"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, August 20, 2010

A Great Week for Eureka Moly LLC (GMO)


Morning Miners!

It is 5:59 AM. Have a hot cup of Raine's TGIF brew and let's reflect a bit on the last few days. It has been a great week for Eureka Moly LLC, subsidiary of General Moly (GMO), as many things have fallen into place to bring us closer to the start of Mt. Hope molybdenum mine construction next summer. Here is a recap of events and links in case you've been away:

Thursday (8/12) - The Eureka Commissioners met with the Nevada Rural Housing Authority (NRHA) to discuss plans and financing for the Eureka Canyon housing development. The new housing will relieve present shortages as the Mt. Hope project starts to roll (Eureka Housing Update)

Wednesday (8/18) - General Moly hosted a breakfast for community business leaders at the Owl Club (picture below, Eureka Housing Update). General Moly consultant Elaine Barkdull-Spencer told the Report, "As a result of the one-on-one interviews, a better than expected turnout of 34 business representatives attended the inaugural Eureka Business Breakfast Buffet that was hosted by General Moly and held on Wednesday, August 18, 2010 at the Owl Restaurant in Eureka. The focus of the meeting was on the Mount Hope project and its impacts on the business community. The group has agreed to meet the third Wednesday of each month at 7 a.m."

Thursday (8/19) - General Moly issued two press releases announcing the completion of the Preliminary Draft Environment Impact Statement (PDEIS) and a breakthrough on their water rights issue (General Moly (GMO) Makes Key Milestone):

GENERAL MOLY ANNOUNCES COMPLETION OF PRELIMINARY DRAFT ENVIRONMENTAL IMPACT STATEMENT (Press Release, 6:00 a.m. PDT, 8/19/2010)

GENERAL MOLY ANNOUNCES CREATION OF AGRICULTURAL SUSTAINABILITY TRUST IN DIAMOND VALLEY (Press Release, 1:40 p.m. PDT, 8/19/2010)


It is always a treat to read Adella Harding, Elko Daily Free Press & Mining Quarterly Editor, report on our local events. Here are her articles on this week's happenings:

Preliminary draft out on Mt. Hope (Adella Harding, Elko Daily Free Press, 8/19/201)

Eureka Moly, growers sign agreement (Adella Harding, Elko Daily Free Press, 8/19/201)

That should be enough reading material for your lunch break and maybe the weekend. As the markets opened today, the ole Colonel tossed a few more shares of General Moly in the buckboard. I paid $3.00/share which is a thin flat washer below the GMO 200-day moving average ($3.02/share), not a bad price for a mining company that may bring jobs and revenue to Eureka County for the next forty years.

Daily Market Roundup

Enough talk, let's walk the walk:

The Eureka Miner's Index(EMI) is above-par at 113.58, a noticeable drop from yesterday's 139.53 but a big improvement from the 6/7/10 low of 50.7. Importantly, the high and low trends remain positive since the EMI high on 6/25 but today's number just broke the lower trend line (120.67). Remember an EMI greater than 100 is good times (or at least better times) for metals & miners.

4-WD is ON - rough but improving roads in the marketplace; The VIX or "fear index" is above 25; metals & miners are on firmer timber with bellwether Freeport-McMoRan (FCX) in the low-$70s below its 200-day average of $75.3 (our new warning level, 8/05 update); 10-year Treasurys are safely below 4% preserving a low-interest rate environment but there is some deflationary caution now that we are sub-3%.

The YELLOW light is turned back on for Commodity Reflation. Although copper is trading above $3/lb, the 10-yr T-Note is solidly below 3.00%

The GREEN light is turned on for Stable Markets the VIX below the 30 level (what's this?)

The YELLOW light is turned on for Inflation/Deflation Watch as the Federal Reserves resumes buying back Treasurys and the 10-yr T-Note remains below 3.00%

The YELLOW light is turned back on for Investor Confidence as the bond markets signal trouble ahead

The GREEN light is turned on our Fuel Gauge with oil below $80

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, U.S. House committee debates miner workplace safety bill

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

NYMEX/COMEX: Oil is down $0.61 in early trading to $74.16 (October contract, most active); Gold is down $7.0 to $1228.4 (December contract, most active); Silver is down $0.222 to $18.105 (September contract, most active); Copper is down $0.0410 to $3.2775 (September contract, most active)

Western Molybdenum Oxide is $14.75; European Molybdenum Oxide is $15.75; LME moly 3-month seller's contract is $16.33, LME cash seller is $16.06

The DOW is down 70.99 points to 10,200.22; the S&P 500 is down 6.10 to 1069.53. The miners are down:

Barrick (ABX) $44.12 down 1.69%
Newmont (NEM) $57.47 down 1.66%
US Gold (UXG) $4.85 down 2.79%
General Moly (Eureka Moly, LLC) (GMO) $3.01 down 0.66%
Thompson Creek (TC) $8.74 down 2.56%
Freeport-McMoRan (FCX) $71.25 down 1.17% (a bellwether mining stock spanning copper, gold & molybdenum)

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

ArcelorMittal (MT) $29.62 down 1.99% - global steel producer
POSCO (PKX) $105.21 down 1.44% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 1.50% to $1,355,489.68 (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 of Mt. Hope by Mariana Titus

Eureka Business Breakfast Buffet photograph
courtesy of Eureka Moly LLC

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