"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.

Thursday, April 15, 2010

Barrick Clears Cortez Hurdle, General Moly Pops

Morning Miners!

It is 6:08 AM. Have a cup of Thor's thunderous java and let's enjoy some good news. Yesterday, U.S. District Court Judge Larry Hicks approved a "tailored injunction" for Barrick Gold that allows the company to continue mining at Cortez Hills. Here is the Barrick press release and some discussion of the decision posted on Mineweb this morning.

US Court Allows Continued Mining at Cortez Hills (Barrick Gold Press Release, 4/14/2010)

Cortez Hills gold mine can keep operating with court-ordered conditions (Mineweb, 4/15/2010)

It ain't over 'til it's over but this is a big step in the right direction. The tailored injunction is expected to result in little environmental harm while sheltering Nevada and Lander County from the economic harm a shut down of the massive gold mining operation would cause. Greg Lang, President of Barrick's North America Region, said:

"The court's order is a great relief to all of us at Barrick, especially to the many people who are directly employed at Cortez Hills. The court has affirmed that the supplemental studies can be completed by the Bureau of Land Management without halting our operations."

The Report is changing the "Adverse Regulation/Legislation" warning light from ORANGE to YELLOW on the Eureka Outlook Dashboard (upper right, what's this?). That deserves a Colonel Yee-ha!

OK, the markets are now open and guess what? General Moly (GMO) comes out punching with a pop in share price on high trading volume. Today's opening price jumped to $3.84 (10.4% higher than Monday's open) with a whopping 179,313 shares traded at the bell (335% greater opening volume than Monday morning during the first 15 minutes of trading). We might touch $4 today if this momentum continues, somebody loves us! Benchmark moly producer Thompson Creek (TC) has also opened higher but with less fanfare than GMO on a mixed morning for other miners and the broader markets. As I mentioned Tuesday, General Moly has been on a terrific roll lately (General Moly & US Gold Lead the Pack). It doesn't get much better than this...for a mining stock that is.

Yesterday Western moly oxide also got a little pop in price moving up from $17.50/lb to $17.75/lb. It is closing in on European moly oxide at $18.00/lb and nudging above the LME 3-month futures contact which is sitting at $17.64/lb. I'm sticking with my bet that moly will break $20/lb before the summer (Is Miss Moly Ready for $20 Shoes?). Here's a 1-month chart of Miss Moly, western-style, heading north with her Uncle Nickel:

Dennis Gartman, the Commodity King and my hero, spoke about the recent market rallies yesterday on CNBC Business News. He has advised his team to trade with some caution but not stand in the way of the broader markets' surge. Yesterday, the Dow Jones posted its first triple-digit point gain in three weeks, finishing up 103.61 points to 11123.03. The S&P 500 closed above the key 1200 psychological milestone after early upbeat corporate earnings reports. At 1200 we are only 52 points away from the bull pasture range gate. The Great Recession Bear Market commenced when the S&P dropped and remained below 1252 (i.e. 20% below the October 2007 intraday high of 1565.27, for a fuller discussion of what this means checkout Copper, Freeport & the Devil's Triple-6).

Enough talk, let's walk the walk:

4-WD is OFF - smoother markets return; the VIX or "fear index" is in the 15-16s far below 25 which is good; metals & miners are good with benchmark FCX comfortably above $74, 10-year Treasurys are below 4% preserving a low-interest rate environment (what's this?)

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

A YELLOW 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 $0.28 in early trading to $87.01 (May contract, most active); Gold is down $5.6 to $1154.0 (June contract, most active); Silver is down $0.065 to $18.350 (May contract); Copper is down $0.0170 to $3.5935 (May contract); Western Molybdenum Oxide moves to $17.75, LME moly 3-month seller's contracts is $17.64

The DOW is down 4.08 points to 11119.03; the S&P 500 is up 0.36 to 1211.01. The miners are mixed:

Barrick (ABX) $40.52 down 0.37%
Newmont (NEM) $53.24 down 0.57%
US Gold UXG) $3.22 up 0.92%
General Moly (Eureka Moly, LLC) (GMO) $3.88 up 4.86%
Thompson Creek (TC) $14.06 up 0.79%
Freeport-McMoRan (FCX) $84.97 down 0.46% (a bellwether mining stock spanning copper, gols & molybdenum)

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

ArcelorMittal (MT) $46.22 down 1.13% - global steel producer
POSCO (PKX) $121.26 down 0.53% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 0.44% to $1,459,662.75 (what's this?).


Colonel Possum

Write Colonel Possum at colonelpossum@gmail.com for answers to your questions or to request e-mail updates on the market

Headline photograph by Mariana Titus

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