"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, April 17, 2015

GMO Breaking News; Gold Stable Above $1,200; China in Wonderland; New Kitco Gold Survey

Eureka, Nevada

*** BREAKING NEWS ***

General Moly Announces Strategic Partnership with AMER International Group to Become a Major Shareholder (Press release, 04/17/2015)

AMER has agreed to work with General Moly to procure and support a senior secured term loan (“Bank Loan”) of approximately $700 million from a major Chinese bank or banks for development of the Mt. Hope Project. AMER will guarantee the Bank Loan, which is anticipated to have normal and customary covenants and security arrangements.

GMO up 35% at $0.78 per share (10:01 AM)
 

Please checkout Mariana's Eureka, Nevada on Facebook

The Colonel's latest Mining Quarterly Column:

"Major Henry G. Catlin and the Eureka-Croesus Revival" Online edition pages 60 to 74

And latest Kitco News Commentary: As Copper Goes, So Goes Gold (03/16/2015)

*** Local Mining News ***

MIDWAY RAMPS UP GOLD PRODUCTION AT PAN MINE AND PROVIDES OPERATIONS UPDATE (Press release, 04/02/2015)

MIDWAY POURS FIRST GOLD AT PAN MINE (Press release, 03/27/2015)

***  Closing Prices (04/02/2015) ***

Yesterday's closing prices (Markets closed for Good Friday):

Goldman Sachs Commodity Index

S&P GSCI 435.2 (392.20 low on 03/18/2015) 5/15 contract

Nymex/Comex

Nymex oil (WTI) $56.64 per barrel
Brent crude $64.32 per barrel
Comex copper $2.7785 per pound
Comex gold $1,204.8 per ounce
Comex silver $16.285 per ounce

Latest Nevada gasoline prices


China in Wonderland

Morning Miners!

Things are becoming curiouser and curiouser in the land of dragons. Shanghai shares are moving ever higher fueled by expectations that stimulus will aid a faltering Chinese economy. The parabolic rise in China stocks has brought Asian equities markets to new 7-year highs. In her pre-market brief, Wells Fargo Metals Director Janet Miraola quoted Mike Bird of Business Insider:

China’s economy is not looking too healthy right now. But its probably even worse than it looks. Power output is completely flat and imports from the country’s commodity suppliers are plunging. Domestic demand is plunging for the only time ever on record. Even in the midst of the global financial crisis domestic demand did not actually fall.

Hmm, now tell us what you really think!

Metals are feeling the China market frenzy too as Comex copper made a new high earlier this morning at $2.818 per pound before falling back to $2.7785 - still a comfortable 14% above January lows. Gold is showing good resilience around the $1,200-level as I note in the new Kitco Gold Survey below (my target for next week is $1,210).

The wonderland theme extends to the red metal as further reported by Mirasola yesterday as the 14th World Copper Conference came to a close:

COPPER – the well telegraphed summary has been on re-play in Santiago this week – that of the scarcity of new copper deposits, falling grades at mines in Chile, North America, Australia and Indonesia and ever-increasing operating costs to develop projects. Go figure then as everyone wakes up this morning and starts to leave Santiago for their homes, the red metal sees a nice bounce back up and through the 100d MA ($5995) to $6000+ [$2.72+ per pound]

Today continues the copper advance above the 100-day moving average - all this drama plays out in a strong U.S. dollar environment. If copper breaks $2.87 ($6,333) next week things are really nuts, at least statistically speaking*.

Bad news is good, at least in an easterly direction. U.S. equities are taking a more sober path today as the S&P 500 and DOW are both off more than 1 percent...the Colonel needs to check with the Mad Hatter on future market  directions. Stay tuned, pardner.


* greater than 2-standard deviations from trend (based on 1-month gold-to-copper ratio performance)

General Moly (GMO) Breaking News

I just received this e-mail from General Moly's Director of Communications (9:28 AM):

Good morning Richard! General Moly issued a press release this morning announcing a significant strategic partnership with AMER International Group as well as a major investment from our new partner. This agreement is a very important, foundational step in our broader goal of achieving full financing for Mt. Hope development, and exciting news for Nevada. Many thanks to you for your support! 

Best, 

Zach M. Spencer, MBA General Moly|Mt. Hope & Liberty Mines

The press release is below today's headline photo. The best of luck to the General Moly team!

Eureka Miner's Gold Value Index (GVI)

The Eureka Miner's Gold Value Index (GVI), which measures gold value against oil, copper and silver independent of currency, continues to bullishly trend higher (dashed orange line, click for larger view):



This morning's GVI at 109.8  is trending down from its January peak but still comfortably above the long term trend. Any number above 100 is considered a high value for gold; the 1-month rolling average is 114.9.

The January 28, 2015 GVI (point C) is at high levels not seen since the dark days of early-2009 (point A). Reassuringly gold has been trending higher relative to these key commodities (i.e. real stuff, not paper money) since mid-2006.

New Kitco Gold Survey




Kitco News has resumed its weekly gold survey under the stewardship of its chief editor Neils Christensen - the best of luck on its debut!

Here is the Colonel's input for this week:

Q: Where do you see gold’s price headed next week, up, down or unchanged?

A: Up. Target price: $1,210 per ounce.

Q: Why?

Stabilization around the $1,200 per ounce level continues with a small bias to the upside. Gold has strengthened in value relative to U.S. equities since mid-March continuing that trend with this morning's equity downdraft. Weakness in domestic stocks going forward is supportive for gold price. The yellow metal premium relative to key commodities copper & oil remains positive but declining.




Spring 2015 Mining Quarterly

The Spring 2015 Edition of the Mining Quarterly is now accessible online. Marianne Kobak McKown has done another outstanding job of compiling Nevada's premier mining publication! It has engaging articles on Barrick Goldstrike's new way to process ore and updates on Bald Mountain, progress at Newmont's Long canyon and a terrific conversation with Dana Bennett, our new President of the Nevada Mining Association.

This issue also features a column I wrote about Major Henry G. Catlin - a mover n' a shaker in the early mining days of Eureka, Nevada. A bold futuristic mining plan, deathbed pack and surprising twist of fate combine to remind us not much has changed in the luck of miners and the importance foreign markets. The Nevada Mining Press declared in 1919, "There is no more interesting character living among old school mining engineers than Major Henry G. Catlin." Have a good read!

"Major Henry G. Catlin and the Eureka-Croesus Revival" Online edition pages 60 to 74. (scroll bar at bottom of page allows you to easily access pages)



Have a great weekend!

Cheers - Colonel

Photos by Mariana Titus

Friday, April 3, 2015

Jobs Disappoint; Gold $1,200 - What Next? Spring 2015 MQ - Major Henry G. Catlin


The latest Mining Quarterly is now online!

Please checkout Mariana's Eureka, Nevada on Facebook

The Colonel's latest Mining Quarterly Column:

"Major Henry G. Catlin and the Eureka-Croesus Revival" Online edition pages 60 to 74

And latest Kitco News Commentary: As Copper Goes, So Goes Gold (03/16/2015)

*** Local Mining News ***

MIDWAY RAMPS UP GOLD PRODUCTION AT PAN MINE AND PROVIDES OPERATIONS UPDATE (Press release, 04/02/2015)

MIDWAY POURS FIRST GOLD AT PAN MINE (Press release, 03/27/2015)
 
***  Closing Prices (04/02/2015) ***

Yesterday's closing prices (Markets closed for Good Friday):

Goldman Sachs Commodity Index

S&P GSCI 401.00 (383.75 low on 03/18/2015) 4/15 contract

Nymex/Comex

Nymex oil (WTI) $49.14 per barrel
Brent crude $54.95 per barrel
Comex copper $2.7340 per pound
Comex gold $1,200.9 per ounce
Comex silver $16.701 per ounce

Latest Nevada gasoline prices




Jobs Disappoint

Happy Easter!

A disappointing monthly jobs report  arrived this morning with major markets closed for Good Friday. Economist expectations exceeded 240,000 jobs added for March; the Labor Department reports only 126,000 with the unemployment rate unchanged at 5.5%. To put this in perspective, the employment growth has averaged 269,000 new jobs per month - today's data is a surprising decline indeed with downward revisions for the two previous months. Nuts!

Employment continued to trend up in professional and business services, health care and retail trade. Unsurprisingly, employment in mining declined. From the horse's mouth:

"Employment in mining declined by 11,000 in March. The industry has lost 30,000 jobs thus far in 2015, after adding 41,000 jobs in 2014. The employment declines in the first quarter of 2015, as well as the gains in 2014, were concentrated in support activities for mining, which includes support for oil and gas extraction." (Bureau of Labor Statistics)

How does this affect gold price forecasts? We have to wait for market's to reopen but a popular line of thinking goes like this: an unexpected decline in jobs suggests a slowing economy and the Federal Reserve may wait to rise interest rates. The window for a Fed rate rise is June or September or none at all until 2016. A pause in tightening is typically viewed as bullish for gold so next week could bring a welcome bump up form yesterday's Comex close at $1,200.9 per ounce.

This report observes resilience of gold price around the $1,200-level with volatility expected in the near term given inputs such as today's labor report. My recent Kitco column, As Copper Goes, So Goes Gold, explains why the price of the yellow metal may be expected to follow the red metal without too much change in either - boring price stability is more likely than roaring rallies or calamitous crashes, so goes 2015.

Last week marked the Eureka Miner's birthday as it enters its seventh year. It is fun to compare today's jobs report with a December 4, 2009 report that addressed the employment picture in darker days:

A Positive Surprise for Jobs, Gold Stumbles

In retrospect, a reported loss of 11,000 jobs for November 2009 was viewed as positive news compared to an expected loss of 125,000. At that time Comex gold price was $1,194 - only a few dollars from recent prices. Unemployment was a dismal 10%. We've come a long way, pardner...but not much in terms of U.S. dollar gold price.

By contrast, The Eureka Miner's Gold Value Index (GVI), which measures gold value against oil, copper and silver independent of currency, continues to bullishly trend higher (dashed orange line, click for larger view):



The January 28, 2015 GVI (point C) is at high levels not seen since the dark days of early-2009 (point A). Reassuringly gold has been trending higher relative to these key commodities (i.e. real stuff, not paper money) since mid-2006.


Spring 2015 Mining Quarterly

The Spring 2015 Edition of the Mining Quarterly is now accessible online. Marianne Kobak McKown has done another outstanding job of compiling Nevada's premier mining publication! It has engaging articles on Barrick Goldstrike's new way to process ore and updates on Bald Mountain, progress at Newmont's Long canyon and a terrific conversation with Dana Bennett, our new President of the Nevada Mining Association.

This issue also features a column I wrote about Major Henry G. Catlin - a mover n' a shaker in the early mining days of Eureka, Nevada. A bold futuristic mining plan, deathbed pack and surprising twist of fate combine to remind us not much has changed in the luck of miners and the importance foreign markets. The Nevada Mining Press declared in 1919, "There is no more interesting character living among old school mining engineers than Major Henry G. Catlin." Have a good read!

"Major Henry G. Catlin and the Eureka-Croesus Revival" Online edition pages 60 to 74. (scroll bar at bottom of page allows you to easily access pages)



Have a great Easter Weekend!

Cheers - Colonel

Photos by Mariana Titus