Friday, January 15, 2010

TradersBonanza Up and Running!

Link to
Hello fellow Orkonians. It has been since early January I made my last posting on this blog. If you have read my articles here then you will know that I indicated that there would be some changes coming.

Well, that time has come. I have not been sitting idle and doing nothing. I have been very busy working on my new privately hosted website. That I post this news now does not mean I am finished with the work but that I am now a little more satisfied with the progress I've made in getting all my articles in my new website.

It was a hell of a job and took me quite some time. Since I do everything by myself I have only time as a constraint. There is still lots of work to do but that can be done without to much bother to my new visitors.

So, if you see a website error, or some weird coded error message, that is just YeOldGoldNugget working and making the occasional mistake, from those I learn of course.

About the new website and about the old.

The old one, well, I just can't simply remove it from the I won't. I spend too much time working on it to just plainly delete it or cast away like an old rag. So NO. That will not happen. The blog and content will remain the way it is now with this article as...for now at least the last post.

Sounds sad no? Well, it isn't and you should not feel like this is the end of the book but merely the end of a chapter.

Now we get to the good stuff is what you need to think!

Orko Silver, well, that will surely remain my favorite. So, under the section 'Market Analysis' I will continue writing as you have known from me for the last 7 months since I've put this blog online.

A lot has happened in those 7 months, I started with one blog and ended up maintaining and writing for three ;-)

Now, I have partnered up with my contact and friend who already was doing the gold and stocks blog.

All content from the three blogs has thus been exported to my new site. I still haven't had the time to go through every article and see if everything is showing alright but if you find some errors or bad html from the import then please do feel free to use my new contact form.

I have yet to write a privacy disclaimer but it should be obvious to everyone that I have taken every means to ensure ones privacy. So, don't let that fact discourage you :-)

So much to do still!

I would say, lets go take a look and see how I set everything up.

First you have to start by reading my new About Me. I've made some small changes but important you all read them. Transparency and all...

Another new thing is the categories for instance. This way I can better guide my readers to the stuff they want to read. I've also added a breadcrumb trail as a way of navigation.

The theme by hybrid is also improved and they have done a great job on this theme. Of course I've made several of my own adjustments but the basis is by hybrid.

Whats more...oh is now possible for me to let other authors submit or write articles for my new website. I can assign users who can write articles in their own desired category.

So if anyone is interested in having their work published on my new website and they know a thing or two about the markets...then...please do drop me a line and maybe you can be my first new author.

There is still so much to do and I have so many plans so 2010 will be a year where YeOldGoldNugget starts up his new website. Like a stock and the stock market, get in while its low :-)

Hope to see you all there...

That leaves me to wish you all a very warm welcome there and may all the companies you're invested in find Bonanza-grade resources :-)

Sunday, January 3, 2010

The 2009 Small Silver Sweepstakes (Incakola News)

The following article was done by Otto Rock from Incakolanews who has written up a roundup of his 2009 silver sweepstakes. Have a read through his article to see who came out on top :

Yes indeed, 2009 is all over and so the results are in on our tracking of best small silver mining company in 2009. Here's the chart:
click to enlarge

2009 Silver Sweepstakes
  • And the winner is....ENDEAVOUR SILVER (! Congrats guys on a great achievement and a 230% gain in 2009.
  • An excellent second place (silver medal...geddit?) goes to my personal favourite silver miner, Fortuna Silver (FVI.v). You guys should be proud of yourselves, too.
  • The honour of third is won by Great Panther Resources ( Maybe not my number one personal pick, but there's no knocking success. Well done indeed.
YeOldGoldNugget : You can read the rest of his article on Incakola's blog. Also as a little side note. From the last Great Panther news release which you can find by clicking here we know that Great Panther Resources has changed effective as of January 1, 2010 to Great Panther Silver. As you can see on the right side, I've also placed a new Great Panther Silver banner on my blog.

YeOldGoldNugget's links of interestTrend Analysis
Get the most recent Trend Analysis on Great Panther Silver Limited by following this link :
Marketclub - Great Panther Silver Limited Trend Analysis Marketclub - Great Panther Silver Limited Trend Analysis (What's this?)

Get the most recent Trend Analysis on Endeavour Silver Corp. by following this link :
Marketclub - Endeavour Silver Corp. Trend Analysis Marketclub - Endeavour Silver Corp. Trend Analysis (What's this?)

Get the most recent Trend Analysis on Fortuna Silver Mines Inc. by following this link :
Marketclub - Fortuna Silver Mines Inc. Trend Analysis Marketclub - Fortuna Silver Mines Inc. Trend Analysis (What's this?)

Wednesday, December 30, 2009

Best Wishes and on to a Bright New Year!

Our Tiny Precious little Blue Orb We call Earth!We are at the end and at the start of a year. At the end of the old and at the start of the new. True, it is but a mere number 2009, 2010....but it will have a different meaning to each and everyone of us.

Some will use it as a means of closure. In with the new, out with the old, like that sort off thing. Whatever works for you I say stick with it or improve on it. Why change a winning plan right? Why continue with a losing one?

There will even be some who view this event as our tiny blue orb having completed another orbit around our sun on that 365 day lasting journey. Some of my readers will now be enjoying the winter while others will be enjoying the summertime...all based on how far ahead our Earth is in its sidereal year and where we are on this hemisphere, Northern, Southern or somewhere in between.

Whoever you are, wherever you are, whatever you do, just make sure whatever you do is done with passion and compassion. Those who enjoy the work they do have the pleasure of referring to it as being a hobby instead of it merely being work.

To me, well, I like trading, I like the markets, I like the excitement, I even like the disappointments from time to time which are ideal to keep one on its toes and with that also still on the edge.

This year has been a very turbulent one for most investors and probably also for most of my readers in varying ways like with work, their financial portfolio, incurred losses, stock market, shares in the red,...I do hope however that one learns from ones mistakes and hopefully in future tries not to learn from ones mistakes but learns from other peoples mistakes. That is a big difference. Trust me!

Also, most of my regular readers will have noticed I have been busy working on the styling of the website. Some are minor styling details like the styling on my posted images, the rounded corners, minor styling in the widgets and some are bigger changes. The bigger changes include the header which was formerly 'Orko Silver Corp. Blog Spot' and has now changed to YeOldGoldNugget's Blog Spot. Also, my YeOldGoldNugget's Stock Picks blog has been restyled with the current style of this blog.

There will however be no change in me doing updates on Orko Silver Corp. but since I also on occasion post other charts like silver, gold, HUI index, other juniors,...and more the name in the header just was too limiting. That's not saying the current name isn't but at least it defines that this is my own blog ;-)

More to come soon will be a custom and self styled header. Work is now in progress and I expect this work to be finished somewhere by February. I am always looking at improving my blog and will continue doing so in the new year.

Seasons Greetings Bar Silver - 2009 Copyright Northwest Territorial MintSo with that behind me there still remains for me to wish everyone a very GOOOOD and VERY prosperous New Year!

To all the people I have had the pleasure of meeting on various places and through various means.

To all my contacts from Stock-house and other forums, thank you for your input, your conversations, your explanations, your comments and your personal views. Truly appreciated and a very warm and heartfelt thanks for that.

To the management, investor relation agents and personnel of Orko Silver Corp., Pan American Silver Corp., Orex Minerals Inc., Great Panther Resources, Impact Silver Corp., Mexivada Mining Corp., Arian Silver Corporation, and basically all other junior-mid-senior Explorers / Developers / Producers. May 2010 bring more shareholder and company value! May the veins be great, long and thick!

To all the other commodity authors, technical analysts, bloggers, financial writers, silverbugs, goldbugs, oil-diggers out there who zealously churn out daily updates on the markets. My hat off to you all!

And most important to all my readers from all the different places in the world! Thank you for your visits, thanks for sticking with me and for riding this Orko Silver Train of ours to production!

Visits mapped on Earth Country map
Looking at my visitor map though I immediately see I need to re-tighten my advertising campaigns to try to strengthen my new visits from some of the following regions which are now still missing :
  1. Afghanistan
  2. 90% of the African continent
  3. Greenland
  4. Kazakhstan
  5. Iceland
  6. Some South American countries
  7. ...

YeOldGoldNugget's links of interestTrend Analysis
Get the most recent Trend Analysis on Gold Spot by following this link :
Marketclub - Gold Spot Trend Analysis Marketclub - Gold Spot Trend Analysis (What's this?)

Get the most recent Trend Analysis on Orex Minerals Inc. by following this link :
Marketclub - Orex Minerals Inc. Trend Analysis Marketclub - Orex Minerals Inc. Trend Analysis (What's this?)

Get the most recent Trend Analysis on Orko Silver Corp. by following this link :
Marketclub - Orko Silver Corp. Trend Analysis Marketclub - Orko Silver Corp. Trend Analysis (What's this?)

Get the most recent Trend Analysis on Pan American Silver Corp. by following this link :
Marketclub - Pan American Silver Corp. Trend Analysis Marketclub - Pan American Silver Corp. Trend Analysis (What's this?)

Get the most recent Trend Analysis on Silver Spot by following this link :
Marketclub - Silver Spot Trend Analysis Marketclub - Silver Spot Trend Analysis (What's this?)

Tuesday, December 29, 2009

The Dollar's Demise and Gold's Resurrection

The Dollar Consolidates while the Markets recover.

US Dollar Daily Chart
US Dollar Daily Chart December 29, 2009
Chart is courtesy of marketclub.
Marketclub - US Dollar Trend Analysis Marketclub - US Dollar Trend Analysis (What's this?)

Here is a short follow up on my most recent article 'US Dollar Extends Gains' written on December the 22nd. In that article I summarized the following :

To summarize, short term, yes we are in an UP trend, the chart confirms that. However, RSI has reached overbought. MACD is trending higher but with choppy performance. We are trading farther and farther away from the 30 and 50 MA so a consolidation is getting more and more likely to happen from here.

Mr. market was soon to follow this advice cause December 23 was the start of the consolidation/correction for the dollar after extending its gains from a low of 74.356 on December 2 to a high of 78.449 on December the 22nd.

Moving Averages

10 MA : 77.784
30 MA : 76.349
50 MA : 75.916

As of writing the dollar is trading at 77.388 and is thus already trading below the 10 MA. December 27 saw us crossing below the rising trend line indicating that the steam is out of this kettle for sure!

Looking at the chart and all indicators I reckon looking up from here is wishful for those who are long dollar but not very realistic. Down is where I would look. Short term and long term. Market manipulation excluded then cause I am no match for that.

I say manipulation because if you have a look at the charts from Early December and in particular December the 2nd. The dollar starts to rise and right at that time gold starts to drops. Now, OK, I can understand all the dollar/gold relation and safe haven and such...

...but what I do not get is why even after having such a crisis, after knowing what the dollar is worth now or actually ISN'T worth after the stimulus packages, TARP, FED printing presses, Bank bailouts, Company bailouts,...investors are still buying dollars. So...who are these very first buyers driving up the price and starting this Christmas rally in the dollar?

This is no rally based on valid fundamentals. NO Sirree!

So, let me see if I understand Mr. Market? Ok?

So, December 2, gold breaks down and the dollar rallies or vice versa, the dollar rallies and gold breaks down. So, later we get word from the European mainland that Greece, Spain and Ireland are in manure? Is that the right noun to use? Up to their arm pits in the proverbial debt-pit.

The Dollar's Demise - A full motion picture DocumentarySo, because the Euro takes a beating, the dollar who for months has had the leading role in our documentary as being the biggest decliner now steps aside and lets the euro play leading role for a while?

Hm? What does not sound right in this motion picture?

This sounds to me like too much artistic freedom on behalf of the director of this documentary. My original remarks remain, unless the dollar succeeds to AND close above 80.00 and STAY above 80.00 the dollar is in my books at least very much in a downward trend.

US Dollar Weekly Chart
US Dollar Weekly Chart December 29, 2009
Chart is courtesy of marketclub.
Marketclub - US Dollar Trend Analysis Marketclub - US Dollar Trend Analysis (What's this?)

Weekly then, well this hasn't improved much. I'm still not swayed, not even by the rally we had since the start of December. It is still too insignificant a move to even be treated as such. For me, I would stay far far far away from any long positions in the dollar for the moment.

From the MACD indicator we can see this is still clearly trending below the center line and thus still bearish as indicator. Histogram is also declining.

Dowsing Rod - Image from ADX or Average Directional Indicator is in some sort of limbo on the weekly chart? Don't know if this is a chart bug or if the -DI and the +DI just happen to run parallel for the last couple of days.

Maybe it is forming a wishing rod and hoping then to break it in the right place and have their wish come true? Who knows?
Maybe even a dowsing rod? Searching for water? No,..must be an oil dowsing rod then.

Anyway, until this market takes direction again ADX is probably not a good indicator here on the weekly besides than the fact that we see that there is some sort of sideways action to expect perhaps.

Long term like I said, until we clearly break above 80.00 I consider the trend which was downwards still very much intact. Despite the short rally.

I don't know how many more lessons Mr.Market needs but sooner or later this dollar/gold relation will be gone and out the door for GOOD!

YeOldGoldNugget's links of interest

Saturday, December 26, 2009

Oremex Resources Inc. : A Pure Silver Play Indeed.

The Mercenary GeologistThe Mercenary Geologist

A Monday Morning Musing from Mickey the Mercenary Geologist.
December 14, 2009.

It was the last day of the January 2008 Cambridge House Investment Conference in Vancouver. There were hundreds of companies represented and the floor was packed with thousands people strolling casually down the aisles. I like to move fast at these shows and this one was not very conducive to my modus operandi.

I was tired after two long days working the exhibit hall floor and was becoming increasingly frustrated.

Though the junior resource market had begun its long journey south commencing with the Galore Creek debacle the previous November, I had not found a new undervalued stock at an investment conference for over four months. Every company I looked at during the previous three conferences either had something amiss based on my strict evaluation criteria of share structure, people, and projects (Mercenary Musing December 15, 2008) or had an unattractively high and largely undeserved market valuation.

Who could know that with the pending bankster meltdown, junior resource market capitalizations would plummet over the next 11 months? True to my nature, I was focused fully on the here and now.

At 4:30 pm I walked out of the speaker room to the exhibit hall, took a hard right and happened to glance over to the second booth in the row. A pure silver play in Mexico caught my eye. Thus I was first introduced to Oremex Resources Inc. (ORM.V) and their Tejamen silver project in Durango, Mexico. Un sapo, no?

There are many junior and a few mid-tier “silver companies” operating in the Americas; they are especially prevalent in the major silver producing countries of Mexico, Peru, and the USA. I’ll ignore Bolivia at this point because of its current cocalero version/vision of socialism and nationalization, the so-called “Evo-nomics”.

But few qualify as silver companies with actual silver plays. Most are really small and medium-sized lead-zinc companies with base metal mills and concentrators and smelter contracts that recover silver as a by-product. I do not like juniors with counter party risk and the worst kind of counter party risk is being an indentured servant to a major mining company- or sovereign government-owned smelter. These
polymetallic producers prosper when primary industrial metal products lead, zinc, and/or copper are in demand and prices are high. They struggle, suffer, become shells, or go bankrupt when world economies are less than robust and base metal prices are on the down and out.

Most analysts, writers and investors know that it’s just damn hard to find a pure silver play in the junior resource or mid-tier mining sectors.

I found one some 23 months ago:

Oremex Resources Inc. (ORM.V) has been parked on my radar screen since then and has not taken off or really even started up for nearly two years. It had a problem.

The problem was this: Three previous CEO’s and various management teams failed to secure a surface use agreement with the local ejido and village on their flagship silver property in central Mexico. In a nutshell, socio-economic relationships were not developed properly by management and the company reached an impasse with some locals over surface access. Oremex then went thru a period from late 2005 to early 2009 with a veritable merry-go-round of incoming and outgoing officers and directors who just did not get the job done.

Obtaining clear title to surface rights and support of the local community can be problematic for exploration, development, and mining companies in Mexico. Though Mexico is a favored jurisdiction for gold and silver mining, surface rights are a geopolitical issue that have delayed or derailed a few potential mining operations in the country over the past several years (e.g., Mina Cerro San Pedro in San Luis Potosi, Campamento in Chiapas).

Oremex was a 27-35 cent stock when I first examined the company and spoke extensively with the former CEO in late January 2008. Earlier that month it had announced start of a pre-feasibility study on its Mexican silver project. That never happened because of the aforementioned surface access and rights problem.

ORM traded in that range until macroeconomic factors began to take their toll on junior resource stocks in the early spring. As markets bottomed in late October to early November 2008, it could be had for 3.5-5 cents. The company did not fare much better despite an overall improving market in the first six weeks of 2009.

A look at the two year chart shows the story or lack thereof until mid-February 2009 when completely new leadership assumed control of the company. The stock price immediately started to rise. Since mid-June it has built a nice base in the mid-high teens despite no material news:

Oremex Resources Inc. Two-Year Chart
The company has 72.8 million shares outstanding and 91.7 million fully diluted. Insiders, family and friends control 20%, institutions 20%, and the public float is 60%. At the current price of 14c, it has a market capitalization of about $10 million. A recent small private placement raised $520,000 and another will be closed this week to add $450,000. There are 14.1 million warrants in the money at 15 cents with expiries of February and July 2011 and 3.7 million at 17 cents expiring in November and December 2011.
Management holds 3.5 million options at a strike price of 10c. Note that all shares and warrants include the two recent financings.

Liquidity over the past six months has been moderate, trading about 800,000 shares per week. The 52 week high and low is 24 cents and 3.5 cents respectively, and in the past 30 days the stock has ranged from 13.5 to 20 cents. The company will have $1.4 million in working capital at week’s end and burn rate is very low at $45,000 per month.

You will note that this is a large number of shares for most advanced exploration companies that I cover.

But I often say when giving my pitch to potential clients that “everyone has his warts” and “please realize that I will discuss both the positives and the negatives of your company in my analysis.”

Rest assured I will not try to gloss over anything or pull the wool over the eyes of anyone. In the case of ORM, the company has a large number of shares and many cheap warrants which could overhang the market and limit the share price.

However, the story is compelling enough that I am willing to discount this flaw.

The reasons I like Oremex Resources are three-fold: The people, the flagship project, and the current market capitalization.

• Firstly, the people. They include:

Chairman John Carlesso is a merchant banker and financier with Toronto-based Cervello Capital. He has executive experience with successful junior resource companies. I have spent several hours in meetings with John doing my due diligence of Oremex for the past three months.

CEO Michael R. Smith is a geologist with major mining and junior resource exploration, development, and mining experience in the Americas. His resume includes stints as Barrick’s Chief Mine Geologist at Goldstrike, Nevada and its General Manager of Development and Exploration in Peru and Bolivia.

Carlos Pacheco is a geologist with almost 20 years of experience in exploration, development and operations, with major Mexican mining and Canadian junior companies. He manages community relations and assists in business development.

Director Dave Prins is a civil engineer who was an integral part of Placer Dome’s project development teams at Porgera in Indonesia, Quebrada Blanca and Cerro Casale in Chile, and Pueblo Viejo in the Dominican Republic. Dave and I worked together on an advanced copper oxide project in Chile in 2006-2007 and I can vouch for his expertise in project development.

Geologist Ritch Hall is on the company’s advisory board. He brings valuable experience in mine development, permitting, and Mexican socio-economic issues as the former CEO of Metallica Resources.

As an aside, I have known Ritch since a sunny Sunday in the summer of 1986 when we met as competitors while sampling the same dozer cut on a prospect in northern Montana. He worked for a midtier Canadian mining company and arrived via Ford F150. I worked for a major US mining company and flew in via Hughes 500D. That was the pecking order in those days. The property actually belonged to a third company, in this case a major Canadian miner, and we were both trespassing.

This has always been the tried and true way we dumb field geologists in the USA have learned about competitors’ properties. Sneak on Sunday morning and sample their outcrops, trenches, and drill cuttings while they’re still in bed nursing hangovers from their weekly drinking bout on Saturday night.

None of those three mining companies exist today. One was bought out first by Homestake then by Barrick, one was bought out by Newmont, and the third was bought out by Vale. If memory serves, all three were hostile or white knight takeovers.

Such is the nature of capitalism: It’s survival of the fittest; eat or be eaten.

• Secondly, the project: Oremex’ flagship project is Tejamen consisting of 1670 ha and it is positioned in central Durango state, northern Mexico.

The property is located near Nuevo Ideal in the semi-arid high plains province and has favorable terrain, a year round working climate, an all-weather gravel road 15 km from the paved highway, power, and water.
Travel time to Tejamen from the capital city of Durango is about one and a half hours. I can fly from Albuquerque to Durango in a half day.

Good locations and logistics significantly discount the cost of exploration and development and that makes northern Mexico unbeatable as a mining venue. There are no four hour float plane rides, no helicopters, no bugs, no snow, no sunless skies, and no ice roads. Other than perhaps Nevada, there is not a cheaper place to operate in the world.

Tejamen Property, Durango, Mexico
Tejamen Property, Durango, Mexico

The Tejamen project has a long history of exploration, development, and exploitation at Cerro Prieto and Los Mantos.

There are over a dozen vein zones that were exploited by mine workings from 1885 to 1910 and including a 50 tonne/day mill and cyanide recovery plant. During the 1970’s, Mina Cerro Prieto was developed by an 80 meter shaft, it produced up to 30 tonnes per day, and ore was shipped to a government-supported Fomento Minero concentrator.

From 1978 to 1990, the property was sampled by Consejo Recoursos Minerales, Tormex (Lacana subsidiary), and Luismin. Independence Mining Company drilled 7100 m in 36 holes from 1992-1994 and defined high grade vein structures with lower grade wall rock haloes. At the end of the last exploration cycle in 1998-1999, Kobex International drilled four holes.

Oremex’ Mexican subsidiary acquired the rights to the Tejamen property in 2000 and staked surrounding claims in 2001 and 2002. The company drilled 204 holes from 2003 to 2006 and conducted preliminary metallurgical testing on a composite ore sample.

The geologic setting of Tejamen is typical of the eastern foothills of the Sierra Madre Occidental.
Andesite to dacite volcanic rocks of the Lower Volcanic Series are intruded by dacite porphyry and interlayered with dacite and rhyolite tuffs. Faults on the property trend northeast and north and control the main high-grade sulfide vein zones while manto style mineralization is controlled by low angle structures and volcanic stratigraphy.

At Los Mantos, feeder veins are oxidized to about 50 meters depth and surrounded by low-grade, potentially bulk mineable oxide silver-(gold) haloes. Propylitic alteration is widespread and argillic and silica alteration occur in envelopes up to 80 meters wide around feeder vein structures.

Los Mantos Silver Deposit, Tejamen Project
Los Mantos Silver Deposit, Tejamen Project

Tejamen has a 43-101 inferred mineral resource of 22.6 million tonnes, grading 66.9 g/t Ag and 0.05 g/t Au, or 69.8 g/t Ag-equivalent using a cut-off of 20 g/t Ag. The 50.8 million ounces of silver-equivalent resource has been defined on 30 m by 40 m centers by 217 reverse circulation and 24 core holes totaling over 43,000 meters.

As explained above, most so-called silver plays are really base metal mines with by-product silver. Not all silver-equivalent ounces are created equal.

In the case of the Tejamen resource, there are minimal contained base metals that would complicate metallurgical processing or recovery. The contribution of gold to the overall equivalent grade also is very small, less than 5%.

Folks, this is a true silver deposit.

Metallurgical testing on a composite of reverse circulation chips indicated an average silver recovery of 73% for two columns with modest cyanide and lime consumption. Though these results are encouraging they are also very preliminary and additional metallurgical process testing is required.

In late 2006 a scoping study (preliminary economic assessment in 43-101-speak) was completed by Snowden Industry Mining Consultants. Their model envisioned a 10,000 tonne per day open pit, heap leach mine from the two mineralized zones. In its design scenario, Snowden anticipated moving the village of Tejamen to develop and mine the project.

A subsequent internal company analysis used data and cost estimates from the Snowden report and supported initial production from Los Mantos, which contains about 70% of the inferred silver resource and has significant exploration potential. Oremex’ new scenario does not contemplate moving the village.

With the efforts of new management in 2009 Oremex has made considerable progress in establishing amiable relations with the people of Tejamen. This past summer they initiated a community improvement program that hires local people on a rotating basis to clean, repair, and build village infrastructure. They have solicited and received assistance from government at federal, state, and local levels to gain support for the project by the community. In August the company announced they had regained access to the project. Although final agreements are pending, management is optimistic that a surface agreement can be secured in the near future.

• Thirdly, the low market capitalization, which is $10.2 million using the current stock price of 14 cents:

With the 43-101 inferred resource of 50.8 million ounces silver equivalent, the company currently is valued at 20 cents per ounce of silver in the ground. Though I know of no comparable silver-only explorers, this is a very low valuation for any precious metals junior. Using a Au:Ag ratio of 65 and a silver recovery of 70% compared to 85% for high recovery heap leach gold operations, 50.8 million ounces of silver would equate to roughly 644,000 oz of Au.

Let’s use a conservative peer market valuation of $35-45/oz gold in the ground for advanced explorers with inferred resources. This exercise gives a fair market valuation for Oremex of about $23-29 million.

Although Oremex has sufficient working capital at its current level of activity, it must go to the market for financing to significantly advance the Tejamen project. This will result in additional dilution of the company and potentially impact the share price.

Oremex Resources Inc. is clearly an undervalued junior resource company at its current share price of 15c. In my opinion it has a strong chance of doubling in the next 12 months as progress continues on land rights and socio-economic issues at Tejamen and a round of delineation drilling and metallurgical testing advances the project toward development.

I have not yet visited the Tejamen project to conduct due diligence in the field. A field examination will happen in the near future and I will report my findings to you. However, I wanted to inform my loyal readers of this compelling story before the company’s share price starts to rise.

Please note that as a shareholder, I have a vested interest in Oremex. My cost basis is slightly higher than the current price. Oremex is also a sponsor of my website and I am really quite biased. As always folks, I simply choose to inform you of some of my favorites companies in the marketplace thru my Mercenary Musings. I’m assuming that Oremex will resolve its land tenure problems at Tejamen and significantly advance the project in the next 12 months. There is no assurance that these catalysts will happen.

Your risk/reward profile is different than mine and it is likely much less speculative than mine. Please put in some concerted effort, due your own research and your own due diligence on Oremex Resources Inc.
Determine if it is a junior resource company that meets your investing criteria.

Bottom line, this is what I think: Tejamen is indeed a pure silver play in Mexico indeed. Es pura plata.
Que Buena!

And it is undervalued.

Ciao for now,
Mickey Fulp
Mercenary Geologist

Mercenary Geologist Musings Signup

The Mercenary Geologist Michael S. 'Mickey' Fulp is a Certified Professional Geologist with a B.Sc. Earth Sciences with honor from the University of Tulsa, and M.Sc. Geology from the University of New Mexico. Mickey has 30 years experience as an exploration geologist searching for economic deposits of base and precious metals, industrial minerals, uranium, coal, oil and gas, and water in North
and South America, Europe, and Asia.

Mickey has worked for junior explorers, major mining companies, private companies, and investors as a consulting economic geologist for the past 22 years, specializing in geological mapping, property evaluation, and business development. In addition to Mickey’s professional credentials and experience, he is high-altitude proficient, and is bilingual in English and Spanish. From 2003 to 2006, he made four outcrop ore discoveries in Peru, Nevada, Chile, and British Columbia.

Mickey is well-known throughout the mining and exploration community due to his ongoing work as an analyst, newsletter writer, and speaker.


Disclaimer: I am a shareholder of Oremex Resources, Inc. and it is a sponsor of my website. I am not a certified financial analyst, broker, or professional qualified to offer investment advice. Nothing in a report, commentary, this website, interview, and other content constitutes or can be construed as investment advice or an offer or solicitation to buy or sell stock. Information is obtained from research of public documents and content available on the company’s website, regulatory filings, various stock exchange websites, and stock information services, through discussions with company representatives, agents, other professionals and investors, and field visits. While the information is believed to be accurate and reliable, it is not guaranteed or implied to be so. The information may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. I accept no responsibility, or assume any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information. The information contained in a report, commentary, this website, interview, and other content is subject to change without notice, may become outdated, and will not be updated. A report, commentary, this website, interview, and other content reflect my personal opinions and views and nothing more. All content of this website is subject to international copyright protection
and no part or portion of this website, report, commentary, interview, and other content may be altered, reproduced, copied, emailed, faxed, or distributed in any form without the express written consent of Michael S. (Mickey) Fulp, Mercenary Geologist.

Copyright © 2009 Mercenary Geologist. All Rights Reserved.

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Get the most recent Trend Analysis on Oremex Resources Inc. by following this link :
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Tuesday, December 22, 2009

US Dollar Extends Gains

The Dollar Increases on the Euro's Decline.

US Dollar Daily Chart
US Dollar Daily Chart December 23, 2009
Chart is courtesy of marketclub.
Marketclub - US Dollar Trend Analysis Marketclub - US Dollar Trend Analysis (What's this?)

I'll just do a quick run down on the chart.

I've added the ADX chart. Again on the ADX for those who have not used this indicator before, the Average Directional Index can determine trend strength regardless of the market direction. This non-directional oscillator is based on a range of 1 to 100 (although movements over 60 are rare). If the line is under the 20 mark, the trend is considered to be weak. If the line is above the 40 mark, the trend is considered to be strong. The ADX line is built on the results of two separate technical indicators, the +DI (force of up-moves) and the –DI (force of the down-moves). The default for this study is 14 periods which takes into the consideration the measurements of the +DI and –DI for the last 14 periods.

Dollar FanKnowing that and looking at the chart, you can clearly see that the -DI has had the upper hand for most of the year since March 2009. That changed however early December when the dollar started rallying on the very bad news that was coming out of Europe and in particular from Greece, Spain, Portugal and Ireland.

Have a read through following article.

The MACD or Moving Average Convergence Divergence is clearly trading upwards and on the daily trading above the center line. It has not been above the center line since March 2009. So daily and thus short term the trend is UP.

RSI or Relative Strength Index has reached the overbought zone.

To summarize, short term, yes we are in an UP trend, the chart confirms that. However, RSI has reached overbought. MACD is trending higher but with choppy performance. We are trading farther and farther away from the 30 and 50 MA so a consolidation is getting more and more likely to happen from here.

US Dollar Weekly Chart
US Dollar Weekly Chart December 23, 2009
Chart is courtesy of marketclub.
Marketclub - US Dollar Trend Analysis Marketclub - US Dollar Trend Analysis (What's this?)

MACD, well we are still trading below the center line which confirms that weekly we are still not out of the woods yet. The histogram however shows a nice steady increase, one which qualifies as being strong and steady.

Cash rollRSI is hovering around 50 which leaves plenty of room either UP or DOWN.

From earlier on in the article you already read about the ADX indicator. Well, then you know that the blue line does not tell you anything about the direction but merely the strength of the trend. Our blue line thus was increasing from March 2009 until the beginning of December 2009. Now because the dollar was dropping since March our blue line thus indicated that there was a strong DOWN trend.

Now that we see the ADX bending down and going lower we can thus assume that the strength of the down trend has decreased.

The +DI however was trading upwards but has now flattened out so I will have to wait and see if we get any higher beyond from where we are now.

From the chart we also see that we are now trading above the 10 and 30 MA on the weekly. That still leaves us the 50 MA at around 80.56. Until we have clearly taken out the 80.00 there is no difference to the long term trend...which is still DOWN by the way.

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Orko Silver's Strong Performance

Orko Silver still going strong.

Orko Silver Daily Chart
Orko Silver Daily Chart December 23, 2009
Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis Marketclub - Orko Silver Corp. Trend Analysis (What's this?)

Well, not much has changed since I wrote up my last chart. Not for Orko Silver anyway which is still going strong despite a correcting gold and silver market. Just goes to show how a stock gets a reputation of being a strong performer. That title in my book at least is also bestowed on stocks that can witter any storm.

Just compare Orko Silver to most other stocks. Result. Orko holds, most others drop!

Besides that, just take a look at some of the profits one could have taken since Orko Silver started its up march. From early September trading around $0.60 and going to $0.90 up to November for a 50% gain. Then, from early November from $0.90 to around now $1.25 for another near 40% gain.

Also, just take a look at some of these volumes of the last couple of days :
  • December 16, 2009 Volume 875K
  • December 17, 2009 Volume 689K
  • December 21, 2009 Volume 447K
That is some very steady trading to put it mildly. I don't know why but I have the feeling that someone is loading up on shares around $1.20. If that is the case than when this party is done with their Christmas shopping then I expect we could see the start of another UP rally.

I think we have plenty of support at $1.00 and some additional support at $1.10. Anything below that is buying opportunity in my book and that is not saying that it still isn't cheap at $1.20...cause it is.

MACD or the Moving Average Convergence Divergence indicator is trending downwards but not with such strength so as to be concerned. I think this will bounce back up way before we hit the center line. This already shows in the histogram. As you see, the histogram is not increasing but remaining the same.

From the chart we can also see we are still trading above all Moving Averages, and above, well sorta cause we are right at the 10 MA which is around $1.20

So on the daily, I still do not see any considerable downside from here so therefor I must conclude that until said party is loaded up we will remain pricebound around these prices of $1.10 to $1.25.

Orko Silver Weekly Chart
Orko Silver Weekly Chart December 23, 2009
Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis Marketclub - Orko Silver Corp. Trend Analysis (What's this?)

Weekly, still looking at a BULLISH chart. There is this small delay in Durango station we are experiencing but I reckon we are just loading up on passengers until the Silver Train is fully booked up and ready to go!

The rise in average volume can clearly be seen on the weekly chart. I've drawn a red arrow beneath the red line to visualize this. So, more and more shares are changing hands.

MACD is trending upwards and above the center line and thus our UP trend is still intact.

Orko Silver Weekly ADX Chart
Orko Silver Weekly ADX Chart December 23, 2009

I've also added the ADX chart. Again on the ADX, the Average Directional Index can determine trend strength regardless of the market direction. This non-directional oscillator is based on a range of 1 to 100 (although movements over 60 are rare). If the line is under the 20 mark, the trend is considered to be weak. If the line is above the 40 mark, the trend is considered to be strong. The ADX line is built on the results of two separate technical indicators, the +DI (force of up-moves) and the –DI (force of the down-moves). The default for this study is 14 periods which takes into the consideration the measurements of the +DI and –DI for the last 14 periods.

Knowing this and taking a look at Orko's ADX...clearly UP and the trend is qualifying for a STRONG rating.

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