Bill Murphy had this chart in his daily message today. It shows how the U.S. Dollar has been in a series of self-correcting oversold periods that have grown shorter each time. It’s interesting to note that the 50-Day M.A. has held almost the entire time. The dollar continues to be a key factor in most markets and nothing appears on the horizon that can change that.
P.S. By my non-scientific research, it’s Bill Murphy 100, Nadler 0 Who’s the crazy?
It appears the long suffering gold bears have once again failed in yet another attempt to shake the market lower. While the media remains focus on receiving advice about the future from a few chronic bad forecasters from the past, gold appears like it has all but completed its latest consolidation and ready to challenge $1,100 before years-end. As I said all along – the surprises in gold should mostly be to the upside.
With this in mind, I updated the model portfolio this morning.
In regards to some clients of Grandich Publications:
Formation Capital (FCO-TSX) is so close to finalizing their mine developing package one could taste it. Stay tuned.
Sunridge Gold (SGC-TSX-V) management tells me they’re quite please with their on-going exploration program. The $.60 area appears to be a level those not yet believers can become one at an undervalued entry point.
Timmins Gold (TMM-TSX-V) is perhaps one of the most undervalued companies on my entire list.
As noted over the weekend, option expiration in the gold market led to weakness. What a surprise-lol! While risk remains to $1,015 – $1,025, and even as low as either side of $1,000 if the U.S. Dollar can get above 78 on the U.S. Dollar Index, don’t lose sight of the bigger technical picture. Richard Russell of The Dow Theory Newsletter has correctly noted how gold has once again broken out from a bullish triangle formation. We remain in a secular bull market that’s been stealth-like and dominated in the news by bears (who have been wrong over and over again) and weak-kneed bulls who missed the latest up move and desperately need a bigger pullback to get back in so not to lose face.
I’ve updated my model portfolio. Both TGB and NSU have broken out technically on big volume. They still have lots of long-term appeal but with doubles already, I’m content to be just a strong holder at this time.
I had a chance to sit down with who I believe are deserving to be called the best junior resource newsletter writers – the Coffin Brothers/Hard Rock Analysts while I was in Vancouver. They’re very strong believers in Evolving Gold. We both agreed that on a back of an envelope we could start to scratch out 2-3 million ounces at Evolving Gold’s Rattlesnake property. The market is pricing that in now so while that should limit the downside once the hot money players move on to their next play (I suspect they will be gone by years-end in part due to tax loss selling), we’ll need to see drill results that suggest the deposit could be much bigger. I believe the first clue of this came in the most recent drill results so stay tuned. They very much like East Asia Minerals (EAS-TSX-V). I’m looking at it under $2.
Please accept my apologies for being too “promotional-type” in last week’s comment on Continental Minerals (KMK-TSX-V). Using the word cartwheels was too aggressive in my assessment. However, that doesn’t change my biased but humble opinion that KMK is now in play. Their newest large shareholder has been quite “promotional” about their new interest in KMK and the fact that they have not been as aggressive on the acquisition front as they should have. Believing their original shareholder has egg on their face, I’m quite optimistic one of these two, if not a new party can decide its time to take out KMK before their competition does. Stay tuned!
The Mining Journal just covered the recent forum in London, including a bit they titled “Monopoly Rules; Winning is all about having the correct strategy.” Under the header “Passing ‘Go’,” Donner Metals Ltd.’s Dave Patterson refers to the opening speaker’s Monopoly analogy by applying it to the Matagami Project. : http://clients.westminster-digital.co.uk/minesite/microsite/events/62/video/index.aspx?companyid=62_5
This picture shows the proximity of infrastructure in the area currently under development in Matagami.
Pay close attention to the strategy in this game, and you should see that the Matagami Project is a quality property with low-cost, high-margin deposits in a camp that has proven economic in every metals cycle since opening in 1963.
In June 2010, Xstrata is expected to finish the accelerated feasibility study. If it’s positive which seems likely since Xstrata skipped the pre-feasibility study to fast-track it, they should be breaking ground in July.
Crescent Resources (CRC-TSX-V $.21 ) is an early stage exploration company and they have now become a second player in the emerging Rattlesnake Hills Gold District in Wyoming. Crescent announced (I participated in the private placement) that they have concluded the deal on their Rattlesnake Hills Project, a highly prospective gold project that has tremendous upside potential. The property is adjacent to another company that I like – Evolving Gold - and I believe that they have potentially found a very large gold deposit in Wyoming.
Since late in 2008, Evolving Gold has been drilling their property and reported some spectacular high grade intercepts, but more importantly, very long lower grade intercepts where they should be able to build a large gold resource. These results have driven their share price and market cap. But there still appears room for movement as they’re currently drilling with 6 drill rigs and this should create a steady flow of drill results that should likely be reported between now and well into 2010.
Crescent Highlights:
The Rattlesnake Hills gold mineralization appear to be an alkalic gold system and similar to the Cripple Creek Gold District in Colorado where over 25 million ounces have been mined to date. There is a string of other similar deposits through a belt going from Montana, Wyoming, Colorado, and New Mexico, which include the Zortman-Lundusky and Ortiz gold mines.
Crescent can now be considered a significant player in the Rattlesnake Hills as their 4000 acre property is located right next door and in the same geological system as Evolving Gold’s property.
Crescent’s exploration work has now started with the objective of finding drill targets as quickly as possible. The initial field work should consist of ground geological work and geophysics. They have staked additional claims and details of which should be forthcoming.
Management
I am a firm believer in following the flow of people, and the Crescent management team have had key roles in the past (and present) of exploration, discovery, and development of several well known companies that have gone from early stage exploration through to become developing mines. Michael Hopley, President and CEO, has proved himself with companies such as Bema Gold, Sunridge Gold, and Tournigan Gold. Earlier in his career, Mike held the position of exploration manager for Gold Fields at Cripple Creek, which is a very similar geological environment to Rattlesnake Hills. Also in the management team are Don Halliday, Executive Vice President and Greg Davis, VP Business Development who have been involved in Bema Gold, Nevsun Resources, Crosshair Exploration, and Sunridge Gold.
The share structure in Crescent is favorable as there are currently only 30.6 million shares outstanding and there will be less than 40 million after the company closes the current private placement financing.
What to Expect?
From now until well into 2010 we can expect to see drill results from Evolving Gold. Now that the definitive agreement is complete, Crescent can fully begin field work on its’ property and can begin to generate news of their own. Crescent offers a chance to get in early on a highly promising gold district with tremendous upside potential.
Please note I presently own a very large equity position in CRC in addition to the compensation received.
Of all the “claims” I’ve heard from the gold bears/weak-knees bull camp, without a doubt this one today takes the cake:
“…Gold is NOT in a bull market. The dollar is in a bear market…”
Hello? Ah, a declining U.S. Dollar “Is” bullish for gold. It truly amazes me to see how long someone can be wrong and continue to find “innovative” ways of twisting in the wind.
How to know when gold is at a top? This is hysterically funny!
There’s a correction/consolidation out there so when it comes, rest assured the gold bears/weak knee bulls will say for the umpteen time, gold has topped. At this point, it should be only a pause that refreshes.
I believe it’s fool-hearty to think a diplomatic solution will be reached over Iran.
I’ve written about the political price the U.S. is going to pay for it’s outrageous debt and spending habits.
Commentary on Strathmore Minerals
I’m truly thrilled and grateful for the man upstairs for giving one of the best Christian men I ever met another job in the NFL
The Tyree Family and PG
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