Month: April 2014

Technical Sentiment: Bullish

Key Takeaways

• EUR/AUD fails to make a lower low;
• Pair enters a triangle chart pattern;
• Sentiment bias is slightly bullish ahead of news.

EUR/AUD is increasingly developing a bullish technical sentiment, yet confirmation is still required. The current downtrend failed to provide a lower swing low, as price rose above the bearish trendline from March and is now within reach of the main resistance area. If European data does not disappoint too much, a rally above 1.4850 will confirm the reversal of the current trend.

Trend reversal scenario

Last week EUR/AUD offered a perfect rejection from 1.4850 – based off the 200-Day Moving Average and the trendline from March – making a higher low in the process. The rejection itself was signaled by a Bearish Engulfing Bar on the 4H chart (and a small bearish Pin bar on the Daily timeframe). Even with such a nice display from the sellers, the pair failed to beat the weekly low at 1.4653.

In a strong bearish trend, as it is the case right now, any failure to continue making lower swing lows is immediately perceived as a sign of weakness. Buyers are currently seeking to test the resistance between 1.4822 (triangle trendline, 200-Day Moving Average) and 1.4850 (previous high, 100 Simple Moving Average on 4H chart).

A break-out and close above 1.4850 will signal the trend is now bullish, opening the way higher. Main resistance levels:

1. 1.4955 – resistance from late March, beginning of April.
2. 1.4990 – 38.2% Fibonacci Retracement from 1.5536 down to 1.4653
3. 1.5100 – February 2013 Low and strong Fibonacci Confluence

Without corrections, trend continuation is limited

If EUR/AUD fails to breach the resistance, the triangle chart pattern remains valid and prices will continue to adopt a range personality. A bearish break of the triangle is a viable trading opportunity as well, yet the lack of correction in the trend thus far and oversold conditions could limit further drops to 1.4530 area.

*********
Prepared by Alexandru Z., Chief Currency Strategist at Capital Trust Markets

Article By RoboForex.com

Analysis for April 16^th, 2014

EUR USD, “Euro vs US Dollar”

After rebounding from the group of upper fibo levels, Eurodollar started new descending movement. During current pullback, which has already reached local correctional level of 50%, I opened another buy order. In the nearest future, market is expected to reverse downwards and break minimum.

As we can see at H1 chart, pair rebounded from the group of upper fibo levels right inside temporary fibo-zone. Main target for bears is at local level of 61.8% (1.3760). If pair breaks this level, price will continue moving towards level of 78.6% (1.3720) to test it from above.

USD CHF, “US Dollar vs Swiss Franc”

After rebounding from the group of lower fibo levels, market started moving upwards. During correction, I opened another buy
order. Price may yet consolidate for a while, but later it is expected to break previous maximum.

As we can see at H1 chart, possibly price may reach local correctional level of 50% (0.8780). If later price rebounds from it, market may start new ascending movement towards the group of fibo levels (0.8845 – 0.8855) near level of 50%.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Article By RoboForex.com

Analysis for April 16^th, 2014

EUR USD, “Euro vs US Dollar”

Probably, Euro is finishing diagonal triangle [v] of C of (D) of ascending zigzag (D) of [B], which may be followed by final descending zigzag (E) of [B].

Probably, price is forming final ascending zigzag (v) of [v] of C of (D). Pair has already finished ascending impulse a of (v) of [v] of C of (D) and right now is forming descending correction b of (v) of [v] of C of (D).

Possibly, pair is completing local descending correction b of (v) in the form of zigzag, which may be followed by ascending wave c of (v).

GBP USD, “Great Britain Pound vs US Dollar”

Probably, Pound is completing final wedge [c] of D of ascending zigzag D of (B) with extension in its first wave (i) of [c]. After completing zigzag D of (B), price is expected to start final descending zigzag E of (B).

Probably, pair is finishing final ascending impulse (v) of [c] of D. Right now, price is forming ascending wave v of (v) of [c].

It looks like price is starting to form final ascending wave v of (v). However, this assumption hasn’t been confirmed yet, and pair may still be forming correction iv of (v) in the form of long horizontal pattern.

USD CHF, “US Dollar vs Swiss Franc”

Probably, Franc is completing diagonal triangle (v) of [c] of D of descending zigzag D of (4), which may be followed by final ascending zigzag E of (4).

Probably, price is forming final descending zigzag v of (v) of [c] of D. Pair is completing local ascending correction [B] of v, which may be followed by descending wave [C] of v.

Possibly, price is finishing ascending correction [B] of v in the form of zigzag, which may be followed by descending impulse or diagonal triangle [C] of v.

USD JPY, “US Dollar vs Japanese Yen”

Probably, Yen finished long horizontal correction 4 of (A). In this case, price is expected to start final ascending movement inside wave 5 of (A).

Possibly, pair completed skewed triangle 4, which may be followed by final ascending wave 5.

Probably, price finished descending double zigzag [e] of 4 and started forming final ascending wave 5.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By WallStreetDaily.com

Allow me to share an investment insight I recently received from self-made millionaire, Chris Camillo.

Chris is the bestselling author who turned $20,000 into $4 million straight through the Financial Crisis, without shorting the collapsing housing market.

Back in November, Chris invited me into his home to sit and chat.

Knowing that all legendary investors have their own “secret sauce,” I listened very carefully.

And today, I’m stealing Chris’ secret to reveal my favorite company among MIT’s just-published list of the “Top 50 Smartest Companies.”

The company is Uber, MIT’s 26th Smartest Company…

Uber is a sedan service that’s ready to push the taxicab industry into extinction.

Forget dirty, smelly cabs… with the Uber app loaded on your smartphone, the click of a button will summon a beautiful black towncar ready to take you anywhere.

The towncar usually arrives in less than seven minutes, too.

Oh, and the driver is courteous and attentive. Imagine that!

When I downloaded the Uber app, I was prompted to load a credit card, which ingeniously eliminates a cash exchange.

And upon arriving at my destination, I simply opened the door and exited the vehicle.

The driver’s gratuity is built into the price, as well!

I never even reached for my wallet. (Check out this video of me in an Uber “black car” this morning.)

But here’s why I’m declaring the taxicab industry dead…

With all the subtle nuances of a personal limousine service, Uber’s prices are right in line with taxis. Sometimes they’re even cheaper!

Personally, I hope to never see the inside of a cab again.

Now, how does my conversation with bestselling author, Chris Camillo, factor in?

It’s simple, really.

Chris made his fortune exploiting what he calls “information imbalances.”

While that may sound complicated, it’s not.

An information imbalance occurs when the public has a rare, unfair advantage over Wall Street.

The advantage comes from having the freedom to invest alongside trends, phenoms and sensations just as they’re happening.

Wall Street is its own worst enemy in this regard.

Institutional controls and regulations weigh on money managers like cement, which means they’re sitting ducks for any “unexpected” profit sensations.

For example, Wall Street totally missed Uggs, True Religion Jeans and Crocs as they swept the nation.

Wall Street also missed the Wendy’s “Pretzel Burger” craze.

And guess what?

Wall Street is about to miss the next BIG one!

How to play the rise of personal sedan services…

Undoubtedly, competitors will arrive to challenge Uber. I mean, competition is the nature of free markets, right?

But the competition won’t come from taxicabs.

Quite frankly, taxicab companies have failed miserably to adapt to a changing market. And now it’s way too late for them to save themselves.

The fly in the ointment here is that Uber is a privately held company.

Boy, it’d be a shame to waste a classic information imbalance, though.

So I’m going to break form and recommend “going short” shares of Medallion Financial Corp. (TAXI).

Medallion Financial controls the financing of taxicab medallions.

These medallions are the licenses required to operate taxicabs in major cities like New York, Boston, Chicago, Newark, Philadelphia and Baltimore.

As Uber continues to rise to power, taxicab medallions will be worth less and less.

Only 4.8% of the shares are presently being held “short,” so we’re nice and early on this one.

For our more aggressive speculators, consider buying a few November 2014 $10 put options.

By November, I expect cabbies will be scrambling to survive, meaning those put options will have exploded in value.

Onward and upward,

Robert Williams
Founder, Wall Street Daily

The post Anarchy in New York, Taxicabs Suddenly Vanish… appeared first on Wall Street Daily.

Article By WallStreetDaily.com

Original Article: Anarchy in New York, Taxicabs Suddenly Vanish…

By HY Markets Forex Blog

Gold prices have been up and down in recent months, with multiple international incidents impacting the supply and demand for the save haven. Investors who trade gold should be keeping a close eye on Ukraine and China to try and see how the precious metal will move in the coming weeks.

Gold recently declined around 2 percent, as traders participated in technical selling hoping to cash in on the previous sharp rally, according to Reuters.

“Gold was hit by profit-taking as the rally to $1,330 on Fed minutes appeared overdone,” Thomas Capalbo, precious metals trader at brokerage Newedge, told the news source. “The break below 200-day moving average and $1,300 level also triggered tons of sell-stops.”

However, investors may want to prepare for future increases in the coming years, as China’s demand for gold is expected to increase markedly. According to Bloomberg, a wealthier population should lead to a 25 percent rise in gold demand by 2017 in China.

“Whilst China faces important challenges as it seeks to sustain economic growth and liberalize its financial system, growth in personal incomes and the public’s pool of savings should support a medium-term increase in the demand for gold, in both jewelry and investment,” Albert Cheng, Far East managing director at the council, said in a statement.

This increase is expected as China recently passed India as the world’s largest gold user last year. The country accounted for around 28 percent of global usage last year. This is valuable information for investors, as increasing demand could push up prices.

The post Gold Prices on a Roller Coaster appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By MoneyMorning.com.au

Recently I visited the breathtaking city of Hong Kong to speak at the seventh-annual Mines and Money conference, Asia-Pacific’s premier event for mining investment deal-making and capital-raising. During my time in Asia I had the additional privilege of addressing the audience of the Asia Mining Club, alongside my good friend Robert Friedland, Executive Chairman and Founder of Ivanhoe Mines.

The mission of the Asia Mining Club is to promote education among its members, and one way to achieve this is by hearing from experts in the financial markets, notably those focused on resources and commodities. During the club’s sell-out event, I too, confirmed a great deal about the commodity “buzz” on that side of the world, especially on gold…

The demand for the precious metal in Asia is truly phenomenal! In smaller countries like Indonesia, Thailand and Vietnam, consumption of gold totalled 300 tonnes in 2013, and according to Bloomberg, in 2014 mainland Chinese buyers purchased a total of 125 tonnes in February (including scrap). This number tops the 102.6 tonnes purchased in January and 97.1 tonnes purchased a year ago.

As I wrote about in February, Switzerland plays a role in the movement of physical gold into Asia as well. Home to many of the big gold refiners, Switzerland released monthly gold trade data this year for the first time in over 30 years, with the report showing that 80 percent of shipments went straight into Asia. If we continue to see these large movements of the physical metal, especially from the West to the East, it’s only a matter of time until these supply-and-demand factors lift the gold price.

I often say there are two sides to the gold equation: the Love Trade and the Fear Trade. While Asia’s cultural affinity for gold continues to feed the Love Trade, concern over government policies which increase inflation and devalue currencies, fuel the Fear Trade. The Fear Trade demanded attention again on the back of Janet Yellen’s talk of the Federal Reserve raising interest rates in the next six months.

While low interest rates make it less expensive to borrow money, measures to keep rates low also chip away the value of the dollar and cause concern of accelerating inflation. Once real rates start rising, gold isn’t as attractive to those who trade on fear.

As I’ve written about recently, a key driver in gold prices is the real interest rate environment — the real rate of return taking into account the level of inflation. When real interest rates are negative to low, gold prices historically turn positive because there is no opportunity cost to hold the metal. The lower the real rates, the better gold tends to do. So, Yellen’s initial hint of rising rates sent gold prices falling.

On Friday the March U.S. jobs number came in at 192,000. While the number is in line with expectations and clearly shows that hiring in the U.S. is rising, it fell a bit short of the 200,000 jobs projected. The number was just enough of a miss to disturb investor confidence and drive some to seek refuge in hard assets, spurring the price of gold again.

Click to enlarge

BCA Research believes that after Friday’s report, the current pace of employment will be sustained. Although the movement is gradual, hiring is going up.

BCA continued by commenting that, “The data will underscore the Fed’s view: that the need for quantitative easing or other non-conventional tools is waning, but that there is no rush to normalize interest rates.”

In my opinion, even with job numbers in line with expectations, the Fed is still going to focus on long-term job creation and keeping interest rates low, or at least not rushing to normalize them as BCA research stated. If inflation starts to rise while these rates are low, we could see a higher movement in the price of gold.

Another headline-maker for gold last week was Yamana Gold’s purchase of 50 percent of Osisko’s mining assets. I think our Portfolio Manager Ralph Aldis said it best in a recent BNN interview with Howard Green regarding the takeover; “This deal is both sweet and sour.”

The sour part is that by our models, which look at relative value of assets, it appears that both Osisko and Yamana are paying too much on this deal. On the flip side, the sweet part is that this bid caused companies like Mirasol, Pretium and SEMAFO to immediately rise. The structure of the entire deal is a complicated one, but witnessing these stocks finally waking up, is a change in the sentiment for the gold sector that, in my opinion, needed to be seen.

At U.S. Global Investors we are always watching for opportunity, while concurrently managing risk. Along with the “sweetness” of the Osisko deal, I find additional encouragement for the broader commodities space, as well as for gold, from Stifel Nicolaus’ Barry Banister. His strategy for the second quarter of the year is that we may see a one-year rally in commodity-related stocks.

Based on the breakout of the Continuous Commodities Futures (CRB) Index, along with the movement in the U.S. dollar, he forecasts that commodities could rise 15 percent year-over-year in 2014.

Click to enlarge

High Frequency Trading became a household word overnight when bestselling author Michael Lewis gave an interview to 60 Minutes in advance of his new book, “Flash Boys.” Lewis’ allegations of high frequency trading practices that result in a rigged stock market have prompted a firestorm of support from Charles Schwab to Mark Cuban.

I agree with Schwab, chairman of Charles Schwab Corp., who said “high frequency trading has run amok and is corrupting our capital market system by creating an unleveled playing field for individual investors and driving the wrong incentives for our commodity and equity exchanges.” I’m glad to see this issue getting the attention it deserves.

From short selling to overreaching regulation, over the years I’ve shared my opinions on practices that harm individual investors and create unjust advantages in our free market system. I believe that investing is key to long-term wealth creation and that investor confidence in the system is key to capitalism.

The first quarter of the year has certainly provided surprises for the gold market, but remember that every coin has two sides. Every downward data point has an upside opportunity. Follow the smart money, stay diversified and remain a curious investor.

Regards,

Frank Holmes
Contributing Editor, Money Morning

Ed. note: The above article was originally published in The Daily Reckoning US.

From the Archives…

Why I Never Bought David Jones On The Australian Share Market
12-04-14 – Shae Smith

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By MoneyMorning.com.au

By MoneyMorning.com.au

If you ever want to make sense of what happens in the general economy, you’ll need to learn an iron law of economics: and that’s 19th Century economist David Ricardo’s Theory of Rent, or, as I like to call it, the ‘economic rent’. It fools everyone — including modern economists. Don’t allow yourself to be misled.

Victorian Premier Dennis Napthine just gave us a great example of how this law is completely misunderstood. To prove that the ignorance is across both sides of politics, his opposition just agreed with the idea.

I’m going to tell you why they’re misguided shortly. But first here’s the news in case you missed it.

According to the Herald Sun,

‘Labor has backed the Napthine Government’s move to cap maximum daily fares at the Zone 1 rate across Melbourne’s entire tram, rail and bus network from January 1.

‘Commuters in Melbourne’s outer suburbs would see the cost of travelling to work by train slashed by up to $1200 a year under sweeping changes proposed by the State Government in the lead-up to the election.

‘A couple who commute from the suburbs to the CBD each weekday using daily myki passes would save about $50 a week.’

Now, I would never begrudge workers and labourers being allowed to keep more of their earnings.

The only problem is it’ll never work.

The only way commuters are going to keep the $1200 gain is if they own a property in Melbourne. If those commuters rent, those workers will now pay $1200 a year extra to their landlord. They’ll never see a dollar of savings.

Eh? What? How does that make sense?

You see, you absolutely must understand this. Despite what Dennis Napthine thinks, what really happens is this: the locational value of real estate inside Melbourne’s public transport will increase with the cut to the cost of the public transport. This $1200 cut will ‘capitalise’ into the price of property.

Landlords can then charge renters more for the privilege of access to the ‘free’ public transport.

That’s why renters will never see a long term gain from the cuts.

We’ve been here before in history too…

A young Winston Churchill wanted to get into Parliament back in the 1890s. But he needed a platform. An idea. Something to campaign on. Something that would get votes, make him popular, get him elected. But what? The idea came to him eventually; it just seemed so obvious he noted in his diary later, in retrospect.

You see, back then, there were tolls over most of the bridges across the Thames. Only a halfpenny, nothing really, but it was an imposition on the poor, on the infirm and especially on all those young families whose father had to cross the bridge every day to go to work on the other side. And pay up to go back home as well… So there it was. Winston campaigned for the removal of the toll.

The government levied the tolls. Who could argue against abolishing them? The government collected too much money anyway. Churchill won the election. He removed the tolls. The problem?

It was discovered that once the tolls were removed, housing rent had gone up by exactly the same amount as the removal of the toll.

So what the government had given, the land-owners (House of Lords) took away. Winston never forgot this lesson, and campaigned for the rest of his life on the issue of the economic rent. (There are those words again.) Yep he did. Made him extremely unpopular with those Lords, that’s why he was a Liberal. Until world war broke out, but that’s another story.

If you’re a renter, you simply must understand this process. Effectively your taxes subsidise property owners. Under our current system, long term you simply must be on the side of the landlords.

The choice is yours: renter, or rentier.

But there’s much, much more to be gleaned from a study of the economic rent.

I’ve produced a free series of video — with more to come — so you can learn how our economy really works. And how you can use your money to take advantage of it all. All you need to do is sign up here.

I’ve produced a free series of video – with more to come – so you can learn how our economy really works. And how you can use your money to take advantage of it all. All you need to do is sign up here.

Regards,
Phil Anderson
Contributing Editor, Money Morning

PUBLISHER’S NOTE: Gain Priority Access to an exclusive FREE six-part video series where Phil Anderson, the world’s foremost authority on real estate, stock and commodity cycles reveals the secret life of the investment markets… You’ll learn what’s next for Australian stocks…why real estate and stock market cycles repeat every 18 years…why this means we’re just one year into a historic 14-year housing boom…what it means for Aussie resources…and much more. All you need to do is just click HERE.

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By MoneyMorning.com.au

Source: Brian Sylvester of The Mining Report (4/15/14)

https://www.theaureport.com/pub/na/three-key-metrics-to-identify-a-superstar-investment

Etienne Moshevich, editor of Alphastox.com, looks at three things before he decides to get excited about a company: people, projects and structure. In this interview with The Mining Report, Moshevich explains his ground-up approach to evaluating junior resource companies and names the names that are set to rake in the profits.

The Mining Report: Alphastox.com follows junior equities in everything from gold, silver and diamonds to uranium, oil and gas. Why did you choose those particular market segments?

Etienne Moshevich: If you invested wisely and at the right time—meaning in companies that have the right management teams, the right projects and the right capital structure—there’s a lot of upside in those segments. Every day I come to work, there’s a new opportunity for me to relay to my subscribers.

TMR: Alphastox.com is part of the larger Transcend Resource Group. How do you remain independent in your coverage?

EM: I’m totally open in terms of my disclosure for every company I feature.

If I think a company offers good growth opportunity, I want to feature it, to help it build a track record. I’m very open about whether I’ve been paid, whether I own stock and at what price or if I’m just looking at becoming an investor. I often feature companies that don’t pay me or that are not Transcend clients.

TMR: In a recent research report you wrote that the junior mining sector is “not where it was in 2009, but it’s definitely getting better.” What makes you think that?

EM: In the last three months, more money has poured into the junior markets than in all of 2013. A lot more financings are being done. Banks are starting to raise money for exploration and development plays. Investors see that the game is back on; the institutional side is showing more interest.

The retail side is starting to follow along. You see transactions like Goldcorp Inc.’s (G:TSX; GG:NYSE) bid to take over Osisko Mining Corp. (OSK:TSX). You see Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE) buying 50% of Osisko’s assets. People see quality assets getting the recognition they deserve, and the market is reacting.

TMR: You’ve written about mitigating risk in the junior resources market. How can investors reduce risk in their resource portfolio?

EM: To lower risk, number one, you have to diversify. Out of the 10 junior listed companies one invests in, some lose market share, and a couple may stay even, but you really hope one makes it big—hopefully big enough to pay off all the other losses and then some. That’s the name of the game.

However, the amount of capital needed to invest in several companies at the same time can pose a problem. Second, many retail investors don’t have the necessary expertise to invest in the right company at the right price. That is why investors would greatly benefit by investing in a public vehicle that has the right management team to intelligently invest their capital. Zimtu Capital Corp. (ZC:TSX.V) is a perfect example of this. By investing in one entity like a Zimtu Capital, you not only gain exposure to a number of different companies and decrease your risk, but you are also investing in an undervalued company where its asset value is worth more than its current market cap.

Which brings me to my next point: Invest in companies that are fundamentally sound—companies that have cash in the bank, companies that are trading below cash or asset value and companies with the right structure. With the right capital structure, if the company were to make a real discovery, investors will get the appreciation and the valuation they deserve. Bottom line, you need to invest in companies with sound assets, whether that be cash or a project with real assets that can be objectively valued.

TMR: How do you determine which companies fit that profile?

EM: I look first at capital structure, even before looking at the people and the project. Oftentimes, companies with great management and great projects don’t get the valuation they deserve because there’s too much stock out there.

I need to know where 70–80% of the stock is before deciding to get involved in the deal. If you have investors with similar mindsets all rowing the boat in the same direction, you have a higher chance of success.

When it comes to people, I look at track records. I look for success; not just one discovery, but multiple successes.

TMR: How much do you like to see owned by the management team?

EM: I need to see at least 10% management ownership. If it’s not good enough for management, how can it be good enough for others to invest in?

I make sure management is writing a check at the same level that I’m writing a check; that management is buying stock in the market and putting it out on its Canadian Insider reports.

TMR: How do you react if management starts selling?

EM: I don’t come to any conclusions right away. I speak with the CEO and get his reasons for the sale, then decide whether I’m positive about the sale or not. Often, management will sell some stock, but will come back into the private placement if the company is doing one. I’m fine with that.

Generally however, I try to make sure that a lot of the management stock is tied up so it can’t be sold easily. If management sells into the market, no matter what the reason, the market will react negatively. It damages confidence. You can’t blame the market for that.

TMR: Let’s turn to your thesis for the oil and gas sector for 2014 and beyond.

EM: Oil and gas prices are going higher. I see a narrowing spread between West Texas Intermediate (WTI) and Brent. Canadian companies are now paying for their operations in Canadian dollars, but are getting paid back in U.S. dollars. Geopolitical issues are creating higher demand for North American supply. The gloom and doom that hung over the sector due to worries over Canadian oil and gas production are fading. These are all positive signs.

Given increased demand for natural gas, I see those prices stabilizing in 2014.

TMR: Which companies do you follow in the oil and gas space?

EM: Crocotta Energy Inc. (CTA:TSX) is one. It’s about a $350 million ($350M) market cap company that does about 10,000 barrels oil equivalent per day (10 Mboe/d). The company is targeting its Edson play in Alberta and the Montney play out of British Columbia. Crocotta is taking a conservative approach to growth, going after stable and proven fields.

Jagercor Energy Corp. (EM:CNSX; JAMTF:OTC) is basically a shell company right now; it has no asset. However, I invested in its last private placement at $0.20/share because I’m betting on the management team. The company is run by Matias Bullrich. He spent 11 years at Morgan Stanley structuring energy deals in Argentina, which is where Jagercor is looking for an asset. I’m betting on Bullrich and CEO Edgardo Russo, an ex-YPF guy, to pick a good asset and get it financed.

Two years ago, no one in the oil and gas sector was bullish on Argentina because of the YPF SA (YPF:NYSE) expropriation. Today, a lot more positive sentiment and capital are going into the country. Chevron Corp. (CVX:NYSE), Royal Dutch Shell Plc (RDS.A:NYSE; RDS.B:NYSE) and Wintershall Holding GmbH are paying between $7.5–10K/acre. Yesterday, YPF and Chevron signed an agreement to invest $15 billion ($15B) over 35 years. That’s giving more confidence to the space.

TMR: Jagercor dropped 7% in one day in early April. Is volatility like that common with these stocks?

EM: Yes. If you’re looking at it as a penny stock, that means the stock went down two pennies from $0.27 to $0.25/share. That might not seem like a lot, but yes it is 7.5%. Investors need to be aware that penny stocks are risky. Your portfolio can go up 10–50% or down 70–80% in a day. You have to be patient.

TMR: Are there any other oil and gas companies you want to discuss?

EM: I follow Cub Energy Inc. (KUB:TSX.V), which has assets in Ukraine. The company is doing about 1,800 boe/d. Mikhail Afendikov, its president and CEO, has lots of experience in the region. The company just announced that it is drilling its O-11 development well. Cub owns 30% of that well.

TMR: KUB-Gas LLC owns the other 70%. What’s the relationship with KUB-Gas?

EM: KUB-Gas is Cub Energy’s subsidiary. Cub Energy has a 30% ownership interest in KUB-Gas.

TMR: This story is really about the netbacks isn’t it?

EM: Yes. Cub’s netbacks are very high, something I look for when evaluating oil and gas companies.

Two other companies I follow, in totally different jurisdictions, are Taipan Resources Inc. (TPN:TSX.V)and High North Resources Ltd. (HN:TSX.V).

I took a position in Taipan’s latest financing at $0.36/share. The company has assets in East Africa. Africa Oil Corp. (AOI:TSX.V) got a massive valuation for its discovery in the same area. If Taipan does the same, the market will react and move the stock a lot higher.

High North is targeting its Montney wells in Alberta. The company just closed about $8.5M on a convertible debenture led by GMP Capital Inc. High North is doing about 350 bbl/d now. We saw great results from its first two Montney wells and I expect more from the third well that it is drilling now. President and CEO Collin Soares has been very successful with privately held companies. He has the right people in place to guide High North on the public side.

TMR: Is it easier for companies to get financing through private placements, given that capital is more difficult to come by these days?

EM: Definitely. Sentiment is becoming more positive. Investors are more willing to put money into the right deals. Companies are more able to raise money without having to restructure. But both retail investors and the investment banks are a lot pickier in terms of which deals they decide to raise money for. That weeds out a lot of the deals that should not be in the game in the first place.

TMR: Uranium is another energy play getting fresh attention. Is that just about Fission Uranium Corp.’s (FCU:TSX.V) big discovery in the Athabasca Basin or is this a larger story?

EM: In the long term, the outlook for uranium is positive, and the discovery that Fission and Alpha Exploration Inc. (AEX:TSX.V) made in the Athabasca Basin is huge. There were only three big winners in 2013 for investors, in terms of penny stocks going to multiple dollars: Zenyatta Ventures Ltd. (ZEN:TSX.V)went from $0.30 to $5/share, Alpha went from $0.20 to over $7.50/share and Fission from $0.20–0.30 to close to $2/share. When investors saw that two of the three big winners were in the uranium space, they started moving there.

TMR: Beyond the discovery itself, it was about the discovery being a different deposit model in a structure thought to be barren of uranium mineralization. This could be a game changer, no?

EM: I agree; it opens a lot of doors. People forget that Fission was spun out of Strathmore Minerals Corp. (STM:TSX; STHJF:OTCQX). Fission is exploring assets that Strathmore had not. This gives people hope that the majors may have overlooked properties and that a junior could leap to being a developer and vastly expand its market cap.

TMR: What other companies operating in the basin could benefit from this renewed interest?

EM: Skyharbour Resources Ltd. (SYH:TSX.V) is one. It’s run by Jordan Trimble. When the company got into the uranium sector, it syndicated with a few partners. Now, it’s the largest landholder around Fission’s discovery. Skyharbor is fully funded for this program.

TMR: To some investors, Jordan Trimble might seem rather young. What would you say to them?

EM: He is young, but I’d much rather invest with somebody who’s willing to work and market his company every single day. I don’t care how old somebody is. Skyharbor stock more than tripled from $0.04 to $0.14/share over the last year, so he has made his investors substantial profits. All that matters are the returns, and Jordan Trimble has delivered them so far.

I judge people on track record and what they can bring to the table. He is an extremely hard worker. He brought a lot of contacts from the market side into the business when he stepped in as president and CEO. He’s always willing to tell his story, nonstop.

Trimble has the right team in place. Skyharbour has the right advisors helping run the field and exploration programs, people like Thomas Drolet, Rick Kusmirski, who ran JNR Resources Inc. (JNN:TSX.V; JNRRF:OTCPK), and Jim Pettit, the CEO of Bayfield Ventures Corp. (BYV:TSX.V). These are successful people. Any successful company needs one guy who knows the geology and the project inside out, and can lead a drill program. You need guys with capital markets experience and capital markets contacts. Jordan brings those contacts to the table.

TMR: Skyharbour just acquired 60% of the Mann Lake uranium project. What do you make of that?

EM: I think Skyharbour got a great project at a cheap price, for $15,000 and 1M shares. It offers investors a nice bonus property. Mann Lake gives Skyharbour another chance to make a discovery in the basin.

TMR: What other companies do you follow in the Athabasca Basin?

EM: Lakeland Resources Inc. (LK:TSX.V) has done extremely well for investors, going from $0.10/share to a high of $0.295 in January.

Lakeland’s President and CEO is Jonathan Armes. He has great support for financing and market from Dave Hodge and Ryan Fletcher of Zimtu Capital, one of Lakeland’s largest shareholders. It may take some time, but we see Lakeland rewarding shareholders over the next three to six months. Recently, Lakeland did an option with Declan Resources Inc. (LAN:TSX.V), another company that I’ve talked about and whose stock I own. Declan has an option to earn up to 70% of Lakeland’s Gibbon’s Creek project by incurring $6.5M of staged exploration expenditures.

Lakeland has a great model and a very tight share structure. At Gibbon’s Creek, for example, Declan is committed to spending about $1.25M in the first year. Declan brings a great team to the table, as well with David Miller as their new CEO. Miller used to run Strathmore Minerals (bought by Energy Fuels in late 2013). Altogether, both Lakeland and Declan have built a solid asset base and large scale presence in the Basin. Lakeland is well funded, having recently closed an oversubscribed $2.8M private placement and can continue to build its asset base and advance its projects by exploration, joint-ventures, and options. Look for Declan to follow suit shortly.

TMR: Moving on to copper, prices have hovered around $3/pound ($3/lb) since early March. Where do you think the price is headed?

EM: I think copper prices are going to stabilize and then could increase over the next 12–18 months.

One reason is China. I think China’s demand will rise. Chinese utilities account for around 40% of Chinese copper demand. The State Grid Corporation of China (SGSC) provides power to 80% of the world’s second largest economy. SGSC recently reported it would boost its annual investment to more than $60B. That sort of increase in capital investment should firm up or increase prices.

The second reason is supply. A number of weather issues, strikes and scheduled maintenance at major facilities flattened the growth in copper production. A hold on supply should increase the price.

TMR: Are you following any copper stories?

EM: I am. One is Kombat Copper Inc. (KBT:TSX.V). The company has the right guys in place to take the project to the next level. It just brought Justin Reed on as chairman. He is the president of Sulliden Gold Corp. (SUE:TSX; SDDDF:OTCQX; SUE:BVL) and used to be the head of mining and metals at National Bank Financial. He brings a lot of capital market experience and contacts on the Street. Kombat’s president and CEO Bill Nielsen, formerly vice president of exploration at Nevsun Resources Ltd. (NSU:TSX; NSU:NYSE.MKT), was there when that company made its big discovery on the Bisha Gold volcanogenic massive sulfide deposit.

The project in Namibia is very good. This month, Kombat will release an initial resource report, followed by a preliminary economic assessment. The initial resource will come from a historic, past-producing mine. The existing infrastructure will cut down on a lot of the cost.

TMR: Kombat owns an 80% interest in five mining licenses and five exclusive prospecting licenses. Who owns the other 20%?

EM: It varies from project to project.

TMR: What is Kombat’s core focus?

EM: It will be on the Kombat mine, the past-producing, underground copper mine I mentioned. Over 54 years, it produced 12 million tonnes (12 Mmt) of ore between 2.5–3% copper. Kombat hopes to prove there’s a lot more there.

If Kombat can show an initial resource of 2 Mmt grading at 2.5%, the company could be looking at a market cap a lot greater than where it currently stands at $16–17M. That doesn’t even take into consideration the tailings.

In its presentation, the company estimates it has 17,400 tonnes. At $6,500 per tonne, that pencils out to more than $110M. If you assume 60% recovery, that’s $68M going to Kombat.

TMR: How soon could it be in production?

EM: Probably 18 to 24 months.

TMR: Any other copper names?

EM: Freyja Resources Inc. (FRA:TSX.V) is trying to take its Las Cristinas copper project in Mexico into production. The company just raised money on the debt and equity side. The next step is to turn the company into a small-scale producer and generate real cash flow.

Alain Lambert is its chairman. He wants to fund further exploration work with the cash flow the company generates from its production, which I like. Too many companies keep going back to the public markets to raise more equity and dilute their structure.

TMR: What do you think of Mexico as a copper jurisdiction?

EM: I like it. Mexico has very rich copper resources and high grades. Some districts are favorable to mining. It drives a lot of the Mexican economy.

TMR: Do you follow any precious metals stories?

EM: Definitely. Ascot Resources Ltd. (AOT:TSX.V) just released an NI 43-101 resource of 2.85 Moz at just over 1 gram per ton (1 g/t) Indicated on its Premier/Dilworth project near Stewart, British Columbia, not far from Pretium Resources Inc.’s (PVG:TSX; PVG:NYSE) project.

Ascot’s management team is second to none. John Toffan is the CEO. He ran Westfield Securities. He took Delaware Resources from $0.30 to $26/share, by discovering gold in the Steward area. Then he started Stikine Resources Ltd., the Eskay Creek discovery that went from $0.10 to $75/share. Even better, John has brought Bob Evans, Stikine’s CFO and many of Stikine’s biggest backers to Ascot.

Ascot is close to a $95M market cap. In addition to its Premier project, Ascot has a gravel pit filled with 66 Mmt of gravel. That’s important because liquid natural gas (LNG) plants use a lot of gravel. Ascot’s Swamp Point gravel deposit could be one of the cheapest deposits around. Several LNG plants in the area are exploring a deal with Ascot. At $4.50/t, 66 Mmt is worth $300M. That’s a significant cash injection.

The company also has the Mt. Margaret project in Washington state. That is a 523 Mmt, NI 43-101-non-compliant historic resource from Duval Corp in 1980. Ascot has the Bureau of Land Management permits and will hopefully be developing that resource later this year.

I’ve also been looking at Source Exploration Corp. (SOP:TSX.V). It just announced 97 meters (97m) of 2.7 g/t gold equivalent ounces at its Las Minas project in Mexico. The results are very promising. These are shallow holes. It won’t take a lot of money. The company drilled more than 22 holes on $320K. With such low all-in costs, Ascot will be able to generate incredible results.

David Baker, who’s now the chairman of Source Exploration, accumulated his stock in Source in the market while he was still at Goldbrook Ventures Inc. The moment he sold Goldbrook for $100M to a Chinese group, he fell in love with Las Minas and decided that Source Exploration would be his next venture.

TomaGold Corp. (LOT:TSX.V) is one of the first companies I featured on Alphastox.com. The company completed a $17.5M joint venture with IAMGOLD Corp. (IMG:TSX; IAG:NYSE) recently. IAMGOLD is now heading up TomaGold’s Monster Lake project, having to spend $17.5M to acquire a 50% stake. Toma drilled a hole that hit over 237 g/t on its Monster Lake Project a couple of years ago, and the stock ran to $0.96. IAMGOLD values the Monster Lake asset at $35M and the company now has a $10M market cap and the program is just starting up again. This is a very exciting time for TomaGold. David Grondin, Toma’s CEO, is extremely hard working and always works to add value for his shareholders. One way or another, I believe in Toma and the potential of its assets and more importantly, the team which surrounds it.

TMR: One more?

EM: Sure. Great Bear Resources Ltd. (GBR:TSX.V) is looking to potentially develop a 2 Moz NI 43-101-non-compliant exploration target first drilled by Newmont Mining Corp. (NEM:NYSE) and BHP Billiton Ltd. (BHP:NYSE; BHPLF:OTCPK) in the late 1980’s. The company has a very tight share structure, with about 17M shares out. It has about $1.1M cash in its treasury. It hopes to get its exploration permit in May or June and assess its drilling options then.

Atna Resources Ltd. (ATN:TSX) is another cyanide heap-leach producer in the same county. California once posed a lot of environmental hurdles for mining. That is changing because the state is not doing very well financially.

TMR: It may be changing, but not quickly enough for the appetite of most investors.

EM: Previously, many projects couldn’t even get exploration permits because of the environmental lobbyists. That has changed; there are active mining operations in the area today.

TMR: That’s a positive outlook on an unexpected topic to end our conversation. Etienne, thanks for your time and insights.

Etienne Moshevich is the editor of Alphastox.com, a junior market newsletter featuring companies with the very best in management teams, projects and capital structures. Moshevich is also the president of Transcend Resource Group, an investor relations company based in Vancouver, B.C., specializing in exposing undervalued companies to the market place. With a degree in economics, Moshevich has helped finance many successful mining, oil and gas, technology and biotech companies over the years, many of which have rewarded shareholders with substantial returns.

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DISCLOSURE:

1) Brian Sylvester conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Pretium Resources Inc., Freyja Resources Inc., Sulliden Gold Corp., Fission Energy Corp., Cub Energy Inc., Zimtu Capital Corp. and Royal Dutch Shell Plc. Goldcorp Inc. is not affiliated with The Mining Report. Streetwise Reports does not accept stock in exchange for its services.

3) Etienne Moshevich: I own, or my family owns, shares of the following companies mentioned in this interview: Great Bear Resources, Source Exploration, TomaGold, Skyharbour, Declan and Jagercor. I personally am, or my family is, paid by the following companies mentioned in this interview: Ascot, Great Bear, TomaGold, Skyharbour, Lakeland, Jagercor, Crocotta, Cub Energy and High North. My company has a financial relationship with the following companies mentioned in this interview: Zimtu Capital Corp. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

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By CentralBankNews.info

   (Following article is written by Michael Lombardi of Profit Confidential for Central Bank News. Central Bank News will occasionally carry articles by guest contributors if they are of interest to our readers.)

By OilPrice.com

As protests in Ukraine’s eastern region turned violent on Sunday leading to the death of a Ukrainian security officer in a shootout with pro-Russian militia, Kiev threatens military action while Moscow flexes its geo-economic warfare muscles.

Pro-Russian militia groups have seized government buildings and police headquarters in Ukraine’s eastern city of Donetsk and Slovyanks–where the shoot-out took place–and despite a Monday morning ultimatum by the Ukrainian government, these groups have shown no sign of giving in.

There has been no movement by the Ukrainian military to make good on its ultimatum; indeed, the messages have been unclear and contradictory.

Acting president Oleksander Turchinov has dangled the idea of a referendum that would seek to address the demands of the region’s Russian-speaking population for more autonomy. In the same breath, Turchinov on Sunday promised a “large-scale anti-terrorist operation” to prevent another incident such as Crimea, which was annexed by Russia last month.

On Sunday, Moscow requested an emergency meeting of the United Nations Security Council (UNSC), while NATO came out with estimations that Russia had amassed up to 40,000 troops in more than 100 locations along its border with Ukraine.

This is the atmosphere that leads us up to 25 May presidential elections in Ukraine, which will be shaped by metamorphosing relations with Russia-and by energy.

Over the past few years, Ukraine’s relationship with Russia has become increasingly adversarial, in tandem with Russian President Vladimir Putin’s desire to increase his status and dominion.

But it is through the spectrum of energy that we have seen the more poignant phases of this change. The current controversial gas supply agreement Ukraine has with Russia was put in place less because of Putin’s negotiating skills and more because of a concerted effort by former prime minister and current presidential candidate Yulia Tymoshenko to destroy the Ukrainian gas lobby run by oligarch Dmitry Firtash.

While Ukraine has always struggled with gas supply issues, this really changed the dynamic. Yuri Boyko-former energy minister and another current presidential candidate–has gone from a close working relationship to a very strained one with Russia as he sought to both keep the population supplied with cheap gas and to increase the country’s independent energy supply.

Boyko’s plans to further diversify the industry were halted when he was promoted to the position of vice-prime minister and Eduard Stavitsky, a member of ousted president Viktor Yanukovych’s inner circle, was given the energy portfolio. At that point, all efforts towards energy independence abruptly ceased.

What’s going on now is geopolitical and geoeconomic battle for the region, driven by loss of Russian credibility and Moscow’s control of the Ukrainian presidency when Yanukovych was ousted in February.

But it’s important in all of this to pay close attention to what Russia is airing as its grievances, which included: an illegitimate Ukrainian government led by radicals; unprotected Russian speakers in the eastern regions; and $11 billion in unpaid Ukrainian gas debt.

What Moscow is saying, then, is that the current administration has zero representation from the eastern portion of the country. It is important to remember that over 40% of the Ukrainian population-all from the east-was against signing the economic cooperation agreement with the European Union, which was carried out immediately after the annexation of the Crimea in late March.

Russia can realistically argue that the Maidan protest movement drove the political section process, and that the current government is not representative of the country as a whole. The current administration was interested in placating the Maidan and moving towards Europe, not necessarily in united the country.

And what have they accomplished? Nothing. There are still people protesting in the Maidan; Crimea is gone; and eastern Ukraine is under threat of attack from Russia.

The current leadership should also take responsibility for its role in provoking the current situation. They refused to speak with Russia once they assumed leadership, stating they had support from Europe and the United States. At the same time, some politicians and ministers are busy conducting their own brand of justice, accusing anyone that is of the former government of crimes with little to no justification and trying to take advantage of their few remaining weeks in office to position themselves for future power.

What Russia wants is an integrated representative government. If this is realized, Moscow will no longer be able to play the legitimacy card. If Petro Poroshenko, who is leading in the polls right now, wins the presidency, then Ukraine will need a prime minister that is accepted in the east in order to have an integrated government.

This new government will also need to find an effective way to pay the country’s gas debt to Russia, because that will not disappear. The only way to do that is to start selling off energy assets and privatizing the energy infrastructure.

Russia has been able to manipulate Ukraine’s energy dependency to the benefit and pursuit of its foreign policy goals. We’re seeing this very clearly today as Putin has called for the payment of $38 billion from Ukraine, the result of unpaid gas sales and the removal of the discount for the Black Sea port in Crimea.

Ukraine’s economic crisis had been transformed into geoeconomic warfare caused by Russia’s control of supply to Europe and Ukraine’s failure to develop its own internal energy resources. And it cannot be coincidental that Russian troops are building up close to Ukraine’s gas pipelines.

Ukraine presents the most powerful example of Russia’s use of the energy weapon as a means to influence the foreign policy orientation of a post-Soviet state, and as “testing ground” for Russia’s possible use of energy as a foreign policy weapon elsewhere in the former USSR and beyond.

However, Ukraine’s new leadership has to take responsibility here as well. The current situation is not as black and white as our Cold War mentalities tempt us to believe. The onus is now on Kiev, and there are diplomatic and economic ways to halt the violent progression and render Moscow’s arguments moot.

Source: http://oilprice.com/Energy/Energy-General/Ukraine-Falling-to-Economic-Warfare-and-Its-Own-Missteps.html

By Robert Bensh for Oilprice.com