gold reserves for the 10th straight month in July, while Mexico reduced its holdings…Russian holdings, the 7th largest by country, gained about 6.3 metric tons to 1,002.8 tons…Kazakhstan’s reserves rose 1.1 tons to about 132 tons, and Turkey boosted holdings by 22.5 tons to 464 tons…various nations added 534.6 tons to reserves last year, the most since 1964, and the World Gold Council expects that central banks may buy 350 additional tons this year…

Interesting prediction from a Citgroup analyst as reported by www.usfunds.com in its weekly Investor Alert:

“Citigroup strategist Tom Fitzpatrick said in a telephone interview that Gold and Silver should surge in the coming years as the precious metals continue to benefit from easy monetary policies adopted by central banks. “We believe we are back into that track where Gold is the hard currency of choice, and we expect for this trend to accelerate going forward. We still believe that in the next couple of years we will be looking at a Gold price of around $3,500. As the Gold and Silver ratio plummets near 30, this would also suggest a Silver price above $100,” Tom commented in the interview.”

Today’s Markets

Asian markets were strong overnight…Japan’s Nikkei average surged over 400 points to close at 13978…China’s Shanghai Composite, meanwhile, added 25 points to finish at 2123…a gauge of China’s manufacturing sector (PMI) jumped to a 16-month high of 51 in August as the economy perked up on the back of government policy support…analysts have pointed to 2 main factors for the upturn in China…1) Credit growth surged at the start of the year, but that wave of financing is only just now translating into real economic activity; and 2) Over the past 3 months, the government has taken a series of steps – referred to by some as a “mini-stimulus” – to boost growth…it has cut taxes for small businesses, provided support for exporters and, most importantly, boosted investment in rail and infrastructure…

European shares are mixed after a strong performance yesterday thanks to better-than-expected euro zone economic data…signs of growth in Spain and Italy helped manufacturers overall grow at the fastest rate in over 2 years, according to data provider Markit in its monthly report…

Stock index futures in New York as of 4:45 am Pacific are pointing toward a strong opening on Wall Street with investors encouraged by strong global PMI data…the U.S. will release a closely watched report on U.S. non-farm payrolls on Friday amid ongoing speculation over when the Federal Reserve will start to taper QE3…

The Venture Exchange is underpinned by strong technical support as it begins the new trading week at 939…a test of important resistance at 970 appears likely in the near future, perhaps as early as this week…Fission Uranium Corp. (FCU, TSX-V) and Alpha Minerals Inc. (AMW, TSX-V) have both been halted this morning, pending news…

Prosper Gold Corp. (PGX, TSX-V) Starts Trading Today, Garibaldi Resources Inc. (GGI, TSX-V) President and CEO Speaks Up On Sheslay River Valley Area

Pete Bernier puts his much-anticipated Sheslay River Valley Copper-Gold Porphyry Project into play today through Prosper Gold (PGX, TSX-V), which was granted final approval for its qualifying transaction after being halted for nearly 4 months…PGX begins trading at the open…it last traded at 42 cents in early May before Bernier cut what we view was an extremely  favorable deal for Prosper Gold with Firesteel Resources (FTR, TSX-V) to earn up to an 80% interest in the Sheslay…Bernier and award-winning geologist Dirk Tempelman-Kluit executed with amazing precision at Blackwater, allowing Richfield to get taken out in 2011 by New Gold Inc. (NGD, TSX) for half a billion dollars, so they have a template to follow at Sheslay and the same personnel to carry out their game plan…if you want a decent chance to make big money on the Venture, stick to companies like Prosper Gold that have the cash, the properties, the expertise and the drive to succeed both on the ground and in the market, and can find deposits that majors will buy…Garibaldi Resources (GGI, TSX-V), 100% owner of the even larger Grizzly Property contiguous to the western and southern borders of the Sheslay, also falls into that category…

As long-time BMR readers know, we followed Richfield closely from the early stages at Blackwater, and some of our readers made massive profits…no one, of course, can say for sure if Prosper Gold will be as successful, but 5 things are certain which help make the risk-reward ratio in this case very attractive:

1) Bernier and Tempelman-Kluit have found a highly prospective area;

2) They have a substantial following and the ability to raise lots of money;

3) The Prosper Gold share structure is fabulous;

4) They will carry out an exploration program with extreme efficiency and professionalism;

5) They will move at lightning speed (as they did at Blackwater)…

We can hear the thunder already from the Sheslay River Valley…

As we mentioned in a separate article on the Sheslay yesterday (“Bernier’s Brigade Ready To Conquer The Sheslay”), Prosper Gold is now operator of a property that holds major upside potential given the historical data from intermittent work completed since the 1950’s...the Sheslay features 5 permitted and drill-ready Copper-Gold-bearing porphyry bodies – the Star (most advanced), North Star, East Star, Copper Creek, and Pyrrhotite Creek…the first 4 are clustered within a 12 sq. km area while the Pyrrhotite Creek porphyry is located in what appears to be a 2nd distinct multiple target area 4.5 km to the southwest…surface showings (high-grade Copper) in some areas of the Sheslay are eye-popping, as pictures have shown…this has all the makings of a very large system…

Firesteel drilled a total of 26 relatively shallow holes at the Star target (all angled holes, and 18 of them were less than 150 metres in length), primarily testing the zone within an area of just 300 m by 400 m…each and every hole was mineralized from the collar to the bottom of the hole, such as CC2004-05 which returned 242.3 m grading 0.44% Cu and 0.32 g/t Au (it ended in strong Cu-Au mineralization, as did most of the other holes)…the continuity of grade was impressive…based on historical geophysical, geochemical and drill data, the Star target covers an approximate 700 m x 500 m area and is open at depth and laterally in all directions…mineralization is not restricted to specific rock types; the porphyry intrusive and bounding volcanic rocks are mineralized…

It’s incredible, though, that after 60 years of intermittent exploration at the Sheslay, detailed geological mapping has been completed over only isolated portions of the property as PGX stated in its technical report…this underscores the untapped potential this property has…one can be certain that Bernier’s team will utilize every tool and technique at its disposal, and turn the Sheslay upside down if they have to, in order to find the bulk tonnage deposit they’re after at the right grade…

Garibaldi’s Regoci:  “This (Bernier’s deal) Has Certainly Changed The Dynamics In The Area”

Following Friday’s news that the Venture Exchange has given its final blessing to the Prosper Gold qualifying transaction, BMR was finally able to get some brief comments from Garibaldi President and CEO Steve Regoci who has promised us an extended interview in the “very near” future:  “The Sheslay River Valley holds immense exploration potential,” Regoci stated rather emphatically, “which is why we’ve always been excited about the Grizzly, holding on to every square inch of this large property over the last several years while advancing our significant assets in Mexico and creating value there.  The work that we have done at the Grizzly since we acquired it has been extremely encouraging.  We’re delighted to see that Prosper Gold has successfully completed its QT with a significant financing to allow Pete and his group to exploit the opportunity at the Sheslay.  Yes, this has certainly changed the dynamics in the area.  We’re looking forward to updating investors in the immediate future with regard to the Grizzly and our Mexican properties.”

Combined, the Grizzly and the Sheslay total 240 sq. km – the scale of which is being taken into consideration, no doubt, by Bernier and Tempelman-Kluit…while the Grizzly is much less advanced from an exploration standpoint than the Sheslay, it nonetheless appears to be a critical piece of the overall puzzle and offers its own “blue sky” potential…the Kaketsa pluton rests on the northwest corner of the Grizzly and is believed to be an important “heat engine”, driving mineralizing fluids in the area…the Grizzly covers the western and southern contacts of the Kaketsa intrusion with the surrounding Stuhini Group volcanics, and shows many of the characteristics of alkalic porphyry Copper-Gold mineralization…the possibility of a high-grade Gold system at depth somewhere on this property also can’t be ruled out, according to some geologists we’ve spoken to and technical reports…the Garibaldi group is solid, as we’ve been reporting, and they have the working capital, the expertise and the desire to take full advantage of this unique opportunity…while GGI already has impressive assets in Mexico, and hasn’t had to do a financing in 4 years due to success down there, the Grizzly could yet have an immense impact on this company and its valuation…

Probe Mines Ltd. (PRB, TSX-V) Update

Another high quality exploration story (still not on everyone’s radar screens, amazingly) continues to unfold in northern Ontario, as we’ve been reporting for months, where Probe Mines (PRB, TSX-V) is building tonnage and hitting some stellar grades at its Borden Lake Gold Project…

We have written about Borden Lake on numerous occasions and the incredible work that Probe is doing under the strong guidance of President and CEO David Palmer…Agnico Eagle Mines (AEM, TSX) took a position in Probe a few months ago and for good reason…Borden Lake, which already boasts a significant resource, is evolving in a major way with a dramatic improvement in Gold grades in the expanding southeast extension of the deposit…Probe is actually reclassifying the deposit as a more traditional high-grade, Archean lode Gold system, amenable to underground recovery, which is also bounded by significant ancillary lower-grade mineralization, the latter ideally suited to potential open-pit mining techniques…drilling continues at Borden Lake, Probe is sitting on piles of cash and has only 75.7 million shares outstanding for a current market cap of $167 million based on Friday’s closing price of $2.21…still plenty of upside potential as exploration continues, especially if Gold and Gold stocks in general continue to strengthen through the balance of the year…the latest assays from Borden Lake came out August 21…hole BL13-455 on Section 1500m SE returned an impressive interval of 44 m averaging 4 grams g/t Au…100 metres to the southeast, hole BL13-458 returned an equally impressive 41.0 m grading 5.1 grams g/t Au…

Palmer stated August 21:  “The deposit continues to distinguish itself not only with its high grades, but also the remarkable consistency of the mineralization. This consistency is an important element that is often missing in Gold deposits and should aid in the potential development plans with improved efficiency and therefore costs. Our priority now is to continue delineating and defining the high-grade zone in order to incorporate this into the economic studies.”

Below is an updated Probe chart from John (2.5-year weekly)…you can see how volume and buy pressure have both picked up considerably recently, and how Probe has also significantly outperformed the Gold price even though bullion has enjoyed a terrific couple of months…the stock closed at relatively minor resistance Friday…

Ginguro Exploration Inc. (GEG, TSX-V) & Endurance Gold Corp. (EDG, TSX-V)

On Friday morning we commented about Ginguro Exploration Inc. (GEG, TSX-V) and its channel sampling results from the recently discovered 007 Zone at the Pardo Paleo-Placer Gold Property 40 miles northeast of Sudbury…the stock rocketed from a low of 3 cents at the beginning of last month to a multi-year high of 35 cents intra-day Friday (you can’t beat the leverage this industry offers)…

Average Gold content over the 22.5-metre length of channel sampling was an impressive 40.1 g/t Au…we’ll see how this develops…GEG has arranged financings at 10 cents and 15 cents totaling $2.3 million as they try to ramp up exploration at Pardo…it’s not the easiest property for most investors to understand from a geological perspective, so not only are future results important but so too will be the way the company communicates this story…so far, President and CEO Richard Murphy is telling the story very well – so well, in fact, he has made it a whole lot easier for GGI to successfully complete its financings with the stock closing at 31 cents Friday…he says Ginguro is targeting “the first large-scale Precambrian paleo-placer Gold deposit in North America”, offering “potential for mineralization on a scale never seen before in Canada.”

According to Ginguro, it has identified a “Gold-bearing channelized conglomerate reef system that is approximately 11 km x 4 km in extent…drilling and geological analysis has demonstrated geological processes at work that are similar to those that created the world’s largest Gold deposits in the Witwatersrand basin of South Africa.”

Ginguro earned a 55% interest in this property from Endurance Gold by completing $1 million in exploration expenditures and making cash payments totaling $200,000 over a 3-year period ending in 2012…a JV was formed and Ginguro was appointed operator…Ginguro, however, is now financing 100% of the current work program and states that its interest in the Pardo JV will increase as a result…according to EDG’s most recent MD&A for the 6 months ending June 30, 2013 (released August 27), “In April 2012, the Pardo JV Management Committee approved a drilling and geological basin analysis program with a budget of approximately $1 million.  The Company (EDG) elected…not (our emphasis) to fund its proportionate share of this program, which was to have been completed by the end of April 2013.  The operator has not yet provided the financial reports for the 2012 Program.  The operator has not yet provided any of the financial and all of the technical reports for the 2012 Program.  The Company will not be in a position to make an informed decision with respect to its participation in the Pardo JV until such time as the Company has received and reviewed the required reports.”

Well, that’s certainly interesting…as it stands right now, EDG’s interest in the Pardo JV is still 45% and we’ll see how everything plays out…both the 007 Zone and the Eastern Reef are located within the Pardo JV package (Ginguro also holds 100% of approximately 90 sq. km of claims)…Robert Boyd, a widely respected geologist who was formerly Vice President Exploration for Homestake Canada, is the President and CEO of Endurance…EDG had approximately $450,000 in working capital as of the end of June…GEG had about twice that much, and as mentioned they’re in the process of trying to raise over $2 million…

Endurance seems to be more excited about its Rattlesnake Hills-Natrona Gold Project in Wyoming, and to us that looks interesting as well…EDG now controls 18 Tertiary volcanic complexes which define both the northern half and eastern and western extensions of the Rattlesnake Hills Gold district…these complexes, comprising 6,500 acres, are related to known Gold mineralization in the district…EDG also has other projects – the key for them will be to focus on 1 and do it well…impressively, company insiders took down a $500,000 (non-flow-through) financing in early July at 10 cents when the stock was trading at 2.5 cents…there are currently nearly 70 million shares outstanding…

Below is an EDG 5-year weekly chart from John…there has been strong accumulation in EDG for than a year, and the trend at the moment is clearly bullish…the stock closed Friday at 9 cents, a penny below important resistance…definitely worth putting on the radar screen…

Updated Silver Charts

Silver enjoyed its biggest monthly gain in August since January 2012, climbing nearly 20%…Silver’s out-performance vs. Gold is typically a sign of positive money flow into precious metals…

Silver Long-Term Chart

RSI(2), which had become extremely oversold (a great entry point) during the 2nd quarter, is now at 75.87% and still has room to move higher based on historical patterns…the biggest challenge Silver faces in the near future will be to overcome strong resistance at $26 and then break above the down trendline in place for more than 2 years…if that were to occur, then Silver has a chance to really explode…but this won’t happen overnight…

Silver Short-Term Chart

The 6-month daily chart (completed last Friday) shows how oversold RSI(14) conditions in June turned into overbought conditions last month…there is strong support at $23, the top of a resistance band that is now a support band…there is also resistance at $24.50…note how the Silver-Gold ratio started to change dramatically in August…

Note: John and Jon both hold share positions in GGI.