Friday, September 10, 2010
Adella Harding Interviews the Colonel
It is 5:40 AM. Have a well deserved cup of Scott Raine's delicious TGIF coffee and let me show you something I got in the mail. The ole Colonel just received the Fall 2010 edition of the Mining Quarterly. Adella Harding is the editor of this quarterly magazine that includes her unique "boots-on-the-ground" reporting style that covers every aspect of mining in northern Nevada. She is admired and well known in these parts serving also as mining editor for the Elko Daily Free Press.
Adella contacted me this summer to arrange an interview on the Eureka Miner's Market Report. Unfortunately, I was out of town and we conducted a phone interview July 26th. I am honored to be a part of the Fall 2010 edition of this terrific magazine. Please checkout her report on this Report, pages 34-35. There are also informative updates on our Ruby Hill Mine and Eureka Moly's Mt. Hope Project. You can pick up a copy in town or subscribe to this quarterly or the Elko Daily Free Press via this link:
Mining Quarterly (Elko Daily Free Press), Adella Harding, Mining Editor
Hats off to Adella!
Homestake Mining (revisited)
Before we peak at today's markets, the Colonel would like to make a correction to previously reported commentary on the photograph below. This picture is downtown Lead, South Dakota, and was the last in a seven-part series on their historic Homestake Mine. If you missed any of these mining photographs and stories please checkout Homestake Mining Recap for a complete set of links.
I incorrectly identified the men in this photograph as street workers. This Report's friend and Homestake contributor has since identified the activity as drilling an exploration hole, perhaps above the Homestake main ledge (see note 1). Portions of the Homestake mine extended far below the town and cave-ins were a real hazard for the townsfolk. Our photo contributor was in modern day Lead when a section of main street caved in over an old shaft allowing folks to look down a couple of thousand feet into the mining complex below. This occurred by the best bar in Lead, the Stampmill (Stampmill Restaurant & Saloon 305 W Main St). This popular watering hole was originally an old process building with a 12-stamp stampmill right outside the back door - watch your step!
China Jitters Don't Hold Miners Back
The broader markets are now open and it looks like a good morning for our miners even with a new backdrop of China jitters. Earlier this morning a report that Beijing has moved the release of key economic data for August to Saturday from Monday momentarily whacked spot gold in London:
Prices recovered rapidly and COMEX gold is now trading at $1251.5, up $0.6 from yesterday's close; Silver is above $20 again at $20.035. The concern is that the data will show very high inflation or stronger growth than the Chinese presently desire given their recent moves to cool off the economy. The possible outcome is further monetary tightening which could provide more headwinds for the metals & mining sector. Global investors will now have the weekend to absorb the data. May prove to be a rocky Monday, pardner. Stay tuned.
Daily Market Roundup
Enough talk, let's walk the walk:
The Eureka Miner's Index(EMI) is above-par at 189.93, a thin flat washer down from yesterday's 191.77 and a long way from the 6/7/10 low of 50.7. The EMI high for the year was 259.35 on 4/12/2010 - the same day that COMEX copper peaked. Today's number is just below a lower trend level of 195.39 but comfortably above support at 132.23. Remember an EMI greater than 100 is good times (or at least better times) for the metals & miners relevant to Eureka County.
Eureka Outlook Dashboard
4-WD is OFF - improving roads in the marketplace; The VIX or "fear index" is below 25; metals & miners are on firmer timber with bellwether Freeport-McMoRan (FCX) in the high-$70s above its 200-day average of $74.48 (our new warning level, 9/03 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 below 3.00%
The GREEN light is turned on for Stable Markets with the VIX below the 30 level (what's this?)
The YELLOW light is turned on for Inflation/Deflation Watch as the Federal Reserve resumes buying back Treasurys and the 10-yr T-Note remains below 3.00%
The GREEN light is turned back on for Investor Confidence as investment returns to the equity markets but the bond markets still 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?)
Commodity Market Morning Update
NYMEX/COMEX: Oil is up $1.88 in early trading to $76.13 (October contract, most active); Gold is up $0.6 to $1251.5 (December contract, most active); Silver is up $0.157 to $20.035 (December contract, most active); Copper is down $0.0115 to $3.4320 (December contract, most active)
Western Molybdenum Oxide is $15.50; European Molybdenum Oxide is $15.80; LME moly 3-month seller's contract is $16.33, LME cash seller is $16.01
Stock Market Morning Update
The DOW is up 36.17 points to 10451.41; the S&P 500 is up 4.99 to 1109.17. Miners are whistling their way to work:
Barrick (ABX) $44.62 up 0.97%
Newmont (NEM) $60.72 up 0.83%
US Gold (UXG) $4.98 up 1.84%
General Moly (Eureka Moly, LLC) (GMO) $3.12 up 0.32%
Thompson Creek (TC) $9.52 up 0.63%
Freeport-McMoRan (FCX) $79.13 up 1.24% (a bellwether mining stock spanning copper, gold & molybdenum)
The Steels are singing too (a "tell" for General Moly & Thompson Creek):
ArcelorMittal (MT) $32.08 up 0.56% - global steel producer
POSCO (PKX) $108.06 up 0.42% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is up 0.93% to $1,421,136.40 (what's this?).
Write Colonel Possum at firstname.lastname@example.org for answers to your questions or to request e-mail updates on the market.
(Note 1) Photograph of Miners in downtown Lead, South Dakota. This and other old time photos can be seen at the Homestake Visitor Center on 160 West Main Street, Lead, South Dakota. Please pay them a visit on your next pass through.
Headline Photo: Cover of the Fall 2010 edition of the Mining Quarterly, Elko Daily Free Press