November 8, 2018
Daniel’s Den
November 7, 2018
7 @ 7:00
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 $1,236 so far today…as of 7:00 am Pacific, bullion is up $2 an ounce at $1,228…as expected, Americans voted for divided government in yesterday’s midterm elections with the Democrats seizing control of the House of Representatives for the first time since 2010…however, the Democrats fell far short of the Big Blue Wave many pundits on the left were predicting…despite a hostile mainstream media, Trump lost far fewer seats in the House than Obama and Clinton did in their first midterms while Republicans expanded their majority in the Senate and also won some key Governor races including Florida and Ohio…Congressional gridlock is typically bullish for stocks which helps explain Wall Street’s reaction this morning…there could be bipartisan support, however, for a major infrastructure program while Democrats might be able to soften Trump’s approach on trade – two potential developments that would give the commodity sector a boost…Silver is up 12 cents at $14.61…Copper has added a penny to $2.81…Nickel and Zinc are off slightly at $5.27 and $1.14 while Cobalt has rebounded $2.49 a pound to $22.91…Crude Oil is relatively flat at $63.18…the U.S. Dollar Index is off slightly at 96.30 and seems likely to trend sideways or lower given the outcome of the midterms…Congressional gridlock should have the effect of slowing down U.S. fiscal stimulus which has significantly boosted economic growth and allowed the Fed to gradually increase interest rates…
2. There’s optimism within the cannabis sector regarding the outcome of the midterms – in line with predictions, voters in Michigan said yes to Proposal 1 which would legalize recreational marijuana use and cultivation for people over 21, as well as authorize the commercial sale of the drug through state-licensed retailers…current violations related to marijuana would also be downgraded from crimes to civil infractions…under the measure, marijuana will only be allowed to be used by people in the privacy of their own homes…it will also come with a 10% tax…supporters estimate Proposition 1 will bring in roughly $130 million in tax revenue each year…Michigan becomes the first Midwest state to allow recreational use of cannabis…meanwhile, with Democrats in control of the House in Washington, there’s speculation that the prospects for banking legislation helpful to marijuana companies will be enhanced…
3. As of today, the small town of Opaskwayak, Manitoba, features the first licensed recreational cannabis store in Canada on First Nations land…the 1,500 square foot retail store is now officially open for business, fully stocked with cannabis…Chief Christian Sinclair, head of the Opaskwayak Cree Nation, says the operation is physical evidence that joining forces with the legal cannabis industry was a smart idea. “This is wonderful and I feel great. Our investment in cannabis has exceeded all of our expectations, and we want to show our people that this calculated risk, of investing in cannabis, has paid off,” he said…Sinclair and the Opaskwayak have a 10% stake in licensed producer National Access Cannabis (META, TSX-V), a company backed by industry veteran Chuck Rifici, the co-founder of Tweed and current CEO of Auxly Cannabis…that initial investment of $3 million, says Sinclair, has propelled his band into the big leagues, making them the first indigenous community to become a major shareholder of a licensed cannabis producer…
4. To show how misguided the Trudeau Liberals are with carbon policy and their extremist “climate change” initiatives, even voters in left-leaning Washington State yesterday rejected a proposed carbon tax that would have been the first such levy in the United States…the policy would have been an effort to fight “climate change” by mandating that companies using or selling fossil fuels pay taxes equal to $15 per metric ton of carbon, an amount that would rise in future years…the money would have paid for clean air and water projects, as well as community health initiatives…Trudeau is determined to push ahead with a jobs and investment-killing national carbon tax that does further damage to the Canadian resource sector and puts Canadian businesses at a competitive disadvantage to those in the United States…
5. 2018 has featured major shifts in demand and supply in the Oil market…after putting the pedal to the metal on production, OPEC is now apparently musing once again about cutting back production in 2019…ministers from the group gathering in Abu Dhabi this weekend will discuss the possibility of trimming output again next year, according to delegates, a move that would mark an abrupt end to 6 months of supply increases…the group is responding to a worrying prospect – even though U.S. sanctions on Iran are removing significant amounts of Crude from world markets, a fresh surge of American shale Oil threatens to unleash a new surplus in 2019…some members are concerned about the recent trend showing rising inventories…meanwhile, in other sector developments, Imperial Oil (IMO, TSX, NYSE) said yesterday that it would go ahead with the construction of its $2.6 billion Aspen Project in northern Alberta, the first new Oilsands development to be greenlighted since 2013…the Aspen Project will use new recovery technology to lower emissions and water use and improve project economics…
6. The Dow has added 138 points through the first 30 minutes of trading following yesterday’s midterms…in Toronto, the TSX is relatively flat while the Venture is up another 5 points at 671…Westhaven Ventures (WHN, TSX-V) has resumed drilling at its 155 sq. km Shovelnose Gold Property near Merritt…the fully-financed program will consist of approximately 2,500 m of diamond drilling over a strike length of 400 m at the newly-discovered South Zone where recent drilling intersected 17.8 m of 24.5 g/t Au, including 6.78 metres of 50.76 g/t Au…Gareth Thomas, President & CEO, stated, “We are keen to get back drilling at the South Zone. Only 2 holes have been drilled into the newly tested southern block and both holes intersected significant Gold-Silver mineralization. We will be testing both the vertical extent and the strike length of this mineralization”…Datametrex AI (DM, TSX-V) has just announced that it has closed the reverse takeover transaction of Graph Blockchain Inc. (formerly Reg Technologies Inc.) with Graph Blockchain Ltd., an associated company of Datametrex AI, as previously announced on June 29, 2018, and October 1, 2018…TAG Oil (TAO, TSX) is off 2.5 cents at 38 cents as of 7:00 am Pacific after announcing this morning that it’s selling its assets in New Zealand for $30 million (U.S.), plus other considerations…following completion of the transaction, TAG expects to have over 50 cents per share in cash and working capital in addition to continued exposure to the current operations and upside of the New Zealand assets…TAG will also be in a better position to pursue its exploration prospects covering over 275,000 net acres in Australia, including the producing 25,000-acre petroleum mining licence in the Surat basin…
7. Chemesis International (CSI, CSE) and Rapid Dose Therapeutics, a Canadian biotechnology company, have signed an additional definitive agreement to bring QuickStrip oral thin strips to Puerto Rico…CSI previously announced (October 12, 2018) a definitive agreement to produce QuickStrips for the state of California…under the terms of the agreement, Chemesis will receive rights to produce, distribute and sell QuickStrip products, with exclusive rights for the cannabis market in Puerto Rico…this partnership allows Chemesis to further strengthen its position in Puerto Rico by allowing the company to use a convenient drug delivery system that can target a variety of consumers and also allow them to use cannabis products in a new way…CSI says it will continue to position itself to capitalize in this growing market with innovative and effective products…
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November 6, 2018
7 @ 7:00
Visit the BMR comments section throughout the day for updates and helpful information!
1. Gold has traded between $1,228 and $1,237 so far today as Americans vote in critical midterm elections…as of 7:00 am Pacific, bullion is off $1 an ounce at $1,230…Silver is down 5 cents at $14.55…Copper is up a penny at $2.82…Nickel has rebounded 7 cents to $5.37 while Zinc is unchanged at $1.17…Crude Oil is relatively flat at $63.18…the Trump administration today granted temporary waivers to China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey, allowing them to continue purchasing Iranian Oil for 180 days…“These countries take on the lion’s share of Iranian Oil exports,” stated Commerzbank…“This is bad news for Oil prices, as it means the supply situation on the Oil market is set to ease further”…the U.S. Dollar Index is off slightly at 96.30…the greenback would likely explode higher tomorrow if Republicans defy the pollsters and maintain control of the House of Representatives while also expanding their majority in the Senate…
2. As Americans cast their ballots today in the crucial midterm congressional elections, 2 final polls conducted by CNN and Rasmussen have predicted wildly different results…the final generic poll from left-leaning, Trump-hating CNN has put Democrats 13 points ahead of Republicans…meanwhile, a separate poll carried out by the more right-leaning Rasmussen agency has suggested that Republicans are leading, but by a much smaller margin of 1 point…for the record, Rasmussen was more accurate back in 2016…history is not on Trump’s side…the party of the sitting President has lost House seats in 35 of the 38 midterm elections held since the end of the Civil War in 1865…midterms usually produce gridlock in Washington, and Wall Street does have a tendency to love gridlock (U.S. equity markets have not declined in the 12 months following a midterm election since 1946, and have surged roughly 10% into year-end following midterms since 1950)…the gridlock scenario this time around would be an expanded Republican majority in the Senate while the Democrats win control of the House…the Republicans appear highly likely to slightly expand their majority in the Senate…their House majority is vulnerable, however, but the left’s hope of a Big Blue Wave will be shattered like it was 2 years ago…
3. The latest data from the world’s two largest Gold-buying nations points to soft demand in India but an improving picture in China, according to Commerzbank…analysts cite data from India’s Ministry of Finance showing that Gold imports plunged by 42% year-on-year to 38.8 tonnes in October…“The consumer restraint was chiefly due to the steep rise in Gold prices in Indian rupees beforehand,” Commerzbank stated…“Bullion dealers and jewelers are running numerous special offers in a bid to revive Gold demand in India during the Dhanteras and Diwali festivals that are taking place this week”…meanwhile, analysts cite data from the China Gold Association showing that that country’s Gold demand grew by 5.1% year-on-year to 850 tonnes in the first 3 quarters, with the organization attributing this to falling Gold prices, weak stock markets, exchange-rate moves and China-U.S. trade tensions…the organization’s data for Gold demand is significantly higher than that compiled by the World Gold Council, Commerzbank points out…meanwhile, China’s Gold production decreased by 7.5% to 290 tonnes from January to September… “China is filling the gap with imports – for example, from Hong Kong and Switzerland – and will also remain a major Gold importer in the future,” Commerzbank added…
4. Gold holdings in global exchange-traded funds and similar products rose in October by 16.5 tonnes for the first monthly inflow in 4 months, the World Gold Council reported today…holdings now stand at 2,345.6 tonnes…still, they are down 25.8 tonnes for the year to date…“Global stock markets experienced their worst October since the 2008 financial crisis, with the MSCI All-World Index down more than 7.4% on the month,” the WGC said…“As a result, Gold benefited from flight-to-safety investment flows. Further, U.S. dollar-hedged Gold benefited in the stronger dollar risk-off environment, rallying 4.3% on the month. Flows into North America-based ETFs grew by 12.4 tonnes during the month. Holdings in European ETFs climbed by 10.5 tonnes, while those in Asia decreased by 6.5 tonnes. There was a 0.2-tonne increase for ‘other’ regions”…SPDR Gold Shares led global inflows, gaining 11.8 tonnes during the month, while iShares Gold Trust added 5 tonnes…
5. More problems with Cobalt in the Congo…Katanga (KAT, TSX) is under renewed pressure after announcing that it’s temporarily suspending the export and sale of Cobalt at its Kamoto Project until further notice…the presence of Uranium was recently detected in the Cobalt hydroxide produced at Kamoto in levels that exceed the acceptable limit allowed for export of the product through main African ports to customers (one has to wonder if this could be a more widespread issue)…to date, the total Cobalt production impacted by the sale suspension amounts to 1,472 tons…the low levels of radioactivity detected in the Uranium to date do not present a health and safety risk, according to the company…Katanga adds that production of Cobalt at Kamoto is expected to continue “without reduction in the quantity”, once problems are sorted out…the company says it’s currently conducting additional surveys to identify the source of the Uranium and exploring various options to mitigate the impact of the sales suspension…KAT resumed trading at 7:00 am Pacific after a halt at the open…initial trades have the stock down 12 cents at 52 cents…North American Cobalt plays should benefit from the news – First Cobalt (FCC, TSX-V), as an example, is up 3.5 cents at 27.5 cents as of 7:00 am Pacific…
6. A report in this morning’s The Wall Street Journal outlines how a prolonged period of underinvestment by commodity producers is setting the stage for large price increases in raw-materials markets…prices of Copper, Nickel and Aluminum could soar past prior records in the coming years, according to certain portfolio managers…such a development would likely transform markets hampered in recent years by soft prices and tepid investor interest…global miners are only spending a third of what they did 5 years ago on new projects…they’re on track to invest roughly $40 billion for the 3rd straight year, down from more than $120 billion 5 years ago and $80 billion almost a decade ago, according to commodities consultancy Wood Mackenzie…worries that U.S.-China tariffs will slow growth and hurt demand for commodities have weighed on prices the last few months with strong price corrections across the board…“It’s incredibly bullish and inflationary for metals on a long enough horizon,” stated Stephen Gill, managing partner of Pala Investments…“You have a window of opportunity at these low prices”…the lack of investment in metals echoes what happened in the Oil market…a 25% drop in spending on new projects in 2015 and 2016 set the stage for a rally that sent Crude prices to near 4-year highs this year…ramping up metal supply is much more challenging than ramping up Oil supply…meanwhile, mining deals are on track to total about $40 billion for the 4th consecutive year, a fraction of the record $131 billion spent in 2011, according to Dealogic…stock buybacks from the world’s largest miners are also set to more than double for the 2nd straight year, FactSet data show..
7. The Dow has added 78 points through the first 30 minutes of trading…the Canadian market is at one of the cheapest levels vs. its U.S. counterpart in the last 30 years…that’s what over-regulation and high taxes do, plus a disastrous energy policy that continues to drive investment out of Canada…the big internationals, and now Canadian-based firms like Encana, are moving their operations and/or capital budgets out of Canada and relocating their money to the U.S. (Trump is loving it) and elsewhere…the S&P/TSX is now trading at a forward price-to-earnings multiple of only 13 times the 2019 consensus estimate…as of 7:00 am Pacific, the TSX is up 75 points while the Venture, aiming for its 5th straight daily gain, is up 2 points at 663…
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November 5, 2018
7 @ 7:00
Visit the BMR comments section throughout the day for updates and helpful information. Daniel’s Den tomorrow!
1. Gold has traded between $1,226 and $1,235 so far today…as of 7:00 am Pacific, bullion is off $1 an ounce at $1,231…hedge funds and money managers raised their net short position in Gold by 18,723 contracts to 45,622 contracts in the week to October 30, according to the latest U.S. Commodity Futures Trading Commission data…this was the highest in 3 weeks…Silver is down 5 cents at $14.67…Copper, Nickel and Zinc are also off marginally at $2.81, $5.31 and $1.17, respectively, while Cobalt is steady at $23.93…Crude Oil has rebounded 61 cents to $63.75 while the U.S. Dollar Index, which posted its 7th straight month of gains in October, is off slightly at 96.37 ahead of tomorrow’s critical midterm elections…amazingly, U.S. equity markets have not declined in the 12 months following a midterm election since 1946…midterms often produce gridlock in Washington, and Wall Street tends to love gridlock…the gridlock scenario this time around would be an expanded Republican majority in the Senate (almost a certainty) while the Democrats win control of the House…given the Trump Factor, however, Republicans could certainly defy the pollsters and mainstream media pundits and retain control of the House, albeit with a narrower majority…the governor of the Bank of Canada says after a decade of low-interest rates around the world, the global economy has reached stronger footing where stimulus can be “steadily withdrawn”…Stephen Poloz’s remarks this morning came as the Bank of Canada signals it will gradually raise its benchmark interest rate from its current level of 1.75% to a so-called neutral stance of somewhere between 2.5% and 3.5%…
2. Crude prices have come down roughly 15% since the start of last month when Brent breached the $86-a-barrel threshold for the first time in 4 years…“And yet increasing numbers of observers believed in early October that the price could climb to $100,” analysts at Commerzbank wrote in a note this morning…“What has happened since then to cause prices to react so differently? One key reason is that OPEC, Russia and the U.S. have stepped up their Oil supply considerably”…prices have also come under pressure because of signs of weakening global economic growth and equity market turmoil…one of the biggest threats to the global economy would be runaway Oil prices, something Trump has been watching closely…Crude prices around current levels are non-inflationary and will help encourage global growth…
3. Chemesis International (CSI, CSE) is making a major push into Colombia…the company announced this morning that it has entered into a binding LOI to acquire 100% of Colombia-based La Finca Interacviva-Arachna Med SAS, an integrated cannabis company that has been licensed and operational in Colombia since October, 2017…La Finca has access to over 1,000 acres of outdoor cultivation land and is aggressively exploring opportunities to expand….it’s also a founding member for the “Association for the Promotion of Hemp Growing”, a non-profit entity that is concentrated on providing education and promoting the expansion of cannabis plantations, while ensuring the growth of high-quality crops through technical advice…the company’s cultivation program is based on a decentralized model with partner farmers throughout the country, allowing small farmers to quickly generate high quality crops…currently, La Finca has relationships with over 2,000 farming families across Colombia through various co-ops that comprise its land package…La Finca also has a partnership with the largest university in Colombia to develop seed strains that improve the yield of biomass and flower while shortening crop cycles…La Finca currently has several manufacturing relationships including an agreement for licensed cosmetic products under the La Finca brand…Chemesis will acquire La Finca, which has $2.5 million CDN in working capital, for $13.5 million in a combination of cash and common shares to be determined upon execution of the definitive agreement…all stock issued will be subject to a 36-month phased lock-up period…CSI has jumped 28 cents to $1.79 after 30 minutes of trading…
4. Aleafia Health (ALEF, TSX-V) is pushing higher after announcing this morning that it has signed a non-binding term sheet to acquire a 10% equity stake in CannaPacific, a licensed Australian medical cannabis company…CannaPacific has been granted licences to cultivate, produce and research medical cannabis in Australia and has a 53,000 sq. foot cannabis cultivation and plant research facility currently under construction…Aleafia will provide CannaPacific with technical expertise in cannabis cultivation, processing, distribution and medical clinic operations…this marks the launch of Aleafia’s global expansion with a foothold in the budding Australian medical cannabis sector and future market access to Asia under Australian free-trade agreements…
5. Canada Cobalt (CCW, TSX-V), the only junior in Canada that’s able to target high-grade Cobalt in underground drilling, has cut a robust 7 m grading 2.3% Cobalt, 261 g/t Silver and 1.65% Nickel (CA18–001) at its Castle mine in Northern Ontario…other initial results included 3.2% Cobalt and a whopping 345 ounces per ton Silver over 0.60 m within a broader interval in CA18–003 (core lengths)…CCW is drawing strong interest from potential clients in Asia and Europe as the first and only company in the Northern Ontario Cobalt Camp to produce battery grade Cobalt sulphate through its proprietary Re-2OX process…these initial drill results will only boost the prospects for any potential deals to monetize this unique opportunity for shareholders…meanwhile, the Gowganda area is heating up on the Gold front as well…the 3rd hole of a surface drill program east of the Castle mine has intersected 2 mineralized zones with the potential for a Gold discovery on the property, while CCW neighbor iMetal Resources (IMR, TSX-V) is preparing to drill at Zone 3A at its Gowganda West Property…Zone 3A marks the beginning of a minimum 2.4-km-long structural corridor featuring Kirkland Lake-type rocks and high-grade Gold showings at each outcrop area revealed by a massive logging operation…Gowganda West has never been previously drilled even though it’s contiguous to the southern border of Tahoe Resources‘ (THO, TSX) 4 million ounce Juby deposit…
6. Alamos Gold (AGI, TSX) has discovered an extension of high-grade mineralization at its Island Gold mine in Northern Ontario…in the “main” extension, the new findings include 118.6 g/t Au over 6.7 m, 21.5 g/t over 7.8 m, and 31.7 g/t over 3.8 m…in the “western” extension, discoveries include 78.3 g/t over 2.3 m and 19.7 g/t over 2.8 m…findings in the “eastern” include 46.1 g/t over 2.8 m and 13.7 g/t over 7.6 m…“Island Gold continues to impress,” stated President and CEO John A. McCluskey. “In less than a year since we acquired the mine, we’ve seen a 17% increase in mineral-reserve grades and significant growth in mineral reserves and resources across all categories. Ongoing exploration success across all three extensions of the ore body, including the best surface directional hole drilled to date, demonstrate strong potential for this to continue”…last week, Alamos reported net earnings for Q3 of $7.2 million (U.S.)…
7. The Dow is up 80 points through the first 30 minutes of trading…Apple’s stock was downgraded for a second time since its earnings report, this time by Rosenblatt Securities, which said it has lowered its expectations for iPhone production and shipments…the firm cut its rating on the largest public company in the U.S. to neutral from buy, telling clients that it will be difficult for Apple to offset weaker volume with higher selling prices in the second half of 2019…the TSX has added 71 points while the Venture, aiming for its 4th straight daily gain, is up 2 points at 653…GT Gold (GTT, TSX-V), continuing to look strong, is up 9 cents at $1.94 with more results pending from its Gold-rich Saddle North porphyry discovery in Northwest British Columbia…GTT appears to have conquered Fib. resistance at $1.78…Westhaven Ventures (WHN, TSX-V) is a penny higher at $1.07…WHN was up sharply last week after releasing another robust high-grade Gold intercept at its 155 sq. km Shovelnose Property within the Spences Bridge Gold Belt near Merritt…
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November 4, 2018
November 3, 2018
The Week In Review And A Look Ahead!
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