"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.

Friday, December 31, 2010

Quadra (QUX) & Copper Rock in the New Year

Morning Miners!

It is 6:13 AM and time for the ole Colonel to wish you all a Happy New Year! We are brewing up the last pot of Scott Raine's 2010 Red Label and he tells me he has a surprise for us after ten becomes eleven...

Copper is still the King

Just for fun, the ole Colonel checked out last year's sign-off blog (The Colonel Wishes You a Happy New Year). COMEX copper had posted a new high:

"In the metals, copper is king posting a new 16-month high of $3.3790 on the COMEX this morning (most active, March contract). This is a good omen for 2010 since copper has been a fairly reliable gauge of global economic recovery." (Eureka Miner's Market Report, 12/31/2009)

A good omen indeed. All the miners are doing better than last December by a good margin and COMEX copper has set another new high early this morning at $4.4320/lb. The red metal has posted an amazing 9 new records in 18 trading days starting December 7th with a Pearl Harbor high of $4.1320/lb.

What else was going on last year?

"Unless a lightning bolt hits the markets later today, I think we can safely say that 2009 has been a good'un: the S&P 500 is up 68% from its March low, gold is back over $1100/oz, the old greenback is feeling a bit more chipper, our local miner's have had a good run and the Eureka Miner's Grubstake Portfolio has earned more than a quarter million dollars." (Eureka Miner's Market Report, 12/31/2009)

Our favorite Norseman Thor promised not to throw any lightning bolts today so I believe it's fair to say we've got another good'un. This morning the S&P 500 is trading at pre-Lehman Brother levels up 88% from the March 2009 bottom. COMEX gold has been in a tight range above $1400/oz for 3 days ($1402/oz to $1415/oz), the greenback is plumbing a new low for December but the Eureka Miner's Grubstake Portfolio has now nearly doubled since our initial one million dollar investment in May, 2009.

Checkout our favorite miners, then and now

Barrick (ABX) $39.80 (12/31/09 AM) $52.66 (today) up 32.3%
Newmont (NEM) $47.65 (12/31/09 AM) $61.27 (today) up 28.5%
General Moly (Eureka Moly, LLC) (GMO) $2.07 (12/31/09 AM) $6.51 (today) up 214%
Freeport McMoran (FCX) $80.92 (12/31/09 AM) $119.15 (today) up 47.2%

We weren't tracking US Gold then but added them to the Eureka Miner's Grubstake in January:

US Gold (UXG) $2.48 (12/31/09 AM) $7.97 (today) up 221%

What's good for Ely is good for Eureka, Quadra FNX rocks

The Robinson copper mine outside Ely and just down the road a piece from Eureka has been on a tear too. The mine's opertator, Quadra FNX (QUX on the Toronto Exchange), has enjoyed a good bounce in share price (blue) with the red metal this month coming off its 200-day moving average (green) at the beginning of December:

Although up more than 19% in December Quadra is still down a bit from its March high as shown by this 1-year chart:

The best of cheer to the Quadra crew in the new year. It is terrific to have copper, gold, silver and molybdenum in our neighborhood - all four metals with a promising future for 2011 and beyond!

Daily Market Roundup

Enough talk, let's walk the walk:

Eureka Miner's Index(EMI)

This morning the Eureka Miner's Index(EMI) is above-par at 773.82, slightly down from yesterday's record 780.11. The 1-month moving average is now 629.60.

The 2010 record high for the EMI is now 780.11 set 12/30/2010; the low was set 6/7/2010 at 50.7. An EMI greater than 100 signals better times for the metals & miners relevant to Eureka County, the EMI re-established an upward trend on Friday, 12/3.

200-day averages are used in the EMI to normalize current mining company share price and are updated monthly. Upper and lower trend lines are updated weekly.

Eureka Outlook Dashboard

4-WD is OFF - Markets are stable; The VIX or "fear index" is below 25; bellwether Freeport-McMoRan (FCX) in the low-$100s above its 200-day average of $79.39 (our new warning level, 12/06 update); 10-year Treasurys are safely below 4% preserving a low-interest rate environment.

The GREEN light is turned back on for Commodity Reflation with copper trading comfortably above $3.50/lb

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 Watch as the Federal Reserve resumes buying Treasurys (aka QE2)

The GREEN light is turned back on for Investor Confidence as investment returns to the equity markets

The YELLOW light is turned on our Fuel Gauge with oil falling below $90 but above $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 down $0.46 in early trading at $89.38 (February contract, most active); Gold is up $7.3 to $1413.2 (February contract, most active); Silver is up $0.167 to $30.680 (March contract, most active); Copper is up $0.0525 to $4.4150 (March contract, most active)

Western Molybdenum Oxide is $16.00; European Molybdenum Oxide is $16.70; LME moly 3-month seller's contract is $17.01, LME cash seller is $16.78

Stock Market Morning Update

The DOW is down 32.20 points to 11,537.51; the S&P 500 is down 2.93 to 1254.95. Miners are resting for the New Year's party:

Barrick (ABX) $52.66 up 0.11%
Newmont (NEM) $61.27 up 0.31%
US Gold (UXG) $7.97 up 1.27%
General Moly (Eureka Moly, LLC) (GMO) $6.51 down 2.54%
Thompson Creek (TC) $14.74 up 0.14%
Freeport-McMoRan (FCX) $119.15 up 0.17% (a bellwether mining stock spanning copper, gold & molybdenum)

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

ArcelorMittal (MT) $37.92 up 0.37% - global steel producer
POSCO (PKX) $107.13 down 0.29% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 0.09% at $1,950,747.51 (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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