Gold is finally breaking out above resistance and long term downtrends which date back several years. Many who were predicting the demise of the Junior gold miners and were short are covering hard as SPDR Gold Shares (NYSE:GLD) iShares Silver (NYSE:SLV) VanEck Vectors Junior Gold Miners (NYSE:GDXJ) and VanEck Vectors Gold Miners (NYSE:GDX) break above key technical levels.
Why are precious metals and the junior miners breaking out? The Fed doesn’t look like they will be so fast to raise interest rates. They want the bubble in stocks and housing to continue. Investors see precious metals as a form of a hedge against geopolitical uncertainty and easy central bank policies that are constantly deteriorating the purchasing power of the US dollar.
A break above $1300 in gold in terms of US dollars could be a major psychological level starting a new spree of M&A activity and interest in the junior explorers. We may be just days or hours away from this price level.
I am looking forward to visit Northern Vertex’s (V:NEE) Moss Mine near Bullhead City, AZ. They are in construction of a mine that can produce over 40k ounces of year at very low cash costs. If they are successful they could be rerated much higher. They just announced a financing led by a top private equity group known for its due diligence and getting behind some of the highest quality juniors. See my recent interview with CEO Ken Berry by clicking here. I think it could be rerated higher as it comes closer to production. They are fully permitted and with this financing may be fully funded for production.
In addition, I have been following a relatively unknown junior gold miner in Burkina Faso called Nexus Gold (V:NXS) who has a top exploration manager who came from RoxGold which made a high grade discovery and is now a big story. Nexus Gold may be the next Roxgold as this geologist Warren Robb appears to be a Burkina Faso Genius. They keep on discovering additional mineralized zones through sampling at both of their projects and Mr. Robb appears exciting to drill these properties. ”It will be good to get back onto the Bouboulou property, these new numbers from Rawema West are well situated to potentially enhance the mineralization we will be testing at Rawema,” said senior geologist Warren Robb. “Also, the high numbers received from Koala are exciting, and we are eager to test this zone to depth in the coming weeks,” continued Mr. Robb.
See my recent interview with Nexus Chairman Alex Klenman by clicking here.
Finally, look at Genesis Metals (V:GIS) which I have been highlighting for months as a top exploration target in Quebec. News crosses my desk that famous mining investor Eric Sprott and other large funds put in over $3 million to drill the Chevrier Gold Project. Brian Groves CEO of Genesis, commented: “We are pleased to have Eric Sprott, Delbrook and other large, strategic institutional investors participate in this Financing. The proceeds of this financing allows Genesis to commence field work at Chevrier that will include drilling, trenching, prospecting and mapping.”
The project is located 35 km southwest of Chibougamau, Quebec near Iamgold’s Monster Lake discovery. See my recent interview with Genesis CEO Brian Groves by clicking here.
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