BullMarketRun.com

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

1. Gold has traded between $1,219 and $1,229 so far today…as of 7:00 am Pacific, bullion is off $5 an ounce at $1,224 thanks to pressure from a U.S. dollar that hit 2-and-a-half month highs this morning vs. a basket of other major currencies…Bloomberg reported yesterday that Washington is preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between President Trump and Chinese President Xi Jinping fail to ease trade tensions…however, that report was tempered by a Trump interview with Fox News last night when the President said he believes the U.S. will make a “great” trade deal with China…those comments have also given equity markets a boost today…Silver is up 4 pennies at $14.46…Copper has retreated 4 cents to $2.77…Nickel is up slightly at $5.31 while Zinc is off a penny at $1.19…Crude Oil remains under pressure, down $1.31 a barrel to $65.73, while the U.S. Dollar Index is off its highs of the day but still in the green at 96.75…the Conference Board said its consumer confidence index rose to a print of 137.9 this month, driven primarily by a hot labor market and expectations that economic growth will remain solid in the near-term…the reading is the highest level since September 2000…economists polled by Reuters had expected the index to slip to 136…..

2. The International Energy Agency (IEA) said this morning that “high” Oil prices were hurting consumers and could dent fuel demand at a time of slowing global economic activity, though it’s hard to imagine how current Oil prices can be considered “high”… “There are two downward pressures on global Oil demand growth.  One is high Oil prices, and in many countries they’re directly related to consumer prices.  The second one is global economic growth momentum slowing down,” IEA chief Fatih Birol told an energy conference in Singapore…consultancy JBC Energy said the current Oil price weakness has “probably been driven by the wider negative market sentiment amid speculation about additional U.S. tariffs on Chinese imports, should upcoming talks fail to produce the desired results”…Oil is also under pressure from rising output by the world’s biggest producers – Russia, the United States and Saudi Arabia – which is helping to replenish global Oil inventories after more than a year of stock draws…Oil production from these Big Three reached 33 million barrels per day (bpd) for the first time in September, according to the latest data…that’s an increase of 10 million bpd since the start of the decade and means these 3 producers alone now meet a third of global Crude demand…the U.S. is set to impose new sanctions on Iranian Crude from next week and exports from the Islamic Republic have have already started to fall significantly…however, Saudi Arabia and Russia have said they will pump enough to meet demand once U.S. sanctions are imposed…

3. Marathon Gold (MOZ, TSX) has released an updated independent Preliminary Economic Assessment (PEA) on its 100%-owned Valentine Lake Gold Project in Newfoundland…the numbers feature an after-tax NPV(5) of $493 million (U.S.), an after-tax IRR of 30% and a capital payback period of 2.5 years (assuming a $1,250 Gold price)…the new PEA optimizes the development of the Valentine Lake resource by open-pit mining and Gold recovery by a combination of a milling circuit and heap leaching, incorporating gravity and flotation circuits with leaching of the concentrate and tails…the study is based on an initial 12-year mine life and average annual production of 225,000 ounces at an All-In-Sustaining Cost of $666 (U.S.) per ounce…the updated study has benefited from 20,000 m of additional drilling since February 2018, 9,000 metallic screen assays on historical drill core since the last PEA resource, and an internal review of the project…MOZ is off a penny at 75 cents as of 7:00 am Pacific, well off its multi-year high of $1.28 last year and within a dime of its rising 1,000-day moving average…

4. The Dow is up 239 points as of 7:00 am Pacific…we’ll see if it can hold those gains…yesterday the index experienced a 918-point swing after a triple digit gain at the open…in Toronto, the TSX is up 97 points while the Venture is off a point at 629…pot stocks have accounted for more than a third of the 11% decline in the Venture so far this quarter, with cannabis companies making up 10 of the 15 biggest contributors to the benchmark’s downside through yesterday…marijuana stocks are trying to rebound today after a rout that intensified last week…Aphria (ACB, TSX) announced this morning that its common shares have been approved for listing on the New York Stock Exchange and will commence trading effective at the open this Friday…Pascal Biosciences (PAS, TSX-V) announced this morning that it has entered into an exclusive license agreement with the University of Washington in Seattle to develop a cannabinoid-based product for the treatment of glioblastoma multiform and brain metastases…the program, developed in the lab of renowned cannabis researcher Dr. Nephi Stella, founder and co-director of the UW Center for Cannabis Research, includes a lead therapeutic, ST-403…Pascal plans to begin human clinical studies of ST-403 in 2019…former high flier Pure Energy (PE, TSX-V) announced this morning that’s restructuring is management, under which the board of directors is assuming day-to-day leadership of the company for a period of time…Patrick Highsmith and Paul Zink have tendered their resignations from the company as CEO and CFO, respectively, effective tomorrow which of course coincides with Halloween…another scary thought is that the company needs to raise cash quickly in order to make option payments on its flagship Clayton Valley Property or risk being put into default by the optionors…another mismanaged Venture company…

5. Big deposit under the ice:  The first 2 holes completed in this summer’s drilling on the Iron Cap deposit at Seabridge Gold’s (SEA, TSX) 100%-owned KSM Project in the Eskay Camp have  intersected some exceptional widths of Gold and Copper mineralization with grades exceeding the KSM resource average, including 583 m grading 0.59 g/t Au and 0.41% Cu in IC-18–75…results from another 12 holes are expected in the next several weeks…this year’s principal exploration objectives were to test the down plunge projection of the high-grade core zone of the Iron Cap deposit to the west of the current resource and evaluate the relative positioning between Iron Cap and the currently planned alignment of the Mitchell-Treaty Tunnel (MTT)…due to its proximity to the MTT and its higher grade, Iron Cap could potentially improve KSM’s economics by mining it before the Kerr deposit…the 2018 program successfully tested the down plunge projection of the Iron Cap core zone, assessed the distribution of post-mineral intrusions on the south end of the Iron Cap deposit and obtained data for the re-alignment of the proposed MTT to avoid conflicts with mining operations…Rudi Fronk, Seabridge Chairman and CEO, commented:  “Site conditions were challenging for this program, but we have still been able to realize the progress we anticipated.  Our expectation is to extend and improve our resource model for Iron Cap, which is on course to becoming one of the best deposits in the KSM complex.  A new resource estimate should be completed in the first quarter of the new year”…

6. Distribution issues that have plagued the cannabis industry in the first 12 days of legalization are threatening to significantly impact the financial performance of major licensed producers, predicts GMP Securities analyst Martin Landry…“The extremely limited distribution network in many provinces, fulfillment challenges in Ontario, inventory shortage in Quebec and LPs coping with limited availability of excise stamps may take several months to be resolved,” Landry wrote in a Monday morning note…“It becomes increasingly clear that recreational cannabis sales in 2018 will be much lower than previously expected”…Canopy Growth (WEED, TSX), which tumbled 21% last week and is down in 9 out of the last 10 sessions, opened at $42 this morning, slightly above strong support at its rising 200-day SMA, before starting to rebound…

7. November rally?…the investors who helped pull the market down during the October plunge could be the same ones who fuel a rally into the end of the year, according to J.P. Morgan Chase strategist Marko Kolanovic…with markets hovering around technical correction levels, Kolanovic notes that hedge funds went from their record high long positions in September to the highest level of bets against the market since 2015 in October…managers who rebalance their portfolios monthly are at their shortest levels since February 2009, just before a market bottom that led to the longest bull run in history…with that much money going against a market that still has a solid fundamental underpinning, a “short squeeze” could be just the thing that allows equities to undo the damage from this month…

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Check back later today for Daniel’s Den and visit the BMR comments section throughout the day for updates and helpful information!

1. Gold has traded between $1,227 and $1,235 so far today…as of 7:00 am Pacific, bullion is off $3 an ounce at $1,230…the yellow metal has posted 4 straight weekly gains, the longest weekly winning streak since January…technically, Gold has finally pushed above its 100-day moving average but is still trying to confirm a breakout above critical resistance at $1,230…Silver is flat at $14.65…Copper is up 2 pennies at $2.82 as the metal continues to firm due to tumbling inventories on the London Metal Exchange…inventories of Copper in LME approved warehouses are down more than 60% since the 2018 peak near 390,000 tonnes…Nickel has eased off another 3 cents to $5.34…Cobalt is steady at $27.56 while Zinc is unchanged at $1.22…Crude Oil has slipped 48 cents a barrel to $67.11 while the U.S. Dollar Index has gained another one-fifth of a point to 96.66…

2. A firebrand ex-army captain has swept to victory in Brazil’s Presidential election, joining the growing ranks of anti-establishment leaders across the world and shifting Latin America’s largest nation (and the world’s 8th largest economy) sharply to the right…Jair Bolsonaro, a champion of Brazil’s 1964–1985 right-wing dictatorship that he once served, clinched 55% of the vote against Fernando Haddad of the leftist Workers’ Party…Bolsonaro’s sudden rise has been propelled by rejection of the leftist Workers Party that ran Brazil for 13 of the last 15 years and was ousted 2 years ago in the midst of the country’s worst recession and political graft scandal…a Bolsonaro presidency is expected to generate new investment opportunities, especially in the resource sector, finance and infrastructure, as he has pledged to open more of the Amazon to farming, mining and hydroelectric dams, while also privatizing some government-owned companies…he won significant backing from rural lawmakers who say Brazil’s rules on deforestation and land management are too onerous for business…his proposals to increase extraction have been lambasted by environmentalists and Indigenous groups who accuse him, of course, of putting the planet in peril…Brazil’s stock market has responded bullishly to the change that Bolsonaro is expected to bring…

3. China’s yuan closed at its weakest in over a decade today, losing 0.16% to end the domestic session at 6.9560 per dollar and stirring speculation over whether the central bank will tolerate a slide beyond the key level of 7 per dollar…meanwhile, profit growth at China’s industrial firms slowed for the 5th consecutive month in September as sales of raw materials and manufactured goods further ebbed, pointing to cooling domestic demand…China’s major stock indexes closed more than 2% lower today…

4. The TSX tumbled into official “correction” territory last week, marking only the 6th time since the global recession in 2008 that the S&P/TSX composite index has fallen by more than 10%…the drop, which saw the index hit a yearly low of 14,732 in intraday trading Friday – well below its July peak – is being attributed to concerns over global trade tensions and rising North American interest rates…the previous 5 TSX corrections occurred in 2008, 2011, 2012, 2014 and 2015, according to BMO Capital Markets data…the 2 shortest and least painful corrections in 2012 and 2014 saw market declines of 11.5% and 12.5%, respectively…investors should be encouraged by the fact that on average, the TSX gained 18.2% following these 5 corrections…

5. The Dow has rebounded 274 points after the first 30 minutes of trading to start the new week…the sell-off in equities over the past few weeks has gotten “overdone” and will be offset in part as companies get back to buying back their own shares, according to a Goldman Sachs analysis that sees the market gaining close to 6% over the next 2 months…in Toronto, the TSX has rebounded 101 points while the Venture is flat at 643…marijuana stocks remain under pressure…GT Gold (GTT, TSX-V) has hit a new 2018 high of $2.06 in early trading…more results are expected soon from GTT’s Saddle North, the best Gold-rich porphyry discovery in British Columbia in many years with world class intercepts…in the Eskay Camp, Metallis Resources (MTS, TSX-V) has drilled into its highest Gold values yet at its Hawilson porphyry target at Kirkham – 37 m grading 1.54 g/t Au in KH18–14 (36 m to 73 m)…MTS also intersected 141 m @ 0.40 g/t Au and 0.23% Cu in KH18–16…evidence suggests that the Hawilson monzonite was intruded as NS-trending stocks and dikes with porphyry systems preserved at shallow levels, similar to some of the Gold-rich porphyry deposits of the Maricunga Belt in northern Chile…the porphyry has never been the driver of the MTS share price, however…the company has more results pending from other targets at Kirkham, notably Thunder North, Cole and Nina…

6. A Gold stock to keep an eye on:  GFG Resources (GFG, TSX-V) has commenced drilling at its 100%-owned Pen Gold Project west of Timmins within the western portion of the Abitibi greenstone…the objective of this initial drilling is to drill test approximately 15 priority targets distributed across a 20-km segment in the eastern portion of the project (25 to 30 holes ranging in depth from 150 to 300 m)…in conjunction with the drill program, the company continues Phase 2 till sampling…it’s also carrying out an extensive IP survey of the Reeves regional target area while advancing other priority regional targets across the district-scale land package…“Following months of hard work we are very excited to begin the Phase 1 drill program at our recently acquired Pen Gold Project,” stated Brian Skanderbeg, GFG President and CEO.  “With the use of modern technology and integration of historic data at a district scale, our technical team demonstrated that this area is highly prospective and has identified numerous high priority targets.  Our focus during this Phase 1 drill program will be on 3 camp scale targets that have the potential to yield multiple Gold discoveries”…

7. Critical Elements (CRE, TSX-V) announced this morning that the company’s pilot plant program recently completed at the Outotec Research Center in Finland has successfully converted spodumene concentrate from the Rose Project into battery grade Lithium hydroxide using a thermal leaching process…CRE says this achievement, in conjunction with Lithium carbonate and spodumene production, gives the company the flexibility to meet all needs of cathode, battery and electric vehicle producers…the pilot plant conversion process from spodumene concentrate to Lithium hydroxide demonstrated strong results with extraction rates of 93%…this extraction rate surpasses the worldwide average of between 70 to 75% in what is accepted as an industry standard…in addition, the pilot plant produced battery grade Lithium hydroxide with 99% purity…

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