General Moly Headed for $5?

Morning Miners!

It is 8:00 AM sharp, a little late for the ole Colonel. I was glad to find that someone remembered to go down to the bunkhouse to wake up the Sun. It may have been Friday, she left a note in the break room and fired up our pot of Raine's famous TGIF coffee. She's sure handy and everyone is always glad to see her show up. Oh, what did the note say? ...."Have a good'un buckaroos!"

Gold Stock Trades has an interesting analysis of the latest price action of General Moly. They believe their long term target of $5 is coming sooner than later. Here's the link:

General Moly (GMO) Approaching Another Move, Adding Under $3.10

If you could put 48 economists in a room and ask them a bunch of questions would you know more than asking just one...or none? I'll leave the answer up to you. The Wall Street Journal surveyed 48 the other day and this was their composite view:

"The 48 surveyed economists, not all of whom answer every question, expect the economy to bounce back from four quarters of contraction with 3.1% growth in gross domestic product at a seasonally adjusted annual rate in the just-ended third quarter. Expansion is seen continuing through the first half of 2010, though at a slower rate. But the massive downturn has left an open wound in the labor market that will take years to heal. On average, the economists don't expect unemployment to fall under 6% until 2013; unemployment in September hit 9.8%." (WSJ, 10/8/09)

There is good news on the trade balance front:

"The U.S. trade deficit unexpectedly narrowed in August as exports posted a small gain and imports fell on a big drop in demand for foreign oil. The Commerce Department reported that the trade deficit declined 3.5% to $30.7 billion, surprising economists who had expected higher oil prices to push the imbalance to $33 billion. Oil prices did shoot up, but the volume of shipments dropped sharply in August." (WSJ, 10/9/09)

The broader markets are up, life is good and as sweet Friday said, "Have a good'un buckaroos!"

Enough talk, let's walk the walk:

CAUTION: 4-WD is OFF - the VIX or "fear index" remains below 25, smoother markets expected in the near term (what's this?)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is down $0.10 in early trading to $70.95 (November contract); Gold is down $5.2 to $1049.1(December contract, most active); Silver is down 0.085 to $17.730(December contract); Copper is down $0.0585 to $2.8400 (December contract); Molybdenum is steady at $13.625.

The DOW is up 67.71 points to 9793.29; the S&P 500, up 9.11 points to 1066.69. The miners are mixed:

Barrick (ABX) $39.80 up 0.73%
Newmont (NEM) $46.68 down 0.70%
General Moly (Eureka Moly, LLC) (GMO) $3.12 down 0.64%
Freeport McMoran (FCX) $74.50 down 0.64% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are mixed, (a "tell" for General Moly):

Nucor (NUE) $45.31 down 0.48% - domestic steel manufacturing
ArcelorMittal (MT) $37.51 up 0.92% - global steel producer
POSCO (PKX) $107.18 up 2.57% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 0.23% to $1,247,143.59 (what is this?).

Cheers,

Colonel Possum

Headline Photograph by Mariana Titus

Darlin' of the Diggin's'

Morning Miners!

It is 5:50 AM and it is a beautiful day, at least for markets. Spot gold pushed past the key $1050 level on the London Exchange this morning and a surprise quarterly profit from aluminum giant Alcoa lifted markets around the world. There is a terrific article about metals on MineWeb today by Rhona O'Connell reporting from London. She has a wonderful wit noting that commodities have moved from investment pariah to the "darlin' of the diggin's'. She summarizes the latest findings on base metals from the Royal Bank of Scotland (RBS) and what may be in store for the coming months and years. This is a must read for your break today:

Copper to post new records, but aluminium may have the greatest upside - RBS

I'm sure if the ole Colonel could hear Ms O'Connell say "aluminium" in that wonderfully Brit (and proper) way he wouldn't need another cup of coffee for the day.

Would you forgive me if I indulged in a few bragging rights? Predicting the price of gold is a fool's errand and I'm a happy fool today. On May 22 of this year, the Colonel predicted that gold would see $973 before the Fourth of July and $1050 before Christmas in my article The Colonel's New Gold Price Predictions. It turns out that if you predict gold prices, you attract a lot of attention in the blogoshere. This article became the second most popular for the Report attracting readers from such far away places as Hong Kong, Gibraltar, the United Emirates, Belgium and India.

The Report's most popular article, The Colonel's Gold & Silver Predictions for the Summer, nailed gold hitting $980 and silver reaching $15.80 before Labor Day. In all candor, I must admit to also saying gold would drop to $880 before Thanksgiving which, in light of the yeller metal's recent momentum, seems quite unlikely. Hmmm...the pressure is on buckaroos, I'd better take a break from all this blasted prognostication. One thing for sure is that metals are some of the best "darlins' of the diggin's" on our bumpy road to recovery.

Enough braggin', let's walk the walk:

CAUTION: 4-WD is OFF - the VIX or "fear index" drops below 25 for a second day. Smoother markets expected in the near term (what's this?)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is up $1.38 in early trading to $70.95 (November contract); Gold is up $6.3 to $1050.7(December contract, most active); Silver is up 0.250 to $17.750(December contract); Copper is up $0.0665 to $2.8620 (December contract); Molybdenum is steady at $13.6.

The DOW is up 67.71 points to 9793.29; the S&P 500, up 9.11 points to 1066.69. The miners are happy:

Barrick (ABX) $39.76 up 1.22%
Newmont (NEM) $46.82 up 0.52%
General Moly (Eureka Moly, LLC) (GMO) $3.19 up 1.92%
Freeport McMoran (FCX) $74.38 up 2.20% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are up, (a "tell" for General Moly):

Nucor (NUE) $45.79 up 1.10% - domestic steel manufacturing
ArcelorMittal (MT) $37.90 up 4.19% - global steel producer
POSCO (PKX) $103.54 up 1.46% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 1.96% to $1,247,779.18 (what is this?).

Cheers,

Colonel Possum

Headline Photograph by Mariana Titus

Today's "Darlin' of the Diggin's" is an unknown young woman photographed at Blair Studio, Gatesville, Texas. William J. Blair took the photograph and had a studio in Gatesville, Texas from 1890-92 and again from 1896-1900.

Oyu Tolgoi, Solar Panels & $1050 Gold

Morning Miners!

It is 6:05 AM and we've got a second pot a'brewin'. A little late for sign-on this morning because the ole Colonel has been crunching numbers. Things are happening so quickly lately it is hard to catch up. There will probably be a pause in the action today because third quarter earnings season kicks off after the markets close. The first at bat is always Alcoa which gets the Report's attention because aluminum is a key industrial metal and Alcoa is a world class producer of the light stuff. Alcoa has lagged its peers (e.g., steel producers) because there has been a glut of aluminum. A positive report from them would be a good sign indeed for the commodity world and global recovery in general. Stay tuned.


Since we have a little time I thought we'd look at several events that could become game changers in the "new normal" which is becoming the popular name for our present economic situation. Rio Tinto announced yesterday that they had finally signed a deal between the Mongolian government, Rio Tinto and Ivanhoe to develop the Oyu Tolgoi copper-gold project. The report covered this massive project in August (Dondog's Find in Oyo Tolgoi). Here's a link to the latest update on MineWeb:

Rio Tinto says it has signed Oyu Tolgoi agreement

I call this a potential game changer because it marks the first time Western mining companies have been brought into the Chinese interior for a project of this scale. Another recent example is a 2,000-megawatt photovoltaic farm to be built in the Mongolian desert. At the center of this project is an American solar developer, First Solar:

U.S. Solar Firm Cracks Chinese Market

Both the mining and solar projects are located in the forbidding Gobi Desert. The copper-gold project is expected to commence in 2013 with a five year ramp up to full expected production of 450,000 tons of copper per year and 330,000 ounces of gold. The solar poject is slated to be complete by in 2019. The Chinese are on the move buckaroos.

I'll close with a few more thoughts on gold's latest rise to the heavens. Just Monday I noted the one-month average price was just a tad over $1000 at the end of September (A Nevada Silver Mystery). Based on my models I predicted that if gold stayed at this level, copper had a shot at breaking $3 but oil was probably not likely to see $80 anytime soon. What a difference a few days make, this morning gold hit a record high of $1,048.25 before pulling back. It hasn't happened yet but I thought I'd run $1050 gold through the models (see note 1) to see what happens to silver, copper and oil. Here's a comparison with Monday's numbers:

$1000 gold

silver (fair value) $16.47; range $15.90 to $17.05
copper (fair value) $2.867; range $2.547 to $3.189
oil (fair value) $70.47; range $63.89 to to $77.05

$1050 gold

silver (fair value) $18.73; range $18.15 to $19.03
copper (fair value) $3.113; range $2.7916 to $3.4349
oil (fair value) $73.692; range $67.11 to to $80.27

That's a another game changer, pardner. At $1050 gold, the fair value of copper (with respect to gold) is over $3 and oil could see $80 before, let's say, Christmas. Ouch! That wily billionaire T. Boone Pickens said on CNBC business news yesterday that $80-85 oil or higher was in the cards for 2010. We'll see. By the by, I'm not complaining about the expected range for silver.

Enough crystal ball gazing, let's walk the walk:

CAUTION: 4-WD is ON - the VIX or "fear index" remains above 25. Expect to experience more off-road conditions in the markets (what's this?)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is down $0.33 in early trading to $70.55 (November contract); Gold is up $0.8 to $1040.5(December contract, most active); Silver is up 0.095 to $17.390(December contract); Copper is down $0.0002 to $2.7825 (December contract); Molybdenum is steady at $13.6.

The DOW is up 5.74 points to 9736.99; the S&P 500, up 3.15 points to 1057.87. The miners are mixed:

Barrick (ABX) $39.07 up 0.59%
Newmont (NEM) $46.28 up 0.15%
General Moly (Eureka Moly, LLC) (GMO) $3.09 down 1.28%
Freeport McMoran (FCX) $71.17 up 2.24% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are up, (a "tell" for General Moly):

Nucor (NUE) $45.35 up 0.18% - domestic steel manufacturing
ArcelorMittal (MT) $36.31 up 0.86% - global steel producer
POSCO (PKX) $103.11 up 0.54% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 0.07% to $1,213,163.60 (what is this?).

Cheers,

Colonel Possum

Headline Photograph by Mariana Titus

Oyu Tolgoi Photograph: Financial Post

Note 1: The Colonel's proprietary predictive models compare the prices of one commodity versus another. This has the advantage of diminishing the influence of currency fluctuations and can reveal the "fair value" a commodity with respect to a reference commodity (e.g., gold). The range is +/- two standard deviations from the fair value. Presumably the lower range is an "undervalued" condition; the upper range, "overvalued. If there is a good positive correlation between a commodity and its reference then the range provides an indication of where prices may be headed. Here are the 3-month correlations (1.0 = highest correlation; 0.0 = no correlation) for the values shown above:

silver 0.9578
copper 0.6676
oil 0.4647

Gold Surges Past $1040, Miners on a Tear

Morning Miners!

It is 5:46 AM, grab a cup of joe and a bucket. We got a sage brush fire in precious metals buckaroos, be right back. Phew! Gold surged past $1040 on the London Exchange this afternoon (their time), what's going on? The present rally started yesterday with a falling U.S. dollar and it looks like we're far from done today. Gold price touched $1033 during the Bear Stearn's meltdown in March of last year and has not returned until today. It is believed by some that when we push past "Bear Stearn's Gold", the yeller stuff can head much higher. The ole Colonel is standing by his bet that we see $1050 before Christmas; maybe at this pace, a lot sooner.



The buzz yesterday said the fire started when economist Nouriel Roubini (aka Dr. Doom) commented on CNBC business news about a global "wall of liquidity". Others claim it is just "technical buying" triggered by the dollar's descent toward new 52-week lows. You can judge for yourself, the Colonel has included a video of the interview at the bottom of this blog (scroll down and you can meet the good doctor yourself). The report has covered Dr. Doom several times before (Moly Hits the Magic Number, Dr. Doom Speaks to Miners) and you'll remember his present popularity is based on his uncanny predictions of the global financial mess several years ago.

His view which is shared by others such as Dr. Mohamed El-Erian of Pimco (Unemployment Jumps to 9.7% but...) addresses all the money that central banks have pumped into the global economy. This so-called "wall of liquidity" must find some where to go and riskier asset classes such as equities and commodities have been a popular target for easy money. According to Dr. Doom, if this goes unabated, new bubbles will form and history sings another chorus to an old familiar song. If you're in a hurry, the key parts of this interview occur at 4:20 minutes and a memorable remark complete with his unique accent and hand gestures at 6:14, "...asset prices go through the roof!"

To reverse the trend, central banks must raise interest rates. The concern is that if it occurs to quickly it might kill our fledgling recovery and send us on the road to "double-dip" recession or worse. Ironically, Australia which has a commodity-sensitive economy just raised their rates today:

Australia on Tuesday became the first G-20 country to raise interest rates since the start of the financial crisis, breaking the ice for other relatively healthy economies to follow suit. The surprise move -- which came earlier than markets expected -- is a signal that the great global monetary loosening is beginning to reverse. Australia's rate increase "is a game changer," says Sanjay Mathur, economist at RBS in Singapore. "No central bank wanted to be seen as the ugly duckling and be the first. Now that they've done it, theoretically it paves the way for tightening by other central banks. (WSJ, 10/6/2009)

This has put additional pressure on the dollar and is another reason behind today's spike in gold. Stay tuned buckaroos, this movie is getting exciting (or scary?).

Enough talk, let's walk the walk:

CAUTION: 4-WD is ON - the VIX or "fear index" is headed south with the gold rally but is still above 25. Expect to experience more off-road conditions in the markets (what's this?)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is up $0.55 in early trading to $70.96 (November contract); Gold is up $25.4 to $1042.6 (December contract, most active); Silver is up &0.825 to $17.360(December contract); Copper is up $0.0475 to $2.7745 (December contract); Molybdenum is steady at $13.6.

The DOW is up 147.14 points to 9946.89; the S&P 500, up 17.70 points to 1058.16. The miners are crazy:

Barrick (ABX) $39.00 up 5.66%
Newmont (NEM) $46.47 up 7.57%
General Moly (Eureka Moly, LLC) (GMO) $3.20 up 2.89%
Freeport McMoran (FCX) $70.03 up 4.04% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks mixed, (a "tell" for General Moly):

Nucor (NUE) $45.57 up 0.15% - domestic steel manufacturing
ArcelorMittal (MT) $36.34 up 1.99% - global steel producer
POSCO (PKX) $103.30 down 0.42% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 2.78% to $1,219,033.80 (what is this?).

Cheers,

Colonel Possum

Headline Photograph by Mariana Titus

A Nevada Silver Mystery?

Morning Miners!

It is 5:52 AM and Monday just roared into the break room for a cup. She's headed uptown to give someone a hard time so watch your door. Once she clears out of town, we should be set for some pleasant Autumn weather.

I read an interesting article this weekend by geology enthusiast, Andrew Alden. Here's the link:

The Nevada Silver Rush

He takes us back to the early days of Nevada's silver mining when a surface bonanza of silver made for easy pickings. Heavy gray crusts of silver formed on the surface of our deserts over millions of years and were polished by dust and wind to the dull luster of a cow horn. This likeness brought the name "horn silver" which is a mineral form of silver chloride called Chlorargyrite. The old timers could find big silver beds larger than football fields and it didn't take much more than a shovel to get rich. Of course the ease of finding and removing these crusts led to their disappearance from the Nevada landscape in just several years.


A Comstock Miner

The more enduring silver mining was the common hard rock variety such as the Comstock Lode exploitation of large silver deposits discovered under Virginia City and later on, the silver-lead mining in our own Eureka. According to Alden, the curious thing about these early days is the lack of surviving specimens from the original surface bonanza. Here is an image of horn silver displayed in a mineral case at the University of Bremen. Alden points out that it comes from Australia and he has yet to find a specimen from Nevada.


This is a good mystery for the Readers (yup, that's you) because I have a hunch that someone has seen a real chunk of Nevada horn silver in their lifetime. There's probably one sitting in our own museum! Let the ole Colonel know if you have any clues.

Here's an interesting thought about gold. The one-month average price was just a tad over $1000 at the end of September. Based on my models this is where I believe the price of silver, copper and oil should be when gold rattles around in the $1000 sage brush:

silver (fair value) $16.47; range (2-standard deviations) $15.90 to $17.05
copper (fair value) $2.867; range (2-standard deviations) $2.547 to $3.189
oil (fair value) $70.47; range (2-standard deviations) $63.89 to to $77.05

These numbers are derived from models of each commodity versus gold for the past 3-months, just something for you to scratch your head on. Note that $3 copper is still possible but $80 oil is not likely in the near term. That deserves a Colonel Yee-ha!

Enough talk, let's walk the walk:

CAUTION: 4-WD is ON - the VIX or "fear index" remains above 25 today. We are still experiencing off-road conditions in the markets (what's this?)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is down $0.98 in early trading to $68.97 (November contract); Gold is up $0.6 to $1004.9 (December contract, most active); Silver is down $0.020 to $16.250(December contract); Copper is down $.0110 to $2.6705 (December contract); Molybdenum is steady at $13.6.

The DOW is up 50.78 points to 9538.45; the S&P 500, up 8.15 points to 1033.36. The miners are mostly up:

Barrick (ABX) $36.08 down 0.07%
Newmont (NEM) $42.62 up 1.20%
General Moly (Eureka Moly, LLC) (GMO) $3.06 up 3.03%
Freeport McMoran (FCX) $66.80 up 1.43% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are up, (a "tell" for General Moly):

Nucor (NUE) $44.89 up 1.19% - domestic steel manufacturing
ArcelorMittal (MT) $35.05 up 1.54% - global steel producer
POSCO (PKX) $103.08 up 2.77% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 1.57% to $1,170,221.02 (what is this?).

Cheers,

Colonel Possum

Headline Photograph by Mariana Titus

New Jobs Report..."Staggering"

BREAKING NEWS: Rio de Janeiro chosen as the site for the 2016 Olympics. Chicago and Tokyo eliminated in the first round.

Morning Miners!

It is 5:20 AM. We've got both blue and red label TGIF coffee this morning. A thanks to Raine's for stocking the break room with their very best before the Labor Department's monthly jobs report. The Colonel has CNBC business news on in the shop, be right back.


Ouch! That's a rough one buckaroos. Nonfarm payrolls declined by 263,000 in September, economists had expected a 175,000 decrease. Bill Gross, "The Bond King" from Pimco Funds, called the new numbers "staggering".

In our 21st month of decline, the unemployment rate grew 0.1 percentage point to 9.8%. Since the start of the recession in December 2007, the number of unemployed folks has increased by 7.6 million. Let's give this some perspective. Here are some selected nonfarm payroll numbers going back to the beginning of 2008:

January 2008: -72,000
January 2009: -741,000 (the worst)
August 2009: - 201,000
September 2009: - 263,000 (today's number)


Although we've made considerable progress since January, the reversal from the August numbers is discouraging. Steve Liesman, economist for CNBC, noting there is always room for error in new numbers put it in the best light, "...not worse, but not getting better."

Spot gold on the London Exchange had an interesting reaction to the news, diving down initially then popping back up above the $1000 mark:


The dollar had the opposite reaction, strengthening then falling. This helped support commodities in early morning trading and the gold pop lifted stocks like Barrick into positive territory on an otherwise down market.

Treasury yields are quite low with the long bond sitting under 4%:

2-year Treasury Note: 0.861%
10-yr Treasury Note: 3.157%
30-yr Treasury Bond: 3.957%

Bill Gross predicted that interest rates would remain low and core inflation could approach zero. This makes your lousy 1% bank CD return look better in terms of real interest rates and fixed mortgage rates will probably improve with lower Treasury yields. Not much to get excited about.


To close things out Meredith Whitney wrote a fairly downbeat op-ed in the Wall Street Journal last night:

"Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan." (WSJ, 10/1/2009)

You may recall that Ms. Whitney predicted this recession's banking crisis with nearly 100% accuracy several years ago, a lone voice in the desert then. Hmmm...

Hang in their buckaroos and be happy we live in a gold mining town!

Enough talk, let's walk the walk:

CAUTION: 4-WD is ON - the VIX or "fear index" is above 25 today approaching 30. We are experiencing off-road conditions in the markets (what's this?)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is down $0.63 in early trading to $70.19 (November contract); Gold is up $5.4 to $1006.1 (December contract, most active); Silver is down $0.030 to $16.410(December contract); Copper is down $.0445 to $2.6925 (December contract); Molybdenum is steady dropped to 13.6.

The DOW is down 34.16 points to 9475.12; the S&P 500, down 4.01 points to 1025.84. The miners are mixed:

Barrick (ABX) $38.36 up 0.49%
Newmont (NEM) $42.44 up 0.09%
General Moly (Eureka Moly, LLC) (GMO) $2.88 down 1.37%
Freeport McMoran (FCX) $64.73 down 1.02% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are down, (a "tell" for General Moly):

Nucor (NUE) $44.89 down 0.13% - domestic steel manufacturing
ArcelorMittal (MT) $34.56 down 1.17% - global steel producer
POSCO (PKX) $99.71 down 0.29% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 0.40% to $1,147,586.99 (what is this?).

Cheers,

Colonel Possum

Headline Photograph by Mariana Titus

A Little Salt with Your Moly?

Morning Miners!

It is 5:45 AM and Thursday dropped by the break room for a cup before she awoke the sun. She's a good ole gal, a lot more friendly than her moody sister Monday. How about starting your day with a little Latin, cum grano salis? Lots of good stuff has come from the Greeks and Romans and it turns out they were often just as skeptical as us modern folks. Our expression of doubt, "take it with a grain of salt" was literally cum grano salis in the days of Pompey. That brings us to the point of today's discussion: you can take yesterday's article, Massive Moly Deposit Found in Utah, cum grano salis.

As a general rule announcements that are both startling and lacking in detail are candidates for scrutiny. When Rio Tinto announced they discovered "what may be the world's biggest deposit of molybdenum" below their open pit Bingham Canyon mine, the Colonel promised to check the facts. As I mentioned yesterday, "...the Reuters' report gives no information on the moly concentration, time frame or economic viability of this find."

I contacted Tim Arnold of our Eureka Moly and he shared some interesting observations. His first impression was, "Sounds like it is a long way off at first glance." He checked with the Denver office later in the day and relayed, "Our guys tell me that it is really not a 'new' discovery, as they have known about the moly below Bingham for some time. You notice that they do not talk numbers, so until they do we don’t really know if it is an increase to the old one, or if it has expanded. The deposit will have to be mined by underground block caving methods, like the Henderson mine. That means my original thoughts are probably correct. They will need to finish the Bingham pit before they can start caving it in. I also believe that the open pit is getting into some higher moly grades too."


I thought it would be useful to remind ourselves just how big the Mt. Hope project promises to be. Presently, the Henderson mine is the largest primary producer of molybdenum in the world. Operated by Climax Molybdenum (a subsidiary of Freeport McMoran), Henderson has produced more than 770 million pounds of molybdenum during the past 27 years.

The Mt. Hope deposit contains 1.3 billion pounds of Proven and Probable reserves with an estimated life of 44 years. Let's compare the annual averages:

Henderson: 770 million pounds/27 years = 28.5 million pounds per year
Mt. Hope: 1.3 billion pounds/44 years = 29.5 million pounds per year

Of course, these are averages and actual production varies year-to-year as a function of moly concentration, mine life etc. Mt. Hope is expected to produce 40 million pounds per year in just the first five years! That's B-I-G buckaroos.

Time will tell what the Bingham "new" discovery will bring but it appears to be a long long time away. Nothing to lose sleep over pardner.

Molybdenum and nickel slipped a little more yesterday. Here's the one-month chart the report updates for you periodically. If you missed it, General Moly provided a very good explanation of current molybdenum price action in our recent article, Good Golly Miss Moly.


Enough talk, let's walk the walk:

CAUTION: 4-WD is ON - the VIX or "fear index" is back above 25, I'm going keep the warning set until we get past Friday's employment report. So for now, off-road conditions for markets possible (what's this?)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is up $0.06 in early trading to $70.67 (November contract); Gold is down $5.6 to $1003.7 (December contract, most active); Silver is down $0.038 to $16.620(December contract); Copper is down $.0445 to $2.7745 (December contract); Molybdenum is steady dropped to 13.6.

The DOW is down 102.56 points to 9609.72; the S&P 500, down 13.50 points to 1043.57. The miners are down:

Barrick (ABX) $37.29 down 1.61%
Newmont (NEM) $43.24 down 1.71%
General Moly (Eureka Moly, LLC) (GMO) $3.14 down 0.32%
Freeport McMoran (FCX) $66.97 down 2.39% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are down, (a "tell" for General Moly):

Nucor (NUE) $46.36 down 1.38% - domestic steel manufacturing
ArcelorMittal (MT) $36.08 down 1.72% - global steel producer
POSCO (PKX) $103.39 down 0.53% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 1.21% to $1,183,427.50 (what is this?).

Cheers,

Colonel Possum

Headline Photograph by Mariana Titus: "Lone Mountain"