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Weekly Trends: August 24, 2013

NioGold Mining is “Stock of the Week” |¬†Another Positive Week for Precious Metals

Commodity Talk

Precious metals posted another positive week on the heels of technical buying and a weaker U.S. dollar. Gold built a bull flag earlier this week, broke out on Friday morning posting a solid $20 gain on the day, and has now pushed above the 100-day moving average ($1370) for the first time all year. Platinum broke out Thursday, breaking through the 200-day moving average at $1535. Silver continues to push higher, posting another monster day and closed around the $24.00 resistance point we pointed out last week.

Gold Support Areas: $1350, $1335, $1265

Gold Resistance Levels: $1425, $1475, $1515

Silver Support Areas: $23.80, $23.20 $23.00

Silver Resistance Levels: $24.11, $24.60, after that there is no technical resistance until the 200-day moving average at $26.40

Gold Yearly Chart 2013

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Silver Yearly Chart 2013

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Some substantial short positions surfaced on the TMX short list this week including Kinross (79 million shares), Lundin Mining (67 million shares), Yamana Gold (31 million shares) and IAMGold (28 million shares). These large positions were taken in the past two weeks after all the earnings were released. Clearly, some major players believe the worst is still to come in the mining sector, which is a little scary considering the carnage that has already taken place. It will be interesting to see what comes of these positions given the recent strength in the precious metals markets.

Technically, not much changed this week on the TSX-V. It appears the TSX-V is consolidating for a push through 950 towards the 975 level. With the recent strength in the metals this seems quite likely.

TSX-V Chart

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niogoldSymbol: NOX.V
Share price: $0.14
Shares outstanding: 106,764,874
Market cap: $14.9 million


NioGold is a mineral exploration company focused on gold in the Abitibi gold mining district of Quebec. NioGold’s key property, the Marban Block, hosts a 43-101 resource of 2.1 million ounces and has growth potential. The property is close to several operating mines and adjoins Osisko Mining’s producing Malartic deposit. The grade on the project is decent at well over 1 gram per tonne. Management continues to build out the team adding Simon Ridgway, an accomplished mine developer, in late June.

A major catalyst is that the property is currently an option and JV agreement with Aurizon (now Hecla), which was signed in July 2010. Hecla has until August 24th to make the decision to continue and fund phase 3, or the project reverts 100% back to NioGold. The market appears to be telling us that Hecla will not continue with the option agreement. If Hecla decides to opt in they will have to make a resource payment of approximately $30 million to NioGold as part of the option agreement.

NioGold is well setup to continue the project development on its own with $3,785,340 as of last financials. NioGold is an interesting company to watch especially given how the market will react to the news of the option agreement.

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