Gold fell as low as $1465 yesterday morning before reversing higher following the much worse than expected ISM manufacturing index number for September which came in at its lowest level since June 2009 (47.8). This morning, gold is adding onto yesterday’s bullish reversal by attempting to vault itself back above the ‘neckline’ of the much talked about head & shoulders top:
And if we zoom in to the 15-minute time frame we can see how powerful this morning’s rally has been:
Remember that statistic I quoted yesterday morning about only 50% of H&S tops achieving their downside measured move targets? This one got $31 into the money (below the neckline) and is now at serious risk of being nullified, and in turn causing a lot of short covering above $1500.
Turning to the junior mining sector, my favorite underdog story, Banyan Gold (TSX-V:BYN) has begun its largest ever drilling program at its Aurex-Mcquesten Project in the Yukon’s Mayo Mining District (now being called the Keno Hill – Dublin Gulch District thanks to Alexco Resources and Victoria Gold). You must immediately be wondering why they are commencing a drill program in October, it’s the Yukon after all right?
Well, it just so happens that Banyan can drill “AurMac” year round due to the excellent infrastructure in place in the area. Banyan is conducting a 3,500 meter program with a cost of about C$200 per meter all-in (including assays) which is as cheap as drilling gets pretty much anywhere in Canada, let alone the Yukon. Banyan CEO Tara Christie has a knack for saving money and cost cutting, and she strategically timed this program to begin when all the other drilling programs in the area had gone dormant. This affords her the best labor and rock bottom costs.
This phase of drilling at AurMac has a two-fold exploration focus:
1) Expansion of the drill defined strike length of the “Airstrip” Zone from the current 500 meters to >1 kilometer; with a target of doubling the interpreted mineralization volume; and
2) Step-out drilling at the “Powerline” Zone, a new discovery of a modelled parallel, structurally controlled zone of gold mineralization located one-kilometer south of the south “Airstrip” zone.
The Fall 2019 drill program at AurMac is expected to be completed before mid-November and the results from this work program are anticipated to be developed into a maiden 43-101 compliant, near surface, bulk-tonnage gold resource by the Banyan team over the winter. Tara is cautious when speaking about how large the maiden resource for AurMac could be, however, I don’t mind taking a shot at it and I see 750,000 ounces in all categories (measured/indicated/inferred) as being very achievable.
I applaud Tara’s aggressiveness as she decided to raise more than C$1 million and attack AurMac at a time of the year when most are shutting down. I wish Banyan the best of luck and I continue to be a significant shareholder of this company.
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