Thursday, August 27, 2009
Dondog's Find in Oyo Tolgoi
It is 6:09 AM and the Colonel just saw a shooting star in the north sky. If we were ancient warriors that event might cause us to change our battle tactics for the day. More on that in a moment. Speaking of warriors how would you like to walk in the Gobi Desert with a geologist named Garamjav Dondog to a site important to Ghenghis Khan? Today it is called Turquoise Hill but in the Bronze Age it was a place to mine copper for for all manner of bronze implements.
As reported by Reuters yesterday, Ivanhove Mines has received the go-ahead for full scale operations to proceed at their massive Turquoise Hill copper and gold project in Oyu Tolgoi, Mongolia. This is important on several levels. Ivanhoe Mines in partnership with Rio Tinto has waited for years for this landmark agreement with Mongolia and it may open the gates for other foreign companies to explore and develop this mineral rich land, a modern day rush! Secondly, it illustrates the extent a resource hungry world will go to find new mineral reserves.
This is great reading for your break today. I found two stories; a new York Times Article published in 2004 that will introduce you to Garmajav Dondog, and yesterday's Reuter's article on the historical agreement:
Finding a Mother Lode in Mongolia - (New York Times, 10/14/2004)
A giant leap for Mongolia, but where to? - (Reuters, 8/26/2009)
Now back to our battle plan. Yesterday we left the Duke and the Cavalry in dangerous country wondering what might happen in the markets for the next several months (Is the Cavalry in the Long Dusty Valley?). Caution is the word buckaroos. Investor Doug Kass predicted yesterday that we have hit a market top and it would be downhill for the rest of the year. Why should we listen to him? Like Nouriel Roubini and Meredith Whitney, Doug Kass shares the distinction for calling last year's market collapse (Look for Change in Familiar Places). In fact, Kass called the bottom last March when the S&P 500 hit the Devil's Triple Six (S&P intraday low of 666.79). They may all be wrong this time around but the ole Colonel is listening and the Duke has his scouts galloping up a butte to get a better view. Stay tuned.
Enough gloom-doom talk, let's walk the walk:
All lights are green on the Eureka Outlook Dashboard (upper right, what is this?)
Oil is down $1.32 in early trading to $70.11 (October contract); Gold is down $0.4 to $945.4 (December contract, most active); Silver is down $0.090 to $14.165 (September contract); Copper is down $0.0130 to $2.8440 (September contract); Molybdenum holds steady at $18.00
The DOW is down 57.29 points to 9486.23; the S&P 500, down 9.59 points to 1018.53. The miners are getting clobbered:
Barrick (ABX) $33.44 down 2.22%
Newmont (NEM) $39.17 down 1.78%
General Moly (Eureka Moly, LLC) (GMO) $2.70 down 2.88%
Freeport McMoran (FCX) $61.86 down 2.01% (a bellwether mining stock spanning gold, copper & molybdenum)
Steel stocks are mostly down, (a "tell" for General Moly):
Nucor (NUE) $43.94 down 2.96% - domestic steel manufacturing
ArcelorMittal (MT) $35.60 down 1.06% - global steel producer
POSCO (PKX) $94.40 up 0.01% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is down 1.78% to $1,082,483.81 (what is this?).
Image of Garamjav Dondog adapted from a photograph by Jae Hyun Seok for The New York Times