Inflation Up, Rate Cuts won't Help, Juniors - ZON, GOT, GLM, FTZ
Not a great day on the economic front. Jobless claims for the week ended Dec 7, jump to two-month highs. Initial claims rise 17,000 to 242,000. Economist's expectations were for a fall down to 220,000.
The overall Producer Price Index, meanwhile, increased by a greater-than-expected 0.4% last month, double the Wall Street forecast. A big increase in egg prices drove up food costs and contributed to the higher headline number. The increase in wholesale prices in the 12 months that ended in November climbed to 3.0% from 2.6% and touched the highest level in almost two years.
The narrative is the Fed will focus on the core rate that is just up 0.1%.
The Bank of Canada cut rates by 50 points and really just signals recession. There is happy talk that lower rates will help the economy and housing but I am sure that won't happen. It is true that low rates stimulate borrowing and spending but we just did this trick from 2019 to 2022 so a repeat is too soon to matter. As I pointed out earlier this week mortgage renewals will still see a 1.5% to 3% increase.
The average size of a mortgage in the biggest market Ontario is $427k. As of Q2 2024 the average mortgage payment in Ontario was $2,099. The best rates at the Banks are now about 4.6% to just under 5%. A lot of mortgages were around 3.5% in the pandemic years. With current rate drops most renewals will see a 1% to 1.5% increase. The average $2,131 payment on the $427K is going to jump about $230 to $350 a month. Take note that this is the average so half of the renewals are going to be much higher because there are about 30% of mortgages over $600k in Ontario. Those will see about a $500 jump per month. This is not stimulus, just less pain.
And insult to injury is credit card rates are going up, not down because of higher delinquency rates. I just got notice on my card that is increasing from 21% to 23%. More money sucked from consumers.
I just commented on the Indigenous contract fraud. I saw a number on one of these today. An auditor alleges a $160M Indigenous Contract went to non-Indigenous venture. An agency that supplied nursing services to remote indigenous communities received a $160 million indigenous business contract, despite being non-indigenous, a former government auditor says. They entered into a joint venture that was a “shell” to receive the massive contract.
PM Trudeau should just keep his mouth shut it only spews B.S. His comments likening Kamala Harris’s election loss to an attack on women’s rights and progress earned him criticism from the country’s premiers and from American billionaire Elon Musk on Wednesday. Musk responded to Trudeau’s remarks, saying, “He’s such an insufferable tool. Won’t be in power for much longer.”
I have worse words but will leave it like that.
Zonte Metals - - - TSXV:ZON- - - - Recent Price - $0.09
Entry Price - $0.09 - - - - - Opinion – buy
I hope some of you picked up some cheap stock around 6 cents on my last 'strong buy'. The stock has moved up 50% from there. I don't think we will see those cheap prices again. Today Zonte announced the identification of two large gravity anomalies which are spatially coincident high magnetics, elevated copper-in-soils and rocks, sitting in structural zones.
The K10S anomaly measures 1,800 metres in length, up to 400 metres in width, and 500 metres deep at its thickest portion. It sits adjacent to the magnetic high in the target area. Previous exploration by the Company has identified copper showings and indications in bedrock along the entire strike length of the anomaly. The K10N gravity anomaly measures 1,100 metres in length, up to 500 metres wide, and 750 metres deep, remaining open along strike. This anomaly is enveloped by the magnetic high in the target area.
These targets are huge and that is what the major miners look for. I did a quick calculation on tonnes. One cubic metre of water is one tonne, but rock is a lot denser. Metamorphic rock is 2.7 tonnes in a cubic metre so for a quick calculation I used that. K10S has 360 million cubic metres so is 972 million tonnes. It will not be a perfect cube so I will multiply buy 0.6 to be more conservative so we have 583.2 million tonnes.
Lets assume it has 0.5% copper, kind of a common number for large low grade deposits so this equates to 2,016,000 million tonnes of copper. There are 2,204.6 pounds in a tonne, so we end up with 6.4 billion pounds of copper. Yes that is right, billions. You can play with the numbers, but it is going to come out huge, only a matter of how huge. And now Zonte has 3 large targets like this and working on more.
Terry Christopher, President and CEO, comments: “The K10 target hosts two high-priority anomalies. The large gravity anomalies are supported by coincident geophysical, geological and geochemical data. Together with the recently announced K9 target, the Company now has three large drill ready targets. We continue additional processing and compilation for the K6S-K7 and K8 targets.”
Goliath Gold - - - - TSXV:GOT - - - - - Recent Price - $1.09
Entry Price - $1.22 - - - - - Opinion - buy
Golaith keeps hitting awesome drill numbers but the stock like most juniors can't gain much traction.
Today the reported that hole GD-24-249 intercepted the Bonanza Zone returning 226.12 g/t or 7.3 oz/t AuEq near surface between 76.60 – 77.60 meters within a larger interval consisting of 45.60 g/t AuEq or 1.5 oz/t AuEq over 5.95 meters near surface between 71.65 – 77.60 meters.
With only 3 months of drilling in 2024 and the strong gold mineralization observed in multiple drill holes, the delineated size of the known Bonanza High-Grade Gold area has been nearly doubled from 720 x 612 x 410 meters to 835 x 685 x 612 x 410 meters and remains wide open.
Also Drill hole GD-24-260 intercepted the Bonanza Zone over 13.10 meters at the same elevation as GD-24-249, has the highest concentration of visible gold to drilled date with a vein-hosted band of semi-massive pyrrhotite that looks similar to previously reported GD-23-197 in 2023 that assayed 34.03 g/t or 1.09 oz/t AuEq over 9 meters (~true with); assays pending.
The stock pulled back some with the recent gold correction and is a good buy here.
Golden Lake - - - - TSXV:GLM - - - - Recent Price $0.03
Entry Price - $0.20 - - - - - Opinion – buy at $0.02
Today GLM announced results of their drill program. In all, a total of 1,756 metres of reverse circulation drilling comprising 5 holes were completed at Jewel Ridge (JR-24-51 to JR-24-55).
Highlighting the results, are 2 intercepts obtained in hole JR-24-54, yielding broad intervals of anomalous to strongly anomalous gold and silver values, specifically 0.77 g/t Au & 17.54 g/t Ag over 13.72 metres (including 1.42 g/t Au & 35.10 g/t Ag over 6.10 metres) as well as 0.18 g/t Au & 3.92 g/t Ag over 25.91 metres (including 0.44 g/t Au and 3.29 g/t Ag over 7.62 metres).
Notably, both intercepts are closely associated with 2 prominent north-trending structures that traverse the Eureka district: an unnamed fault as well as the Jackson fault. The Jackson fault in particular, is intimately associated with several known Carlin-type gold as well as carbonate replace deposits (CRD), situated immediately to the north of Jewel Ridge on the Ruby Hill property, owned by i-80 Gold Corp. Additional drilling is clearly warranted in the immediate locale of drill hole JR-24-54 at Jewel Ridge, along strike as well as at depth.
Drill hole JR-24-55 was undertaken to evaluate a strong prominent Induced Polarization (IP) anomaly, thought to be prospective for carbonate replacement deposit-type mineralization. Unfortunately, the drill hole trace deviated drastically from its intended direction and accordingly, did not optimally test the IP anomaly. Additional drilling utilizing directional drilling equipment is recommended, as an additional drill test.
Clearly the market was expecting better numbers and myself, I believed we would at least get 1 or 2 good hits as in previous drill programs. More like 20 or 30 metres of 8 or 9 g/t gold or better still some numbers like North Peak on their border. Five drill holes are not many and a drill hole is skinny and can easily miss. Ridiculous the stock is this cheap at all time lows, but with sellers and tax loss season, I am suggesting stink bids at 2 cents for now.
Fitzroy Minerals - - - TSXV:FTZ - - - - Recent Price- $0.165
I did sent an alert out on FTZ and plan a full report for next week. Again with tax loss selling, this is a good time to buy. They also announced a financing at $0.15 so this has added to weakness also.
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