"The history of Eureka lies in its future." - Lambert Molinelli, 1878


The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Monday, June 1, 2009

The Future of Water in Eureka?

Morning Miners!

*** 7:07 AM UPDATE ***

It is 5:34 AM and a bit gray outside. The ole Colonel has waited until the first of June to say this: May was a weird month. Now, I’m not complaining that there wasn’t snow to shovel from a freak but not infrequent Memorial Day snow storm. My sweetheart of 31 years has a birthday on the 9th of May and I can remember barbecuing a rack of ribs in the snow a few years back for her birthday party. The sun room project last May brought on every element of weather in Mother Nature’s bag of tricks after the roof was off; high wind, rain, sleet and yes, snow. More than one Eureka old timer has commented to me that this has been a May like no other in recent memory. There has been the occasional afternoon thunderstorm but it seems trustees have used more water washing county vehicles than rain has wet our sage.

“Wait a darn minute!” some of you are no doubt saying, “The sage is green, there was a ton of snow in April and it rained like the dickens last night!” You're right and that makes my first point: local weather and climate are like markets, fickle and unpredictable. There does, however, seem to be something changing in our global climate as average temperatures creep steadily upwards in recent years. Without entering the debate of man-made versus natural cycle, there is little argument that global warming threatens future water supply in nearly every region of our globe.

Water is central to economic activity in Eureka. For miners it is always in the way of the next strike; for farmers and ranchers, there never seems to be enough. The Eureka folks that work on the ground (or below it) know these issues first hand whether it be a lower water table at Devil's Gate or the dewatering plan for Mt. Hope. The mission of this Report is to take a higher altitude view and peek at what might be coming at us in the future. One way to do this is to look at other commodity-sensitive economies that are dealing with extreme water issues today. Australia is a good example as they struggle with the worst drought in over a century. This week, we will look at some of the water shortage impacts in South Australia.

Before closing, please notice that I have expanded "Local Weather" (to your right) to include links to the Western Regional Climate Center and their Nevada Drought Monitor. From now on we'll call this section "Local Weather & Climate".

Enough talk, let's walk the walk:

Oil is up $1.11 to $67.42 (July contract); Gold is down slightly $0.5 to $979.8 (August contract); Silver up $0.155 at $15.765 (July contract); Copper is up 0.0680 to $2.2655(July contract); Molybdenum holds at $10.25.

General Motors and Citigroup will be removed from the DOW Industrials effective June 8. GM filed for Chapter 11 bankruptcy at 8:00 AM (ET) this morning.

The DOW is up 156.99 points to 8657.32; the S&P 500, up 18.30 points to 937.44. The miners are kicking butt:

Barrick (ABX) $38.43 up 0.92%
Newmont (NEM) $49.43 up 1.15%
General Moly (Eureka Moly, LLC) (GMO) $2.55 up 19.72%
Freeport McMoran (FCX) $57.41 up 5.47% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are doing cartwheels (a "tell" for General Moly):

Nucor (NUE) $45.44 up 3.48% - domestic steel manufacturing
ArcelorMittal (MT) $35.59 up 7.26% - global steel producer
POSCO (PKX) $86.30 up 2.87%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio rips, up 4.55% to $1,096,278.05 for a daily gain of $47,709,09!


Colonel Possum

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