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November 5, 2018

7 @ 7:00

Visit the BMR comments section throughout the day for updates and helpful information. Daniel’s Den tomorrow!

1. Gold has traded between $1,226 and $1,235 so far today…as of 7:00 am Pacific, bullion is off $1 an ounce at $1,231…hedge funds and money managers raised their net short position in Gold by 18,723 contracts to 45,622 contracts in the week to October 30, according to the latest U.S. Commodity Futures Trading Commission data…this was the highest in 3 weeks…Silver is down 5 cents at $14.67…Copper, Nickel and Zinc are also off marginally at $2.81, $5.31 and $1.17, respectively, while Cobalt is steady at $23.93…Crude Oil has rebounded 61 cents to $63.75 while the U.S. Dollar Index, which posted its 7th straight month of gains in October, is off slightly at 96.37 ahead of tomorrow’s critical midterm elections…amazingly, U.S. equity markets have not declined in the 12 months following a midterm election since 1946…midterms often produce gridlock in Washington, and Wall Street tends to love gridlock…the gridlock scenario this time around would be an expanded Republican majority in the Senate (almost a certainty) while the Democrats win control of the House…given the Trump Factor, however, Republicans could certainly defy the pollsters and mainstream media pundits and retain control of the House, albeit with a narrower majority…the governor of the Bank of Canada says after a decade of low-interest rates around the world, the global economy has reached stronger footing where stimulus can be “steadily withdrawn”…Stephen Poloz’s remarks this morning came as the Bank of Canada signals it will gradually raise its benchmark interest rate from its current level of 1.75% to a so-called neutral stance of somewhere between 2.5% and 3.5%…

2. Crude prices have come down roughly 15% since the start of last month when Brent breached the $86-a-barrel threshold for the first time in 4 years…“And yet increasing numbers of observers believed in early October that the price could climb to $100,” analysts at Commerzbank wrote in a note this morning…“What has happened since then to cause prices to react so differently?  One key reason is that OPEC, Russia and the U.S. have stepped up their Oil supply considerably”…prices have also come under pressure because of signs of weakening global economic growth and equity market turmoil…one of the biggest threats to the global economy would be runaway Oil prices, something Trump has been watching closely…Crude prices around current levels are non-inflationary and will help encourage global growth…

3. Chemesis International (CSI, CSE) is making a major push into Colombia…the company announced this morning that it has entered into a binding LOI to acquire 100% of Colombia-based La Finca Interacviva-Arachna Med SAS, an integrated cannabis company that has been licensed and operational in Colombia since October, 2017La Finca has access to over 1,000 acres of outdoor cultivation land and is aggressively exploring opportunities to expand….it’s also a founding member for the “Association for the Promotion of Hemp Growing”, a non-profit entity that is concentrated on providing education and promoting the expansion of cannabis plantations, while ensuring the growth of high-quality crops through technical advice…the company’s cultivation program is based on a decentralized model with partner farmers throughout the country, allowing small farmers to quickly generate high quality crops…currently, La Finca has relationships with over 2,000 farming families across Colombia through various co-ops that comprise its land package…La Finca also has a partnership with the largest university in Colombia to develop seed strains that improve the yield of biomass and flower while shortening crop cycles…La Finca currently has several manufacturing relationships including an agreement for licensed cosmetic products under the La Finca brand…Chemesis will acquire La Finca, which has $2.5 million CDN in working capital, for $13.5 million in a combination of cash and common shares to be determined upon execution of the definitive agreement…all stock issued will be subject to a 36-month phased lock-up period…CSI has jumped 28 cents to $1.79 after 30 minutes of trading…

4. Aleafia Health (ALEF, TSX-V) is pushing higher after announcing this morning that it has signed a non-binding term sheet to acquire a 10% equity stake in CannaPacific, a licensed Australian medical cannabis company…CannaPacific has been granted licences to cultivate, produce and research medical cannabis in Australia and has a 53,000 sq. foot cannabis cultivation and plant research facility currently under construction…Aleafia will provide CannaPacific with technical expertise in cannabis cultivation, processing, distribution and medical clinic operations…this marks the launch of Aleafia’s global expansion with a foothold in the budding Australian medical cannabis sector and future market access to Asia under Australian free-trade agreements…

5. Canada Cobalt (CCW, TSX-V), the only junior in Canada that’s able to target high-grade Cobalt in underground drilling, has cut a robust 7 m grading 2.3% Cobalt, 261 g/t Silver and 1.65% Nickel (CA18001) at its Castle mine in Northern Ontario…other initial results included 3.2% Cobalt and a whopping 345 ounces per ton Silver over 0.60 m within a broader interval in CA18003 (core lengths)…CCW is drawing strong interest from potential clients in Asia and Europe as the first and only company in the Northern Ontario Cobalt Camp to produce battery grade Cobalt sulphate through its proprietary Re-2OX process…these initial drill results will only boost the prospects for any potential deals to monetize this unique opportunity for shareholders…meanwhile, the Gowganda area is heating up on the Gold front as well…the 3rd hole of a surface drill program east of the Castle mine has intersected 2 mineralized zones with the potential for a Gold discovery on the property, while CCW neighbor iMetal Resources (IMR, TSX-V) is preparing to drill at Zone 3A at its Gowganda West Property…Zone 3A marks the beginning of a minimum 2.4-km-long structural corridor featuring Kirkland Lake-type rocks and high-grade Gold showings at each outcrop area revealed by a massive logging operation…Gowganda West has never been previously drilled even though it’s contiguous to the southern border of Tahoe Resources‘ (THO, TSX) 4 million ounce Juby deposit…

6. Alamos Gold (AGI, TSX) has discovered an extension of high-grade mineralization at its Island Gold mine in Northern Ontario…in the “main” extension, the new findings include 118.6 g/t Au over 6.7 m, 21.5 g/t over 7.8 m, and 31.7 g/t over 3.8 m…in the “western” extension, discoveries include 78.3 g/t over 2.3 m and 19.7 g/t over 2.8 m…findings in the “eastern” include 46.1 g/t over 2.8 m and 13.7 g/t over 7.6 m…“Island Gold continues to impress,” stated President and CEO John A. McCluskey.  “In less than a year since we acquired the mine, we’ve seen a 17% increase in mineral-reserve grades and significant growth in mineral reserves and resources across all categories.  Ongoing exploration success across all three extensions of the ore body, including the best surface directional hole drilled to date, demonstrate strong potential for this to continue”…last week, Alamos reported net earnings for Q3 of $7.2 million (U.S.)…

7. The Dow is up 80 points through the first 30 minutes of trading…Apple’s stock was downgraded for a second time since its earnings report, this time by Rosenblatt Securities, which said it has lowered its expectations for iPhone production and shipments…the firm cut its rating on the largest public company in the U.S. to neutral from buy, telling clients that it will be difficult for Apple to offset weaker volume with higher selling prices in the second half of 2019…the TSX has added 71 points while the Venture, aiming for its 4th straight daily gain, is up 2 points at 653GT Gold (GTT, TSX-V), continuing to look strong, is up 9 cents at $1.94 with more results pending from its Gold-rich Saddle North porphyry discovery in Northwest British Columbia…GTT appears to have conquered Fib. resistance at $1.78Westhaven Ventures (WHN, TSX-V) is a penny higher at $1.07WHN was up sharply last week after releasing another robust high-grade Gold intercept at its 155 sq. km Shovelnose Property within the Spences Bridge Gold Belt near Merritt…

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  1. Hey guys, what is going on with AUN… Silence is deadly?

    Comment by PatrickLamane — November 5, 2018 @ 12:10 pm

  2. Aurcana has been halted for a few months now pending the announced acquisition, hence the silence.

    Here’s a link to Aurcana’s presentation made in Beaver Creek only a few months ago. Worth a listen if you haven;t heard it. http://www.gowebcasting.com/events/precious-metals-summit-conferences-llc/2018/09/21/aurcana-corporation/play/stream/25961

    Comment by Daniel — November 5, 2018 @ 12:38 pm

  3. Daniel, thoughts on BAR’s retraction back to .165? It seems the market isn’t expecting much from the drilling to date. Hopefully they surprise to the upside.

    Comment by Dan1 — November 5, 2018 @ 3:25 pm

  4. Yes Dan1, Balmoral had a nice move up to 23 on over a million shares, pullback to support at 17 on very light volume. It should hang around there until we get the next announcement.

    Market cap = $23M

    As of last SEDAR filing they still had around $5M working capital.

    Agreed, hopefully we get the upside surprise and some great Nickel numbers from Grasset, with help from borehole EM.

    Looking at some other companies drill results lately, mainly high-grade gold, and can’t help but wonder how Mr. Market would react if Balmoral hit 33 OUNCES over 4.8 metres (like they did May 2014) and 365 g/t Au over 24 m (April 2015). Two high-quality discoveries, the newest in the Abitibi, under one roof.

    Some weakness in Nickel prices might not be helping with enthusiasm though. Balmoral needs Nickel to stick above $6

    Comment by Daniel — November 6, 2018 @ 7:17 am

  5. Hi Jon, Any update on TPS?

    Comment by Ryan Guilbault — November 6, 2018 @ 8:32 am

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