*** Local Mining News ***
Timberline and Wolfpack Gold to Merge (Press Release, March 13, 2014)
General Moly Announces Fourth Quarter and Full Year 2013 Results (Press Release, March 12, 2014)
Latest Nevada Gas Prices (click this link)
My latest Kitco commentary:
Oil, Copper & Gold Transmit a Distress Signal (Kitco News, Mar. 18,2014)
My latest column in the Mining Quarterly:
Major McCoy and the Rebellious Ores of Eureka (p. 83-87 online, MQ Spring Edition 2014)
Paintings by Mariana Titus, The Three Anas & The Three Moon Anas, are presently at Lafitte Guest House & Gallery, New Orleans
Friday's AM prices used for this morning's early analysis:
COMEX Gold price = $1,385.2/oz (April contract most active)
COMEX Silver = $21.695/oz (May)
COMEX Copper = $2.9555/lb (May)
NYMEX WTI crude = $98.76/bbl (April)
ICE Brent crude = $107.23/bbl (May)
Eureka Miner’s Gold Value Index© (GVI) = 93.45 (gold value relative to a basket of commodities that include oil, copper and silver; 100 is a high gold value)
Value Adjusted Gold Price© (VAGP) = $1,238.5/oz
COMEX - VAGP = +146.71/oz; gold is trading at a premium to key commodities (bullish implication - "bottom is in for gold")
As of 9:26 AM (percentages are from yesterday's closing prices; parentheses are a comparison to last Friday's morning price):
Barrick Gold (ABX) = $20.855 up 0.31% (Last Friday AM $19.92)
Newmont Mining (NEM) = $25.97 up 1.92% ($24.24)
Midway Gold (MDW) = $1.28 (unchanged) ($1.25)
General Moly (GMO) = $1.11 up 1.83% ($1.25)
Timberline Resources (TLR) = $0.19 up 0.69% ($0.155)
Gold breaking above $1,385 per ounce while copper falls below $3 per pound makes a pretty exciting week for market participants but a mixed picture for miners. If you're busting rocks for the yellow metal, gold price heading for last August's $1,400+ highs is something to cheer about - perhaps one more reason to put Ruby Hill mine back online this year. If base metals are your game, the bad news coming from China must be troubling indeed. As explained in my Kitco gold survey input (see below):
This has proved an exceptional week for gold with a notable bounce in U.S. dollar price and significant value gains relative to equities and key commodities. Safe-haven status has been re-established for the yellow metal given deteriorating conditions in the Ukraine and a slowing Chinese economy burdened with debt concerns. A strengthening euro and yen, the fall of copper prices to sub-$3 per pound levels and a reversal of oil prices to the downside have all buoyed gold price in U.S. dollars terms. One possible headwind is forward guidance from the FOMC meeting next week that may hint at higher interest rates but this outcome is far from certain.
My gold target for next week is $1,395 per ounce betting there will be more gremlins emerging from the Ukraine and China.
Kitco Global Editor Debbie Carlson did a terrific column on industrial metals this week and was kind enough to include one of the Colonel's charts:
Silver, Copper Could Weaken Further If Chinese Economic Data Disappoints; Copper Breaks $3/Lb (Kitco News March 11, 2014)
My chart points out the divergence between copper and crude oil relative to gold which has widened to levels not seen since the Arab Spring in 2011 or the onset of the Great Recession.
At last week's close Comex gold and Nymex oil (WTI) were trending up while the red metal was falling down the mineshaft. This led to the peak divergence shown in the chart. Oil then took a downturn on bad economic data from China leaving only gold in the lead. Divergence in the commodity family is rarely a good sign for other markets, especially when it reaches levels comparable to periods of significant market stress. This is reflected by the recent downturn in the equity markets - the S&P 500 is down 1.7% for the week.
I plan to write a Kitco commentary on these developments next week. In the meantime - keep the faith!
Spring 2014 Mining Quarterly
As mentioned last report, the Spring 2014 Mining Quarterly is out and can be accessed online.
MQ editor Marianne Kobak McKown has done another terrific job putting together the latest mining news and events in Northern Nevada. The ole Colonel submitted a column on Eureka's Major William Wirt McCoy - someone we can be very proud as we celebrate Nevada's Sesquicentennial:
Major McCoy and the Rebellious Ores of Eureka (p. 83-87 online)
In his 70 years, Major McCoy was a physician, cattleman, statesman and mining entrepreneur. He served with distinction in the Mexican-American War and the legislatures of three states. Most importantly for Nevada, he found an economic way to reduce the stubborn argentiferous lead ores of the Eureka mining district. His solution brought Eureka from a struggling mining camp in 1869 to become Nevada’s second largest city with a population of 10,000 and a world class lead-silver producer by 1878. Before his death in 1881, this remarkable man had contributed to the creation of Nevada through his brave actions in the Mexican-American War, served as a Senator of the “Battle Born State” and helped form Eureka town site and County.
My most sincere thanks to the many folks in Eureka that contributed to the historical and field research for this article. This included locating the sites of the McCoy waterworks, Eureka Smelting Company, brickyard south of town and quarry for the sandstone that revolutionized smelting in the Eureka mining district (photo above).
Happy reading, pardner!
Kitco Gold Survey
Here is my input for the weekly Kitco Gold Survey:
Photos by Mariana Titus
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Paintings by Mariana Titus, The Three Anas, are presently at Lafitte Guest House & Gallery, New Orleans
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