Surf Report 9.4-4: The "Endless Summer" in Precious Metals and Miners

Junior Gold Miners, GDXJ Part 4

Did you know that there is a place called “Surfer’s Paradise”? Indeed, in the “land down under”, there lies an astounding abundance of picture-perfect reeling right pointbreaks, over 50 kilometers of beautiful beaches, and crystal clear warm water. Gold Coast in Queensland boasts some of the best and most consistent waves in Australia. The Superbank offers one of the longest wave rides in the world and on a regular daily basis. Here surfers can choose from three surf spots, Snapper rocks, Greenmount, and Kirra...

Shown below is a view showing Snapper rocks which under peak conditions becomes a freak of nature, famous for regularly producing barrels.

Gold Coast surfing is legendary, hosting many surfing competitions year round and is on my bucket list of surf spots to one day visit. You may wonder why I chose to introduce this surf spot to y’all on this particular Surf Report? Well first and foremost, I thought it was fitting as we continue surfing Elliott Waves on our own “Gold Coast” during our the Endless Summer in Precious Metals and Miners Series. Secondly, for this particular report as we continue our review of the VanEck Junior Gold Miners ETF (GDXJ), you’ll see that 5 out of 8 charts of individual mining companies that we’ll review are gold mining companies whose operations reside in Australia. Not only does Australia have some of the best surfing in the word, it also has the treasure trove of precious metal hidden in its crust that these companies are seeking to extract. Let’s see what Elliott waves their charts are producing. We’ll begin with an update to GDXJ itself first before digging into individual miners.

GDXJ Update

The last time we reviewed GDXJ in the smaller degree / timeframe was in Surf Report 9.4-2 when we were “embracing the suck” and looking for one more rally higher to complete Minor degree 3. That rally was achieved however the Minor degree wave structure appears to be following linear based Fib extensions more closely with wave (v) of 3 topping at the 1.382. Wave 4 still needs a bit more confirmation before being considered complete but it also appears to have made a nice back test of the 2010 downtrend line. One more wave awaits to finish Intermediate (1) in GDXJ.

De Grey Mining Ltd (DEG.AX)

Our first junior gold miner from the land down under is De Grey Mining which is a Western Australian gold explorer and project development company focused in the Pilbara region called as the Hemi Project. The total Hemi Project Mineral Resource is now 12.7 million ounces according to the company’s website. Since this is a brand new chart let’s review the large degree count first. Here we see that DEG.AX has been in a sustained impulsive rally for nearly a decade. It still has some work to do to finish off its Intermediate wave (5) structure which would complete its first Primary degree wave count.

Bumi Resources Minerals Tbk Pt (BRMS.JK)

Bumi Resources Minerals is a multi minerals mining Company operating in Indonesia with shares listed on the Indonesia Stock Exchange since 2010. BRMS is operating a diverse portfolio of minerals including copper, gold, zinc, and lead. Like many other gold miners, BRMS had a solid 2024 with revenues rising by 231% in the first 9 months of 2024 compared to the same period in 2023. The BRMS chart is quite interesting during the 2016-2020 timeframe as a definite floor was set at 43 Indonesian Rupiahs. I’m not sure how that came to be without more research but I’m taking that pricepoint as the initiation of Intermediate wave (1). Based on the Fibs and wave structure I now believe Bumi is getting set to make a final rally in Minor degree 5 of Intermediate (5).

Fresnillo Plc (FRES.L)

We last looked at the smaller degree wave structure in Fresnillo in the last Surf Report for SILJJ which was 9.4-3 which was published early November 2024. Then we were looking for a completion of an Minute degree wave ‘a’ rally towards the £832-£879 region. Minute wave ‘a’ did not quite make it that high but I think we saw enough structure in Minuette (c) to consider Minute ‘a’ complete. It is typical for wave C extensions from an A-B structure to extend to the 1.00 level. Sometimes they will overextend but the 1.00-1.382 level more often than not brings considerable resistance which is what was seen in in Fresnillo. Price then broke down as expected in a corrective ‘b’ wave in the Minute degree setting the stage for a larger rally in a Minute c wave to compete Minor degree A.

Capricorn Metals (CMM.AX)

Our next gold miner from Australia is Capricorn Metals. Capricorn operates within two distinct project areas within Western Australia: 1) the Karlawinda Gold Project located 65 km south-east of Newman in the Pilbara region of Western Australia and 2) the Mt Gibson Gold Project located in the Mid-West region of WA, 280 km northeast of Perth. These two resources have a combined total base of 4.4 million gold ounces and 1.3 million ounces of gold reserves. Shares of CMM.AX have been in a bull market for nearly a decade. We can see a very large ending diagonal structure forming in the longer term chart as well with negative divergence forming in the MACD. A correction is coming but of what degree I am not entirely certain. I’m open to seeing either one more Intermediate wave higher but I think we must also consider that all of Primary wave 3 can be potentially complete once a top is confirmed. I think the key will be whether price holds Fib support and what the nature is of the wave structure of the next correction. A wave 4 correction is very different than a wave 2 correction of one higher degree in terms of the magnitude in price consolidation so caution should be warranted once price begins correcting from the large ending diagonal.

Gold Road Resources (GOR.AX)

Our second Aussie Gold Miner of this report is Gold Road Resources which is a mid-tier Australian gold producer and explorer with a Tier 1 mine and exploration projects across Western Australia, South Australia and Queensland. GOR.AX owns 50% interest in the Gruyere gold mine located in north-east of Perth and the company was formerly known as Eleckra Mines Ltd. and changed its name to Gold Road Resources Limited in 2010. By my count, the Elliott waves in GOR.AX find themselves completing the heart of an Intermediate wave (3) with Minor wave 5 currently filling out as shown in the 3-day chart below. As you may recall from the theory of alternation, since Intermediate (2) was really brief, Intermediate (4) is likely going to take more time to complete.

Torex Gold Resources (TXG.TO)

Since we covered the larger degree picture for TXG.TO in Surf Report 9.2-4, we’ll take a few moments here to review the smaller degree structure and counts. In that Surf Report published early last month we were considering TXG.TO was filling out a Minute wave c, of Minor wave C. As we can see from the 4-hr chart, Torex continues to test and is trying to break through Minute degree Fib resistance and may very well be in the heart of Minuette degree wave (iii). However it must hold Fib support since a breakdown from here would invalidate this potential and signal a larger (i)-(ii) or something else.

Vault Minerals (VAU.AX)

I wasn’t joking when I mentioned in the introduction that we had a lot of Australian gold miners to cover in this Surf Report. Our next one is Vault Minerals which operates three major gold mining properties in Western Australia (Leonora, Deflector and Mount Monger), plus an advanced gold production restart project in Ontario, Canada (Sugar Zone). During 2024, the company delivered approximately 455k ounces of gold. Let’s look at the larger degree wave structure first which I believe is pretty straight forward. Vault had 5 waves in the Intermediate degree which completed in May 2022, followed by a sizable (-73%) correction in what I’m counting as Primary wave 2. Price then rallied in its first Intermediate wave within Primary 3 but we shouldn’t be surprised to see a little bit more consolidation in Intermediate (2) in order to see a full corrective structure.

Westgold Resources (WGX.AX)

Our final chart and yes indeed also another Australian gold miner is Westgold Resources. Westgold operates three mining projects in Western Australia; the Fortnum Gold Mine, the Meekatharra Gold Operation centered around the Bluebird Gold Mine, and the Cue Gold Operation, which includes the historic Big Bell Gold Mine. Recently in August 2024, it was announced that Westgold and Karora Resources had completed the merger of their operations. We’ll need to watch out for that new listing which will be listed on both the ASX and TSE exchanges. Looking at the larger degree wave structure we can see an intermediate impulse filling out which is subdivided into 3-wave diagonals. Price is now testing Intermediate Fib support. After Intermediate (4) completes we should also expect another Minor degree 3 wave structure to complete one final wave up in Intermediate (5)

Summary

Vault and Westgold may have a little more of a consolidation, but the rest of the charts reviewed in this Surf Report look bullish with at least another wave higher on the way. The surf is generally looking higher in gold junior mining stocks in the coming months, including the majority of these Aussie gold miners. So if you are feeling anxious about this sector, I would simply say (as any laid back Australian would) “she’ll be right and have no worries mate!” which is Australian slang for “all will be well in due time” as the next major rally get’s going in metals and miners.

We still have much to cover in GDXJ with only 29 of 83 miners that are held by the ETF analyzed. It will take us a few more Surf Reports to see them all. However the weighting of each holding will continue to get smaller and smaller from here. The 29 holdings we’ve covered so far represent 72% of the ETF. However we can always find some potential standouts in the bottom of the pack so let’s keep charging hard on this endeavor.

Thank you for reading this Surf Report! I’ve already started work on the next Surf Report which will cover the next set of holdings in SILJ. Silver itself STILL has quite a bit of catching up to do with gold so it goes without saying silver miners do as well so we’ll continue our Endless Summer by tracking them!

Until next time…

Cheers and #EndTheFed!

-Hypersonic78

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Disclaimer: None of this is financial advice! Please do your own diligence. The views expressed here and other Surf Reports are my own. Only risk what you can afford to lose in these crazy markets. Know your timeframes, parameters, and personal risk tolerance.

Position Disclosure: I remain long physical silver and gold (mostly silver) and am long a handful of individual precious metals mining shares not covered in this report.

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