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January 9, 2020

7 @ 7:00

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

1. Gold has traded between $1,559 and $1,540 so far today…as of 7:00 am Pacific, the yellow metal is down $6 an ounce at $1,549…President Trump gave a very Reaganesque speech yesterday, restoring deterrence to Iran…peace through strength, which the left and its friends in the mainstream media don’t seem to comprehend, has allowed the winds of war to recede for now, sending Gold down by as much as $72 from its Tuesday night high of $1,612…Trump will have to maintain that deterrence, and emerging this morning is a belief that the Iranians were responsible for the downing of the Ukraine 737 that killed all on board including 63 Canadians shortly after it left from an airport in Iran…Gold has a strong new floor at either $1,550 or $1,500, meaning downside risk is limited at current levels…bullion should also start to benefit from traditionally strong buying ahead of  Chinese New Year festivities later this month…Silver has retreated 22 cents to $17.85…Copper and Nickel are up slightly at $2.80 and $6.41, respectively, while Zinc is steady at $1.10…Crude Oil has eased off 46 cents to $59.15 while the U.S. Dollar Index has rebounded one-fifth of a point to 97.15…the Labor Department will report U.S. non-farm payrolls tomorrow with economists expecting the tally to show a gain of 160,000…a Japanese billionaire is giving away more than $9 million (U.S.) to 1,000 people on Twitter to see if it improves their happiness…in an announcement on YouTube, the tech tycoon called the contest a “serious social trial” to see what impact a million yen could have on a person’s life (unfortunately the entry deadline expired at midnight Tuesday)…

2. Rhodium prices have skyrocketed, which analysts and traders are attributing to strong industrial demand – particularly from the Chinese car market – at a time when supplies are unable to keep pace…further, Rhodium is one of the smallest metals markets, meaning huge spreads right now between “bid” and “ask” prices in limited trading conditions…Rhodium has already jumped about 30% during this 1st half of January with prices last trading around $7,300 an ounce…some commodity analysts and traders say that the 2008 record high near $10,000 is the new target to watch, and prices could remain at historically higher levels even when they do finally correct…“Everyone needs this metal, and we are seeing speculators now entering the market,” said Jonathan Butler, precious-metals analyst and head of business development at Mitsubishi“This has all the makings of a squeeze, and who knows where it will end”…Suki Cooper, precious-metals analyst with Standard Chartered, described the market as undersupplied…“It has very much been a demand-driven story,” Cooper said…“The prospect for future supply is a concern.  But in the near term, it’s being driven by higher (auto) emissions standards.  And given that it’s a small market, we see that tightness materializing in much sharper moves higher”

3. Skeena Resources (SKE, TSX-V), focused on the Eskay Creek and Snip high-grade Gold opportunities in the Eskay Camp, continues to hit new highs…this morning the company provided the remaining results from its 2019 10-hole Phase I surface exploration drilling program at Snip…drilling totalled 1,924 m and tested the 200 Footwall Corridor…highlights included drill hole S-19035 which successfully intersected a new zone of high-grade Gold mineralization averaging 16.6 g/t Au over 5.10 m (core length) including 2 sub-intervals grading 96.2 g/t Au over 0.50 m and 39.8 g/t Au over 0.85 m in the 200 Footwall…this zone is located 100 m vertically below surface and 370 m east of the recently reported Phase I 200 Footwall discovery intercept which graded 1,132 g/t (36.4 oz/t) Au over 1.50 m (S19044)…the area surrounding the new zone is open down-dip and down-plunge…SKE is up a nickel at 84 cents as of 7:00 am Pacific

4. The Dow is suddenly at a new record high again, up 120 points through the first 30 minutes of trading…the TSX is up 42 points with the Gold Index dipping as low as 250 before rebounding to 252 as of 7:00 am Pacific…the Venture is off a point at 577…a strong new Venture support band stretches from 580 to 560Granada Gold (GGM, TSX-V) is up sharply on strong volume after drilling 33 m from surface grading 11.45 g/t Au at its Granada Gold deposit near Rouyn, Noranda…this intersection was within the existing resource but points to the strong potential for areas of significantly higher grade…also in Quebec, QMX Gold (QMX, TSX-V) – in a new uptrend – has retreated to its 20-day SMA at 8 cents…Eldorado Gold (ELD, TSX; EGO, NYSE) recently completed a private placement in QMX at 6 cents…Eric Sprott has purchased 39 million common shares of Jaguar Mining (JAG, TSX) at a price of 18 cents per share ($7 million)…the stock was purchased by way of a block trade with a single vendor…Sprott now owns nearly 50% of Jaguar…the company is developing a Gold project in Brazil…Oreninc tabulates that from May to August 2019 alone, Sprott financed 29 companies and invested a total of $176 million…the Venture, already with too many listings, welcomed 12 new issuers in December compared with 4 in the previous month and 12 in December 2018…the new listings were 6 capital pool companies, 5 mining companies and 1 clean technology company…total financings raised last month increased by 75%, compared with the previous month, and were unchanged from December 2018

5. Palladium One Mining (PDM, TSX-V) has entered into a binding letter of intent (LOI) to buy back an existing 2% net smelter return (NSR) royalty in respect of the historic Haukiaho deposit that forms part of the Palladium dominant LK PGE-Ni-Cu Project in Finland…“The historic Haukiaho deposit is now royalty free,” said Derrick Weyrauch, President and CEO…“Buying back the existing royalty on Haukiaho eliminates a dilutive overhang on the project while also providing future optionality”…the terms of the royalty buyback include a cash payment of $50,000 and issuance of 375,000 common shares of the company on closing…the Haukiaho zone is hosted in the basal unit of the Koillismaa complex and was first discovered in the 1960’s by Outokumpu while exploring for Copper and Nickel…widely spaced historic reconnaissance drilling indicates the mineralized zone extends for at least 12 km along this basal unit…the 2013 historic Haukiaho resource estimate only covers about 2 km of this 12 km trend…the Haukiaho deposit shares many similarities to the nearby Kaukua deposit yet has a higher Copper-Nickel endowment…the historic 2013 Haukiaho resource was based on very widely spaced drilling, and as such the company decided that additional infill drilling was necessary prior to conducting a National Instrument 43-101 resource estimate…as a result, in 2019, the company focused its efforts on the Kaukua deposit and published a resource estimate last September…PDM is up half a penny at 18 cents in early trading…

6. Galway Metals (GWM, TSX-V) has drilled 20.9 g/t Au over 4.75 m at its Clarence Stream Project in southwestern New Brunswick…the latest drilling continues to fill in the gap (now just 425 m vs. 1 km a year ago) with high-grade intercepts between the Richard and Jubilee Zones…given results in this gap area to date, Galway is demonstrating that its interpretation that the Jubilee, Richard and the George Murphy Zones, which cover 2.5 km of strike length, are part of the same system…none of these three zones is in the existing resource which will be updated to incorporate them around the middle of this year…Robert Hinchcliffe, President and CEO, stated, “The Richard and Jubilee Zones are expanding towards each other, which is what we thought would happen, but at higher grades than expected.  Given the strong exploration results and the company’s successful equity financing, Galway has increased its 2020 drilling budget at Clarence Stream to 25,000 m, up from 15,000 m previously.  Galway Metals believes that Clarence Stream is an emerging new Gold district in eastern Canada”…

7. Goldman Sachs is calling Gold a “better hedge than Oil” in the wake of heightened U.S.-Iran tensions…“While tensions in the Middle East have undeniably escalated with Iran reportedly committing to retaliating, we believe that the current risk premium embedded in Brent prices (through time spreads) is already elevated, with an actual supply disruption now necessary to sustain Oil prices near current levels of $69 (Brent) per barrel,” Goldman said in a research report yesterday…“History shows that under most outcomes, Gold will likely rally to well beyond current levels.  This is consistent with our previous research, which shows that being long Gold is a better hedge to such geopolitical risks”Goldman says the Oil market has effectively already priced in an outage of 800,000 barrels a day for 3 months or a 30% chance of a 2.7 million-barrel-per-day outage for 3 months…further, the aftermath of Abqaiq attack last September shows the market has “significant supply flexibility” when Brent is around $70 a barrel, even before shale production rises, suggesting “only moderate upside” in Oil from here…

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  1. GGM- what a hole!!!What huge volume! I was kind of expecting a bigger SP though? Will this gap up even more tomorrow? Just need some more CCW results with the golden corridor? And they will both take off even more!!! Exciting time yet again!! Comments anyone? What could we expect going forward? Thx

    Comment by Alec — January 9, 2020 @ 3:28 pm

  2. GGM

    for those that haven’t seen Frank’s interview by CRUX in October 2019. Very instructive about the game plan (and past history for this stock).



    Comment by rgiroux — January 10, 2020 @ 12:21 am

  3. CCW wraps up PolyMet deal…


    Canada Cobalt Works Inc. has closed its deal to acquire the only facility (PolyMet Labs) in the Northern Ontario silver-cobalt district that combines bullion pouring, bulk sampling, commercial assaying and e-waste processing.

    The Transaction, completed at an opportune time in the precious metals cycle, provides Canada Cobalt with multiple immediate and long-term advantages as a fully integrated leader in Canada’s Silver-Cobalt heartland. The lab and mineral processing facility in the town of Cobalt, within just 50 meters of a rail line and just a short distance from Canada Cobalt’s Castle and Beaver properties, will also become the new home of the Company’s environmentally friendly Re-2OX Process.

    Terms of Transaction

    Canada Cobalt’s newly-formed wholly-owned subsidiary, Temiskaming Testing Laboratories Inc. (“TTL”), and PolyMet Resources Inc. (“PolyMet”) have entered into a definitive asset purchase agreement dated January 8, 2020 (the “Purchase Agreement”) pursuant to which TTL has agreed to purchase substantially all of the assets of PolyMet (the “Transaction”).

    Under the terms of the Purchase Agreement, Canada Cobalt will issue an aggregate of 690,409 units to PolyMet at a deemed price of $0.45 per unit for total consideration of approximately $310,684. Each unit comprises one common share and one common share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional common share of Canada Cobalt at an exercise price of $0.50 for a period of two years from closing of the Transaction. TTL will also assume certain outstanding obligations of PolyMet in an amount of approximately $339,316.

    The Transaction is subject to standard closing conditions, including approval by the TSX Venture Exchange. The shares and warrants to be issued to PolyMet will be subject to restrictions on resale for a period of four months from the closing date of the Transaction.

    About Canada Cobalt Works Inc.

    Canada Cobalt has 100% ownership of the Castle mine and the 78 sq. km Castle Property with strong exploration upside in the prolific past producing Gowganda high-grade Silver Camp of Northern Ontario. With underground access at Castle, a pilot plant to produce cobalt-rich gravity concentrates on site, and a proprietary hydrometallurgical process known as Re-2OX for the creation of technical grade cobalt sulphate as well as nickel-manganese-cobalt (NMC) formulations, Canada Cobalt is strategically positioned to become a vertically integrated North American leader in cobalt extraction and recovery while it also exploits a powerful new silver-gold market cycle.

    We seek Safe Harbor.

    Comment by Jon - BMR — January 10, 2020 @ 4:55 am

  4. Hi Jon
    Has Ccw discussed the value of the rail spur next door to polymet? Can that bring business to polymet and allow shipping if ore to China or Germany?

    Comment by Donald — January 10, 2020 @ 4:58 am

  5. Not yet, Donald, but I’m sure there’s a lot more information to come about how they are going to leverage this tremendous asset that they scooped up at a fire sale price at just the right time…

    Comment by Jon - BMR — January 10, 2020 @ 5:08 am

  6. CCW halted…

    Comment by rgiroux — January 10, 2020 @ 6:01 am

  7. CCW Halted as well now!

    Comment by Foz1971 — January 10, 2020 @ 6:08 am

  8. This should make for an interesting day…a double whammy news day?…

    Comment by Jon - BMR — January 10, 2020 @ 6:16 am

  9. Wow- haven’t been this excited since when GGB hit 90 cents. Hold on to our hats gentlemen!

    Comment by Alec — January 10, 2020 @ 6:28 am

  10. Was thinking yesterday. CCW buys GGM in an all-share transaction. Pays .25 cents a share which is roughly double the three month average of GGM. Costs CCW about 30,000,000 shares. Has Polymet now to deal with the processing. Stupid thought or hmmmmmmmm…

    Comment by DBReese — January 10, 2020 @ 6:31 am

  11. After just finishing paying GGM shareholders for the CCW spin out to have CCW issue shrs for GGM might be a bit fishy for the exchange

    Comment by david — January 10, 2020 @ 6:46 am

  12. No chance of Frank buying GGM with CCW paper. He has clearly stated his strategy is to sell the company and he wants $50/oz in the ground. Think this works out somewhere in the 40-50 cent range per share which is very achievable after yesterday’s results and the upcoming drill program into at surface visible high grade gold.

    If he buys anyone out I think he might take GEMC out at 2 cent a share which is a complete steal and has more synergies with CCW. Probably won’t buy anyone as he has an awful lot going on at the Castle and today should tell us more.

    Comment by Patrick — January 10, 2020 @ 6:58 am

  13. Fully agree with Patrick. GGM will be sold to someone else. CCW has so much on its hands, but it is true that GEMC is way undervalued (although it represents the confidence in the management…).

    Comment by rgiroux — January 10, 2020 @ 7:56 am

  14. I just watched the Crux interview with Frank re GGM. Thanks for posting that rgiroux. So leaning towards stupid thought then as he clearly said he desires to sell it, and his hands are full besides. He said he had people interested to buy GGM in the previous gold bull, so it looks like more upside in GGM no matter how you slice it. Thanks for comments.

    Comment by DBReese — January 10, 2020 @ 8:31 am

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