I recently heard an interview with Van Eck Gold Fund Manager Joe Foster, one of the smartest minds in the industry, who expects a major economic slowdown over the near term and a stock market decline that will increase risk, volatility and cause a huge move in gold.
That is exactly what I've been preaching for several months expecting a breakout at $1,400 in gold.
Maybe this could come after the Fed meeting this month or next which will eventually be the final straw that breaks the camel's back and cause a stumble in stocks.
Just looking at the GDX we see a potential break of the downtrend in gold stocks over the past six weeks. This could be exactly the sell the rumor of a rate hike and buy the news for gold.
Meanwhile, immediate attention must be paid to Allegiant Gold Ltd. (AUAU:TSX.V; AZLLF:OTCBB) before gold breaks out for the following reasons:
1) Ground Floor Opportunity! Earlier this year Columbus Gold Corp. (CGT:TSX; CGTFF:OTCQX) spun out all of its U.S. assets into Allegiant which just started trading in the U.S. under AUXXF less than a month ago. Its an American-focused gold explorer.
2) Run by the #1 gold explorer in Nevada. Allegiant is run by Andy Wallace a protege of the legendary John Livermore who discovered the Carlin Mine in Nevada transforming gold mining in the U.S. and starting the development on the Carlin Trend, which hosts more than 120 million ounces, and built Newmont, Barrick and others into the giants they are today. In the last Nevada gold rush in the 1970s Andy Wallace found nine gold mines, including the 5-million-ounce Marigold Mine, the 12 million-ounce Stonehouse/Lone Tree Mine, and the Daisy Mine. Mr. Wallace was also involved in the discovery of the Sterling Mine and of the Dee Mine. He knows what he is doing and in the next Nevada gold rush he may have a few more discoveries up his sleeve as the team has been working hard for over 40 years.
3) Drilling is happening right now on what is known as Allegiant's Eastside property that I visited recently located right outside Tonopah Nevada. The company recently released nine holes, which all hit gold mineralization. One drill hole returned 42.7 metres of 2.49 g/t gold, including 9.1 metres of 9.03 g/t gold. A second drill rig has been added.
"These results confirm our geological model and validate our objectives to double the in-pit ounces and significantly reduce the strip ratio at the Original Zone," said Robert Giustra, Chairman of ALLEGIANT. "The Original Zone has the hallmarks of a very large gold system and is just one of many exploration targets that exist at Eastside." Drilling is in progress and I hope to hear good news with regard to hitting some new high grade zones. There are numerous undrilled exploration targets. An updated resource is expected by the end of this year.
4) In addition to Eastside, Allegiant has 14 drill-ready gold projects in U.S. with 11 in Nevada. It plans to drill 10. Five are already permitted and bonded.
5) There are less than 60 million shares outstanding fully diluted with around 60% in institutional hands. Some of the reps on the board have experience with majors such as Goldcorp, Newmont and Eldorado.
In conclusion, Allegiant's portfolio of high-priority gold exploration projects are in the right place, Nevada, with the top team led by Andy Wallace at the right time as we could be on the verge of the next big gold rush which happens every 40 years. In the last gold rush Andy Wallace found the top mines and I think in the next one, which could start any day now, Andy's Allegiant will be the #1 explorer in Nevada.
Jeb Handwerger is an author, speaker and founder of Gold Stock Trades. He studied engineering and mathematics at University of Buffalo and earned a master's degree at Nova Southeastern University. In 2014, Jeb was the first to highlight the top two performers of the Best OTCQX 50. Handwerger began investing in junior mining equities in the late 90s, avoiding the dot-com crash. In early 2009, at the depth of the credit crisis, Handwerger began the Gold Stock Trades website for investors to become more aware of exciting developments in the mining and natural resource sector.
1) Jeb Handwerger's disclosures: I own shares in Allegiant participating in the private placement and in the open market and the company is a website sponsor. This means I could benefit from increased price gains in stock and I have been compensated, which is a conflict of interest. Please do your own due diligence.
2) The following companies mentioned are billboard sponsors of Streetwise Reports: Columbus Gold. Click here for important disclosures about sponsor fees.
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