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June 12, 2018

7 @ 7:00

Visit the BMR comments section throughout the day for updates and helpful information.i

1. Gold has traded between $1,293 and $1,299 so far today following last night’s historic U.S.-North Korea summit in Singapore, the first time a U.S. President has met with a North Korean leader…as of 7:00 am Pacific, bullion is down $an ounce at $1,298Silver has eased off 4 cents to $16.86…Nickel has added 4 cents to $6.94 while Copper and Zinc are both steady at $3.26 and $1.46, respectively…Cobalt has slid 23 cents to $37.88…Crude Oil is up slightly at $66.20 while the U.S. Dollar Index has retreated one-tenth of a point to 93.59…Donald Trump was not a politician when he was elected, and he’s not a politician now…he continues to throw old rules out the window as evidenced by his historic meeting with North Korean leader Kim Jong Un…the two signed a document stating that Pyongyang would work toward “complete denuclearization of the Korean Peninsula”, one of the requirements the U.S. sought at the summit in Singapore…it came about through intense economic pressure and a credible threat of military action (not a fake “red line”)…

2. U.S. consumer prices rose marginally in May amid a slowdown in the pace of increases in the cost of gasoline…while the 0.2% monthly gain for the Consumer Price Index matched market expectations, the annualized gain came in at 2.8%, the biggest advance since February 2012…that was up from the 2.5% pace in April…meanwhile, the Fed’s preferred inflation measure, the personal consumption expenditures price index excluding food and energy, rose 1.8% on a year-on-year basis in April, matching March’s increase…it remains below the Fed’s 2% target rate as the central bank begins a 2-day meeting this morning…the Fed is widely expected to boost interest rates by a quarter point when its meeting concludes tomorrow, and it will also provide an update that should show it expects stronger growth and higher inflation – and maybe even more interest rate increases this year…

3. Brazil’s mining giant Vale (VALE, NYSE) is moving ahead with construction of an underground mine at Voisey’s Bay, extending operations by at least 15 years…transitioning the Nickel mine from open-pit operations to underground will cost about $2 billion and is expected to extend its productive life to 2035…over the 5-year construction, to begin this summer, more than 16,000 person-years of employment will be created…once operational, and including the Long Harbour processing plant that could also end up serving high quality feed from Nickel Mountain in the event of a mine scenario there, direct employment will hit 1,700 jobs…the Voisey’s Bay mine, which opened in 2005, currently employs about 500 people…meanwhile, Vale has inked agreements with Cobalt 27 Capital (KBLT, TSX-V) and Wheaton Precious Metals (WPM, TSX) to sell future production of Cobalt…the combined $690 million (U.S.) in upfront payments will help finance the Voisey’s Bay expansion…KBLT is raising $300 million at a price of $9.75 per share which has put some downward pressure on the stock this morning…KBLT has plunged $1.36 to $9.70 after 3o minutes of trading…

4. South Africa’s Association of Mineworkers and Construction Union says it will demand a higher minimum monthly wage of 12,500 ZAR ($953 U.S.) in their upcoming negotiations with the country’s Gold producers.  “This is significantly higher than the ZAR 10,500 per month demanded by the larger National Union of Mineworkers, and the ZAR 7,700 per month currently seen as the industry norm,” noted BMO Capital Markets‘ analyst Colin Hamilton. “This sets the scene for a fractious negotiation period with unions in conflict with each other as well as the mining industry”…the union will also be asking for a 5-day work week, better housing, and maternity leave benefits…

5.  Kevin O’Leary, chairman of O’Shares ETFs and an investor on “Shark Tank”, told CNBC yesterday that he’s making a two-pronged bet on Canada’s future prosperity, due to what he sees as a conservative groundswell to challenge Liberal prime minister Justin Trudeau.  “I’m waving the Canadian flag.  I’m going long the [Canadian] dollar and I’m going long 60 large-cap Canadian companies,” said O’Leary, who was born in Montreal…he said he had zero exposure to Canada until this week and now has a 1% exposure in 60 names in Canadian dollars using a Canadian ETF called XIU which owns everything: all the banks, all the rail, and all the energy; and I bought Canadian dollars to do it.  So I’m betting on a move in the Canadian dollar to the upside and I’m betting that all of these left wing governments, including the one at the federal are all getting wiped out”…he added he’s prepared to increase his exposure to Canada by 1% if conservatives win in Alberta and another 1% if the Liberals and Trudeau get bounced in the 2019 federal election…Trudeau has not done himself or his country any favors by battling President Donald Trump over trade, O’Leary said, following the weekend G-7 summit in Quebec that featured a combative Trudeau press conference followed by a series of tweets from Trump that attacked the PM…

6. The Dow has retreated 20 points through the first 30 minutes of trading…in Toronto, the TSX is up slightly…Goldcorp (G, TSX) said on Monday an ongoing protest blocking entry to its Penasquito mine, one of Mexico’s biggest Gold producers, could force the company to halt output… Aurora Cannabis (ACB, TSX) continues its torrid acquisition pace…Aurora is buying out privately held Anandia Laboratories in an all-share transaction valued at approximately $115 million on a fully diluted basis…led by CEO and co-founder Dr. Jonathan Page, PhD, one of the industry’s most widely recognized cannabis experts, Anandia is considered the industry leader in science, genetics and independent cannabis product testing…Dr. Page was the first scientist to sequence the cannabis genome and provide deep insights into the biosynthesis of cannabinoids and the interplay between cannabinoids and terpenes…the Venture has slipped 5 points to 764A.I.S. Resources (AIS, TSX-V) will resume trading at 9:00 am Pacific after being halted for news dissemination…while the company will not be proceeding with the purchase of the Chiron Property in Salta due to results from 2 test holes (saving the company $1.5 million), AIS has received the date for its UGAMP meeting (July 2) pertaining to the long-delayed Guayatayoc Project in neighbouring Jujuy province…UGAMP meetings aren’t set unless there’s a high level of confidence that a permit will be issued, so it now appears likely that drilling at this advanced flagship property will finally proceed this summer…Canada Carbon (CCB, TSX-V) has filed in the Superior Court of Quebec its action for $96 million in damages against the Municipality of Grenville-sur-la-Rouge…Bruce Duncan, CEO for Canada Carbon, commented: “From the beginning, we have rigorously complied with the laws and regulations that apply to mining projects in Quebec.  Our priority is to pursue our efforts with the competent authorities to obtain all of the necessary authorizations for the development of the Miller graphite mine and marble quarry project”

7. Former Liberal cabinet minister Anne McLellan, who headed the task force that made recommendations on legalizing pot, told industry members at the first World Cannabis Congress in Saint John, New Brunswick, that many Canadians are becoming increasingly sensitive about the legalization of cannabis…McLellan urged companies to respect legislators’ cautious approach and boundaries, and not play “fast and loose” with the rules…“Everybody had better be on their best behaviour for the first few years after legalization because there is a societal fragility to this,” McLellan warned…“If this goes bad, if people play fast and loose with the rules, there could be enormous societal push-back”…several licensed producers in the audience received McLellan’s message with frustration. “We have no intention of skirting the regulations,” said Ray Gracewood at Organigram. “We are all aligned on wanting to keep [cannabis] out of the hearts and minds of children and eliminating the illicit market.  Those are our two objectives.  But we need to do everything we can to be competitive with other licensed producers and the illicit market.”

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  1. Looks like it is just a matter of time before CCW explodes to all time highs or gets bought out with all that is happening in the cobalt space right now, still a steal at these prices….

    Comment by GREGH — June 12, 2018 @ 9:57 am

  2. Just came in from the Field and saw AIS down under .30 ……. did they Roll back or whattttt ??? Wow, talk about a disaster !!!!! Glad I didn’t bite when it did its ” dead cat bounce ” . Luckily my good friend ” bailed ” out a few weeks ago …… bought GGI with that failed money ….. GO GGI and MTS and CLM …. the only three Stockes worth owning imho. Farmer Tom

    Comment by farmer — June 12, 2018 @ 10:11 am

  3. Lots of fear still out there…

    Comment by Jeremy — June 12, 2018 @ 1:10 pm

  4. Any insight as to what may be going on with clm? Seems like ages ago they announced drilling and if i recall correctly we havent heard a thing from them since. Is clm still your #2 pick of 2018 for nickel next in line to ggi?
    Thanks Jeff!

    Comment by Jeff — June 12, 2018 @ 5:52 pm

  5. Comments on CCC? It took a huge run today and I’m just wondering if the price will hold? I hope so. Do you have any price targets for CCC?

    Comment by Tfred — June 12, 2018 @ 7:10 pm

  6. Dr. Lightfoot is a common denominator between CLM and GGI, Jeff, and Richard Savage, the former broker-turned CEO, is CLM’s version of the very astute Steve Regoci (ironically, Savage used to be Regoci’s broker). Anyway, with Lightfoot and Savage, CLM is positioned to do something really big IMHO and we’ve expanded on that in subscriber-only pieces. Going foward, I expect CLM and GGI to very much track each other to the upside, as they have done often since last summer.

    With respect to Nicobat, it’s a gem of an opportunity in the Rainy River region. If anyone can make an exciting new discovery there it’s Lightfoot.

    Comment by Jon - BMR — June 12, 2018 @ 7:34 pm

  7. Another company Aurora has its sights on…


    Aurora Cannabis Inc. intends to complete a $7-million investment in Choom Holdings Inc., whereby Aurora will receive 9,859,155 common shares from Choom’s treasury, priced at 71 cents per share, representing an 8-per-cent ownership interest.

    Choom currently operates two late stage applicants under the Access to Cannabis for Medical Purposes Regulations (“ACMPR”). Choom has agreements in place to acquire two additional late-stage applicant craft growers in BC and Saskatchewan, including a facility in Sooke, British Columbia, anticipated to receive its cultivation license from Health Canada in the third quarter of 2018.

    The relationship between Aurora and Choom germinated through Aurora Pro, the platform through which the Company delivers a variety of services to industry participants, including cultivation, genetics, regulatory consultancy and market development services. The Aurora Pro platform was developed by Aurora to interact with craft growers who are faced with potentially unreasonable entry barriers to the adult usage market in Canada.

    Choom’s strategy is to develop a carefully curated portfolio of high-grade cannabis strains with ideal characteristics for craft growing, targeting the premium segment of the adult consumer use market. Choom continues to develop a sophisticated brand, high-grade products, and an elevated in-store customer experience. Images of the company’s concept cannabis retail outlets can be found on https://bit.ly/2JzwdOr.

    To date, Choom has secured rights to 17 retail leases in highly defensible locations throughout Alberta. Applications to obtain a cannabis retail license for these outlets have been submitted. Choom also has 7 leases secured in BC, and licenses will be applied for upon commencement of the licensing program in BC. Choom furthermore intends to play an important role in the Saskatchewan retail market, and has a robust strategy in place to develop its presence in this market.

    Management Commentary

    “Our investment in a consumer-focused brand with a strong retail strategy offers Aurora additional growth opportunities through supply, retail and distribution to the adult consumer use market, and provides a good example of the functioning of Aurora Pro,” said Terry Booth, CEO of Aurora. “Choom has established a well-developed brand, supported by deep roots within the British Columbia cannabis community and a passion for high-grade, handcrafted product. We’re excited to strengthen our relationship with the team at Choom and help amplify their market reach as they continue to execute on their differentiated craft growing philosophy and their unique retail strategy.”

    Chris Bogart, President & CEO for Choom, added, “Teaming up with what we consider to be the most dynamic licensed producer with exceptional strength throughout the entire cannabis value chain, we believe, will prove to be a key growth accelerator for Choom. Both companies have a very strong focus on the entire customer experience, key in establishing exceptional brands. This investment by Aurora is a strong signal to our markets and our shareholders that Choom’s strategy meets with the highest standards in the industry.”

    About Aurora

    Aurora’s wholly-owned subsidiary, Aurora Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, known as “Aurora Mountain”, and a second 40,000 square foot high-technology production facility known as “Aurora Vie” in Pointe-Claire, Quebec on Montreal’s West Island. In January 2018, Aurora’s 800,000 square foot flagship cultivation facility, Aurora Sky, located at the Edmonton International Airport, was licensed by Health Canada. Once at full capacity, Aurora Sky is expected to produce over 100,000 kg per annum of cannabis. Aurora is completing a facility in Lachute, Quebec utilizing its wholly owned subsidiary Aurora Larssen Projects Inc. (“ALPS”). ALPS provides comprehensive project services related to the design, engineering, construction support, compliance requirement, genetics, commissioning and maintenance of Aurora Standard production facilities across the globe.

    About Choom

    Choom(TM) was created for and inspired by the Choom Gang; a group of buddies in Honolulu during the 1970’s who loved to smoke weed-or as the locals called it, “Choom”. Now, after four decades, Choom(TM) is bringing the spirit of Hawaii to Canada. Choom(TM) is focused on delivering an elevated customer experience through our curated retail environments, high-grade handcrafted Cannabis supply, and a diversity of brands for the Canadian recreational consumer.

    Comment by Jon - BMR — June 13, 2018 @ 5:43 am

  8. Class 1 Nickel, exactly what Garibaldi is finding at Nickel Mountain with a lot more to come…good story in this morning’s Sudbury Star…


    Comment by Jon - BMR — June 13, 2018 @ 6:39 am

  9. BMR are you surprised GGI price action as well as GTT? Thought we would have a bit more excitement atm.

    Comment by flyinthruu — June 13, 2018 @ 8:06 am

  10. Lots of room on the runway for both, flyinthru, as things get going…that’s what you want to see…both charts remain strong, and GGI will kick things off soon enough…

    Comment by Jon - BMR — June 13, 2018 @ 8:10 am

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