Better than expected unemployment reports have the U.S. tight-lipped about any further economic stimulus through bond buying, or ''quantitative easing'' as it is called. A third round of quantitative easing would mean more printing of U.S. money, which generally strengthens gold prices as the value of a greenback is lowered. QE3 being put on the back burner and China not producing double-digit GDP statistics has hamstringed metal prices recently with gold hovering around $1,700 per troy ounce as investors ponder future metal demand.
Prices can always go either way, but hints were given last week that gold may have a push coming. Commercial short positions in gold declined significantly and 16 of 23 analysts surveyed at Bloomberg expect gold to gain next week (1 was neutral). From a broader view, most analysts are still predicting gold values to substantially increase in both the near and long-term.
A bounce in bullion should help the resource-heavy Toronto markets, including juniors like Encore Renaissance Resources Corporation (TSX-Venture:EZ) (Pink Sheets:ERRCF), a Canadian junior miner focused on developing its 75%-owned Bonaparte Gold Project near Kamloops in southern British Columbia. A closer look at Encore shows that since appointing Matt Wayrynen as President and CEO and completing a re-structuring in December 2011, Encore has been aggressively working towards building corporate value by growing its holdings in the prolific Kamloops area while packing an Advisory Board with industry experts to help shepherd the company towards production.
Wayrynen knows a bit (to say the least) about mining in BC as the former President and CEO of Bralorne Gold Mines Ltd. The Bralorne mines in BC have produced more than 4 million ounces of gold from 52 separate veins.
Encore recently raised $1.5 million through a non-brokered private placement and followed that with an acquisition of 243 hectares to expand its holdings on the Bonaparte Gold Property, which is nearly 2,500 hectares (approximately 6,200 acres or 9.7 square miles) in size at this point. More than 14 known major en-echelon gold veins are being developed both from surface and underground with the mineralization vein system still open in all directions and at depth. In 1994, a 3,700 metric ton bulk sample of mineralized vein material from surface trenching in the Discovery Zone produced 3,160 ounces of gold.
The compilation work regarding the historical data is nearly complete as Encore is set to embark on a $2 million exploration program at Bonaparte. According to a statement from the company that hit at market’s close on Friday, a new gold zone has been discovered on the property in close proximity to the Discovery Zone, an area from which sampling has returned gold grades up to 365 g/t gold.
The new area in the ''Cooler Creek Zone'' is located 500 metres SE of the Discovery Zone along a structural trend. Historical soil geochemistry and magnetic geophysical surveys in the Cooler Creek Zone have outlined a NW-SE trending zone with highly anomalous gold in soils approximately 1500 metres long by up to 400 metres wide, according to the Encore press.
This late-week news of another discovery helping to validate and broaden historic data showing promising gold reserves could prove a catalyst for movement in EZ this week. Coupling that information with a chart that is sitting on a strong support level at 3 cents and possibly increasing values in gold this week should put this little miner with a lot to offer on the radar screen of the investment community.
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