Gold: Another Head Fake?

Written by Gerardo Del Real
Posted January 9, 2017

For the second straight week gold registered a gain. Fed minutes released show a willingness for a “gradual hike in interest rates.”

The lack of conviction in the statement set the stage for gold to rally to a five-week high, gaining 1.8% for the week and closing at approximately $1,173 per ounce.

I’ve written that I believe gold will go lower but that we will see a few head fakes beforehand. I believe this rally to be just that... a head fake. We’ll see.

Silver closed at $16.15 per ounce for a weekly gain of 3.3% while copper was up approximately 1.5% for the week closing at $2.55/lb.

Palladium started the new year with a bang. It closed at $758 per ounce for a weekly gain of approximately 11%.

Platinum had a solid week as well, closing at approximately $971 per ounce for a weekly gain of approximately 7.2%.

Uranium continues to show some upward momentum as the spot price flirted with $22 and closed in the $21/lb. range.

West Texas Intermediate (WTI) crude futures settled up 23 cents at $53.99 a barrel while Brent Crude closed at $56.83 a barrel.

Week in Juniors

It was a busy week for companies in the Resource Stock Digest Premium portfolio. Not so much so elsewhere but there was some news that merits mention.

Dolly Varden Silver Corporation (TSX-V: DV) (OTC: DOLLF)

On January 3, 3017 Dolly Varden Silver reported that Ben Whiting has been appointed as the company's new Vice President of Exploration.

Ben Whiting is a professional geoscientist with more than 35 years' experience in the international mining industry. He has worked for both major & junior companies, managing a wide range of operations from exploration through to production.

Mr. Whiting is a busy man as he also serves as the current Vice President of Exploration for Orex Minerals Inc. and Barsele Minerals Corp.

This is the second appointment that Dolly Varden has announced in the past month.

On December 6, 2016 the company appointed Gary Cope as President and CEO. Mr. Cope holds the same positions at Orex and Barsele.

Mr. Cope served as the President, CEO & Director of Orko Silver Corp., and was instrumental in negotiating and arranging the sale of Orko Silver to Coeur d'Alenes Mine Corp in 2013.

Dolly Varden Silver is a mineral exploration company focused on the exploration of the Dolly Varden silver property located in northwestern British Columbia, Canada.

The entire Dolly Varden property is considered to be highly prospective for hosting high-grade precious metal deposits, since it comprises the same structural and stratigraphic setting that host numerous other on-trend, high-grade deposits (Eskay Creek, Brucejack).

GoldQuest Mining Corp. (TSX-V: GQC)(OTC: GDQMF)

On January 5, 2017, GoldQuest announced that the company has been granted a new five-year exploration license on the 425 hectare Hoyitos ("Hoyitos") exploration concession.

Hoyitos contains the Las Animas Volcanogenic Massive Sulfide ("VMS") deposit.

Bill Fisher, GoldQuest's Executive Chairman commented:

"We are pleased to have been granted a new concession license which will add to the Company's critical mass in the country, The government of the Dominican Republic continues to issue exploration licenses to GoldQuest and this support is encouraging as we work with the Ministry of Mines on the Mining License Application for our flagship Romero gold/copper Project.”

The Las Animas deposit was defined by 47 drill holes with results up to 142 meters grading 2.50 g/t Au, 36.58 g/t silver, 2.59% Cu, and 1.91% Zn in hole LA-06 and has a small oxide resource at surface although true width for the resource estimation was 23 meters

While the company is examining its options to restart exploration at Las Animas, the Tireo Formation remains the focus.

GoldQuest’s priorities are to continue the Romero mining application and environmental studies and continue work on the current 40-hole drill minimum program in the Tireo Formation surrounding the Romero deposit.

The exploration potential and people at GoldQuest are both excellent, but the share structure isn't what I’d like it to be although, in fairness to the company, much of the dilution happened as a result of the latest resource bear market.

Eastmain Resources (TSX: ER)(OTC: EANRF)

On January 4, 2017 Eastmain Resources announced additional assay results from its ongoing, 63,300 m drill program at the Clearwater Project, which includes the Eau Claire deposit in James Bay, Quebec.

The results are from 18 holes (5,285 m) of drilling for a total of 50 holes (17,516 m) to date, from three drill rigs. A fourth rig is now commissioned to accelerate the program. Main takeaways from the release are below:

Highlights include:

• Eau Claire infill drilling highlights:

◦ ER16-608 - 67.7 g/t Au over 2.4 m (vertical depth - 216 m)
◦ and 6.17 g/t Au over 5.3 m
◦ ER16-617 - 15.8 g/t Au over 3.5 m (vertical depth - 171 m)
◦ including 66.6 g/t Au over 0.8 m
◦ ER16-620 - 6.74 g/t Au over 6.6 m (vertical depth - 118 m)
◦ including 31.3 g/t over 1.0 m

• Snake Lake drilling highlights:

◦ Two types of gold mineralization identified
◦ ER16-604 - 11.3 g/t Au over 1.2 m (vertical depth - 32.0 m)
◦ ER16-633 - 5.78 g/t over 2.0 m (vertical depth - 22.0 m)

Claude Lemasson, Eastmain President and CEO commented:

"Drilling continues to return excellent results from our open pit and shallow underground definition program on the Eau Claire deposit. The infill drilling results are confirming our expectations within the current resource while tightening the drill spacing to enhance vein continuity. A fourth drill is now arriving onsite and we remain on track to deliver an updated mineral resource estimate in 2Q2017.”

Eastmain is a Canadian exploration company with 100% interest in the Eau Claire and Eastmain Mine gold deposits, both of which are located within the James Bay District of Quebec.

Clearwater, host of the Eau Claire deposit, is the company's core asset with access to superior infrastructure in a favorable mining jurisdiction.

Eastmain also holds a pipeline of exploration projects in this new Canadian mining district, including being a partner in the Éléonore South Joint Venture.

To your wealth,


Gerardo Del Real
Editor, Junior Mining Monthly and Junior Mining Trader.

For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.

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