OceanaGold Corporation is pleased to announce results from an underground exploration program at the Panel 2 Deeps area of the Frasers underground mine in Otago, New Zealand.
Oceana released some impressive drilling results this morning from Panel 2 Deeps at Frasers underground. As of now, the stock is up 9-10% on the ASX. With Q2 numbers getting closer, this might just be the start of the next significant leg up of the OGC share price. As we have stated before, we hope to provide O B Research subscribers with some of our thoughts about Q2 and the rest of 2010. But for now, let’s enjoy today’s interesting pressrelease.
Some great holes were released, including 20 metres of 3.73 g/t Au and 9 metres of 3.39 g/t Au (true thickness). This confirms what we stated in our report on OGC from April 12, that they will prove up more minable ore hence extending minelife considerably. This, combined with moving resources into reserves and higher corporate earnings, will eventually lead to a much higher valuation.
“An updated resource estimate will be calculated for release later this year and it is expected that a significant portion of the current inferred resources will be upgraded to indicated resources and then integrated into the mine plan as reserves”
CEO Paul Bibby made a significant statement in the release, worth reading more than once. “The resource at P2 Deeps, originally announced in September last year, now represents the potential for an additional 1.5 years of underground mine life providing we continue to be successful upgrading the confidence of the resource through the infill drilling program. The results from this most recent program further point to an expanding mineralised package which should be integrated into the mine plan. We expect to be able to determine the total extent of P2 Deeps through continued drilling programs scheduled through to the year end.”
Overall, we are very pleased with the development in Oceana and we think that there’s a fair chance that OGC will not be affected to the summer doldrums this year.
Team O B Research
For full pressrelease, click on pdf icon
The striking trend in this chart is the upward trajectory of the index from the beginning of the year to the end of the year. This occurred in every calendar year except 2008 (yellow line) when the financial crisis created a dash for cash and liquidation across all investments. Other than this outlier we can see that the gold price is typically 5-10% below average during the first few months of the year and 5-15% above average during the last few months of the year.
The only problem with this chart is that gold is in a secular bull market that is steadily advancing every month. Thus part of the reason for the higher index readings during the later months is simply because they are more recent in time. So I decided to slice the data another way and take a look at percentage change versus the previous month. This gives us a more recent and relevant baseline to use in evaluating gold’s seasonality. The following chart averages the monthly change (versus previous month) over the past 10 years.
The above chart shows that gold only has two months with a negative average gain with -0.5% being the worst month during August. This reinforces just how strong the gold bull market has been given that only two months show losses and those losses are tiny compared to the gains in other months. The highest monthly gains all occur during the Winter months (November – February) and the slowest growth occurs in the Spring/Summer months (March – August).
The data table for the above chart can be found below. It shows a few outliers such as the May 2006 growth of 10.6% which explains the May spike that occurs in the middle of the slow growth season. Similarly the -11.8% drop in June of 2006 is responsible for what would otherwise be a very strong month for gold. In fact removing this outlier leaves June with average growth of 1.1%.
I also added a row showing what percentage of the time gold advances in a given month. Further testament to the potency of the current bull market is the fact that April is the only month where gold has declined more often than it has advanced over the past ten years. November December and January not only have the largest percentage gains but are also the months when gold advances most often. In fact gold advances 88% of the time during November and December with the only declines occurring during the 2008 financial crash.
Investors looking to buy the dips are most likely to have success during the Spring/Summer months of March April May July and August. Please note that June is left out of this sequence because the price actually advances 78% of the time despite the negative average growth. Short-term traders should look to buy during these months and sell during February of each year. Regardless of your investment horizon this data demonstrates the robustness of the bull market in precious metals. 10 out of 12 months produce positive gains and only one month April has a history of declining more often than it advances.
As we move into mid-July and August it is the perfect season to load up on physical gold and silver as well as shares of quality mining stocks. If this Winter follows previous years (2008 excepted) you should be racking up considerable profits by Spring of 2011. The trend is your friend.
This article is written by Jason Hamlin and with his kind permission, O B Research has been privileged to publish his work on our website. To find out more about his work, please visit:
First Majestic Silver Corp. announce that production in the second quarter increased to a new company record of 1,651,411 equivalent ounces of silver representing a 2% increase over the previous quarter and a 72% increase over the second quarter of 2009.
About La Encantada: The new 3,500 tpd cyanidation mill achieved commercial production effective April 1, 2010. Starting this quarter, all revenues and associated operating costs will be treated as commercial production.
For full pressrelease, see this LINK
Orvana Minerals Corp announced today that it has resolved the arbitration proceedings commenced against its wholly-owned subsidiaries, Orvana Minerals Asturias Corp. “This will allow our senior management team to remain focused on developing our current projects and seeking out new opportunities.”
Our latest recommendation Orvana Minerals came out with a release today, saying it has agreed to pay Glen Eagle $1.5 million in settlement. Orvana is not acknowledging any liability. Roland Horst (CEO) stated that they are pleased to have this resolved as they can now fully focus on more important matters as developing new mines etc.
We at O B Research fully agree with Mr Horst, even though this was never “any major issue” for the company as we saw it. In our mind, it is still good to have this behind us rather than an overhang.
We expect a feasibility study on the El Valle-Boinás project shortly, and will then update our report and share it with our subscribers.
Team O B Research
For full pressrelease, see pdf
Avion Gold Corporation announces second quarter 2010 production of approximately 22,210 ounces of gold from its Tabakoto/Segala operations in Mali, West Africa. This is a 42% increase in production over Q1 2010 where 15,710 ounces of gold was produced. Year to date gold production for 2010 is 37,920 ounces.
Avion plans to release its Q2 Financial Results on Thursday August 26, 2010
For full press release, see this LINK