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July 19, 2019

7 @ 7:00

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

1. Gold has traded between $1,433 and $1,444 so far todayas of 7:00 am Pacific, bullion has retreated $6 an ounce to $1,439 after yesterday’s surge…Gold prices rose to their highest in more than 6 years ($1,453), supported by fresh tensions in the Middle East and comments from a top Federal Reserve official (since clarified) that cemented expectations of an interest rate cut at the end of the month…SPDR Gold Trust, the world’s largest Gold-backed ETF, says its holdings rose 1.42% to 814.62 tonnes yesterday from 803.18 tonnes on Wednesday…Silver, up another 17 cents at $16.49, is on track for its best week since July 2016, having gained more than 8%…the long-term Silver chart is pointing to a hugely significant breakout above a multi-year downtrend line…Nickel, on a torrid run, has eased off 15 cents to $6.54…a supply deficit, low stockpiles, solid stainless steel production, events in Indonesia and the likelihood of future strong demand for Nickel in rechargeable batteries are key factors driving this latest move in an ongoing Nickel bull market…headline Nickel stocks in LME-registered warehouses, at 147,942 tonnes, have slid from more than 450,000 tonnes in 2016 and are the lowest in 6-1/2 years…adding to worries over supply, between 50% and 79% of LME Nickel warrants are held by 1 entity…Copper has jumped 5 cents to $2.76, a fresh 2-month high, while and Zinc is down a penny at $1.10…Crude Oil has added 27 cents to $55.57…Global Oil prices, which have been active all week amid mixed signals on demand, rising Middle East tensions and supply disruptions in the Gulf of Mexico, got a boost following a statement from the U.S. Navy that it had shot down and destroyed an Iranian drone that had threatened an American vessel in the Strait of Hormuz…Iran, not surprisingly, denies that ones of its drones was shot down…the U.S. Dollar Index has rounded one-quarter of a point to 97.05…a large Chinese conglomerate has fallen deeper into a debt crisis, after it said it won’t repay $500 million in U.S. dollar bonds coming due next month…cash-strapped China Minsheng Investment Group said today it will not be able to repay the principal amount or interest on the 3-year bonds that mature on August 2, marking one of the largest Chinese defaults on a U.S. dollar bond this year…meanwhile, companies are moving their supply chains out of China instead of waiting for a resolution of the trade battle between Washington and Beijing, BlackRock Chairman and CEO Larry Fink told CNBC this morning…“We’re hearing from CEOs that more and more supply chains are moving out of China right now.  People are not waiting, companies are not waiting to see what the outcome is”…President Trump understands the power of leverage and that’s what he has with China right now, to America’s advantage…

2. Stocks and commodities were in negative territory yesterday until New York Fed President John Williams said the central bank needed to “act quickly” when the economy was slowing and rates were low, adding in a speech that it is “better to take preventative measures than wait for disaster to unfold”…those words sent Gold up sharply and the dollar down, but a spokesperson later said he was drawing from research, not hinting at what may happen at the upcoming FOMC meeting July 3031“This was an academic speech on 20 years of research.  It was not about potential policy actions at the upcoming FOMC meeting,” a spokesperson for the New York Federal Reserve said in a statement…after Williams’ earlier remarks, market expectations for a 50 basis point rate cut leaped to about 59%, according to CME’s Fedwatch tool…prior to his speech, predictions for a half-point cut had hovered between 20% and 30%…

3. October’s elections are going to be critical to Canada’s resource sector…Kevin O’Leary, star of Shark Tank and Chairman of O’Shares ETFs, told Kitco News in an interview that Canada’s future hinges on drastic changes that need to happen in Parliament…“The country is a disaster,” O’Leary, said, noting that the Trudeau government has failed to attract investment capital and stimulate the economy…Canadians must make a change in the government now, O’Leary warned, or the country’s future will be dire…“It is so bad that if we got another 4 years of this, I think you can take Canada down to probably zero growth rate”…the issue lies with incompetence in government, he noted…“I’d like to get rid of the anti-business tonality to our country and replace it with people that want to create jobs in Canada, that want to attract capital.  So my bet is, the most likely scenario is a 50/50, in other words, Trudeau loses his majority mandate.  He is a young man who had no managerial history.  I’ll let you, as the voter, decide what the best alternative is but I’m telling you right now, anything’s better than what we’ve got”…what’s scary is that according to a recent survey by Nanos Research Group for Bloomberg News, 31% of respondents say they trust Trudeau most to promote economic growth in Canada, compared with 26% for Conservative Leader Andrew Scheer…the latter will need to up his game considerably if needed change is going to come to the federal level this October…

4. Silvercrest Metals (SIL, TSX), up sharply again this morning and a great stock to hold for the coming big run in Silver, has received approval for its environmental impact statement (MIA or operating permit) for the development of its Las Chispas Project in the state of Sonora, Mexico…the MIA provides the company with conditional approval to construct a 3,000-tonne-per-day (maximum capacity) underground mine and a conventional processing facility with subsequent dry stack tailings and underground backfill for Las Chispas…Silvercrest CEO Eric Fier commented, “The approval of the MIA is a key milestone for Las Chispas.  The MIA should enable Silvercrest to have all major operating permits in hand ahead of our scheduled construction timeline.  With the anticipated completion of a successful feasibility study in H1 2020, the company is well positioned to project finance and begin construction activities in H2 2020.  We are extremely pleased with the progress that our team has made in the 3.5 years that we’ve been exploring at Las Chispas.  We continue to work hard to simultaneously derisk and add value to the project in a cost-efficient manner”Silvercrest has 14 active drill rigs on site which continue to test, expand and upgrade the high-grade resource delineated to date at Las Chispas…the company is also conducting further underground grade reconciliation on the Babicanora vein with additional drilling and underground work to better understand the positive grade difference between recent underground vein sample results and the resource model…

5. The price of Rhodium, one of the Platinum group rare metals used to curb harmful emissions from vehicle engines, has rocketed to its highest since 2008 as tightening environmental regulation compels auto makers to buy more just as supply looks set to stagnate…Rhodium has leaped from $615 an ounce in mid-2016 to $3,565 an ounce this month, shooting up by more than $1,000 since mid-February alone…“Within this year we might well see $4,000,” said Mitsubishi analyst Jonathan Butler, adding that rising demand would likely tip the market into deficit…“That’s not to say we wouldn’t see a pullback potentially to $3,000 – this is a volatile metal – but it does have good long-term prospects,” he said…Rhodium is used alongside its sister metals Platinum and Palladium in vehicle exhaust systems to neutralize pollutants…but its price has raced ahead of its peers since 2016, when commodities including precious metals hit multi-year lows…this is because Rhodium is the most effective at tackling nitrogen oxides (NOx), whose reduction is increasingly demanded by regulators…auto makers account for around 85% of Rhodium demand…

6. The Dow is up 83 points through the first 30 minutes of tradingMicrosoft (MSFT, NASDAQ) shares have hit a new record high after the tech giant posted quarterly earnings and revenue that topped analysts’ expectations…in Toronto, the TSX has added 61 points while the Venture is speeding toward a breakout, up 5 points at 593Crystal Lake Mining (CLM, TSX-V), leveraging the Eskay Camp’s newest Copper-Gold-rich discovery, continues to gain momentum, pushing above both its 50 and 200-day moving averages (SMA’s) in early trading…CLM is up 2 cents at 36 cents on strong volume as of 7:00 am Pacific…maiden diamond drilling commences at Burgundy Ridge next week with bullseye targets after last October’s RC drilling and this month’s extensive sampling and hyperspectral vectoring…it’s amazing Burgundy Ridge has never been diamond drilled before, but that’s only because the Newmont Lake Project (like Nickel Mountain) was in the wrong hands for so many years…veteran prospectors/geologists say the surface alteration and mineralization at Burgundy is some of the best they have ever seen in the entire Golden Triangle (3-m chip sample returned 5.1% Cu, 28.5 g/t Au and 90 g/t Ag)…Eskay Camp neighbor Garibaldi Resources (GGI, TSX-V) has touched a fresh 9-month high, up 12 cents at $1.81 as drilling continues at Nickel Mountain with the possibility of first results very soon…a “Golden Cross” is now unfolding in GGI as its 50-day SMA crosses above its 200-day in a similar pattern to late July/early August 2017Atlantic Gold (AGB, TSX) has completed the previously announced plan of arrangement under the Business Corporations Act (British Columbia) whereby Australia’s St Barbara Ltd. (SBM, ASX) has acquired all of the issued and outstanding common shares of Atlantic for $2.90 in cash per Atlantic share, plus 0.05 of a share of Artemis Gold for each Atlantic common share…with the takeover now complete, Atlantic will be delisted from the Venture at the close of trading Monday…here’s a twist in the cannabis sector – The Flowr Corp. (FLWR, TSX-V) has decided to withdraw its recently announced public offering “due to prevailing market conditions, which were not conducive to the completion of the offering on terms that would be in the best interest of Flowr’s current shareholders.  Flowr will continue to monitor market conditions as it evaluates options to drive long-term growth”…the stock has responded well to the news, climbing 85 cents to $4.85…scandal-plagued CannTrust is off 14 cents in early trading at $3.70Mackie Research Capital analyst Greg McLeish says, “We believe that Health Canada must make an example out of CannTrust.  If Health Canada does not come down hard on the company, it will set a bad precedent for other ‘law abiding’ industry participants”McLeish stopped publishing research on CannTrust last Monday, saying “management has lost credibility”…he says the company’s ability to grow pot in B.C. is now in doubt, as it still needs Health Canada approvals…

7. Eric Sprott is pouring another $3 million into Tudor Gold (TUD, TSX-V) at 45 cents, as announced this morning…Tudor commenced drilling at its Goldstorm target in the Eskay Camp last month…yesterday, Sprott jumped into Discovery Metals (DSV, TSX-V) for the first time…Discovery, a growing Silver play, is doing a $9 million financing at 23 cents per share, with most of it being taken by Sprott…Discovery will issue 23.2 million common shares at 23 cents per share and 15.9 million subscription receipts at 23 cents per subscription receipt…Sprott is taking 17.5 million of the common shares ($4 million) and 15.9 million subscription receipts ($3.65 million)…if those subscription receipts are converted, he’ll maintain his 19.9% interest in Discovery following the completion of the company’s acquisition of Levon Resources…Taj Singh, President and CEO of Discovery commented, “We are excited to have Mr. Sprott’s support as we enter into our next phase of growth.  His investment ensures Discovery is well funded to pursue its exploration plans for its Coahuila projects (Mexico) and also for the Cordero Project, which will be added to Discovery’s portfolio upon closing of the Levon transaction.  For Discovery and Levon shareholders, Mr. Sprott’s investment is a strong endorsement of the combined company’s future business plans”…for more regarding Discovery, refer to the July 3 edition of Daniel’s Den

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  1. Shorts have actually dropped a bit on GGI compared to GTT/CLM…

    Comment by Jean — July 19, 2019 @ 10:39 am

  2. CCW tested support again today and held, I guess that’s a positive?

    Comment by Danny — July 19, 2019 @ 3:14 pm

  3. The chart on AUX looking really good right now.

    Comment by Danny — July 19, 2019 @ 4:47 pm

  4. Not only that, Danny, but you’ve seen how quickly some other plays, also with lots going for them, have suddenly erupted…rest assured, CCW will not be left out and in fact will play a prominent role in this rejuvenated resource market (or market within a market)…then people will regret not having picked up more when they had a chance…I have a hunch we’ll be hearing from CCW really soon (this month)…timing is everything, as the saying goes…

    Comment by Jon - BMR — July 19, 2019 @ 7:42 pm

  5. Hi Jon, ggi trading at the top parts of the BBs. Think that continues or perhaps takes quick breather to the middle range or test an EMA before regathering strength? Didn’t close above $1.85 this week.

    Comment by flyinthruu — July 20, 2019 @ 5:09 am

  6. Great week for GGI, flyinthru…we’ll have an updated chart this weekend…

    Comment by Jon - BMR — July 20, 2019 @ 7:09 am

  7. Hi Jon,
    Glad to hear your enthusiasm for CCW. Do you have a new, approximate price target for CCW? Hope we get news (This month) as you mentioned, and hope that it’s good enough to affect the SP positively this time.
    Thanks in advance, for you time and effort,

    Comment by Frank — July 21, 2019 @ 12:30 pm

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