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

DISCLOSURE

The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO), McEwen Ming (MUX) 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.

Friday, March 12, 2010

Western Lithium, Gold, Silver, Copper & Oil


Morning Miners!

It is 5:59 AM. I've got a pot of Raine's Red Label TGIF coffee brewing, let's put a wrap on this week. The Report has been drilling down on on molybdenum lately with its recent launch on the London Metal Exchange (LME) and General Moly's groundbreaking announcement last Friday (A Game Changer for General Moly & Eureka County). It's high time to change bits and catch up with some of our other favorite metals and oil.

Lithium

Mineweb reported yesterday that Western Lithium (WLC.V) is seeking strategic partners to help develop a planned mine in Kings Valley over in Humboldt County. President Jay Chmelauskas says they hope to bring it on line by early 2014. Mineweb reports, "Western Lithium is betting that car makers' plans to develop electric vehicles will prove a boon to the lithium ion battery industry, lifting demand for lithium metal by two- or three-fold in the coming years." The Kings Valley massive lithium carbonate deposits can be exploited by low-cost open pit mining. Here's the latest:

Western Lithium looking for strategic partners for Nevada mine
(Mineweb, 3/11/2010)

If you're just catching up with this exciting story here are some background articles on how emerging battery technologies may become very important to our State and County through the mining of lithium together with vanadium and silver:

The Next Big Thing in Northern Nevada (The Eureka Miner's Market Report, 9/28/2009)

A Big Step into the Future for Eureka County (The Eureka Miner's Market Report, 10/23/2009)

A Silver Lining for the Silver State? (The Eureka Miner's Market Report, 11/16/2009)

What's in a Battery for Eureka County? (The Eureka Miner's Market Report, 11/23/2009)

More News on US Gold & Western Lithium (The Eureka Miner's Market Report, 01/12/2010)

Gold & Silver

It is nearly mid-month and gold is trading at $1112/oz on the COMEX this morning. At the beginning of the month, the Colonel picked $1120/oz as a nominal price for March and I see no compelling reason to change it (The Colonel's Outlook for March). Kitco Metals sees a lot of price resistance at $1125/oz and solid support at $1110/oz. Looks like a Goldilocks to "not too hot or not too cold" month so far to me:

Kitco Metals Roundup: Gold Higher as U.S. Dollar Index Slumps
(Kitco Metals, 3/12/2010)

For $1120/oz gold, I'll hold on silver price too:

The fair value of silver is $17.184 in a range of $15.944 to $18.423

This morning COMEX silver is sitting at 17.200 just a feather above fair value. Comme ci comme ça, pardner.

Copper

There have been many calling for the demise of copper price recently but it just doesn't happen. Freeport-McMoRan (FCX) keeps on ticking above $80 too, a comfortable margin above the Report's warning level of $74. For $1120/oz gold, the March numbers for copper were:

The fair value of copper is $3.2170 in a range of $2.9363 to $3.4977

COMEX copper is trading at $3.3880, above fair value but hanging comfortably in its range. The March decline in LME copper stocks is price-supportive, reversing the build-up trend earlier this year:



Oil

Oil may very well become the wild card in our deck this month jumping outside its expected range this morning on the upside. Nuts.

The fair value of oil is $76.55 in a range of $70.33 to $82.77

COMEX oil is $83.19, is there a $90 barrel sitting out there this coming Spring? I'll keep my eyes on this bad dog buckaroos.

Enough talk, let's walk the walk:

4-WD is OFF - the VIX or "fear index" is below 25, improving broader markets are expected; metals & miners are headed for smoother roads with FCX above $74 (what is this?)

The YELLOW light is switched on our fuel gauge with oil above $80

An ORANGE light is ON for possible adverse regulation/legislation: Miner's claim fee, Miner taxation, Cortez Hills & mercury emissions

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

NYMEX/COMEX: Oil is up $0.76 in early trading to $83.19 (April contract, most active); Gold is up $3.8 to $1112.0 (April contract, most active); Silver is up $0.040 to $16.995 (May contract); Copper is up $0.0110 to $3.3880 (May contract); Western Molybdenum Oxide is steady at $18.25, LME 3-month futures (seller) is $17.24; 15-month, $17.01

The DOW is up 0.23 points to 10612.07; the S&P 500 is down 1.24 to 1149.00. The miners are mixed today:

Barrick (ABX) $39.04 down 0.36%
Newmont (NEM) $50.16 down 0.52%
US Gold UXG) $2.66 unchanged
General Moly (Eureka Moly, LLC) (GMO) $3.50 unchanged
Thompson Creek (TC) $13.63 up 1.94%
Freeport-McMoRan (FCX) $80.81 up 0.39% (a bellwether mining stock spanning gold, copper & molybdenum)

The Steels are mixed, (a "tell" for General Moly & Thompson Creek):

ArcelorMittal (MT) $42.69 up 1.62% - global steel producer
POSCO (PKX) $123.55 down 0.19% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 0.34% to $1,360,843.55 (what is this?).

Cheers,

Colonel Possum

Headline photograph by Mariana Titus

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