James Turk: On Swiss Gold Referendum, US Dollar And China's Quest For Gold.

James Turk of GoldMoney.com says, “COMEX is just a side show. It’s just a paper market. The action is taking place over here in London. You are seeing this huge backwardation. If you want to put a big order in, say $50 million for physical metal, you can’t get that metal tomorrow. You are going to have to wait for a while before you can get that metal. That’s sign to me that gold is cheap. The same thing is happening in silver. As a result of that, you are going to see much higher prices as we move to the end of the year.” Turk goes on to add, “We’ve seen the slow burn in the dollar. You have these blips up and down and, right now, we are having this momentary blip of dollar strength, but eventually, it will go over the edge of the cliff. That is, ultimately, what happens when a currency collapses. Eventually, people realize the currency no longer makes sense.”

Chris Powell of GATA: Gold Manipulation Historical Fact Not Conspiracy Theory.

"After headlines today about the settlement in the FOREX market manipulations by the major banks it looks like "this conspiracy theory" will be proven to be true very soon as well or is it already happening? If traders from major banks and even BOE were rigging the FOREX what is happening with Gold and Silver markets were the manipulation is "blessed" by the Central Banks? Will these developments coincide with the cycle bottom for Gold called by Charles Nenner now? Read more."

Gold and Commodities: What Is next - Major Reversal Or Another Bloodbath?

  We had a small party this Friday with Gold short covering in a full action. Will this Reversal hold to its promise now? All hope was lost for the Gold bugs and all miners were obliterated in capitulation last week. This is when the bottoms are formed. No buyers and everybody who can has already sold. Last few weeks we had no bids in any junior miners and if any volume came in it was sold at any price. It is The Capitulation. I have seen it before and not a lot of people out of our industry can believe it, but we have hit even the lower low than in the middle of financial Panic in 2008 in our sector!

  Nobody knows the future and I am not a trader any more. I have to stick with my companies moving forward, building up the assets even when nobody cares any more. But when the turn-around comes the move from insanity Low to another side is the most dramatic of all as well. You just have to stay in one piece before it. Have we reached this level?

  The chart above could be the answer. Everybody is Bullish on US Dollar and Markets. Everybody is Bearish on Gold and Miners. Sentiments are at the total extremes.  Fundamentals are supporting much higher Gold, Silver and Copper prices. The most important: smart money - Industry Insiders are buying the best assets now.

  Please notice the fist Candle when USD started this rally in May 2014, the move was dramatic and uninterrupted. Now we have the Reversal Candle just formed. What will bring the downward pressure on US Dollar now? I do not know, but Nothing grows up into the Sky. Strong US Dollar means that Deflation can become the reality. Who will risk it now? We will see very soon and the next week will be very important. The real short squeeze has not even started yet. 
  Alan Greenspan talking about Gold as Premier Currency, Charles Nenner calling the cycle bottom and China buying record amount of Gold could be the signs of the tide coming up now to the gold market.

  You can find my previous posts links to showcase my Big Picture view on this blog and I will remind you about our assets in International Lithium and TNR Gold, as usual. Read more."

WSJ: Single Firm Holds More Than 50% of Copper in LME Warehouses.

  

  Red Kite is the well known company to the industry insiders, what do they know the others don't about the coming squeeze in the Copper market? Fortunes can turn around very quickly with rising Copper price in the tight market and China's SRB coming into the market again.

TNR Gold NSR In Los Azules Copper Project: What Is Net Smelter Return?

TNR Gold Receives Royalty From McEwen Mining On "One Of The Largest Undeveloped Copper Projects".

I am very pleased to report our latest development on Los Azules.
We have finally locked up the participation in this unique world-class copper  asset for the benefit of all our shareholders: Read more."

WSJ:

Just one firm has more than half the copper in LME warehouses

Updated Oct. 26, 2014 7:21 p.m. ET

"A single buyer has snapped up more than half the copper held in London Metal Exchange warehouses, giving it control over a crucial source of supply and raising concerns among traders about the potential for higher prices.

On several occasions in the last month, this buyer held as much as 90% of the world’s copper stored in LME-licensed warehouses, equal to about 140,000 tons, or enough to make the copper parts of the Statue of Liberty more than 1,700 times. As of Wednesday, the buyer owned between 50% and 80% of copper held in warehouses, according to the most recent exchange data.

At today’s prices, a 50% to 80% share of LME copper inventories would be worth anywhere from roughly $535 million to about $850 million.

Although the exchange doesn’t identify the owners of metals, eight traders and brokers working for different firms active on the LME said they believe Red Kite Group, a London hedge-fund manager that focuses on metals trading, was the one buying. One of the brokers said that when he needs to buy copper for clients, contacts in the market refer him to Red Kite, indicating the fund is sitting on a large pile of metal.

ENLARGE

Red Kite declined to comment.

Banks often hold large portions of the metal in LME-licensed warehouses on behalf of clients, but a hedge fund holding that much copper is less common, traders and brokers say. The London Metal Exchange, owned by Hong Kong Exchanges & Clearing Ltd. , doesn’t limit how much metal a single trader may hold in its warehouses, and says that it has mechanisms in place to prevent market squeezes—a situation in which holders of a large share of the supplies use their position to jack up prices. For example, it requires a company with a dominant position to lend metal for short periods and it caps the amount of money that can be charged for that service.

“The LME constantly monitors its markets to ensure that trading is orderly,” a spokeswoman for the LME said. The LME’s “lending guidance” system “is the most effective way to manage pressure arising from dominant positions in our market.”

Prices ticked higher last week in response to positive economic news from China, the world’s biggest consumer of the metal. They remain below their levels at the start of the year because demand has been sluggish and production capacity is expected to increase. The official price of copper for delivery in three months on the LME was $6,696 on Friday.

The metal’s owner could be wagering that global copper supplies will tighten, causing prices to shoot up, analysts say. The price of copper traded on the LME is used as a global benchmark, and metal users rely on the exchange’s warehouses for emergency supplies. If one firm owns most of that spare supply, it can charge higher prices to buyers, analysts say.

“There’s no reason for anyone to be holding 70% of the stocks of the commodity,” said Jessica Fung, head of Commodities Metals at BMO Capital Markets.

Established in 2004, Red Kite is now run by two of its founding partners, Michael Farmer and David Lilley, both alumni of the German industrial conglomerate Metallgesellschaft AG, which collapsed in 1993. The fund is known for its bold and extremely profitable trades involving copper, as well as other metals. Red Kite Group manages $2.3 billion, according to its website.

A single firm has owned at least 50% of the copper in LME-licensed warehouses for much of the last four months. Accumulating such a dominant position became easier in June because the amount of metal under the exchange’s watch had plummeted, as had prices. The warehouses have held less than 160,000 tons of copper since mid-June, compared with more than 360,000 tons at the start of the year. Some analysts say copper production is running behind demand, forcing some users to draw on stockpiles in LME-licensed warehouses.

Some traders say the concentration of so much copper under one firm’s control is already driving up prices. It costs about $72 more per ton to buy copper for delivery today than for delivery in three months. Others say copper is more expensive because miners aren’t meeting global demand.

The LME’s regulatory function has come under intense criticism from aluminum buyers, who have complained of long waits and high costs to get supplies out of certain warehouses. The exchange has responded by changing its rules.

—Tatyana Shumsky contributed to this article.

Write to Sarah Kent at sarah.kent@wsj.com, Ese Erheriene at ese.erheriene@wsj.com and Ira Iosebashvili atira.iosebashvili@wsj.com"

Mining M&A in Latin America, China And Prospects For Copper Supply.

Source: ICSG and IMF. 

  Chile, Indonesia, USA, Australia and Canada together account for 80% of the world’s copper supply, and with the revived interest in the metal, many national companies are now making headlines with plans of acting to relieve demand pressures and ease supply shortfalls, signalling the potential turnaround and the major bottom in this mining cycle anticipated in the copper market.
  Roughly half of all mined copper is used to manufacture electrical wire and cable conductors that are used in today's energy and communication technology applications. With both of these sectors rapidly advancing worldwide, it shouldn’t surprise market observers that the demand for copper is similarly on the rise. 

  

Source: ICSG and IMF.

  Yet as copper gained ground, hitting a four month high at the beginning of July (London Metal Exchange) and peaking just above US $3.25/lb, many analysts had to re-rate their copper valuations, which were largely based on overblown fears of a dropping demand from China, it being the world’s largest base metal consumer. In actuality, Chinese copper demand continued to rise while the refined copper market ran into a deficit.

Source: IMF.

  There is however a new drive for copper demand to be considered, a technological drive delivered by the global introduction of the electric car. Copper finds itself a prerequisite for every electric and hybrid car: it goes into the electric motors, the wiring and the battery power supply system. A complimentary factor, charging infrastructure, presents another component of the driving force developing the rapidly growing demand for copper cables and it's wiring market. The Chinese march against air pollution has catapulted electric car industry into the status of the strategic industry. In the recent news Beijing  has announced building charging infrastructure with 1,000 fast charging stations and "electric cars ready" wiring mandate  for all new residential communities. 

Source: Tesla Motors.

  Speaking of the U.S. and Europe Elon Musk continues to build the supercharger networks for Tesla Motors and talks with BMW and Nissan strongly insinuate that this technology could become the industry standard igniting the rapid development of the mass market for electric cars.

  Copper demand is further bolstered by the development of high-speed railway network in China. This move is mirrored in the West with the UK and US flirting with the idea of developing their own high speed mass-transit systems, representing another strategic consideration for the industry which begins to feel somewhat constrained supply for all the projected demand.

  A change in the copper market cycle was signified this spring with the carefully engineered by Chinese authorities acquisition by Minmetals Group of Las Bambas copper in Peru for US $6 billion from Glencore. Frik Els from Mining.com has reported that according to PwC Global Mining Leader John Gravelle this takeover is the sign of things to come, with companies further down the scale will also be impacted by the "Las Bambas" effect. It seems that the new M&A boom is just around the corner now: 

"The size of the deal reflects Chinese belief in copper.  And China's smaller and private mining operations take their guidance from the large state-owned enterprises," said Gravelle.
The National Development and Reform Commission, China's powerful economic planning agency, in May put into effect a new regime to govern overseas investment, making it much easier for domestic companies to make acquisitions and set up joint ventures abroad.
The so-called Order 9 scraps the approval process for deals worth less than $1 billion entirely, replacing it with a simple registration process, eases forex requirements and cuts out much of the bureaucracy. Mining.com"

  Interestingly, while many Wall Street market forecasters were caught off guard, Vancouver based TNR Gold Corp., a junior exploration company and Lumina Copper Ltd., a junior miner, planned to capitalise on the copper turnaround.  Both companies pursued and secured their copper interests near the Andean Copper Belts in Argentina. For Lumina Copper Ltd. the foresight clearly paid off as the company recently announced they found a buyer for their Taca Taca project in the Salta Province (120 kilometres east of the Escondida, the world's largest producing copper mine). First Quantum Minerals Ltd. struck a deal to buy Lumina for CDN $470-million in cash and stock, and with the recent advance in copper prices Lumina Copper market cap is now close to CDN $500 million.

  With revived interest in the commodity and that of the copper rich area, TNR Gold Corp. holds rights into the next obvious valuable asset for potential prospectors. The company retains a back-in right to northern part of Los Azules in San Juan, one of the largest undeveloped copper deposits in the world, currently owned and operated by McEwen Mining. 
  The back-in right is exercisable following the completion of a feasibility study and allows TNR to back-in for 25% of the northern part of the Los Azules property, which McEwen stated contains the largest share of the known resource at Los Azules. TNR’s advantage in this deal is that it does not assume any risks, nor does it need to raise any funds until a feasibility study is complete – which typically costs companies between $80-100 million. TNR has engaged PI Financial Corp., a leading independent investment dealer, to help market and sell TNR’s interest in this world-class, early-stage copper asset.

  It is clear from looking at Lumina Copper’s stock, which went from CDN $3 to nearly CDN $11 in three months, that the market is slowly catching on to the real potential value of essential metal projects. Now it’s just a matter of patience and apt timing until the Los Azules project gains recognition for its formidable asset worth.

 "The sale of our Back-in Right will provide the necessary liquidity and catalyst to all of our group of companies. Rob McEwen has done a great job as Operator developing this project and now Los Azules is at the top of the list of the best copper projects in the world available for sale, according to PI Financial! I would recommend to contact Jim Mustard VP at PI Financial to get more information about Los Azules Copper project and our Back-In Right Asset. Read more."

TNR Gold Investor Presentation March 2014 from Kirill Klip