Monday, January 11, 2010
Eureka Good News: US Gold, General Moly & POSCO
It is 6:37 AM, grab a cup and let's get to work. Nothing like starting out the week out with a buckboard loaded with good news. For the big picture the 2010 metals rally continues to rock with COMEX gold moving up $17 to $1156 and copper only a few pennies from $3.50. For Eureka County, there is positive news about US Gold, General Moly and POSCO. Let's take these in order:
Investment Banker Dahlman Rose is sponsoring an Emerging Miners CEO Conference this week in New York City. There is a a MineWeb report this morning about their thoughts on junior mining in Nevada:
Nevada still offers excellent potential for discovering and developing gold assets (MineWeb, 1/11/2009)
Adam Graf, director of equity research for Dahlman Rose, suggests that when compared to mining giants Barrick and Newmont, "junior miners stand to gain from existing processing facilities and well developed infrastructure, as well as the desire of major gold producers to replace existing assets."
One of Graf's top picks is US Gold (Amex, TSX: UXG) which includes their Tonkin and Gold Bar projects in Eureka, "US Gold holds one of the largest land positions on Nevada's gold trends, consolidating most of the southern portion of the Battle Mountain-Eureka trend, just south of the Cortez district and Barrick's Cortez Hills deposit." (the geology of this trend was recently covered in the Report's Mountains Move slowly, Time Passes Quickly).
"We believe the company's land position encompasses several prospective areas with the potential to discover new Carlin-type ounces," Graf said and has faith that US Gold head, Rob McEwen, makes "no secret of his goal to build another U.S. domiciled gold major and S&P 500 listed gold miner."
Here is a link to the US Gold website discussing the status of their projects in Eureka County:
Exploration Overview: Cortez Trend
The Gold Bar deposits were mined in the late 1980’s and early 1990’s by Atlas Gold Corporation (Atlas) and remain some of my fondest memories of Eureka:
Johnny Horton and Atlas Mine Memories (Eureka Miner's Market Report, 11/02/2009)
General Moly (Eureka Moly LLC)
General Moly (GMO) broke $3 in early morning trading. In late December the Report indicated that it may be a good time to buy some GMO stock since their share price had dipped below its 200-day moving average (POSCO & Miss Moly Go Dancing). We also warned that GMO stock needed to move quickly above the 200-day line to maintain momentum for 2010. Last Friday General Moly made a 13.4% move up on high trading volume. Predictably, momentum traders moved in this morning to jump on the band wagon to break the $3 mark. That deserves a Colonel Yee-ha!
Moly prices have been steadily moving upwards too hitting $14.25 Friday:
POSCO Goes to India
In addition to positive price action for molybdenum there is encouraging news from our favorite steelmakers, ArcelorMittal (MT) and POSCO (PKX). Both have investments in General Moly (South Korean steel producer POSCO has a 20% share in our own Mt. Hope) and are presently expanding their presence in India:
Arcelor, POSCO gear up for new India ventures (Reuters, 01/07/2010)
As reported, "The global steel industry is expected to experience a long-awaited recovery in demand this year, but the revival will vary across regions, with mature economies facing a slow and painful improvement and emerging markets enjoying a robust comeback." With this backdrop, demand growth in China and India are key to maintaining investor interest in the steel sector and derivative plays like General Moly.
There is an additional MineWeb article on the India developments:
POSCO plans $7.1bn steel plant in India (MineWeb, 01/07/2010)
I think all this positive news deserves another Colonel Yee-ha for the morning!
Enough hollering, let's walk the walk:
4-WD is OFF - the VIX or "fear index" remains below 25; smoother road market conditions expected to continue (what's this?)
Yellow light is ON for our fuel gauge with oil above $80
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 up $0.55 in early trading to $83.30 (February contract, most active); Gold is up $17.3 to $1156.2 (February contract, most active); Silver is up $0.300 to $18.770 (March contract); Copper is down $0.0730 to $3.4735 (March contract); Molybdenum is steady sits at $14.25.
The DOW is down 2.19 points to 10616.00; the S&P 500 is down 1.48 points to 1143.55. The miners are happy-pappy except for Thompson Creek:
Barrick (ABX) $41.82 up 0.95%
Newmont (NEM) $50.17 up 1.11%
General Moly (Eureka Moly, LLC) (GMO) $3.08 up 9.97%
Thompson Creek (TC) $14.07 down 1.68%
Freeport McMoran (FCX) $88.61 up 0.58% (a bellwether mining stock spanning gold, copper & molybdenum)
The Steels are mixed, (a "tell" for General Moly & Thompson Creek):
ArcelorMittal (MT) $48.03 down 1.90% - global steel producer
POSCO (PKX) $139.06 up 1.80% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is up a strong 1.27% to $1,404,720.23 (what is this?).
Headline Photograph by Mariana Titus