The surge in General Moly (GMO) share price last week, briefly scoring $0.53 per share, quickly faded the following day and this morning trades at $0.3476, a 34% drop. Ouch, nice while it lasted. GMO needs to stay above the $0.30-level from my view.
General Moly CEO Bruce Hansen presented their future plans at the Marcum Microcap Conference yesterday which included a very detailed power point presentation:
Marcum Microcap Conference (Press Release, 6/16/2017)
These are their priorities for next year:
- Leverage internal skills working with AMER to identify value-accretive opportunities with a focus on base metal prospects in North America
- Effect reinstatement of the ROD, and re-issuance of permits for water rights at the Mt. Hope Project which would lead to the Tranche 2 investment of $6.0 million by AMER, contingent on a molybdenum price trading at or above $8 per pound for 30 consecutive calendar days, and the restoration of our water permits by the State Engineer
- Maintain existing state permits for the Mt. Hope Project
- Prudently manage financial liquidity and flexibility to sustain the Company over the medium term and to fund current business activities into 2Q 2018, excluding potential additional AMER investments
Gold Price Outlook: Second-Half 2017
Gold started the year nicely and should remain in my revised range of $1,180 to $1,320 per ounce*. Average gold price for 2017 is expected to print above $1,200 per ounce with an outside chance to see $1,400 given an adverse outcome for evolving U.S. trade policies, political or geo-political shocks (e.g., North Korea, Syria).
Gold has gained ground on the embattled euro and yen. Post-election, gold in euro and yen terms is up and safely above 2013 lows (chart below). It was somewhat worrisome that gold in euro terms broke below uptrend support March 9 and then again after French elections (i.e. defeat of Le Pen) but has since stabilized. Gold in yen has consistently trended higher.
An important gold ratio to watch is gold-to-S&P500 or AUSP (see "Chart to Watch" below).
Gold ratios relative to copper and oil were stabilizing near historically less extreme levels which proved a healthy sign. However, the gold-to-oil ratio is once again headed north above a comfortable range of variation. Gold valuations relative to copper are elevated but not alarming.
Political and geo-political events together with concerns about the timing and efficacy of the new administration's policies have restored glitter to gold in 2017 although that is being tested lately. There is solid support at the $1,250-level; a fall below $1,230 is very bearish.
Gold below $1,200 per ounce-level is a tempting "buy."
(please do your own research, markets can turn on you faster than a feral cat!)
* My pre-election October range for gold price was $1,240 to $1,320 per ounce, Winter 2016 Edition of the Mining Quarterly:
Storms Never Last: Positive News for Gold, Oil & Copper
Here's a new chart to watch. Click on the image for a larger size:
Colonel Possum & Mariana