For weeks I have been writing to my premium subscribers about the seasonality of junior miners and gold to bottom in the summer months while many investors are away on vacation. Investors usually sell equities in May and rotate into precious metals and junior miners who are active drilling and developing top quality projects in stable jurisdictions. Even more so this summer there are increasing signs of the beginning of a major rotation from the overbought stock market into the beaten down natural resource sector.
How do I sense this? Some of our featured junior gold miners have already been in an uptrend for 2015 and continue to raise impressive amounts of money to fund development and exploration. The general equity markets look quite toppy as the Dow Transports which are a leading indicator may be already in a downtrend. Meanwhile, gold and the junior gold miners appear to be bottoming and on the verge of a bullish reversal. Looking at the ARCA:GLD it is quite nice to see a bounce above the 50 day moving average. I look forward to a breakout into new four month highs through $117.50. Similarly with the ARCA:GDXJ which has been in an uptrend for four months may breakthrough into new four month highs shortly at $27.
Looking at some of my holdings and featured companies. Integra Gold Corp (TO:ICG) and Nulegacy Gold (OTC:NULGF) are in powerful uptrends in 2015 with increasing accumulation. Investors appear to like the progress these companies are making.
Integra may be just beginning to breakout as they just announced results from the Phase One compilation of 75 years of mining data at the historic Sigma and Lamaque Mines in Quebec which Integra acquired in October of 2014.
NuLegacy has been drilling away in the Cortez Trend next to Barrick and has made some impressive results. I think the experienced technical team may be onto an exciting discovery and the stock could make a move into new highs in the near term. In late May, NuLegacy intersected two gold bearing horizons with a high assay result of around 25 grams/tonne over 4.6 meters within over 40 meters of around 4 gram/tonne material. These are the sort of results the team was looking for and they got it. As NuLegacy Director and Former Barrick Executive Alex Davidson said, “This result indicates the Iceberg gold deposit is a very robust Carlin-type gold system and significantly expands its exploration potential.”
Another two of our favorite Nevada gold juniors Corvus Gold (TO:KOR or OTC:CORVF) and Pershing Gold Corpor (OTC:PGLC) are still basing and may soon be on the verge of a major bullish reversal.
Corvus recently announced this week an impressive Preliminary Economic Assessment (PEA) incorporating the high grade Yellowjacket Discovery. The PEA shows high margins with low costs and Capex. With a NPV (5% Post Tax) of $246 million and IRR of 38%, Corvus may be quite undervalued at these levels. Jeff Pontius Corvus Gold CEO stated in the Press Release,
“The results from this initial analysis of the North Bullfrog deposits have clearly illustrated the economic potential of this new and emerging Nevada Gold District. The unique mix of a high-grade vein/stockwork deposit surrounded by oxide heap leach deposit has resulted in a potentially exceptional, low strip, open pit, mining project in one of the best jurisdictions in the world. By using a conservative US$900 gold price driven WhittleTM pit to define the PEA base case pit design the project demonstrates potential to perform well in the current gold price environment. The existing project infrastructure and advanced permitting work linked with simple oxide processing offers the opportunity for a low Capex, high margin operation with near term production potential. Utilizing the new high-grade YellowJacket deposit as our proof of concept, we have begun a District wide exploration and development program to identify other large vein systems as well as follow-up resource expansion drilling of the YellowJacket deposit, both of which could add significant potential to the North Bullfrog project and Corvus as a whole.”
Remember smart investors such as Van Eck and Toqueville Funds made Private Placement purchases at higher prices so investors can possibly get in now at much cheaper levels with an excellent PEA in hand.
Finally, look for Pershing Gold (PGLCD) to eventually breakout of its recent four month consolidation. Pershing just announced two new additions to the board and an 18-1 share consolidation so that it can get uplisted to a higher quality stock exchange. A better listing will improve Pershing’s acceptance into the institutional community as a major near term producer in Nevada. With a better listing the company could improve financing options to fast track the recommencement of mining at Relief Canyon which has three open pits and a fully permitted heap leach processing plant. The company has made some great progress recently making some of the most exciting high grade discoveries in Nevada.