"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.

Wednesday, May 19, 2010

Local Thumbs Up for General Moly - The Colonel's on the Road!


Morning Miners!

It is 5:55 AM. Have a cup of java on the ole Colonel. I'll be on the road again soon and be back at ya' bright and early Monday morning, 5/24. We've got great local news from General Moly (GMO); don't miss their 11:30am luncheon at the Opera House to discuss the results of an independent poll of Eureka County residents. Here's a link to the invitation and poll results:

GENERAL MOLY ANNOUNCES STRONG SUPPORT FOR MT. HOPE PROJECT AMONG EUREKA COUNTY RESIDENTS (Press Release, 5/18/2010)

Bruce D. Hansen, Chief Executive Officer, said:

"The results of this survey are extremely encouraging. That 74% of Eureka County residents support the development of the Mt. Hope project and 60% have a positive impression of our Company are phenomenal results for a modern greenfield mining project and speak to the importance of doing things right and maintaining open and honest communication with the community."


This Report gives a hats off to Tim Arnold, Mt. Hope Project Manager, who has worked long and hard to get the facts out to Eureka County residents.

Full details of the survey will be discussed at the luncheon but here's a quick summary:

Importance and Support of Mining Industry

• 89% of respondents are supportive or very supportive of mining in Eureka County with only 8% opposed;
• 65% of respondents believe mining is the most important industry in Eureka County, followed by agriculture/ranching at 25%.

Support/Opposition to Mt. Hope

• Of residents aware of General Moly's plans to open the Mt. Hope project, 59% had a positive view of the Company and explained their support by citing benefits to the economy that the company would bring and the positive personal impressions of General Moly employees;
• 74% of residents were supportive of the development of the Mt. Hope mine, including 33% who were very supportive compared to 15% of residents that were opposed;
• Among those supportive, the most important factor was high-paying jobs to the area (42%) followed by increased revenues for local businesses (27%);
• 79% believed that Eureka County should work cooperatively with General Moly in its efforts to open the Mt. Hope mine while only 8% disagreed.

Water Usage

• Just 37% of respondents knew that Mt. Hope will draw its water from the Kobeh Valley, 15 miles north-west of the agricultural community of Eureka while 14% mentioned Diamond Valley and 47% didn't know.

Mt. Hope molybdenum production in Eureka County may very well influence our future for the next forty years. It will bring jobs and revenue to the county and state through sales and use tax, property taxes and Nevada Net Proceeds (A Game Changer for General Moly & Eureka County). That deserves a Colonel Yee-ha!

German moves on short-selling have got the markets in a dither again with the euro plumbing new depths. The related strengthening of the U.S. dollar has taken a another whack at the commodity space including metals & miners with COMEX copper trading below $3. There are some new warning lights coming on our Eureka Outlook Dashboard buckaroos...stay tuned.

Before I fire up my rig, let's walk the walk:

4-WD is ON - rough roads in the marketplace; The VIX or "fear index" returns to the 30s but above our 25 level threshold; metals & miners remain on shaky timber with benchmark FCX trading in the high 60s well below its 200-day average of $75 (our new warning level), 10-year Treasurys are safely below 4% preserving a low-interest rate environment

The YELLOW light has just been turned on for Commodity Reflation with copper trading below $3/lb and the U.S. dollar index (.DXY) trading above 86

The YELLOW light returns for Stable Markets with the VIX above the 30 level (what's this?)

The YELLOW light returns for Investor Confidence with the possibility of a 10% correction in the broader markets possible and more likely

The GREEN light remains turned on our Fuel Gauge with oil below $80 (although this may only be a brief respite)

A ORANGE light is ON for possible adverse regulation/legislation: Mine Safety Violations, Miner's claim fee, Miner taxation, Cortez Hills, mercury emissions &
General Moly Mt. Hope Water Rights


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

NYMEX/COMEX: Oil is up $0.09 in early trading to $72.79 (July contract, most active); Gold is down $6.3 to $1208.3 (June contract, most active); Silver is down $0.534 to $18.345 (July contract); Copper is down $0.0460 to $2.9850 (July contract)

Western Molybdenum Oxide remains at $17.25, LME moly 3-month seller's contract remains at $18.14

The DOW is down 131.95 points to 10379.00; the S&P 500 is down 13.78 to 1107.02. The miners are mostly are unhappy campers:

Barrick (ABX) $42.87 down 3.62%
Newmont (NEM) $54.65 down 2.52%
US Gold (UXG) $3.74 up 6.03%
General Moly (Eureka Moly, LLC) (GMO) $3.67 unchanged
Thompson Creek (TC) $9.61 down 2.24%
Freeport-McMoRan (FCX) $67.21 down 0.21% (a bellwether mining stock spanning copper, gols & molybdenum)

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

ArcelorMittal (MT) $30.88 down 1.34% - global steel producer
POSCO (PKX) $95.42 down 1.95% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 1.93% to $1,331,636.74 (what's this?).

Cheers,

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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