-- Posted Monday, 23 June 2008 | Digg This Article
| Source: GoldSeek.com
Firstly I would like to thank Jim Puplava at www.financailsense.com for his “Crime of the Century” series which outlines how the junior and exploration stocks are being manipulated illegally to the downside. And Mr. Jim Sinclair at www.jsmineset.com who has seemingly come up with a solution.
Here is the proposed solution; “The junior producer and exploration and development companies need to consider the formation of a Chamber of Mines for this section of the industry.
This Chamber should be free of any individual company agenda, free of fees and other interferences with the singular intention of protecting our shareholders from being attacked by those in the shadowy part of finance.
There are close to 2000 companies in this part of the industry, many of which are experiencing the same extreme nuisances.”
I am in full support and await further instruction on the next step. I have talked with every company I own and will not put up with ANY excuse, as that is as bad as picking my pocket in my opinion.
I hope you all join in this campaign against illegal short positions which in turn take money away from you. The solution is simple, you just have to show your support by contacting your companies and expressing your interest in this program. They will do the rest.
Metals review
Gold continued a range trade this week moving back up above the $900 level. The range trade will continue until Gold can break above $940 then $950 definitively.
There is a reverse head and shoulders pattern with the upside breakout signal now at the 100 day MA so if gold can break $920 then we may get a quick heavy volume run to test the $940, $950 region.
RSI is poking up above 50, Slow STO is strong and the slower MACD has just moved into positive territory and flashed a buy signal.
Silver remains within its tightening triangle right at the upper limits. It was nice to see the $16.50 support level left in the dust this week and getting above the 50 and 25 day MA is a positive as well.
RSI is above 50, Slow STO is about to cross the 80 mark and MACD has just crossed bullishly. I think we will see another swoon down and continue trading within the triangle in an increasingly tight range before a big up move out of the triangle.
Platinum continues within its trading range between $2,000 and $2,200. It is tracking the 100 day MA with uncanny accuracy, so far. Fundamentals continue to be bullish as the crowd realizes evermore that higher prices are sustainable.
There is a bullish triangle formation here as well with the 100 day MA as the up sloping base and the March and May highs drawing a line as the top.
The late May gap was filed but not closed above as it is still proving resistance. It should fall soon as Platinum works its way to breaking the trading range above $2,200.
RSI is flat just above 50, MACD is flat at 0 and the Slow STO has flashed a slight sell or at least flat trade signal. The 100 day MA should provide support and it would be nice to touch that again before mounting a charge at closing above the gap.
Palladium moved above the reverse head and shoulders line at $460 and surpassed the strong resistance level of $475 this past week. If Palladium can hold above $475 this week then $525 is the next significant target although $500 will offer some resistance as the round number syndrome asserts itself. Fundamentals are still strong with the Russian stockpile reportedly diminishing quickly.
RSI has flattened out at 70, MACD is flashing a buy signal and the Slow STO is undecided above 80.
Fundametals Review
Imperial Metals has received a positive decision in court allowing regulators to issue permits for the Red Chris mine in BC, Canada. The decision may be appealed again but the shares surged on the news.
Battered and beaten, Crystallex has filed its second appeal to try and reverse the recent decision to deny mining rights to their huge Las Cristinas mine in Venezuela. During this process Crystallex was invited to make a presentation to the Economic Development Committee and received some support and validation of their presentation. The first appeal was promptly rejected, now the second appeal has ninety days to be resolved. I expect a very quick decision.
Ghana is trying to cope with an increase in illegal mining which is hurting major producers and the economy. Safety is at the forefront as well as the illegal metal being smuggled out of the country thus evading taxes. Stolen or sabotaged equipment must be replaced by the miner. Goldfield, who runs the Damang mine in Ghana, is slated to move underground but has said they will not as long as illegal mining remains such a problem since they will just follow the company down. It’s tough since the illegal’s have little or no other way to support their families. The government must come up with a solution but may be slow as this is an election year and stirring the pot could cause a loss of votes.
Hecla Mining has packed up and left the nationalization prone jurisdiction of Venezuela. Hecla sold their Venezuelan subsidiaries for $25 million which will mark a $10 to $12 million loss. Rusoro Mining is buying the properties for $20 million and 4.3 million shares. This deal makes Rusoro the largest Gold producer in Venezuela.
South African Gold output is down 10.1% in April year over year. Total mineral production was down 2%. The Eskom power shortage is blamed.
According to this article South Africa has the second most Chinese investments in all of Africa with mining projects. The Democratic Republic of Congo (DRC) ranked number one with six. Zimbabwe has four and Zambia has five. All four countries contain 20 of the 33 Chinese backed mining projects in Africa today.
The mining industry is so busy these days and has so many issues and shortages, one of which is getting samples assayed in a timely manner. The delays have hurt shares prices and investor sentiment. In the very busy exploration area of Ontario, Canada a new and highly sophisticated assay lab is being built. The facility will be built at an airport further speeding assay results which have to be flown to the lab. The lab will be able to analyse up to 12,000 samples a week and in theory could have assays back to the company within a day rather than the common few month time horizon many companies deal with today.
The new Gold Wheaton has had overwhelming interest and has increased their initial private placement offering from $200 million to the maximum of $260 million. There is a lot of interest finally starting to come back to the precious metals sector. It won’t take much money to make the smaller stocks move so make sure you are getting close to fully invested soon or over the summer at the latest.
The Indian Multi Commodity Exchange (MCX) is launching futures trading in Platinum.
Mining activities continue to accelerate in Canada and contributed $11 billion to the Canadian government in taxes in 2006, up from $5.5 billion in 2005. 180 mines operate in Canada employing 180,000 people at a very nice rate of pay.
This is a good story which talks about the benefits of doing business in Quebec Canada, a theme I have talked about on numerous occasions. Canada is full of minerals and relatively unexplored. Explorers get back $0.42 per dollar spent as a tax incentive. That’s essentially exploration at a 50% discount and has and will continue to attract serious money, investors, and companies.
Agnico Eagle has spent the required $5 million to gain a 51% interest in the West Pequop property in Nevada. They have elected to increase their interest by 19% to 70% by carrying all costs through to a bankable feasibility study. Agnico continues to grow and do it right. They are a great model for other companies to follow and will do very well. Don’t be surprised to hear them knocking on the doorstep of other good companies in the future, let’s hope we can be a part of it.
Excellon continues its excellent recovery from the recent mine flood. Just last week they gave word that the hole had been sealed successfully now this week they say they have dewatered and resumed normal production and development activities.
Nigeria is considering converting some of their foreign reserve into other assets including Gold and other metals. Their reserves stand at $61 billion having dropped by 40% as the US dollar continues to fall. This type of story will be reported on more as the US dollar continues to fall and Gold and Silver come back into view as money. Talk of opening a sovereign wealth fund has also surfaced on the back of record oil prices.
Hochschild Mining has increased their stake in Lake Shore Gold to 35% from 19.99% through a private placement. Lake Shore operates in Canada and is delineating a high grade Gold deposit. Production is expected to be about 200,000 ounces per year of Gold by 2011. Hochschild was a private miner for years and within the past few became a public company. They are smart and do things in a very profitable manner. This is a huge thumb up for Lake Shore.
South Africa was vying for a 50% increase in power rates but in the end only raised rates by 13% after a 14.2% increase in April for a total increase of 27.2%. The increase is expected to add 29% or $200 million to mining industry costs.
Kyrgyzstan has cancelled Centerra Gold’s license to develop their Gold deposit there. The government is defending the company and has vowed to challenge the decision in court. We will see how it goes but the shares hit a low of $4 this week from a high of over $16 early in 2008.
Investors and analysts insist that China is a good place for explorers and miners to do business. While a spade of negative stories has emerged I believe that if done right China is a great place since infrastructure and labour are cheaper as well the permitting process is much quicker than any developed country. China invites foreign companies with expertise in mining into their vast mineral wealth that is largely unexplored since the Chinese lack state of the art mining techniques.
Eldorado Gold seems to have satisfied management and shareholders of Frontier Pacific Mining for the proposed takeover. Adding to the offer an exchange receipt entitling Frontier shareholders to receive an additional 0.008 shares has won acceptance.
The Swiss Platinum ETF grew by 45% since February. The ETF (ZKB) now holds 62,300 ounces. The Palladium ETF has grown by 8.5% over the same period and now holds 358,000 ounces.
Precious metal fundamentals continue to strengthen while the US economy reels in news which persistently worsens. More every day people are looking to the metals as a viable place to invest and expect a real rate of return after accounting for inflation losses which are accelerating. I sing the same old song, the time for accumulating is nigh.
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-- Posted Monday, 23 June 2008 | Digg This Article | Source: GoldSeek.com
