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October 24, 2014

BMR Morning Market Musings…

Gold has traded between support level $1,229 and $1,235 so far today…as of 7:15 am Pacific, bullion is up $1 an ounce at $1,233…Silver has added 14 cents to $17.34…Copper is up a penny at $3.07…Crude Oil is $1.39 lower at $80.70 while the U.S. Dollar Index is off one-quarter of a point to 85.59

Gold’s next focus is the upcoming Federal Reserve’s meeting Tuesday and Wednesday…the consensus view is that the U.S. central bank will decide to wrap up its asset purchases under its third round of quantitative easing…clues are awaited regarding potential timing for its first interest rate hike…

Holdings in SPDR Gold Trust, the world’s top bullion exchange-traded fund, fell to their lowest since late 2008 this week in a sign of lingering bearish sentiment in the bullion market (a positive sign for contrarians)…interestingly, the fund this week recorded its biggest daily percentage drop in holdings in a year despite a bullion price jump to a 6-week high…some physical support for Gold came from continued strong sales in India due to festivals there…CNBC reported that a better Indian economy has contributed to increased buying of the metal in that country…

Saudi Arabia supplied the international and domestic market with 9.36 million barrels a day of Crude Oil in September, down from 9.688 million barrels a day in August, according to a report in The Wall Street Journal…however, the country’s overall production grew from 9.597 million barrels a day in August to 9.7 million barrels a day last month…the country can use storage, of course, to produce more Oil than it supplies to the market…market participants are still waiting for clarity on whether OPEC will collectively lower its Oil output goal when it meets November 27…some countries have called for the group to meet earlier to respond to the recent drop in prices…

Today’s Equity Markets

Asia

Asian markets were mixed overnight…China’s Shanghai Composite finished relatively unchanged at 2303…official data showed new home prices falling 1.3% on year in September, the first annual drop in nearly 2 years…the report heightened concerns over the country’s property market, which many experts say poses the single biggest risk to the economy…Japan’s Nikkei average, which was very volatile this week, surged 153 points overnight to close at a 2-week high of 15292

Europe

European markets are down modestly in late trading overseas, thanks in part to reports of the first Ebola case in New York…preliminary growth data from the U.K. showed that GDP grew 0.7% in the third quarter, in line with forecasts in a Reuters poll…

North America

The Dow is up 14 points as of 7:15 am Pacific while the S&P 500 is unchanged at 1951

Dow Updated Chart

The Dow’s recent reversal has formed a bullish engulfing pattern and RSI(7) has pushed above the RSI SMA(25) which indicates that the trend at the moment remains to the upside despite some weakness at the open this morning…

DOW30

The TSX is up 12 points as of 7:15 am Pacific while the Venture is down 3 points at 806…a minor intra-day reversal could allow the Venture to eek out another weekly gain after closing at 810 last Friday…

This is encouraging to hear:  “Montreal is back, we’re open for business,” new Mayor Denis Cordere stated yesterday during a luncheon speech at the Québec Mining Exploration Xplor 2014 Convention in Montreal.  “It’s in Montreal’s best interest to make sure that the mining sector in Quebec flourishes, because when it goes bad for the industry, it’s going to go bad for the metropolis.”

Updated Venture Chart

The Venture chart is looking healthier after the Index hit a series of RSI(2) extreme lows during September and October…selling pressure has abated significantly, and the Venture’s next challenge is to overcome its 10 and 20-day moving averages (SMA’s) and have those reverse to the upside…support is at 800

CDNX349

Garibaldi Resources Corp. (GGI, TSX-V) Update

Continuous drilling at Garibaldi Resources’ Corp.’s (GGI, TSX-V) Silver Eagle discovery in central Sonora State, Mexico, is yielding encouraging signs as the company reported late yesterday that Phase 2 “continues to consistently intersect silicified and brecciated rock containing pods of semi-massive sulphides similar to the mineralized intercepts reported from earlier holes. Mineralization remains open in all directions.”  The first batch of assay results from this second phase of drilling are expected in the near future…

A Big Fish Swimming Around

A couple of items of particular note regarding yesterday’s GGI news underscore the growing significance of Silver Eagle and the dozen or so other targets at the Rodadero Project, many of them clustered within a 30 sq. km area from Silver Eagle to the south and east…

1) The potential of Rodadero becoming an important new mineral camp in this part of Sonora State has much greater credence after Garibaldi confirmed that a “leading international Silver and Gold producer” has signed a confidentially agreement with the company and has just completed a second visit to the project…this is obviously a major who must see something they like, not just at Silver Eagle but throughout this district where high-grade Silver, high-grade Gold and very elevated base metal values exist near-surface over a very broad area…something must also be feeding this…in addition, a privately-held Chinese company has also expressed interest in Rodadero and just completed a 2-day visit…

Keep in mind, Garibaldi is not new at this business – with the aid of hyperspectral data, which they’ve used very effectively at Rodadero, they identified the highly promising nature of the Temoris option they held several years ago…they then sold that option to Paramount Gold & Silver (PZG, NYSE and TSX) for cash and millions of shares…on the Temoris ground is where PZG discovered the richest part of its San Miguel deposit (Don Ese)…expect GGI to negotiate very shrewdly with any parties interested in Rodadero…they have a history of success in Mexico to back them up…in the case of Rodadero, GGI stressed yesterday that these “approaches” by other companies have been unsolicited…the potential of this situation – both on the ground and in the market – is explosive given the scale, high grades and near-surface nature of the Rodadero mineralization…

GGI Rodadero Project

2) The discovery of surface mineralization (a zone including visible galena) 150 m north of SE-14-01 is significant in that it’s at a lower elevation than the discovery hole which may indicate the presence of feeder zones, perhaps even richer than what has been drilled into near-surface…also, the only Phase 1 hole that did not return significant results was collared slightly north of SE-14-01…so this surface discovery may make the area going to the north even more prospective than first thought…Phase 1 drilling showed the high-grade mineralized system widening to the south…

We’ll have more for our readers on GGI over the weekend from a fresh interview with President and CEO Steve Regoci that we’ll be conducting later today…

GGI is up 2 pennies at 19 cents as of 7:15 am Pacific…technically, it’s looking stronger than it has in several weeks…

TSX Gold Index

Speaking of producers, they staged an interesting turnaround late in yesterday’s session despite Gold’s modest drop…the TSX Gold Index rallied from 156.53 to close at 160, perhaps completing a double bottom low for October…there’s a bullish divergence RSI(14) and price on this 6-month daily chart…

SPTGD138

Spectra7 Microsystems Inc. (SEV, TSX-V) Update

Spectra 7 Microsystems (SEV, TSX-V) has had a strong week, rebounding after announcing Tuesday that the company expects to report record quarterly revenue of approximately $1.7-million for the 3 months ended September 30, 2014…this represents an increase of 45% over the prior quarter and an increase of 170% compared with the same period last year…gross margins for the 3-month period ended Sept. 30 will exceed 80% up from 76% in the previous quarter and from 69% in the same period last year…the third quarter 2014 financial results indicate record quarterly revenue and gross margins for the company and continued strong product gross margins for the second consecutive quarter…

Technically, strong buy pressure has emerged in SEV and the 200-day moving average (SMA) is reversing to the upside…key resistance remains in the mid-80’s – a breakout through that area would be a very bullish development…as always, perform your own due diligence…

SEV is unchanged at 78 cents as of 7:15 am Pacific

SEV2

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

18 Comments

  1. Jon – They then sold that option to Paramount Gold & Silver (PZG, NYSE and TSX)
    for cash and millions of shares…on the Temoris ground is where PZG discovered
    the richest part of its San Miguel deposit (Don Ese)…expect GGI to negotiate
    very shrewdly with any parties interested in Rodadero…

    Bert – Very interesting, now the question remains, will Shareholders be
    better off, if they sold the property, as opposed to be taken over. I know
    companies, with millions in cash, yet they can’t entice the market to buy
    their shares. What is the saying, i would rather have a bird in my hand,
    rather than 2 in the bush.

    Comment by Bert — October 24, 2014 @ 7:12 am

  2. Go GGI Go! Jon is right, this could be an explosive situation with GGI! My other two top picks are moving nicely the past few days as well. TLT.V and of course ZEN.V. Something must be afoot with ZEN. Anyway nice to see green on this friday!

    Comment by Dan — October 24, 2014 @ 7:16 am

  3. Wow, what an article released today on Baystreet.ca. I mentioned TLT a couple of days ago. So many possibilities and so much upside potential, it could be mind boggling.

    Comment by Dan — October 24, 2014 @ 12:37 pm

  4. And for anyone interested in a summation of what Theralase has to offer, watch on youtube “Theralase Technologies” a nice presentation by the CEO Roger White. The presentation was January 2014.

    Comment by Dan — October 24, 2014 @ 1:12 pm

  5. I’m on a mission, that is, to find out what advantage it will be for shareholders
    to see GGI sell the rights to their Mexico property, as opposed to having a company
    take them out at a premium. I admit to not knowing much about this line of thinking,
    & could be lost in my thoughts, but it’s D.D. for sure. Surely there are keen people
    on this board, who can add their opinion. I don’t want to find out in the future, that
    GGI sells their property & ends up with a pile of cash in the bank & the market responds,
    so what. In 2009 they sold their option to PZG for U.S. $400K & 6 million shares, but
    looking at their chart, i don’t see a spike in share price. Maybe that’s part of the reason
    they haven’t had to do a p.p., but whatever, it’s time for shareholders to catch a break.
    Good night !

    Comment by Bert — October 24, 2014 @ 6:19 pm

  6. Bert, a unique situation has developed at Rodadero for GGI, which Steve discussed at length in our interview this afternoon (the first excerpt of which we hope to post Sunday). GGI had an option on Temoris where they, as it turned out, correctly identified (with the aid of hyperspectral technology/data) a relatively small area (surrounded by Paramount ground) with potentially rich mineralization at depth (the high-grade Don Ese structure). Under the circumstances, IMHO, it made sense at that time to sell that option to PZG. What makes Rodadero so different is what we’re talking about here is SCALE (very large area assembled and controlled by GGI) and high-grade NEAR-SURFACE, and not just Silver (Gold and base metals). Rodadero North is 10 km north-south, 5 km wide, and this has shallowness to it (and of course potential at depth) and scale which combine to make it even more attractive than Temoris. I don’t think for a minute you’re going to see GGI sell Rodadero at this stage of the game, though that doesn’t mean a major might not enter into the equation in some way soon. What ultimately I believe could unfold here, if these targets connect like they’re beginning to think they do, is that GGI itself may get taken out in the same fashion as Cayden recently did (before a 43-101 resource estimate was even put together). GGI is going at Rodadero fiercely, the pace is going to pick up dramatically with the rainy season over, and Regoci I predict is going to leverage this in a huge way. Yesterday’s news has me thinking/guessing this is leading up to something very significant very quickly. With players like Megaw, Charest, Gibson, Sprott and others involved, look out. The fireworks have just begun with how this is now progressing.

    Comment by Jon - BMR — October 24, 2014 @ 7:08 pm

  7. Jon

    Will you be posting the interview with Regoci this weekend? Cant wait to hear it…
    thanks

    Comment by Greg — October 24, 2014 @ 8:45 pm

  8. Sorry did not see the post above when I posted my question about the interview

    thanks

    Comment by Greg — October 24, 2014 @ 8:47 pm

  9. We’re just working thru it, Greg—first excerpt probably Sunday.

    Comment by Jon - BMR — October 24, 2014 @ 8:51 pm

  10. Jon

    Could GGI sell out the entire company, and hold back the Shesley properties and then re name the company and come back out as a public co and start all over with the Shesley properties? or would who ever be the buyer want all of GGI’s properties?

    thanks

    Comment by Greg — October 24, 2014 @ 8:57 pm

  11. Jon

    “With players like Megaw, Charest, Gibson, Sprott and others involved, look out”

    this statement you made above, I know Gibson is involved, how are the others involved? I don’t remember seeing their names before?

    Comment by Greg — October 24, 2014 @ 9:08 pm

  12. Sorry to pre-empt your release Jon, but can you tell us what plans GGI have to drill the Grizzly this year. If they are using all their cash to progress Mexico, then I will not be disappointed if they leave BC until next year. Progressing their projects without share dilution will pay us shareholders handsomely in the long run.

    Comment by Tom UK — October 25, 2014 @ 2:14 am

  13. Jon

    Thanks for that ! No doubt, i do place, maybe too much emphasis, on your each & every word,
    but that’s my nature. I don’t mean any harm, but there’s only one way going forward & that’s
    the right way. The best of decisions are most always better made with a clear mind. Have a
    good weekend… R !

    Comment by Bert — October 25, 2014 @ 6:52 am

  14. Greg, GGI could simply sell whatever property or parts of property in Mexico they want. GGI would then continue with it’s other properties plus a stack of cash in the bank. GGI have only explored a small portion of the targets so far, so it’s too early IMO to be talking about selling properties. A JV however would make sense for the parties involved.

    Comment by Tom UK — October 25, 2014 @ 8:35 am

  15. Tom I agree. With Rodadero possibly being the first project to propel GGI higher and potentially transform the company in the near future, I would hope they wait until next spring to drill the Sheslay, unless they can find a way to drill it without dilution.

    Comment by Dan — October 25, 2014 @ 10:15 am

  16. Dan

    I am already on record as stating that GGI will not drill Sheslay
    this year. It’s my opinion that they would be dang fools to not
    concentrate entirely on Mexico, especially since the excitement
    is starting & the rain is stopping. Nor will PGX be drilling
    Sheslay, but i don’t know what DBV has in mind, but i do know,
    they better go purchase some longjohns.. I want to see GGI bring
    their Mexico project to a point, where we will see companies
    outbid each other for GGI.. Fatten my bank account from Mexico
    & i won’t worry about a private placement for Sheslay, nor will
    i worry about the future. One day at a time my buddy !

    Comment by Bert — October 25, 2014 @ 12:17 pm

  17. Paramount Gold and Silver (T.PZG) makes important discovery in Mexico

    Read more at StockHouse Website

    Comment by Bert — October 25, 2014 @ 2:28 pm

  18. Interestingly of course, Bert, this discovery was made adjacent to the high-grade Don Ese structure (deposit) identified by GGI that forms the richest part of San Miguel. The use of hyperspectral technology, which was critical to the discovery of Don Ese, has created another game-changer for GGI at Rodadero.

    Comment by Jon - BMR — October 25, 2014 @ 2:39 pm

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