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December 13, 2019

7 @ 7:00

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

1. Gold has traded between $1,466 and $1,476 so far today…as of 7:00 am Pacific the yellow metal is up $an ounce at $1,472Gold’s nearest resistance is in the high $1,480’s followed by $1,500…the bullish technical posture of many Gold producers suggests a breakout above $1,500 is in the cards for Q1Silver is unchanged at $16.90…Palladium continues to run, up another $29 an ounce at $1,954…Nickel is the star among base metals this morning, climbing 14 cents to $6.31…an exceptionally strong support band stretches from $6 to $5.50 and that’s where Nickel appears to have bottomed in its 4th correction since a new bull cycle started in 2016…Copper is trading at its best levels since July, thanks to a thawing of U.S.-China trade relations…the metal is steady at $2.77 after trading higher earlier in the session…China consumes half the world’s Copper and the dispute with the U.S. has weighed on the market since early 2018…given its widespread use in industry, construction, transport and power distribution the metal is very sensitive to global economic conditions…Zinc has added a penny to $1.03 while Cobalt is flat at $15.65Crude Oil has gained 17 cents a barrel to $59.35 while the Dollar Index has tumbled nearly half a point to 96.97…U.S. retail sales increased less than expected in November as Americans cut back on discretionary spending, which could see economists dialing back economic growth forecasts for the 4th quarter…the Commerce Department reported this morning that retail sales rose 0.2% last month…data for October was revised up slightly, but the November print was well below expectations of a 0.5% increase…

2. China is now holding a briefing regarding trade talks with the United States with word just out that the Chinese have agreed to the text of a trade deal…up until now, China had been quiet ever since news broke yesterday that the U.S. had agreed to a Phase 1 deal in principle…a notice to reporters a short while ago said China will discuss “issues on relevant progress of China-U.S. economic and trade consultation”America’s initial trade pact with China “looks like a real breakthrough”one expert says, marking President Trump’s 2nd victory this week on a key campaign promise (yet Democrats in the House, not focused on the priorities of taxpayers, are on the verge of impeaching Trump)…the Phase 1 agreement, which reportedly includes promises by Beijing to purchase $50 billion of U.S. agriculture, stronger intellectual-property protections and an end to China’s currency manipulation, will further cool the 21-month-long trade battle between the world’s 2 economic superpowers…the U.S. has agreed not to put 15% tariffs on $160 billion of Chinese goods on Sunday…“There’s a matter here that the Chinese may have given him so much that he doesn’t really want to embarrass them by making it all public so it may be a lower-level signing agreement, not him and President Xi and not some sort of long 20-page deal,” stated Michael Pillsbury, director of the Center for Chinese Strategy at the Hudson Institute, in an interview with FOX Business’ Lou Dobbs…

3. Socialists have been crushed in the UK (the U.S. is next, followed by Canada)…Prime Minister Boris Johnson will retain power with a thumping majority after his Conservative Party secured its best election result last night since 1987…with 1 seat still up for grabs, the Conservatives have secured 364 parliamentary seats, a majority of 78 in the House of Commons and a stunning victory for the Brexit cheerleader that paves the way for the U.K. Parliament to trigger a long-delayed split with the European Union…Labour’s at 203 seats, the worst result for the party since 1935, after offering voters a 2nd referendum on Brexit and the most radical socialist government in generations…Labour leader Jeremy Corbyn said he would step down…markets liked the results – the FTSE 100 has shot up 2% while sterling has strengthened significantly against the greenback…early today, President Trump promised to move quickly on talks for a new U.S.-U.K. trade deal…“Britain and the United States will now be free to strike a massive new Trade Deal after BREXIT,” Trump tweeted…“This deal has the potential to be far bigger and more lucrative than any deal that could be made with the EU”

4. Canada Cobalt (CCW, TSX-V) has drilled into visually spectacular mineralization (massive native Silver and Cobalt) at Castle East, just 750 m from the old workings of the Siscoe (O’Brien) mine that churned out 41 million ounces of rich Silver in the prolific Gowganda Camp…assays from CCW’s first wedge hole, highlighted by 4.65 m of exceptionally high-grade mineralization given the extent of native Silver, are possible prior to Christmas…the Robinson Zone discovery, striking northwest-southeast and dipping to the south, is also within just 600 m of the past producing Capitol mine and 1.9 km from the Castle #3 Shaft…the vein shoot described by CCW in last night’s news release following an all-day trading halt matches the deposit model of this incredible district (Northern Ontario Silver-Cobalt Camp) that historically has produced over half a billion ounces of Silver, making it the most prolific primary Silver producing region in Canadian history as described by Peter Fancy in a riveting series of books (“Temiskaming Treasure Trails”)…the “low-hanging fruit” was picked off last century with more than 100 mines that made the region the birthplace of Canadian hard rock mining…however, modern exploration methods featuring new technologies are destined to discover a lot more deposits in an area with such impressive metal endowment, and Canada Cobalt is leading the way…it should come as no surprise, then, that a Kirkland Lake Gold (KL, TSX, NYSE) resource geologist – Matt Halliday – has switched teams to become CCW’s VP-Exploration starting this coming Monday…short wedge holes have been completed off CA-1108 (1,194 oz/ton over 0.45 m within 3.1 m core length @ 189 oz/ton), giving geologists a clear understanding of vein orientation while extending the shoot to at least 15 m…CCW has just commenced a series of new drill holes from surface to build out the discovery and hit potential new vein systems higher up in the system and even further at depth – should be lots of news flow as drilling continues right up until Christmas and resumes during the first week of January…this discovery, interestingly, occurs in the lower middle portion of the Nipissing diabase around a vertical depth of ~420 m – the upper contact closer to surface and the Archean package should be very prospective, while the lower contact deeper down could feature very rich Silver and Cobalt as well…plenty of potential scale here – keep in mind that historically, just a single shoot in this district that extends for just 100 feet has yielded millions of ounces of Silver due to such unusual grades…CCW is off half a penny at 41.5 cents through the first 30 minutes of trading, but this is the type of news that typically has a lot of legs and will give fresh oxygen to the overall CCW uptrend into Christmas and month-end…

5. The Dow is 16 points higher through the first 30 minutes of trading…the S&P 500 has rallied 26% this year, on pace for its best annual performance in 6 years…the rally has been underpinned by pro-growth policies from the Trump administration and a dovish Federal Reserve which has cut interest rates 3 times this year to shore up growth, a sharp reversal after 4 increases last year…the central bank wants to see significantly higher and sustained inflation before raising rates again, meaning no more rate hikes are likely until at least 2021…in Toronto, the TSX is up 26 points…the Gold Index is back above 250, up a point at 251 – it’s just a matter of time before there’s a confirmed breakout above that key 250 level…the Venture is 2 points higher at 539 as it continues to prepare for a breakout through 540…in the Northern Ontario Silver-Cobalt Camp they measure Silver in kilos – elsewhere, it’s in grams…nonethless, Kootenay Silver (KTN, TSX-V) delivered a healthy result yesterday as it reported 415 g/t Silver over 11.5 m (true width) in drill hole CDH-19030 at its Columbia Project (E and J veins) in Chihuahua state, Mexico…the intercept is within a new type of mineralization hosted within silicified breccias in close proximity to a district lithologic contact…the overall interval averaged 200 g/t over 25.85 m intercepting quartz veinlets and hydrothermal breccias across the J vein structure…GoGold (GGD, TSX) has just reported net income of $8.1. million (U.S.) on record revenue of $27 million for its fiscal year ending September 30 (net income included a gain on the sale of the Santa Gertrudis royalty of $11.8 million)…total precious metal sales were just over 1 million ounces of Silver and 8,752 ounces of Gold on record production of 1,781,080 Silver equivalent ounces, an increase of 37% from the prior year’s record…all-in-sustaining costs were $14.82 per Silver equivalent ounce (an average of $13.70 over the last 6 months)…GGD is unchanged at 61 cents…

6. The U.S. Army plans to fund construction of rare earths processing facilities, part of an urgent push by Washington to secure domestic supply of the minerals used to make military weapons and electronics, according to a government document seen by Reuters…the move would mark the first financial investment by the U.S. military into commercial-scale rare earths production since World War Two’s Manhattan Project built the first atomic bomb…it comes after President Trump earlier this year ordered the military to update its supply chain for the niche materials, warning that reliance on other nations for the strategic minerals could hamper U.S. defenses…China, which refines most of the world’s rare earths, has threatened to stop exporting the specialized minerals to the United States, using its monopoly as a cudgel in the ongoing trade spat between the world’s 2 largest economies…“The U.S. rare earths industry needs big help to compete against the Chinese,” said Jim McKenzie, CEO of UCore Rare Metals (UCU, TSX-V) which is developing a rare earths project in Alaska…“It’s not just about the money, but also the optics of broad support from Washington”…the Army division overseeing munitions last month asked miners for proposals on the cost of a pilot plant to produce so-called heavy rare earths, a less-common type of the specialized minerals that are highly sought after for use in weaponry, according to Reuters…responses are due by next Monday (Dec. 16)…UCore, Texas Mineral Resources (TMRC.PK) and a joint venture between Lynas (LYC, AX) and privately-held Blue Line are among the expected respondents, according to company officials…

7. The government of Ontario has announced it will abandon the current lottery system for cannabis retail and move towards an open licensing system beginning in January that will see the removal of a cap on the number of private cannabis stores across the province…the Alcohol and Gaming Commission of Ontario (AGCO), the provincial regulatory body that is in charge of the cannabis retail system, will begin accepting operator licence applications from prospective retailers on January 6, followed by store authorization applications on March 2, 2020, according to a Financial Post report this morning…store authorizations will be issued starting April at a rate of approximately 20 a month, similar to the pace in which Alberta awards cannabis store licences…“In response to the federal government’s decision to legalize cannabis, our government is determined to open the cannabis market as responsibly as possible,” said Attorney General Doug Downey…“We have said all along that opening more legal stores is the most effective way to combat the illicit market, protect our kids and keep our communities safe.  That is our number one priority”…the announcement is bound to reinvigorate investor confidence in cannabis companies, which has been waning partly because of limited accessibility in Ontario that has, to date, just 24 stores…licensed producers, many of which have experienced declining revenues and are sitting on a pile of cannabis inventory, are banking on the creation of hundreds of new retail outlets to boost cannabis sales…

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  1. IMR ready to pop! I think…….warrraants are dead time to move forward, bring on results please

    Comment by Karen — December 13, 2019 @ 11:45 am

  2. Jon, definitely some great looking cores from CCW today. Do you expect the Polymet closing to be the next news? Cheers

    Comment by Danny — December 13, 2019 @ 5:37 pm

  3. Danny, good question. I think it could actually be assays on hole 1 first – for CCW to say assays on 1st hole are possible b4 Christmas, they must have somehow worked something out with Swastika to get numbers by next Friday at latest…my hunch is hole 1 is our Christmas gift, but more treats follow leading up to New Year’s including news on closing of PolyMet and maybe other stuff…so much going on that news flow from these guys should be better than just about any other company the next several weeks…High-Grade Halliday starts Monday – what an amazing start he’s going to have as VP-Exploration for CCW…he’s bringing over that magic from Kirkland Lake Gold!

    Comment by Jon - BMR — December 14, 2019 @ 2:54 am

  4. Jon, do you think we’ll hear from GGI before the AGM?

    Comment by Labrador — December 14, 2019 @ 5:54 am

  5. I hope so and I expect we likely will, Labrador…20+ holes to come yet…

    Comment by Jon - BMR — December 14, 2019 @ 12:56 pm

  6. I hope it’s 40 plus holes…..

    Comment by Laddy — December 14, 2019 @ 3:17 pm

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