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December 22, 2014

BMR Morning Musings…

Gold has traded between $1,193 and $1,204 so far today…as of 7:15 am Pacific, bullion is up $2 an ounce at $1,196…Silver is off 9 cents at $15.98…Copper is up a penny at $2.91…Crude Oil is off nearly $1 a barrel to $56.21 while the U.S. Dollar Index is down slightly at 89.56

Gold exports out of Switzerland reportedly reached their highest level of the year last week…furthermore, in order to meet rising demand from Asia, Swiss refineries are working at full capacity…

Interesting…this was announced just recently and is effective beginning today…the COMEX has instituted a new rule for Gold and Silver trading (memorandum S-7258) whereby if prices ratchet up (or down as the case may be) $100 for Gold and $3 for Silver during a trading day, they will institute a 5-minute trading halt to allow some semblance of order in the markets…any reason why they might be anticipating that kind of volatility?…

Officials in the South American country of Guyana say this year’s Gold production is expected to be lower than originally forecast…Miners Association spokesman Colin Sparman said Friday that hundreds of miners have abandoned the industry after suffering losses amid fluctuating prices…he said Gold production likely will not surpass 400,000 troy ounces this year, which falls short of the target of 481,000 troy ounces set by Guyana’s government…Gold is Guyana’s main export…the industry there generated nearly $1 billion in revenue last year…

The drop in Crude Oil prices equates to a significant tax cut for North American consumers which has to have some stimulative effects…the average price of a gallon of gasoline in the U.S. fell 25 cents in the past 2 weeks, tumbling to its lowest level in more than 5-and-a-half years, according to the Lundberg survey released yesterday…prices for regular-grade gasoline fell to $2.47 a gallon in the survey dated Dec. 19, down 25 cents since the previous survey on Dec. 5…the recent drop has taken prices down more than $1.25 a gallon since a recent peak in May of this year…

Today’s Equity Markets

Asia

China’s Shanghai Composite continues to roar ahead with the Index briefly touching a near 4-year high of 3,189 in the morning session…it closed up 20 points at 3129…over the past 6 months, China’s market capitalization has surpassed the other BRIC nations’ (Brazil, Russia and India) market capitalizations combined…the Shanghai is aiming for its 7th straight weekly advance…

Japan’s Nikkei finished up slightly overnight at 17635

Europe

European markets are up modestly in late trading overseas…a recovery in beaten-down Oil prices and the ruble and more calls for quantitative easing from the ECB helped lift sentiment…

An investor who owned all of Apple Inc. (AAPL, Nasdaq) would be able to sell it, purchase the entire stock market of Russia, and still have enough change to buy every Russian an iPhone 6 Plus…the market capitalization of Russia’s MICEX currently stands at 20.40 trillion rubles or $350.14 billion, which compares to Apple’s figure of $655.57 billion

North America

The “Santa Rally” continues on Wall Street this morning…the Dow is up 82 points through the first 45 minutes of trading after climbing more than 700 points the previous 3 sessions…U.S. home resales tumbled to a 6-month low in November after 2 straight months of strong increases, underscoring the uneven nature of the housing market recovery…

Santa Rally

Some profit-taking on the TSX this morning after 4 straight triple digit gains…the TSX is down 55 points as of 7:15 am Pacific

Seabridge Gold Inc. (SEA, TSX) announced this morning that the Federal Minister of the Environment has issued her Environmental Assessment Decision Statement for Seabridge’s KSM Project in northwest British Columbia…the Statement endorses the conclusions of the KSM Comprehensive Study Report (CSR) prepared by the Canadian Environmental Assessment Agency (“CEAA”) which found that the KSM Project is not likely to result in significant adverse effects on the environment…the federal decision is consistent with B.C.’s approval of KSM which was received last summer…SEA is up 4 cents at $8.72 as of 7:15 am Pacific

The Venture is off 4 points thru the first 45 minutes of trading after a 5% move to the upside Wednesday through Friday…

Venture 10-Year Monthly Chart Update

The Venture’s 10-year monthly chart gives us comfort that an important low was hit intra-day last Tuesday at 637 as this occurred as the -DI indicator reached its 2008 and 2013 peak levels…in addition, the %K is now beginning to bounce off an all-time low…

RSI(14) is crawling out of oversold territory…the Index can be expected to meet some minor resistance around the 680 level, the 2008 Crash low that was breached this month…

CDNX1(2)

WTIC 6-Month Daily Chart

Extreme oversold levels have emerged in Crude Oil, so a significant near-term rally is an increasing possibility…however, severe technical damage has occurred in the long-term chart and this likely means that we’ll see new lows ($50 or less) in WTIC at some point during 2015…on the fundamental side, supply problems aren’t likely to be overcome anytime soon…demand will have to firm up significantly in order to stabilize prices and prevent a drop below support at $50

WTIC2(1)

Gold Bullion Development Corp. (GBB, TSX-V) Update 

A strong turnaround story is emerging in Gold Bullion Development Corp. (GBB, TSX-V) as the company inches closer to receiving its final permit to begin Gold extraction with a high-grade “rolling start” at the Granada Property near Rouyn-Noranda, Quebec…

We see substantial value in the multi-million ounce LONG Bars Zone resource, and the economics of the 3-year “rolling start” are robust with payback in approximately 68 months as indicated in the Pre-Feasibility Study…other factors are also in the project’s favor…the low Canadian dollar and weak Oil prices will have a positive impact on the bottom line…much of the LONG Bars Zone remains to be drill-tested, and Quebec is looking more favorable as a jurisdiction with the socialist/separatist PQ out of power…in addition, GBB’s Castle property across the border in northern Ontario has under-appreciated exploration upside to it…

We’ll explore the fundamentals of the Granada Project in further detail during an imminent return visit to the infamous Cadillac Trend…

On Friday, we posted a long-term chart that showed how GBB has broken above a long-term downtrend line which has become new support…this morning’s short-term chart clearly shows near-term momentum with rapidly declining sell pressure and a bullish +DI/-DI crossover…RSI(14) is approaching 60% (plenty of room to move higher) while the 50-day SMA is flattening out just under 4 cents…

GBB is unchanged at 4.5 cents as of 7:15 am Pacific

GBB1(2)

Fission Uranium Corp. (FCU, TSX) Update

John’s last chart of a stock trading in the 80‘s (Paramount Gold & Silver Corp., PZG, TSX) gave readers an opportunity to make a short-term profit of nearly 50% as PZG closed at $1.18 Friday…Fission Uranium (FCU, TSX) could be poised to make the same kind of move…

Technically and fundamentally, Fission continues to look well-positioned for a potential breakout before year-end or very early in the New Year…the company is soon expected to release a maiden resource estimate for its PLS Property in Saskatchewan’s Athabasca Basin…Uranium mineralization at PLS has been traced by core drilling over 2.2 km of east-west strike length in 4 separate mineralized zones…mineralization remains open along strike both to the western and eastern extents…this is a world-class discovery, and FCU has been primed for a takeout…it’s also hard not to be bullish about Uranium as it moment given the price increase in recent months…

Fission should sparkle if and when there’s a breakout above the downsloping channel in this 2+ year weekly chart…the stock’s 50-day SMA is flattening out at 89 cents and may soon start to trend higher which would be a bullish sign…if FCU is able to push above both its 50-day and the downsloping channel around the Fib. $1.05 level, then this stock could gain serious momentum..

Fission is off a penny at 83 cents as of 7:15 am Pacific

FCU1(1)

Silver Short-Term Chart

Silver has finally staged a definitive breakout above a downtrend line that was in place since the summer on this 9-month daily chart…the December 1 dramatic move from an intra-day low of $14.15 to a close above $16 was technically highly significant…as expected, superb support has been demonstrated around $15 and Silver made a run last week toward near-term resistance at $17.50

Note how the downtrend line has become new support…

SILVER1(1)

Silver Long-Term Chart

This 34-year monthly chart continues to give hope that Silver could be preparing for a powerful “Wave 5” move to the upside, though we caution that this could take some time to play out (if indeed this theory is correct)…

RSI(14) has bounced off previous long-term support which will need to hold along with key price support in the immediate vicinity of $15

Fundamentally, Silver has been hurt by a slowdown in global economic growth…if economies in the euro zone, China and Japan can show some fresh strength in 2015 (and that’s a big “if”),  Silver could begin to appreciate rapidly…

SILVER2(1)

Note:  John and Terry both hold share positions in GBB.

20 Comments

  1. Jon, GBB looks hot right now but I just see one real problem that might affect any share price appreciation. What are your thoughts with respect to the total number of shares outstanding? We are at 282+ million shares. Is this a concern at all?

    Comment by Steven — December 22, 2014 @ 9:21 am

  2. Jon what you think about IMT.v suppose to begin to drill on Serpent River in January !

    Comment by Guy Delisle — December 22, 2014 @ 9:30 am

  3. Well, that was a short lived rally in the metals. Makes me wonder if we will double bottom the low in silver from 2008 under $10 an ounce. That could affect all the silver stocks for sure.

    Comment by dave — December 22, 2014 @ 9:31 am

  4. The O/S total has climbed significantly, Steven, but importantly so has the value of the asset – even more so when in production, so the fundamentals can be supportive of that dilution which has occurred….there could be some real nice liquidity for investors here too, with that share count…it all comes down to the value of the project…

    Comment by Jon - BMR — December 22, 2014 @ 9:42 am

  5. Are there any updates due from GBB e.g. updated PFS, a new 43-101 or maybe drill results?

    Will they need to raise much cash to get the rolling start going?

    Comment by Tom UK — December 22, 2014 @ 10:08 am

  6. GGI Website: 7 New Drillcore photos posted….
    Projects -> Mexico -> Rodadero

    Comment by Frank — December 22, 2014 @ 11:05 am

  7. Frank, these all appear to be well-mineralized intervals with some obvious galena; impossible to say what the grades might be, but this new core certainly looks consistent with previous core which is a good sign.

    Comment by Jon - BMR — December 22, 2014 @ 11:57 am

  8. Yes they also appear to all be at shallow depth (judging from the markings) which also bodes well. Cannot tell however where (drill locations) these cores are pulled from.

    Comment by Frank — December 22, 2014 @ 12:12 pm

  9. Is it an over simplification to say that the rise in the dollar is the problem in the metals ? Some are plotting the US dollar to be on a 10 year up move . Everyone pulling money out of countries with a weak currency and putting it in Wall Street . We are all here hoping for the Dec to Feb rebound that happened in years past but with USD and POG acting like it is today not sure …..

    Comment by Fiat — December 22, 2014 @ 1:00 pm

  10. Ggi news out.

    Comment by Tombc — December 22, 2014 @ 2:07 pm

  11. NEWS From GGI
    Garibaldi completes $1.25-million private placement

    2014-12-22 17:05 ET – News Release

    Mr. Steve Regoci reports

    GARIBALDI CLOSES $1,250,000 FINANCING

    In preparation for a dynamic exploration season in British Columbia in 2015, Garibaldi Resources Corp. has closed a non-brokered private placement of 5,953,310 flow-through units at 21 cents cents per unit (see details below) for gross total proceeds of $1.25-million. This strategic financing will be used to further advance the Company’s B.C. properties including the Canadian flagship Grizzly Project in the Sheslay district. “Exceptional results from Garibaldi’s Rodadero discovery in Sonora State and our La Patilla Gold Project in Sinaloa State already ensures that our shareholders have a great deal of exciting news to look forward to, near-term and throughout 2015, from ongoing exploration in Mexico which is accelerating,” stated President and CEO Steve Regoci. “Additionally, Garibaldi management believes strongly in the significant leveraged opportunity offered shareholders by the Company’s portfolio of B.C. properties led by the Grizzly. We have the means to unlock the value in these excellent prospects during 2015 which will build on our success in Mexico.”

    Garibaldi B.C. Projects Overview

    Grizzly Project

    A comprehensive NI-43-101 Technical Report on the Grizzly Cu-Au Porphyry Project is currently being completed by C.J. Greig & Associates Ltd. following successful 2014 programs that have further refined preliminary drill targets along with identifying new ones over a northwest-trending mineralized corridor that stretches for 30 km. The Company has been granted a multi-year permit for drilling at the Grizzly from the B.C. Ministry of Mines. Garibaldi has expanded the Grizzly to 272 sq. km through staking to extend the western border of the Grizzly West porphyry by 1 km. Significant drilling discoveries 10 km apart at the Star and Hat porphyries contiguous to Grizzly are strong evidence as to the scale of mineralization in this district. A new drill program recently commenced at the Hat Property as reported by Doubleview Capital Corp. Dec. 12, 2014.

    King

    Exploration targets at the 1700 hectare King Property, approximately 10 km north-northeast of the past producing high-grade Snip Mine in the Eskay Creek region, range from high-grade gold to high-grade silver-lead-zinc. Recent power and infrastructure projects have significantly improved access to the claim area. Four mineralized zones are considered highly prospective for potential new discoveries on this under-explored property.

    Red Lion

    The Red Lion Property, 60 km south of AuRico Gold’s Kemess mine in north central B.C., is contiguous to the northern border of Kiska Metals’ Kliyul Cu-Au Porphyry Project under option to Teck Resources Ltd. Kliyul has yielded promising results from drilling including 76 m of 1.16 g/t Au and 0.33% Cu, and 218 m of 0.52 g/t Au and 0.23% Cu.Garibaldi’s initial land position at Red Lion, characterized by extremely strong Cu-Au stream sediment geochemistry in both RGS and follow-up proprietary surveys, was increased recently to a total of 45 sq. km with additional staking covering a broad, high-tenor Cu-Au soil geochemical anomaly.Access and infrastructure at Red Lion are excellent with the power line to the Kemess South mine only 3 km away.

    MSM

    The MSM prospect, comprising 58 sq. km, is located approximately 50 km northeast of Imperial Metals’ Red Chris mine and is underlain by similar Triassic and Jurassic volcanic and plutonic rocks. At least eight Cu-Ag-Au showings have been documented on the property. During this year, Garibaldi compiled all previous exploration data, interpreted satellite imagery lineaments, conducted an airborne magnetic survey and collected stream sediment geochemical samples in preparation for more detailed ground work that will help identify potential drill targets.

    Tora Tora

    Garibaldi’s Tora Tora Property near Princeton, 25 km north of the producing Copper Mountain mine, is largely overburden covered but features a prominent circular shaped magnetic anomaly which management believes may be the expression of a buried intrusive body. The company is following up on last year’s aeromagnetic survey of this distinct target located 2 km west of Sego Resources’ 2012 discovery hole (DDH-12-21, 100.4 m of 0.95% Cu, 0.55g/t Au and 3.5 g/t Ag).

    Black Gold

    Garibaldi’s Black Gold claims near Grand Forks, British Columbia, are potentially suitable for extraction of dimension stone quality “black granite”. The Company continues to examine ways to unlock the value of this legacy asset.

    Private Placement Details

    The flow-through private placement consists of units of the Company’s securities at a price of $0.21 per unit. Each unit contains one flow-through share in the capital of the Company and one-half of a non-transferable share purchase warrant with each full warrant entitling the holder to acquire one additional common share of the Company at a price of $0.30 for a period of 18 months. Secutor Capital Management Corporation acted as exclusive finder in connection with this non-brokered private placement and was paid a cash commission of $87,500 CDN. The units from this private placement are subject to a hold period and may not be traded until April 23, 2015. The proceeds from the private placement will be used for exploration of the Company’s B.C. properties.

    Qualified Person

    Carl von Einsiedel, P.Geo., a non-independent geological consultant and a Qualified Person as defined by NI-43-101, has reviewed this news release and approved the content thereof.

    We seek Safe Harbor.

    Comment by John BMR — December 22, 2014 @ 2:19 pm

  12. I’m having difficulty not being negative or cynical about GGI and the markets in general. However, being a shareholder in ggi since shortly after the paramount deal in 2009, regoci hasn’t done much for the shareholders as far as stock price at least. I’m sure the people who bought in at 40 or 50 cents aren’t too pleased either. Regoci’s comment today sounds pretty similar to his comments months ago about unlocking value in the Grizzly…he keeps promising big results in Mexico but not much follow up to get people excited…I want to believe this will be different than AIX, ABR, FTR, PGX, PZG, but I don’t like the pattern. Anyway, that being said I would like to wish you folks at BMR a happy and safe holiday.

    Comment by bryan — December 22, 2014 @ 2:28 pm

  13. Girabaldi closes 1.2 million dollar financing. Interesting the proceeds will be used for it’s BC properties. What does this mean for the Mexico properties? Must have enough cash to drill the heck out of them? Rodadero drilling accelerating says Regoci. When will we see more assays?

    Comment by Danico.ca — December 22, 2014 @ 2:39 pm

  14. Correction – wrong name
    10.Girabaldi closes 1.2 million dollar financing. Interesting the proceeds will be used for it’s BC properties. What does this mean for the Mexico properties? Must have enough cash to drill the heck out of them? Rodadero drilling accelerating says Regoci. When will we see more assays?

    Dan

    Comment by Dan — December 22, 2014 @ 2:40 pm

  15. “Exceptional results from Garibaldi’s Rodadero discovery in Sonora State and our La Patilla Gold Project in Sinaloa State already ensures that our shareholders have a great deal of exciting news to look forward to, near-term and throughout 2015, from ongoing exploration in Mexico which is accelerating,” stated President and CEO Steve Regoci. “Additionally, Garibaldi management believes strongly in the significant leveraged opportunity offered shareholders by the Company’s portfolio of B.C. properties led by the Grizzly. We have the means to unlock the value in these excellent prospects during 2015 which will build on our success in Mexico.”

    Comment by Dan — December 22, 2014 @ 2:43 pm

  16. GGI have closed their financing. PR says the cash will be used to advance the Grizzly property in 2015. Maybe we will get drill results from Mexico tomorrow?

    Comment by Tom UK — December 22, 2014 @ 3:37 pm

  17. This is looking really encouraging, Tom. GGI means business, between the news, the core photos, the President’s Message, Regoci has given shareholders an early Christmas gift.

    Comment by Jon - BMR — December 22, 2014 @ 4:28 pm

  18. Sorry for the multiple post on GGI, but hopefully closing PP the will be the catalyst to get the share price moving again. It has been like watching paint dry for the past month and a half. Will GGI release the long awaited assays? Interesting the pics were added today and announcement of the financing. Jon, one wish is that this site be more interactive. Postings take forever to appear. Is there an appetite to speed up the postings? Delay of 5 or 10 minutes would be fine with me.

    Comment by Dan — December 22, 2014 @ 4:32 pm

  19. In reference to the other company’s mentioned today, garibaldi has averaged a nr once a month over the past nine. Consistent. They are moving in the rite direction,these things don’t happen quickly or when we want them to. I’m sure in a couple months from now,we will quite happy with what we see.

    Comment by Tombc — December 22, 2014 @ 5:39 pm

  20. Dan, keep in mind that a lot of companies have seen their share prices move in the past month-and-half – down big-time. The Venture plunged nearly 40% and we’ve witnessed a new all-time low but GGI has hung in there, outperforming most. In that sense, I’d rather watch paint dry than get smeared into a mess.

    I’ve had a chance to further review today’s GGI news – the update on B.C. is certainly encouraging and GGI will be the first in the Sheslay district to produce a new 43-101 technical report since the staking rush started just under a year ago. That should be an interesting document. Some other properties obviously have considerable merit, so they’ll be making some noise for sure in B.C.

    In Mexico, they’ve signaled that all is going well at Rodadero and I’m pleased to see they’re finally gearing up to get back to La Patilla, that’s overdue. I’m speculating we’re very close to a Rodadero update, perhaps right after Christmas?

    In any event, you won’t find this kind of energy in very many companies these days—GGI is a rare breed in terms of its activity, and pleasing results as well. And they can raise dollars, unlike most. I like the odds for another major breakthrough for GGI in 2015. This stock is up about 60% this year with the Venture down over 30%. That says a lot.

    Comment by Jon - BMR — December 22, 2014 @ 11:26 pm

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