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September 11, 2018

7 @ 7:00

Check back later today for Daniel’s Den and visit the BMR comments section throughout the day for updates and helpful information!

1. Gold has traded between $1,187 and $1,198 so far todayas of 7:00 am Pacific, bullion is off $7 an ounce at $1,188…metals across the board are under mild pressure amid news that China would seek permission from the World Trade Organization to impose tariffs on U.S. goods based on a 5-year-old anti-dumping dispute…Silver has dipped 23 cents to $13.93…Copper is off 3 pennies at $2.64…Nickel is 8 cents lower at $5.52, Zinc is down 2 pennies at $1.06 while Cobalt is steady at $28.35Crude Oil has climbed 16 cents to $67.70…U.S. Energy Secretary Rick Perry met Saudi Energy Minister Khalid al-Falih in Washington yesterday as the Trump administration encourages big Oil-producing countries to keep output high in the face of declining exports out of Iran due to new U.S. sanctions…Perry will meet with Russian Energy Minister Alexander Novak later this week in Moscow…the U.S. Dollar Index has added one-tenth of a point to 95.76

2. Trade worries coupled with tech’s recent decline have overshadowed strong economic data in the United States…the National Federation of Independent Business has reported that small business optimism jumped to a record high last month, boosted by lower taxes and looser regulations…Nick Raich, CEO of The Earnings Scout, says the fears overshadowing the market “have been overblown as the benefits from the Tax Cuts and Jobs Act and less regulatory burdens have outweighed the negative impact(s) from rising interest rates, tariffs and weakness abroad”

3. GT Gold (GTT, TSX-V) both helped and hurt the junior resource sector yesterday…just a couple of hours before market open, the company announced a blockbuster drill hole at Saddle North that confirmed a new Gold-rich porphyry discovery in Northwest British Columbia – the best porphyry drill hole the region has seen in more than a decade since Red Chris (430 m grading 0.67 g/t Au and 0.41% Cu within a broader 822-m interval of 0.42 g/t Au and 0.26% Cu)…then, strangely, the stock was halted with less than 30 minutes left in the session, interrupting trading and raising expectations for additional exciting news…but in a move that put a disappointing finish on an otherwise stellar day (the stock had gained 44% on record volume, and another gap-up the following day seemed likely), rookie CEO Steve Burleton announced in the late afternoon that the company had arranged a “best efforts private placement of up to 1,493,000 common shares, up to 2,596,000 flow-through common shares and up to 526,000 charity flow-through common shares of the company to raise aggregate gross proceeds of up to approximately $3.5 million.  Each of the shares, FT shares and charity FT shares will be offered by way of a best efforts private placement at a price of 67 cents per share, 77 cents and 95 cents, respectively”…it’s hard not to notice the huge disconnect between a 1st class drill hole, a world class discovery, and a 3rd class “best efforts” financing, most of which is flow-through including some charity flow-through which is the biggest gimmick on Bay Street (and Howe Street)…rather than let the stock “breathe” for at least a few days, and spread the word about such a significant discovery, Burleton’s financing decision, which rewarded his institutional friends, put the brakes on the stock’s momentum and was not well received by retail investors who had every reason to expect much better when it came to any potential financing – at a higher price, preferably not flow-through, and hopefully with a “key player”…the trading halt was certainly unnecessary, reminiscent of a strategic mistake the company had made a week earlier, and the nature of the PP simply cheapened the discovery…goes to show you, the risks in this business aren’t just restricted to what happens on the ground, but how management handles (or mishandles) the market…by the way, GTT’s financing agreement was with a syndicate of agents led by PI Financial which happened to be the 2nd-biggest net seller of GTT yesterday (629,000)…the PP and the timing of it stinks, retail investors should be outraged at such weakness displayed by management, and hopefully Burleton has the courage to discuss all of this in a BMR interview…

4. Pot stocks continue charging higher after Aurora Cannabis (ACB, TSX) reached a deal yesterday to acquire South America-focused ICC Labs (ICC, TSX-V)…the $290 million deal is the latest in an acquisition spree that has seen Aurora buy at least 10 companies in the past 2 years…“We feel a significant sense of urgency to rapidly establish a powerful global footprint,” stated Aurora CEO Cam Battley…Vancouver-based ICC has more than 70% of the market share in Uruguay, which was the first country in the world to legalize recreational cannabis…it also holds Colombian licenses to produce medical marijuana and has an agreement to export cannabidiol products to Mexico…ICC’s current and under-construction facilities will bring its production capacity to an estimated 450,000 kilograms (992,000 pounds) per year…“We see ICC as the jewel of the South American market,” Battley added…“This is going to be our anchor in South America and we have very big plans for that continent”…the purchase price of $1.95 per share represents a 34% premium to ICC’s 20-day volume-weighted average trading price as of August 22, the day before ICC said it was aware of a Spanish-language media report about a potential acquisition…Aurora will issue approximately 36 million shares in connection with the transaction…pot stocks have posted significant gains since mid-August, when Canopy Growth (WEED, TSX) announced a $5 billion investment from Constellation Brands (STZ, NYSE)…the BI Canada Cannabis Competitive Peers index has added 38% since August 14

5. The Dow is off 20 points through the first 30 minutes of tradingin Toronto, the TSX has retreated 32 points while the Venture is off a point at 718Royal Nickel (RNX, TSX) made a big run yesterday and is up again in early trading this morning after announcing that it made a unique new high-grade Gold discovery at its Beta Hunt mine…over the past week, approximately 9,250 ounces of high-grade Gold were produced from a 44-cubic-metre cut (130 tonnes) on 15 level at the Beta Hunt mine (equal to over 70 ounces/tonne or 2,200 g/t)…the high-grade Gold (coarse Gold and large Gold-containing specimen stones) includes approximately 190 kilograms of specimen stone, the largest of which is 95 kg with an estimated Gold content of 2,440 ounces and a second large specimen stone of 63 kg with an estimated Gold content of 1,620 ounces…final ounces will be determined once the coarse Gold is processed and/or sold over the next week which is expected to yield approximately $15-million in cash…all of the high-grade coarse Gold is hand picked, direct ship ore and immediately sent from site directly to the Perth Mint…GFG Resources (GFG, TSX-V) has signed an option and earn-in agreement with Newcrest Resources, a wholly-owned subsidiary of Australian-listed Newcrest Mining (NCM, ASX), to advance its Rattlesnake Hills Gold Project in Wyoming…under the terms of the agreement, Newcrest has the right to acquire, in multiple stages, up to 75% of the project by completing a series of exploration and development expenditures and making staged option cash payments to GFGNewcrest is one of the world’s largest Gold mining companies, operating 4 mines in Australia and the Asia Pacific regions, producing approximately 2.35 million ounces of Gold in 2018Newcrest also has extensive experience in discovering, developing and operating in alkalic Gold systems similar to Rattlesnake Hills…

6. Wesdome Gold Mines (WDO, TSX), one of the best-performing Gold stocks this year, has intersected 177.3 g/t Au over 5.1 m (true width), plus other high-grade cuts, as underground exploration drilling continues at the Deep A zone at its 100%-owned Kiena mine complex in Val d’Or, Quebec…additionally, drilling has identified a well-defined plunge that suggests high-grade mineralization could extend up plunge an additional 250 m, while the down plunge and down dip extensions of the zone remain open…recent drilling has extended the Gold mineralization of the A Zone beyond a 350-m strike length announced in a June 26 news release…today’s drill results have continued to extend the zone of mineralization an additional 50 m down plunge to the southeast…following the continued success of the ongoing diamond drill program, the company took the decision to extend the current exploration platforms by a total of 450 m to continue to define the possible extension of the Kiena Deep A Zone to the northwest, southeast and down dip…a total of 243 m additional development has occurred since July, and is expected to be completed by the end of October…

7. Can Skeena Resources (SKE, TSX-V) bring back the magic of Eskay Creek?…the company this morning provided the first Gold-Silver drill results from a recently initiated and continuing Phase 1 surface drilling program at Eskay Creek (base metal results are pending)…the program on the 21A, 21C and 22 zones is designed to infill areas with low drill density to sufficient drill spacing to allow for future economic analyses and to collect fresh material for an upcoming metallurgical characterization and testing program (no historical drill core remains for any zones at Eskay Creek, so new material must be collected for metallurgical purposes)…results from the first 3 holes featured 16 g/t Au and 149 g/t Ag (SK-18001), 35.4 g/t Au and 47.3 g/t Ag (SK-18002), and 29.5 g/t Au and 973 g/t Ag over 27.7 m (SKE-18003)…about 11 miles northwest of Nickel Mountain, Eskay Creek was one of the richest ore discoveries ever made and the mine had about a 10-year production run beginning in the early 1990’s

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  1. Great point Jon. I look forward to hearing Burleton explain the urgency (dare i say strategy?) behind announcing a PP on the same trading day as world class results, but i’m not holding my breath.

    Comment by Daniel — September 11, 2018 @ 8:30 am

  2. I decided to exist my gtt position for now. Real shame how this was treated after all the hard work done by Kevin K. to bring the company to this point.

    Comment by flyinthruu — September 11, 2018 @ 9:09 am

  3. Thanks Jon. I am soooo disgusted indeed by such a move by GTT, beyond belief…

    Comment by rgiroux — September 11, 2018 @ 9:14 am

  4. This business is all about leverage, rgiroux…bonehead move by Burleton, who’s obviously having difficulty making the adjustment from the institutional side of this business to the junior exploration model…not understanding the retail side of it…GTT should have been on a week-long run with a discovery like this, meaning less dilution at a higher priced PP – instead he totally zapped momentum and cheapened a great discovery…

    Comment by Jon - BMR — September 11, 2018 @ 9:39 am

  5. So odd GTT touched $1.06 on momentum trading BEFORE any world-class hits. Now it DOES have a hit and it’s 70 cents. Sigh.

    Comment by flyinthruu — September 11, 2018 @ 9:50 am

  6. It’s a shame I moved most of my funds out of pot into these mining plays. It’s been a long summer and seems like the mining market is taking the “fall” season literally.

    Comment by Matt — September 11, 2018 @ 4:42 pm

  7. Matt, I have to award you with the dry humor comment of the week (or month!). Funny. Just wish it wasn’t so true. Falling into winter, maybe, then we heat up from there!

    Comment by Daniel — September 11, 2018 @ 5:18 pm

  8. White Metal Announces Proposed Financings to Fund Exploration on the Gunners Cove Gold Project


    Comment by robtr31 — September 11, 2018 @ 6:34 pm

  9. TIG…very nice.


    Comment by keen1991 — September 12, 2018 @ 4:03 am

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