Eric O's Favorite Gold Miners

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Tom L
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Claude Resources CGR.TO / CGR

30 Month Weekly Chart Here:

http://www.flickr.com/photos/29681681@N06/5984073811/

It has drifted towards the bottom of the long-term trend channel bouncing nicely off the 50% Fib. line at $1.72.  Looks to be re-testing the BO of the DT line (thin green line), but 50 wk MA which was the previous support point is now acting as resistance.  Note the RSI (Brown Arrows) and how the 50 line was also a predictor of changing direction but now the stock is below that.  This test of the UT channel is significant.  But, that mild bearishness is offset by the drying up volume (Red Line, Arrow).  A weekly close above $2.00 would be an excellent event.  A close below $1.72 would be catastrophic.

Ta,

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Nova Gold - NG

Hey Eric and Tom - What do you guys think of Nova Gold, it looks like a good lagger at this level but I cant figure out why its been in a downtrend or when it could break it. Thanks!

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@ Tom and Eric

Here's another to check out Nautilus Gold. NUS.TO. I was in and out once. Looks like it recently went up in a weak market today. Had some bad financing news a month or so ago but has pushed past $3. It was mentioned in a couple of different newsletters I subscribed to last year, which I no longer do.

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The Porcupine Break: Part III (The Pot O' Gold)

A couple of miles past Nighthawk Lake and BOOM! here we are in Timmins!  The Pot O' Gold at the end of the Rainbow.  Upwards of ​70 million ounces​ of past production!  Truly top shelf, world class stuff.

Historically, the action centered on the Big Three.  The McIntyre, Hollinger, and Dome Mines.  McIntyre was the first mine in Ontario to go deeper than 4000 feet.  It ultimately went close to 7000 feet and produced 10.7 million ounces between 1912 and 1988.  Only about a mile or so away was the Hollinger Mine.  This one went about 6000 feet deep and outproduced them all at 19.3 million ounces (!) between 1910 and 1968.  I was just reading an article that said in 1920 the Hollinger was the biggest gold mine in the entire British Empire.  Quite an accomplishment when you consider the competition it must have had from South Africa and Australia!  A champion of another sort is the Dome Mine.  Starting in 1909, it has produced 17.1 million ounces, ​so far!  The mighty Dome is still going!  

All three of these historic mines, and 38,000 hectares of land around them, are now under the control of Goldcorp.  Their production from the area as a whole is expected to be 265,000 ounces this year.  I fished through the footnotes, and if my math is right, the mighty Dome is still kicking in 55,000 per year toward the total.  Not bad for a mine that has been going for 102 years!

But it wasn't just these three.  There were dozens of mines in the area.  Several of them would be famous in their own right anywhere else.  Past producers of 1, 2, even 5 million ounces get no respect in Timmins.

With Goldcorp locking up most of the best historic ground, what is a smaller explorer to do?  Some try to get as close as they can to the Big Three.  Some are looking over past producers along the Break to the northeast of the city.  And some are plowing relatively new ground along the Break to the southwest.  Nothing is very far away from anything else so it will probably work best to just list out the companies and try to get the lay of the land.

​Lexam VG Gold ​is about as close to ground zero as you can get, with their propery line just a mile or so from the Dome.  They have some ground that they own 100%, and some in JV's with Goldcorp and some with ​San Gold.  ​Rob McEwen owns about 27% of this $160 million market cap company.  Their main selling point, aside from location and McEwen, is that the old mines on their property did not go nearly as deep as the Big Three, therefore all the more potential yet to drill.  Lexam will drill 70,000 meters in 2011.

​Lake Shore Gold​ is making their bones both NE and SW of the city.  Their mill is NE, most of their production is SW, and they have lots of gold resources in the ground on both ends.  Hardly a month goes by without some really good drilling results being reported by Lake Shore, but actual mining is not quite so easy.  The stock recently took a hit on reduced production guidance.  Still, they expect to produce 90,000 for 2011, as compared to 43,500 for 2010.  Market cap is now $880 million.  Lake Shore's operations SW of Timmins almost constitute an area play of their own, with several juniors now crowing about how close they are to Lake Shore in that area.

​Moneta Porcupine Mines got a mention in Part II, but they are also quite active in the Timmins area.  Land to the NE, land to the SW, and also their Kayorum property which is very near the Hollinger.  Market cap around $40 million.  Personally, I think their Golden Highway Project from Part II justifies the market cap.  I think you are getting the Timmins lottery tickets for free.

​Explor Resources ​had several small properties along other parts of the Cadillac and Porcupine Breaks, but the one they spend all their time and money on is their Timmins Porcupine West property.  It lies adjacent to Lake Shore in the SW, and right along the main fault line.  Early drill results are encouraging.  Market cap of $55 million.

Melkior Resources has projects spread across Canada.  But one of them is nearby Lake Shore Gold in the SW area of Timmins and they make sure you know about it.  Market cap of $20 million.

​Temex Resource ​is earning 60% of the Whitney JV from Goldcorp.  This property includes three past producers that accounted for a total of over 2 million ounces on the NE side of town.   Market cap here is about $33 million.

One of our regulars from the Cadillac Break, ​Richmont Mines, has their Cripple Creek property not far from Lake Shore Gold in the SW area.  They hit 74 g/t over 7 meters there in 2010.  Still waiting to hear about plans for follow up drilling.  Company wide production for Richmont is about 100,000 ounces and the market cap is about $245 million.

That about covers Timmins proper.  One more interesting thing going on though.  About 20 miles north of the highway, on another associated fault line, you'll find the Frankfield Project of Gowest Gold.  They just updated their 43-101 resource calculation to report 1.2 million ounces of resources.  Market cap right now stands at about $25 million.  

Trying to get in on the area play action near Gowest is SGX Resources, who is 50/50 with ​San Gold​ on their adjacent Timmins North Deposit.  They also have some land SW of the city near Lake Shore, and command a market cap of $18 million.

Wow, that about does it for me!  This whole Road Trip has got me exhausted.  I'll sleep well tonight, with visions of Gold dancing in my head.

I think it's time to check in to the Bon Aire Motel (hey, in-room coffee, ooohhh) and check out the Deluxe Suite with the "UltraBath Therapeutic Massage Tub".  Ahhhhhhh..............

http://www.bonairtimmins.com/index.shtml

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jaj64 wrote: Hey Eric and Tom

jaj64 wrote:

Hey Eric and Tom - What do you guys think of Nova Gold, it looks like a good lagger at this level but I cant figure out why its been in a downtrend or when it could break it. Thanks!

30 Month Weekly Chart Here:

http://www.flickr.com/photos/29681681@N06/5986276061/

The Chart looked fantastic back in April.  After a huge run up it was putting in a beauty of a Pennant formation which broke down with the Mat 1st takedown of Silver.  The stock has been punished since then only recovering from a technical perspective to a less bearish posture in the past 2-3 weeks.  Breaking the short-term PDT (Power Down Trend -- Blue line) was a good positive development, b/c the break below $9 was bad, technically (#1 - failure of the past Double-Top BO point, #2 - breaking below the DT channel line). But, looking at the daily chart, $8.50 was the base level from which the stock rose to $17.  All of this bearishness, though, comes within the context of steadily declining volume. 

There are a number of things that have to happen before I would do anything other than trade this by buying dips and selling rallies:

1) Price rise on strong volume to the top of the DT channel in the next two weeks.

2) Break the DT channel by either creating a new range between $9-$11.50 or

3) Break the 50 wk (200 Day) MA

If none of these things happen and a re-test of $9 or the low @ ~$8.50 happens, those levels need to hold to even begin re-establishing a a neutral posture.  Personally, this one may take a while to regain a bullish stance.  Looking at a daily chart of the recent bounce, it's happening on declining volume but the 50 DMA has provided some support.  Today's close is dangerous, though.

Any break below $8.50 is horrible.

Ta,

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Thanks for.....

the roadtrip Eric! anymore?!

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Let's Review: What's so great about...

More road trips?  Doubtful, because I can't come up with another stretch of road on the planet that offers what this area does.  This stretch of road from Val d' Or to Rouyn-Noranda to Kirkland Lake to Timmins is not only one of the top gold districts on the planet, but it also offers all of the intangible advantages that can help get a discovery to production.  Such as:

  1. GOLD!!  Lots of it still being found.
  2. You don't have to build housing for your workers.  Chances are they already live within an easy commute.
  3. You don't have to helicopter your drill cores out to an airstrip, and then fly them hundreds of miles to an assay lab.  There are world class assay labs within a short drive on a paved road.
  4. Actually, all the subcontractors you might need are right next door.  Drilling crews, assayers, resource report writers.
  5. Because the local economy was built on mining in the first place, you can get whatever kind of permits you might need, and fast.  Huge advantage right there.
  6. There is excess milling capacity right down the road.  You don't even need to build your own mill!  But there are so many projects in the pipeline right now that I'm thinking this situation may not last.
  7. Good roads, good electric power.  These things matter.
  8. Tax incentives from the government.  For instance, in Quebec you get a refund of 50% of your exploration costs.  Nice!
  9. Good coverage from the investment community.  An analyst from Toronto can make the short trip, and visit half a dozen companies in a day.
  10. Oh yeah, one more thing:  GOLD!!

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On the personal side...

On the personal side, there's another reason for no other road trips anytime soon.  I'm exhausted.  Really.  My eyes hurt from staring into these white screens for hours at a time.  Hours of computer time went into each of these posts, and I need a vacation.  I need to soak in one of those jacuzzi hot tubs for a while.

I may chime in with some idle chit chat, or post a news release here and there, but as of right now I consider myself on vacation for a week or two.  Unlikely to see anything substantive from me for a while.

Good luck, and be careful out there!

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Lake Shore Gold

Lake Shore Gold will be moving to the AMEX come August 1st.  That never hurts.  yes

http://www.marketwatch.com/story/lake-shore-gold-us-listing-on-nyse-amex-approved-trading-expected-to-commence-monday-august-1-2011-under-symbol-lsg-2011-07-29-111570?reflink=MW_news_stmp

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Holiday!

You deserve a holiday Eric! good luck to you, i will always remember the Cadillac and Porcupine breaks! really entertaining stuff, when Canada is ever mentioned my thoughts will go to what you have written!

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See ya when you get back Eric

Enjoy laying back for a while. Loved hearing about the road trip, what a stretch of ground to cover!

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Eric Original
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qqq62

Glad you enjoyed it.  I enjoyed doing it!

Personally I just love the name "Cadillac Break".  Makes me think "Man, there's gotta be a Springsteen song in there somewhere!!"

OMG!! Check out the big yellow hat!

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Official Video of This Thread

Between the "Cadillac" and the "Big Yellow Hat",  I'm going to take it on my own authority to name that one as the Official Video of This Thread!!

R.I.P Clarence Clemons.  You'll be missed. broken heart

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@ Eric

Ditto the thanks that EVERYONE on the blog thinks about you. You have a very lucky family and I for one am glad you share your knowledge, humor and modesty with us.

Being a Jersey boy originally you could not have selected a more apropos  song. My CB handle was Thunder Road. Boy does that make me sound old or what.

Enjoy some well deserved time off. BTW, liked your dog video. We're getting another border collie pup this week to go with our 4 year old. I must need my head examined.

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Runner Up Video of this Thread

Shania Twain grew up in Timmins.  Lordy, all I want is a few minutes of her time.....

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Shania

is a National Treasure. Loved that incredible voice, I hope she makes it all the way back.

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Shania

MMMore than a few minutes with her Eric! oops forgot your stil knacked from the trip!!!

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murphy wrote: Here's another

murphy wrote:

Here's another to check out Nautilus Gold. NUS.TO. I was in and out once. Looks like it recently went up in a weak market today. Had some bad financing news a month or so ago but has pushed past $3. It was mentioned in a couple of different newsletters I subscribed to last year, which I no longer do.

This is the easiest chart I've had to work on yet.  3 Year weekly chart here:

http://www.flickr.com/photos/29681681@N06/5991255758/

It's a beautiful chart.  The UT channel is well-defined and potential short-term pivot points are obvious price projections as it moves higher.  Just look at intersections with the next purple line after it breaks through a lower one.  Right now it looks like it ran into one during this week.  The blue DT channel looks to be a consolidation/gap filling move (orange arrow, note the gap up in Jan 11).   This one may trade in that blue DT within the purple UT for a while.  Any weekly close outside of the DT channel means the price may accelerate to the upside.  You'll know in the next two weeks if that will happen.  I didn't draw an UT line connecting the May low at $2.2 and the next low, but it's pretty plain to see.

I wouldn't add to my position right now, but would wait until the DT is broken to the upside on a weekly closing basis or I would buy on any swing low that moves away from the lower DT line, ie. between $2.60 and $2.40 on the downside. 

If you're in at anything less than $2.00, I would just ride it for as long as that UT channel holds.

Hope this helps.

Ta,

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Great stuff Eric, Lexam is

Great stuff Eric,

Lexam is top 3 holding for myself and my father, I really like the story behind it. I just want to hear that they strike some high grade gold as the drill deeper.

Temex also seems very interesting, I will continue to watch this name, seems cheap on per oz basis.

Something tells me Richmont Mines will be one of the biggest winners in this bull market, I remember buying shares of RIC in 2008, I got the stock when they had more cash on the balance sheet than the market cap of the stock, with 0 debt, I doubt we will ever see that again.
 

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zman

Yeah, I'm really liking Richmont too.  I bought some about a month ago, and the more I learn, the more I like it.

Temex also seems deserving of some follow-up DD by anyone who is interested.  There's a lot more going on with this company than just the Timmins play that I discussed.

http://www.temexcorp.com/i/pdf/Presentation.pdf

Actually, there's so many interesting little plays here that it just breaks your heart that you can't own them all!  Northern Gold, Moneta, Gowest, the list just goes on and on.

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