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10 Jul

JBP BREAKOUT (PPP): Primero Mining Is Running Away!

by

With Primero Mining trading within inches of an all-time high, the Canadian-based miner issued a news release regarding positive core results at its Black Fox mine.  The news sparked a tremendous rally in PPP, smashing the price through the old all-time high of $8.01 like the proverbial hot knife through butter.  At the close of Wednesday, PPP settled at $8.17, soaring 46 cents, or nearly 6%.

Volume reached 1.3 million shares, more than twice the three-month average of 567,000 shares traded daily in PPP.  In short, the power of the rally through to all-time highs indicates that PPP is running away from those traders asleep at the switch.

Yes!  We Got It Right – And Sooner Than Anticipated

However, frequent followers of Jason Bond Picks swarmed his alert of Jul. 8 to the possibility of a price explosion in the precious metals mining shares, PPP, MUX and SAND.  The alert, titled, JBP SPECIAL ALERT: Golden Cross Signal In Gold; 3 Stocks Poised To 3-Bag, reached thousands of readers since the post of earlier this week.

In the article, Jason stated, “We anticipate Primero to surprise investors with higher-than-expected output at the San Dimas mine.”  But we didn’t expect the breakout from the $8 level to happen only four days from the alert.

ppp

Source: Stockcharts.com

Though the surprise announcement by Primero of Wednesday of an additional six high-grade samples to the two previous sample results at the Black Fox mine had nothing remotely to do with Primero’s San Dimas mine in California, Jason harbors a strong hunch that the company’s communiques are rather modestly presented, in general.

Given the favorable geology grades at the Black Fox site, it comes at no real surprise to JBP subscribers of Primero’s rich core samples.  We were surprised, however, by Primero’s management appears sophisticated in the game of investor expectations.  The timing of such an announcement couldn’t be much better, as the stock hovered just below the all-time high close of $8.01 before smashing the ceiling of resistance.

Jason sees the potential for at least a 2-bagger in PPP within a relatively short period of time, as retail investors and hedge funds alike awake to the realization that China is in control of the gold market.  And where the gold price goes, the shares lead – and lead by multiples to returns of the gold price.

“I’m confident that we’ve come to the long-awaited inflection point in the gold market,” said Jason.  “Extremes in sentiment between equities investors and hard asset investors haven’t been this stretched since 1999.  It’s time for the big unwind, in my opinion.  It appears precious metals mining shares have embarked on the grand catch-up to the rest of the equities market.  At the moment, Primero is screaming at us that this is so.”

ppp2

Source: Stockcharts.com

Important Interviews of Note

Best-Selling Author, Stephen Leeb

And best-selling author and regular featured guest of King World News (KWN), Stephen Leeb, agrees.  It appears that the largest sovereign wealth fund of the world is about to take the largest capital expenditure plunge in precious metals mining outside of the People’s Republic.

“A major Russian gold producer, Polyus Gold, is now in discussions with the Chinese about getting loans because they need money to produce their gold,” Leeb told KWN.  “They have one of the largest deposits in the world and they have turned to the Chinese to help fund their gold production.

“My guess is that Polyus will be funded to some extent by China and the Chinese will end up with some sort of stake in that mine,” Leeb added.  “It will be interesting to see whether the Chinese will accept payment for their loans in gold, yuan, or rubles.  I guarantee you the Chinese will take payment in physical gold.”

What investors have to digest as we move into the dog days of summer is: If China is poised to plunk down some of its massive $3.2 trillion of central bank reserves into a gold project in Russia, China must be white-hot for the yellow metal before the U.S. dollar becomes more marginalized in global trade.

“Gold will end up being the currency the Chinese elect to take as repayment for their loan to Polyus,” Leeb continued.  “Despite the propaganda, the Chinese are accumulating gold as fast as they can, and they are making it more difficult for the West to see how they are doing it and how much gold they are accumulating.”

Propaganda.  The tool by which central bankers herd investors away from assets most likely to enrich them, but at the expense of their primary dealer network of 21 banks across the globe.  Aside from Citigroup, bank analysts consistently issued bearish calls on the yellow metal, both in bull markets and bear markets.  And the media are only too happy to accommodate the banks with headlining bearish call on gold.

“Don’t expect media to talk against the banks when the subject of gold comes up,” Jason points out.  “Advertisers of financial assets don’t pay for more than a modicum of anti-dollar content on CNBC or Bloomberg.  That’s why we [Jason Bond Picks] can provide objectivity and clarity across all asset classes.  We’re unencumbered by such tainted relationships.”

LBMA trader Andrew Maguire

Contrary to the financial media, now is the time to consider the battered gold mining sector, according to Andrew Maguire, the London Bullion Market Association (LBMA) sole ally to the retail investor.  Maguire’s extensive experience in the gold market, and specialized technical knowledge of the trading habits and ‘tomfoolery’ of the bullion banks, offer valuable information as to the timing of entries in the gold shares.

“The paper market ultimately has to get back in sync with the underlying physical market,” asserted Maguire in his Jun. 21 interview with KWN.  “And we’re at the point where the divergences are so extreme that we’re going to have to get to at least $1,350 gold and $22 silver just to remove the worst of the excess froth.

“Now, given the strong bullion demand kick in once we see the 1,300s become support, the 1,400s are still too cheap to meet existing demand, less alone the sideline money yet to re-enter.

Now, this past three-week’s action marks – what I believe – to be an historical landmark that will be looked back on by chartists and bullion holders for years and years to come.”

Maguire goes on to say that there is a tremendous overhang of shorts above the $1,350 gold price.  Though the move higher past $1,350 will “not be a straight line,” said Maguire, “any dips will be short-lived from now on.”

“Once we cemented this $1,300 bottom, I think you’re going to see huge, huge tonnage come in,” Maguire concluded.  “And you’re going to see a massive exit of shorts.”

About Primero Mining Corporation (NYSE: PPP)

Primero Mining Corp. is a Canadian-based precious metals producer that owns 100% of the San Dimas gold-silver mine and the Cerro del Gallo gold-silver-copper development project in Mexico and 100% of the Black Fox mine and adjoining properties in the Township of Black River-Matheson near Timmins, Ontario, Canada. Primero offers immediate exposure to un-hedged, below average cash cost gold production with a substantial resource base in politically stable jurisdictions. The Company is focused on becoming a leading intermediate gold producer by building a portfolio of high quality, low cost precious metals assets in the Americas.

Source: Primero Mining

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