Friday, December 11, 2009
Moly & POSCO Head North
It is 6:00 AM sharp. Let me pour you a simmering cup of that splendorous Raine's TGIF coffee and explain why I just threw a few more shares of General Moly in the back of the F-250. Sometimes the daily buzz gets so focused on one or two hot topics that it is easy to forget that there are other important things happening in the marketplace. Most of December has been consumed with the rise and fall of gold in the shadow of sovereign debt. In truth gold has pulled back from its lofty $1225+ high a 100-bucks or so but so what? Sovereign debt will be bugs on the global wind shield for some months to come (Dubai, A World Away?, A Stronger Dollar for 2010?). If it gets so bad we can't see where we're going, the Colonel will stop the truck and we can scrap those nasty critters off together. In the meantime let's take a look at another metal important to Eureka's future, molybdenum.
Moly has been holding steady a tad above $11 , stumbling down from $12 during all the Dubai ruckus. Moly rose to $11.62 yesterday along with a rise in nickel, another important metal in the production of steel. It is foolish to draw a big conclusion from a daily fluctuation in commodity prices, but when several things occur together the ole Colonel takes notice. This morning gold and oil are both down while silver and copper are up, that's interesting too. I checked out Korean steelmaker, POSCO (PKX) who owns a 20% share in our Mt. Hope project, and they are up a healthy 3% this morning. Aluminum giant Alcoa (A) is up 5%. All of this against a backdrop of a dollar rally, a drop in gold, a drop in oil...very interesting.
Checkout the performance of POSCO for the last 3-months (since 9/11 to be exact) compared to steel goliath ArcelorMittal (MT) and domestic steelmaker Nucor (NUE):
Posco (PKX) up 28%
ArcelorMittal up 9%
Nucor (NUE) down 10%
and General Moly (GMO) down 33%
I may be wrong but at $2.17 I think I just heard someone holler, "Back up the truck" over at Eureka Moly. A few shares of our local miners might look good in your Christmas stocking this year, they will in mine.
Enough Christmas stocking stuffing, let's walk the walk:
4-WD is OFF - the VIX or "fear index" remains below 25; smoother road market conditions expected (what's this?)
Yellow light is ON for possible adverse regulation/legislation: Cortez Hills & mercury emissions
Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)
Oil is down $0.48 in early trading to $70.06 (January contract, most active); Gold is down $2.7 to $1123.5 (February contract, most active); Silver is up $0.047 to $17.235 (March contract); Copper is up $0.0170 to $3.1200 (March contract); Molybdenum is jumped to $11.62.
The DOW is up 51.62 points to 10457.45; the S&P 500 is up 4.74 points to 1107.09. The miners are mixed:
Barrick (ABX) $40.33 down 1.66%
Newmont (NEM) $51.80 up 0.21%
General Moly (Eureka Moly, LLC) (GMO) $2.17 up 0.93%
Freeport McMoran (FCX) $78.26 up 0.67% (a bellwether mining stock spanning gold, copper & molybdenum)
The Steels are mixed, (a "tell" for General Moly):
Nucor (NUE) $42.37 up 0.78% - domestic steel manufacturing
ArcelorMittal (MT) $41.70 up 0.90% - global steel producer
POSCO (PKX) $126.40 up 3.07% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is up 0.20% to $1,254,880.60 (what is this?).
Photograph of HWY 50 heading north by Mariana Titus (2006)