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1. Gold has traded between $1,474 and $1,481 so far today…as of 7:00 am Pacific the yellow metal is up $2 an ounce at $1,478…Gold’s nearest resistance is in the high $1,480’s followed by $1,500…Gold equities continue to point to higher Gold prices going into year-end…since December 3, the yellow metal has briefly traded above resistance at its 50-day moving average in the upper $1,480’s on only a couple of occasions and has closed below that SMA for the last 9 trading days…Goldman Sachs correctly describes Gold as “resilient”, commenting: “In our view, this is due to support from a weaker dollar as well as persistent concerns over late-cycle low global growth. Political risks also remain elevated with U.S. election next year and trade disputes not yet fully settled. Further, the demand from central banks remains strong, driven by de-dollarization, and is on course for 750t (tons) which represents 22% of global supplies, the highest since the Nixon era”…Silver is up 7 cents at $16.99…Palladium continues to run, up another $34 an ounce at $1,949…Copper and Nickel have both added 3 cents to $2.80 and $6.35, respectively, while Zinc is a penny higher at $1.03…it has been over a decade since the U.S. opened a new Copper mine…Nevada Copper (NCU, TSX) announced this morning that its Pumpkin Hollow operation is now processing Copper out of its underground mine near Yerington, Nevada…expected production is 65 million pounds of annual Copper equivalent…Crude Oil (WTI) remains slightly above $60 a barrel, up 12 cents at $60.19, while the struggling Dollar Index is off marginally at 97.10...more encouraging U.S. economic figures released this morning…data from IHS Markit shows that U.S. business activity hit a 5-month high in December, while U.S. homebuilder confidence has jumped to its best level in 20 years…
2. The pickup in China’s economy in November adds to the optimism from the trade deal announced late last week, though plenty of downside risks remain as the nation heads into 2020…industrial output and private consumption were both much stronger than expected, with production jumping 6.2% from a year earlier and retail sales climbing 8%, data released today showed…at the same time, fixed-asset investment in the first 11 months of this year grew at 5.2%, the slowest pace since at least 1998…if the trade deal is signed early next year as the U.S. has indicated and tariffs on some Chinese goods are lifted, it would go some way to dispel some of the uncertainty that has been hanging over the economy…domestically, policy makers still face questions about the sustainability of debt and rising defaults, but the government has emphasized policy stability and there is little chance of a change until at least March next year when authorities meet to approve 2020’s broad policy guidelines…economists from UBS AG and Oxford Economics Ltd. have upgraded their forecast for China’s GDP growth in 2020 to 6% from 5.7% after the Phase 1 trade deal was announced, while saying uncertainties will linger…
3. Canada’s Equinox Gold (EQX, TSX) is buying rival Leagold Mining (LMC, TSX) for $769.3 million (CND) in an all-stock transaction, the latest consolidation in the industry that has seen deals worth more than $30 billion (U.S.) so far this year…the offer, which implies a no-premium consideration of $2.70 per share, will create one of the world’s largest Gold companies operating entirely in the Americas…the combined entity, which is forecast to have Gold production of 700,000 ounces in 2020, increasing to 1 million ounces annualized production during 2021 and beyond, will continue as Equinox Gold and be headquartered in Vancouver…Equinox will have a diversified operating platform with 6 operating mines in the United States, Mexico and Brazil…the deal comes concurrently with a $670 million (U.S.) financing package – an at-the-market $40 million equity investment from Ross Beaty, a new $130 million convertible debenture issued to Mubadla Investment Company, and $500 million in underwritten commitments from a syndicate of lenders to refinance existing credit facilities…the board of directors, led by Beaty as Chairman, will have 8 members, 4 from each company…the management team will be led by Neil Woodyer as CEO…Leagold shareholders will receive 0.331 of an Equinox Gold share for each Leagold share held…this implies at-market consideration of $2.70 per Leagold common share, using closing prices for both Equinox and Leagold common shares on the TSX last Friday…at closing, existing Equinox and Leagold shareholders will own approximately 55% and 45% of the merged company, respectively, on an issued share basis…Ross Beaty stated, “In addition to having strong financial and operating metrics, our large scale will provide improved liquidity, greater asset and country diversification and a lower-risk profile for all shareholders. This is the kind of Gold company investors want today and I’m very pleased we are combining forces to achieve it”…
4. The Dow is up 163 points through the first 30 minutes of trading…U.S. markets hit fresh record highs this morning and are on pace for their 4th straight winning session as a so-called Phase 1 trade deal between China and the U.S. clears the path higher for stocks to end a banner year…in Toronto, the TSX is up 48 points with the Gold Index off slightly at 250…Yamana Gold (YRI, TSX; AUY, NYSE) has increased its dividend again…all technical indicators suggest the Gold Index will soon break out powerfully from that key resistance level…the Venture is 2 points higher at 542 as it begins to push through the important 540 area…Great Bear Resources (GBR, TSX-V) was halted pre-market, pending news…Canada Cobalt (CCW, TSX-V) is charging toward a new 52-week high after drilling into spectacular visual mineralization (native Silver plus Cobalt) just 750 m east of the old workings of the Siscoe (O’Brien) mine that churned out 41 million ounces of rich Silver in Northern Ontario’s prolific Gowganda Camp…drilling continues and rush assays from the first hole are possible later this week or immediately prior to Christmas…oldtimers, focused on the low-hanging fruit at the Castle, Capitol and Siscoe mines on the western margin of the Nipissing diabase, may have missed the “motherlode” in this Camp less than 1 km to the under-explored east…one only has to look at the Macassa Gold mine at Kirkland Lake, just an hour’s drive from Gowganda, as an example of such a near miss…Macassa was mined for 7 decades before the very rich South Mine Complex was first discovered a short distance away in 2005…as the saying goes, the best place to find a new mine is near an old mine…CCW’s find could be the most significant grassroots discovery in the Northern Ontario Silver-Cobalt District in 4 decades…CCW is also on the verge of closing its acquisition of the PolyMet processing facility in the town of Cobalt…the stock is up 4 pennies at 48 cents in early trading, a fresh 9-month high as it breaks out above the low-to-mid-40’s…Mosolf SE & Co. AG, a significant European dealer of DynaCERT (DYA, TSX-V), is making a strong and strategic financial commitment to the company with the expansion of dealer operations across Germany and neighbouring European countries…as well, Dr. Joerg Mosolf, President and CEO of MOSOLF, has made an additional personal equity investment of $1 million…DYA, which got a big endorsement recently from Eric Sprott, is up 2 pennies at 54 cents…
5. Balmoral Resources (BAR, TSX) has commenced its largest ground geophysical survey in several years, targeting the Area 51 Gold system on its wholly-owned Fenelon Property in Quebec…Fenelon forms part of the company’s district-scale Detour Gold Trend Project…the IP survey now in progress will provide first-pass coverage of the untested Area 50 and Area 51 West exploration targets…it will also add to the existing IP coverage of the Area 52 target…the latter target area has been confirmed to host both the southern continuation of the Area 51 Gold system and Balmoral’s recent Ripley Zone Gold discovery…in total, Balmoral plans to complete a minimum of 46 line km of surveying…results from the initial phase of IP work at Area 52 proved effective for targeting both Area 51-style sulphide-rich and more “classic” shear zone hosted Gold mineralization, as evidenced by the Ripley discovery…BAR is up 2 pennies at 34.5 cents through the first 30 minutes of trading…key resistance is in the mid-30’s…
6. Infill drilling at Osisko Mining’s (OSK, TSX) Lynx deposit has returned the highest-grade metal factor (grade x length) result intersected at Windfall to date of 1,475 g/t Au over 4.6 m in hole OSK-W-19–1731-W2...this hole is 50 m up plunge of OSK-W-19–2069-W2 (161 g/t Au over 8 m as reported Nov. 25) and confirms the high-grade continuity in the Lynx 313 wireframe…the zone remains open down plunge and definition drilling will continue to pursue the open areas…the program is currently focused on infill and expansion drilling at the Lynx deposit, exploration on the main mineralized zones, and deep exploration in the central areas of the mineralized intrusive system…21 drills are active at Lynx and Triple Lynx, with another 3 drills conducting infill and exploration drilling on other areas of the deposit…President and CEO John Burzynski commented, “Today’s very impressive results again underscore that Lynx is a well-mineralized part of the Windfall system. Lynx, discovered by Osisko in late 2016, is shaping up to be one of the best new Gold discoveries in a long time in Eastern Canada. The recently announced Lynx bulk sample results and our infill drill program are demonstrating the strong continuity of grade inside the known mineralized zones, which remain open down plunge. Our exploration team is excited by the continuing potential of what we feel is an emerging world-class high-grade Gold deposit”…OSK is up 21 cents at $3.70 as of 7:00 am Pacific…
7. Paradigm Capital analyst David Davidson has commenced coverage of GT Gold (GTT, TSX-V) with a “speculative buy” rating and $2.10 share target…Davidson stated in a note, “With investors refraining from capital investment in low-moderate grade copper projects owing to fear of capital overruns and weak commodity prices, GT Gold offers a high-grade, high-quality project that we expect will offer profitable economics, regardless of the timing of the commodity cycle. We see optionality at Tatogga, which has the option to develop as an open pit, underground or a combination of both – the project could initially be developed as a small-scale open pit (and therefore smaller capex investment) if the commodity price down cycle persists, owing to current resource estimates of +1% CuEq. In the event of a commodity price upturn, the project offers several sources of expansion potential through unlocking deeper mineralization, lower-grade ore or expansion at different zones – specifically, Saddle North is GTT’s top priority, followed by Saddle South and the new target at Quash Pass”…
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Comment by Karen — December 16, 2019 @ 9:31 am
Another day of excellent volume on CCW, almost 1.3 million on all exchanges. Probably due for a little pullback before the next run but you never know.
Comment by Danny — December 16, 2019 @ 4:20 pm