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November 30, 2018

7 @ 7:00

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

1. Gold has traded between $1,216 and $1,226 so far todayas of 7:00 am Pacific, bullion is down $7 an ounce at $1,217…  Silver has slipped 25 cents to $14.03… Copper and Nickel are both off slightly at $2.82 and $4.95, respectively…Zinc is at $1.17, up 2 pennies, while Cobalt remains unchanged at $25.06…Crude Oil has fallen below $50, off $1.59 a barrel at $49.86…Canadian heavy Crude is trading at about a $34 discount to WTI while even light Canadian Oil is being discounted very heavily due to a lack of pipeline capacity which has cost the Canadian economy at least another half a billion dollars this week…meanwhile, latest stats show that Oil drilling activity in Western Canada has declined by around 10% in recent weeks and will likely drop off even more through December, a function of budget exhaustion and the curtailment of capital spending…this is what politicians and climate change extremists are doing to our country…the U.S. Dollar Index is showing strength again, up one-third of a point at 97.16

2. Kirkland Lake Gold (KL, TSXwill continue to outperform its peers – the company announced this morning that its Fosterville mine is on track for record quarterly production this quarter, with full-year 2018 production now expected to exceed 330,000 ounces versus current guidance of 300,000 to 310,000 ounces…Fosterville’s strong Q4 2018 performance largely reflects higher than expected grades and the advancement of 2 additional stopes from the high-grade Swan Zone into the mine’s Q4 2018 production plan….based on the improved outlook for Fosterville, the company now anticipates that full-year 2018 consolidated production will exceed the current target range of 655,000 to 670,000 ounces…on a quarter-to-date basis, the mill grade at Fosterville in Q4 2018 has averaged over 35 grams per tonne, well above target levels for the quarter…Tony Makuch, President and CEO of Kirkland Lake, commented: “Fosterville is clearly firing on all cylinders heading towards the end of the year, with Q4 2018 production on track to easily beat the current production record of 90,618 ounces, achieved last quarter.  We continue to see significant grade outperformance from stopes in both the Swan and Eagle zones.  The higher than expected grades from both development and run-of-mine production, along with the exceptionally high grades reported from recent drilling results, provide confirmation that the presence of high-grade quartz veins with visible Gold is more prolific than estimated in the current block model”KL is down slightly in early trading but expect the stock to firm up on this morning’s news…

3. U.S. Trade Representative Robert Lighthizer said this morning that he expects a key dinner between President Trump and China’s Xi Jinping to be a “success”…Trump and Xi are scheduled to have dinner tomorrow and trade issues will be at the top of the agenda…the meeting comes after tit-for-tat tariffs between the 2 countries dominated headlines this year, created market volatility and drove down base metal prices…the U.S. levied additional duties on $250 billion worth of Chinese goods, and China responded with retaliatory tariffs on $110 billion of American imports…no major breakthroughs are expected this weekend but some are speculating that there might be a “cease fire” agreement, of sorts, whereby both countries agree to withhold further tariffs while discussions continue toward a possible trade deal over the next several months…markets would react positively to that…

4. After much anticipation, Canada, Mexico and the United States signed the revamped NAFTA in Buenos Aires on the sidelines of the high-profile G20 summit this morning…Prime Minister Justin Trudeau, who claimed he stands up for Canadian workers (except of course for those in the resource sector), joined U.S. President Trump and outgoing Mexican President Enrique Pena Nieto at a hotel to formally sign the USMCA (United States-Mexico-Canada Agreement)…the signing of the trade agreement in Argentina was largely ceremonial – the deal still needs to be ratified by all 3 countries before it can formally take effect…ratification by the U.S. Congress is less certain now that Democrats will have control of the House when the new Congress is sworn in early next year…

5. Isn’t this ironic – climate change extremists don’t want new pipelines built in Canada, so record amounts of Oil are now being transported by rail in this country which is actually less safe and less “environmentally friendly”…to top it off, Alberta Premier Rachel Notely says the province needs to buy as many as 7,000 rail cars (gotta love that carbon footprint!) to free up bottlenecks and meet its goal of shipping an additional 120,000 barrels of Oil a day…in a speech to the Toronto Board of Trade yesterday, Notley said her province is prepared to buy roughly 80 locomotives with each train pulling 100 to 120 cars…this extra capacity will allow Alberta to transport 30% more Crude-by-rail than current levels, and would help narrow the price gap by $4 a barrel and generate an additional $1 million a day for the federal government (the same federal government, of course, that has inflicted more damage on the Oil and gas sector in this country than any government since – you guessed it – Pierre Trudeau’s Liberals 30 years ago)…what a tangled web Canada has weaved, all in the name of “saving the planet”…

6. Economic growth in Canada actually contracted during September…for the July-September quarter, the pace of economic growth in Canada slowed to 2.0%, in line with expectations, but it ended on a bad note as September was the first negative month after 7 consecutive months of growth according to data released this morning by Statistics Canada…the agency attributed September’s move lower to weaker output across all goods-producing industries which slipped 0.7%…business investment and the growth in household spending both slowed during Q3…spending on new home construction fell 4.7%, the largest decrease since the 2nd quarter of 2009 during the Great Recession…hard to imagine the Bank of Canada raising interest rates much more than they already have…

7. The Dow is off slightly in early trading but is on pace to register its biggest 1-week advance since late 2016…it will also finish up solidly for the month with a gain of nearly 1%…historically, December has been the strongest month of the year for U.S. stocks on an absolute basis…the TSX is down 65 points as of 7:00 am Pacific while the Venture is 2 points lower at 589…technically, the Venture is showing clear signs of a bottoming pattern…a strong support band exists between 575 and 560, meaning it’s highly likely the Index has already found its low or is within just 5% of it – time, therefore, to do some bottom fishing as the Venture should close the year comfortably above 600…positive technical developments in the Copper market, a leading indicator, also bodes well for the Venture while Nickel appears to be at the end of its correction…

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  1. I just sold over 40 companies to trigger my capital loss to offset the gain from BLO and GGI.. I do not feel that the venture is anywhere close to being a going concern and wont be for some time to come…

    JOn has always said a market within a market… hoping to put the cash to work in valued companies.. but I dont see the venture having any sort of rally anytime in the near future..

    and Gold.. well it is being managed well… we go sideways for the foreseeable future. even CCW cant find any follow through after a strong jump.

    market may be broken – just not sick..

    Could be the time of year… hmmm….

    Comment by Jeremy — November 30, 2018 @ 9:51 am

  2. Anyone have any idea if GGI plans on releasing some news before the investor conference next week.

    Comment by Paul — November 30, 2018 @ 11:04 am

  3. Just rechecked my capital gain/loss… BLO afforded me a 150K gain .. thank you Jon et al!!!!!!!!

    Comment by Jeremy — November 30, 2018 @ 11:28 am

  4. GGI just popped… no news.. and light volume… hmmmm

    Comment by Jeremy — November 30, 2018 @ 12:00 pm

  5. ….and this is exactly why the markets are where they are right now, because one by one people are capitulating after a bad year and add in the usual tax loss season selling pressure, you get extreme lows created, just like we’re seeing now. Small cap markets invariably sell off badly every year around this time, and should have a strong rally starting in a couple weeks or so, for at least a month or two. Then what happens, nobody knows. When pessimism is at extreme levels (now), bottoms are never far away. I’d be buying now, rather than selling anything. The time to sell was last January….just sayin.

    Comment by broen — November 30, 2018 @ 12:22 pm

  6. it has been the worst year since the Financial crisis in 2008/09 for many people I think. My entire portfolio is down close to 60% and no winners this year at all. But this leads me to think 2019 will be a good year, as its rare (not impossible) to get a second such terrible year in succession…..

    Comment by broen — November 30, 2018 @ 12:51 pm

  7. Hey Broen … I may have garnered 20K after selling 40 companies.. these were all stupid buys in the first place and when they got trashed in 2011.. they reverse split and none of them except NOT had no chance of anything unless a rising tide raises all boats type rally that Jon is adamant wont happen..

    the Venture has been in a downward spiral since 2011… that when I should have sold it all… where the fk is that Delorean!!!!!

    Comment by Jeremy — November 30, 2018 @ 1:01 pm

  8. The Russians are everywhere… hacking even the Venture.

    Comment by flyinthruu — November 30, 2018 @ 1:40 pm

  9. broen/Jeremy… some great points, tax loss selling will be a killer for some stocks but that’s why I think the next couple weeks will provide some tremendous opportunities. Been buying up some AIS around .10, you would think there has been and will be a lot of tax loss selling on that one.

    Comment by Danny — November 30, 2018 @ 1:45 pm

  10. broen – you are not alone… and I sincerely hope that the venture and other markets show us some love somewhere… it has been a brutal time…

    Comment by Jeremy — November 30, 2018 @ 2:00 pm

  11. Hi Jon, have you left for Gowganda yet?

    Comment by flyinthruu — December 1, 2018 @ 7:18 am

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