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July 10, 2019

7 @ 7:00

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1. Gold has traded between $1,389 and $1,412 so far today, getting a boost from Fed Chair Jerome Powell who’s appearing before Congressional committees today and tomorrow…as of 7:00 am Pacific, bullion is up $10 an ounce at $1,407…Powell said the economic outlook hasn’t improved in recent weeks, a strong signal the central bank will cut its benchmark short-term interest rate when officials meet at the end of the month…since June’s meeting, “It appears that uncertainties around trade tensions and concerns about the strength of the global economy continues to weigh on the U.S. economic outlook.  Inflation pressures remain muted,” Powell added, and that’s a key point – the Fed is much less concerned now about potential inflationary pressures, even in the midst of the longest economic expansion in U.S. history, and that gives the central bank a certain comfort level to go into rate-cutting mode to prolong the expansion…Silver has jumped 8 cents to $15.17…Nickel, continuing to firm, has added another 10 cents to $5.81…Copper is up 4 pennies at $2.68 while Zinc has gained 1 cent to $1.08…Crude Oil has climbed $1.69 a barrel to $59.52 while the U.S. Dollar Index, after meeting strong resistance at 97.50, has retreated one-quarter of a point to 97.24…Iron ore prices have soared by more than 68% this year, a resurgence driven by falling supplies that has led to challenging times once again for steel mills that use the material…as steel’s main ingredient, Iron ore is one of the world’s most traded commodities and can influence prices for materials used in everything from cars to skyscrapers…the global steel industry uses roughly 2 billion metric tons of Iron ore, along with metallurgical coal and recycled steel, to make 1.7 billion tons of crude steel each year, according to the World Steel Association…Iron ore is one of the best-performing assets year-to-date, trading in the $120’s which is up from roughly $73 at the start of the year and its highest level since January 2014

2. In prepared testimony to the House Financial Services Committee this morning, Fed Chair Powell said business investments across the U.S. have slowed “notably” recently as uncertainties over the economic outlook linger…“Crosscurrents have reemerged.   Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened.  Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook”TD Securities commented, “While the bar was low for the Fed chair to meet the market’s expectations, the fact his prepared remarks beat market expectations should keep Gold prices anchored north of the $1,400/oz mark, as he opted to look past the strong jobs report and rather focus on other incoming data that suggest uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.  Gold remains the most likely winner as the precious metal has historically been the preferred choice for portfolio managers and central bankers alike”

3. The Trudeau economy lost jobs in June while the Trump economy added 224,000 – the numbers speak for themselves…this morning, as expected, Bank of Canada Governor Stephen Poloz and his deputies left the benchmark interest rate unchanged…however, they also issued a mostly dour assessment of the economy’s near-term prospects and will continue to monitor data ahead of future decisions with a particular focus on developments in the energy sector and global trade…the bank predicted economic growth in Canada this year of 1.3%, up slightly from its April forecast of 1.2%, and an expansion of 1.9% in 2020, down from its previous call of 2.1%…no Canadian should be satisfied – those numbers are well below U.S. numbers because of poor public policy choices in this country…the bank also downgraded its 2019 global growth forecast to 3% from 3.2%…“Escalating trade conflicts, geopolitical tensions and related uncertainty are contributing to the broad-based slowdown of global economic activity,” the bank said in its report…blaming global conditions for a severely under-performing Canadian economy, when the country’s largest trading partner is faring very well, is a cop out – Canada just doesn’t have its act together…

4. Great Bear Resources (GBR, TSX-V) has significantly expanded the Hinge Zone high-grade Gold discovery at its 100%-owned Dixie Project in the Red Lake district of Ontario…highlights of drill hole results released this morning include 3 m @ 23.2 g/t (DHZ-042) and 3.9 m @ 18.1 g/t (DL-048, 150 m down-plunge of previous high-grade intercepts)…all 11 drill holes reported this morning intersected 1 to 5 Gold-bearing quartz veins…Chris Taylor, President and CEO of Great Bear said, “Our strong results drove us to fast track our exploration process with aggressive new step-down drilling.  We have now hit more high-grade Gold mineralization 440 m down-plunge from surface and 150 m down-plunge from the nearest previously reported high-grade intercept.  Results suggest the Hinge Zone projects from near-surface with significant depth potential, and contains a high degree of continuity of Gold mineralization within its extensive vein network.  During 2019, we plan to test its continuity down to increasing depths, and will also drill deeper and along strike into what we interpret as at least 6 additional Gold zones with similar plunges along the 500 m strike length of the Hinge Zone vein swarm we have drilled so far”GBR is up 7 cents at $4.61 through the first 30 minutes of trading…

5. Going deep at Brucejack:  Following up on successful deep underground drilling earlier this year, Pretium Resources (PVG, TSX) is drilling a hole approximately 1.5 km below the Valley of the Kings deposit in the Eskay Camp to test both the extent of Brucejack-style mineralization and porphyry potential…hole VU-2019, which is planned to reach a length of 2,000 m, is targeting the centre of a low-resistivity anomaly approximately 1,400 m below the deposit as identified from a CSMT (controlled source magnetotelluric) geophysical program…the new hole, which is already well underway, was drilled from the 1,130-m level of the Valley of the Kings underground development at an azimuth of 40 degrees and a dip of negative 85 degrees…the orientation of VU-2019 was based on geological interpretations of key features of the Brucejack system, including geometry of late mineral dikes and potential major structures, alteration patterns, results of prior drill holes, and downhole geochemical anomalies…meanwhile, modifications and upgrades required to sustain processing at the increased production rate of 3,800 tonnes per day are progressing on schedule…underground development is accelerating to the targeted rate of 1,000 m per month, with 993 m achieved for the month of June…development is expected to continue at approximately 1,000 m per month for the remainder of the year to ensure development remains ahead of production requirements to achieve mining rates of 3,800 tonnes per day…Pretium, a prime takeover target given Breucejack’s location, profitability and high-grade resources, is up 25 cents at $13.76 as of 7:00 am Pacific

6. U.S. markets jumped to new record highs this morning after testimony from Fed Chair Powell bolstered the case for easier monetary policy…the Dow is up 183 points as of 7:00 am Pacific while the S&P has broken above the 3,000 mark for the first time ever with energy and tech sectors leading the way…iToronto, the TSX is up 76 points while the Venture has added 2 points to 587GoGold Resources (GGD, TSX) reports record production of 250,073 ounces of Silver and 2,281 ounces of Gold for 451,011 Silver equivalent ounces at its Parral Tailings Project in Mexico during the quarter ended June 30th, an increase of 6% from the previous quarter which was also a record…the company continues to focus on quality agglomeration to ensure strong recoveries are achieved…519,643 tons were placed on the heap leach pad which is an increase of 9% over the previous quarter…Brad Langille, President and CEO, stated, “This is our second quarter in a row where we have set the production record at Parral.  We’re also pleased with the progress on the SART, with the engineering nearing completion and key components procured, with construction still on schedule to be completed prior to the end of 2019″

7. More high-grade from Silvercrest Metals (SIL, TSX):  The company has released the first underground sampling results for the Babicanora Vein at its promising Las Chispas Project in the state of Sonora, Mexico…last month, Silvercrest intersected the Babicanora Vein in the high-grade Area 51 zone with the newly constructed Santa Rosa Decline and proceeded with development (3.5 m by 3.5 m drift) along the strike of the vein for approximately 35 m…during this development drifting, a total of 133 channel samples were collected from blast faces, analyzed, and compiled to determine the estimated average vein width and grade…compilation shows an average vein width in this area of 2.6 m, which is comparable to the resource block model for this area…compilation of underground sample results within the vein shows an uncut undiluted weighted average grade of 13.7 g/t Au and 1,108 g/t Ag, or 2,132 g/t AgEq…for comparison purposes, the estimated grade from the current resource block model for the mined area (undiluted but with capping applied) is 3.6 g/t Au and 592 g/t Ag, or 863 g/t AgEq…while the difference between the results is significant, the company cautions that sampling covers a small part of the resource for the Babicanora Vein and should not be considered representative…SIL is up 13 cents at $5.22 as of 7:00 am Pacific

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  1. Good price movement and trading volume on USGD.CN.

    Comment by Bryan — July 10, 2019 @ 1:41 pm

  2. Jon: Are you expecting an update from GEMC in the next few days? Looks very tempting at current levels.

    Comment by adrobyshev — July 10, 2019 @ 3:01 pm

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