BullMarketRun.com

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

1. Gold has traded between $1,245 and $1,251 so far today…as of 7:00 am Pacific, bullion is up $2 an ounce at $1,247…Silver is 3 cents higher at $14.67…Copper has shed 4 pennies to $2.73…Nickel and Zinc are flat at $4.94 and $1.16, respectively, while Cobalt remains unchanged at $25.06…Crude Oil has plunged by more than $2 a barrel to $47.11 on renewed oversupply concerns while the U.S. Dollar Index is off one-fifth of a point at 96.92…markets have priced in a quarter point rate hike by the Fed tomorrow at the conclusion of its FOMC meeting…the focus will be on how many hikes will follow in 2019…the chance of a recession in the U.S. in the next 12 months is pegged at 23%, according to the latest CNBC Fed Survey…that’s up significantly from the previous survey…12% of respondents think the Fed, after hiking tomorrow, would next move to reduce the Fed funds rate and do so by October 2019…the Fed Survey had 43 respondents, including economists, fund managers and strategists…

2. Oil prices are off by more than 5% today as the U.S. and Russia continue to pump at record levels even as analysts warn that signs of faltering demand are emerging…WTI hits its lowest point since September 2017 after settling under $50 a barrel for the first time in over a year in the previous session…from peak to trough, WTI has lost about 39% of its value since hitting a roughly 4-year high in early October – a collapse reminiscent of what occurred in late 2014…the slump has brought WTI’s year-to-date losses to nearly 22%…this month, Oil output from U.S. shale fields is set to rise above 8 million barrels per day for the first time ever, the U.S. Energy Information Administration reported yesterday…production from the 7 key regions is forecast to rise by nearly 134,000 bpd in January, the biggest increase since September…these companies have become so efficient, even at $40 a barrel they can make money…meanwhile, Reuters reports that Russia is pumping at 11.42 million bpd this month, a level that would mark an all-time high if confirmed…Goldman Sachs is one of several firms that’s predicting a significant rebound in Oil prices next year…however, Jeff Currie, the bank’s head of commodities, told CNBC’s “Power Lunch” yesterday, “The market is not going to buy forward expectations of supply cuts.  It’s not going to buy promises from China for policy stimulus.  It needs to see real physical tightness”…

3. Gold prices will head higher in 2019 while the mining sector will see much more consolidation, according to BMO Capital Markets’ updated commodities outlook for next year…the 2 main supportive triggers for the yellow metal will be a more dovish Federal Reserve and a weaker U.S. dollar, BMO analysts wrote…“With the Federal Reserve hike stuttering as we head into 2019, and the U.S. dollar relative outperformance in its final innings, we see further potential price gains in H1/19 before taking a backseat in H2/19 as the China-led industrial recovery takes place,” they said…the report calls for Gold to climb as high as $1,260 in Q1 followed by $1,300 in Q2 and Q3 before pulling back to $1,270 in Q4…“We remain optimistic for precious metals heading into 2019.  Precious metals faced up to the brunt of 2018’s macroeconomic storm, and are now emerging from the other side scarred but well positioned for early 2019 outperformance,” the analysts said…

4. More than half of fund managers surveyed in Bank of America Merrill Lynch’s monthly report expect weakening global growth in 2018 – the worst outlook since October 2008…this week’s main focus for investors is the Federal Reserve’s policy meeting, the outcome of which we’ll see tomorrow at 11:00 am Pacific…it’s widely anticipated that the Fed will once again hike short-term interest rates, but investors are increasingly expecting – and hoping for – more dovish commentary from Chairman Jerome Powell on the path of rates for next year…Powell has given mixed signals on Fed policy in recent months, spooking investors in October by saying rates were “a long way from neutral”, referring to the point at which interest rates are neither spurring nor slowing economic growth…he later backtracked on those comments in November, saying rates were “just below” neutral…his tone tomorrow will be critical…

5. The Trudeau government creates a problem, then throws taxpayers’ money at it…but that’s how things are done now in the New Canada, which Trudeau declared in 2015 to be the world’s first post-national state (whatever that means, but it’s certainly not Canada First)…this country’s battered energy industry will get a $1.6 billion boost from Ottawa today to try to slow the political and economic bleeding…this comes on the heels of a wave of protests in Alberta in recent days including an estimated angry crowd of 2,700 that packed into Calgary’s Municipal Plaza yesterday, interrupting speeches by members of Calgary’s City Council with shouts and boos, at a noon rally to show support for Canada’s beleaguered Oil industry…federal Natural Resources Minister Amarjeet Sohi and International Trade Diversification Minister Jim Carr will be at an Edmonton college campus today to unveil a support package for Oil and gas companies, which are reeling from record-low Canadian Oil prices created by a lack of pipeline capacity in this country…the pipeline fiasco, driven by an extremist government that believes we should ultimately abandon our use of fossil fuels, has cost the national economy at least $20 billion this year according to multiple estimates…news reports say Trudeau’s $1.6 billion fund will be divided among several different programs, including money to help companies invest in clean growth, loans, and other financial supports to help companies find new markets away from the United States, as well as investments in training and new technology…it is a package based, in some ways, on those offered to softwood, steel and aluminum producers after the U.S. with new import tariffs…the Trudeau Liberals, of course, had a perfect opportunity to expand new markets outside of the U.S. for Canada’s Oil and gas products when they came to power in late 2014, but they killed B.C.’s Northern Gateway Pipeline Project in 2016 (approved by the previous government in 2014) and then followed that up by banning Oil tanker traffic off B.C.’s northern coast…

6. The Dow has rebounded 312 points as of 7:00 am Pacific after sharp drops the previous 2 sessions…the Dow and S&P 500, which are both in official correction territory, have experienced an historically brutal December to this point with declines exceeding 7%…the Dow and S&P 500 are also riding their lowest closes since March 2018 and October 2017, respectively…the TSX is trying to regain support at 14,500…the index is up 94 points at 14,457…Kirkland Lake Gold (KL, TSX), after a very brief pause at the end of last week, has renewed its uptrend as the stock progresses toward yet another new high…KL is up 59 cents at $33.15 in early trading…the TSX Gold Index continues to strengthen…the Venture is flat at 547…the Index is rapidly closing in on its December low which has never occurred beyond December 21…Venture history, current sentiment levels and multiple charts indicate a sharp reversal out of very oversold conditions is imminent…Sun Metals (SUNM, TSX-V) has amended its option agreement with Lorraine Copper (LLC, TSX-V) to acquire a 100% interest in the Stardust Project…SunMetals will issue 500,000 shares and pay Lorraine Copper $75,000 by month-end, and will then issue LLC a total of 31.5 million shares within 5 business days of March 31, 2019…SunMetals will also assume all obligations under Lorraine’s $50,000 reclamation bond currently posted with the Province of British Columbia…

7. Corruption in the Congo:  The Ontario Securities Commission has approved a global settlement agreement between staff of the commission and Katanga Mining (KAT, TSX), certain of its former directors and officers, and its CEO relating to the previously disclosed investigation by staff into certain of the company’s historical disclosures…in the settlement, the company agrees that it (1) misstated its financial position and the results of its operations; (2) failed to maintain adequate disclosure controls and procedures and internal controls over financial reporting; and (3) failed to disclose material weaknesses in its internal controls…the settlement agreement also states that certain of its former directors and officers and its CEO authorized, permitted or acquiesced in such non-compliance with Ontario securities laws by Katanga and acted in a manner contrary to the public interest in their roles as directors and officers of Katanga…separately, the company (and not its directors and officers) agreed that it failed to adequately describe the heightened risks associated with: (1) its operating environment, specifically the elevated risk of public sector corruption in the Congo; and (2) its reliance on individuals and entities associated with Dan Gertler, including the risk that a cessation or deterioration in Katanga’s business relationships with such individuals and entities could have an adverse impact on Katanga’s business…under the terms of the settlement, Katanga will make a voluntary payment in the amount of $28.5 million and reimburse Commission costs in the amount of $1.5 million…Katanga will also submit to a review by an independent consultant of its metal accounting with respect to reporting of production and its financial accounting with respect to the integration of production statistics….the company’s CEO, Johnny Blizzard, who has served in that role since February 2015, will resign as a director and officer of the company, subject to a short transition period until his replacement is appointed…

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

1. Gold has traded between $1,236 and $1,243 so far today…as of 7:00 am Pacific, bullion is up $4 an ounce at $1,242 after last week’s healthy retreat…Silver is 6 cents higher at $14.60…Copper has shed 2 pennies to $2.77…Nickel and Zinc are flat at $4.98 and $1.18, respectively, while Cobalt is unchanged at $25.06…Crude Oil is off 5 cents at $51.15 while the U.S. Dollar Index is steady at 97.43…markets have priced in a quarter point rate hike by the Fed on Wednesday at the conclusion of its FOMC meeting…the focus will be on how many hikes will follow in 2019…dovish rhetoric by the Fed would go over well with Wall Street and commodity sector investors…Bitcoin rose sharply today, climbing above $3,400 in a move traders ascribed to heavy buying on Japan and Hong Kong-based exchanges…the original cryptocurrency, which has lost half its value in the last 3 months, jumped as much as 11% on the Bitstamp platform and was headed for its biggest daily rise since November 28…in economic news, U.S. homebuilder sentiment declined in December to its lowest point since May 2015…the index has plummeted nearly 20 points over the past year while potential buyers hesitate to purchase new homes even as mortgage rates have pulled back in recent weeks…the housing slowdown is an early indicator of economic softening, a fact that will likely not be lost on Fed officials the next couple of days…

2. Corruption in the Congo:  Katanga Mining (KAT, TSX), a subsidiary of Anglo-Swiss commodities and mining conglomerate Glencore – as well as a key long-serving executive of the parent company – are expected to settle serious allegations levelled by Canada’s largest capital markets regulator at a hearing later this week in Toronto, according to a report in this morning’s Financial Post…the combined financial penalties in the proposed settlement are understood to exceed $20 million, sources say…the Ontario Securities Commission has been investigating whether Katanga made materially misleading statements and is also said to have been looking into whether the firm failed to adequately disclose risks pertaining to international bribery, government payment and anti-corruption laws…meanwhile, Katanga’s activities in the Congo have also drawn scrutiny from the U.S. Department of Justice…sources say the investigation has involved multiple jurisdictions including Switzerland, the U.S., the United Kingdom and the Congo…Katanga has also faced scrutiny over its relationship with Israeli billionaire Dan Gertler, who was sanctioned by the U.S. government in December 2017 in a sweep targeting corruption and human rights abuses…“Gertler has used his close friendship with DRC President Joseph Kabila to act as a middleman for mining asset sales in the DRC, requiring some multinational companies to go through Gertler to do business with the Congolese state,” the U.S Department of the Treasury said at that time…

3. Ethically-sourced Cobalt can be found in the Northern Ontario Cobalt Camp where district leader Canada Cobalt (CCW, TSX-V), still in talks with European and Asian clients, is the only junior explorer/miner in North America during this “battery arms race” to actually produce a Cobalt product from its own mineralized material, thanks to its Castle mine and a proprietary process (Re-2OX)…the company continues to hit massive Cobalt in underground drilling at Castle, as disclosed in news Friday, but what’s also intriguing and significant is that CCW has made a new discovery about 1.5 km east-southeast of the mine where potential high-grade Gold is concentrated in the Archean rocks with more Cobalt-Silver-rich vein networks below the Archean sulphides…the company reported that 2 widely-spaced drill holes have intersected an apparent syenite Gold system with nearby Cobalt potential in a previously undrilled area of the Castle Property, approximately 75 km from Kirkland Lake…drilling continues…the latest holes have cut multiple zones of quartz veining, extensive disseminated pyrite (often associated with Gold in the district), some chalcopyrite and very favorable alteration similar to what exists in the Kirkland Lake area…CCW, the world’s top performing Cobalt stock in 2018, has a history of major upside moves from the last half of December into January and February…it’s off slightly in early trading this morning after a 10-cent run Friday to 55 cents…

4. The Gowganda area is a logical location for Canada’s next grassroots Gold discovery…this morning, iMetal Resources (IMR, TSX-V) – preparing for imminent/near-term drilling – announced that it has increased its Gowganda West land package near CCW’s Castle Property to 140 sq. km by adding, through staking, an additional 35 sq. km along the eastern boundary…as a new understanding of Gowganda West emerges through extensive sampling and state-of-the-art airborne geophysics, areas previously neglected due to overburden cover are considered much more highly prospective for Gold, Copper, Silver, Cobalt and other metals…significantly, IMR has found multiple outcrops highly mineralized with Gold and Copper over a broad area with rock units, alteration and mineralization similar to that seen in the Kirkland Lake Camp…Gowganda West is contiguous to the 4-million ounce Juby Gold Project, soon to be owned by Pan American Silver (PAAS, TSX) following its friendly takeover of Tahoe Resources (THO, TSX), and has never been systematically explored due in part to heavy forestation and overburden cover…a massive clear-cutting and logging operation has opened up critical access while exposing outcrops that were previously hidden…the area was also off-limits for exploration throughout the 1970’s and 1980’s due to a land caution issue that was resolved by the Supreme Court…

5. High on our list of favorite Gold producers, given world class grades and increasing production at the Brucejack mine in the Eskay Camp, is Pretium Resources (PVG, TSX)…late Friday, after markets closed, Pretium announced that it has received the amended permits to increase the Brucejack mine production rate by approximately 40% to 3,800 tonnes per day…minor mill upgrades (estimated to cost less than $25 million) to support the production rate increase are required and will be completed during regularly scheduled mill shutdowns…a specific timeline for ramp-up to the 3,800-tonne-per-day production rate, along with an updated mine plan, is expected during the 1st quarter of next year…

Q3 Summary

• 92,641 ounces of Gold produced
• 12.4 g/t Gold mill feed grade
• 97.4% Gold recovery rate
• 240,122 tonnes of ore milled
• 2,610 tonnes per day ore milled
• Over $190 million cash position as of Sept. 30

Q4 production is expected to increase by as much as 37% over Q3, meaning PVG could close the year with total 2018 production as high as 407,000 ounces….all-in sustaining costs for the 2nd half of 2018 are expected to range from $710 to $770 (U.S.) per ounce Gold sold…those are very favorable numbers….with production having reached a steady state at Brucejack, an increased focus is being placed on operational efficiency to bring costs down even further…the company’s combined Q2/Q3 net income was $41 million (U.S.) after a small loss in Q1…

6. The Dow is down another 211 points as of 7:00 am Pacific after a sharp drop on Friday…all 3 major U.S. indexes closed Friday in correction territory for the first time since March 2016…investors hoping to avoid the first annual decline for major U.S. stock indexes since 2015 are dreaming of a Santa Claus rally…CIBC has cancelled the energy portion of an investors’ conference in Whistler next month…Oil and gas companies justifiably pulled out after ridiculous anti-Oil sector comments by Whistler Mayor Jack Crompton…he later issued a soft apology but frustration is building in Canada at these attacks on our hugely important Oil and gas industry by climate change extremists on their globalist agenda to “save the planet” – enough is enough…the TSX, which closed at a 2-year low Friday at 14,595, has retreated another 82 points as of 7:00 am Pacific…strong support exists at 14,500…Kirkland Lake Gold’s (KL, TSX) 12-session winning streak was snapped on Friday but the stock has rebounded 94 cents to $32.68 in early trading today…the Venture is flat at 555…19 years of Venture history, current sentiment levels and multiple charts indicate a sharp reversal in the Index is imminent…over the past 2 decades, December lows have occurred as early as the 1st of the month and as late as the 21st…

7.  PyroGenesis (PYR, TSX-V) announced this morning that is has received a purchase order to provide specialty metal powder from a government entity –  the name, origin, amount, and type of powder are not permitted to be disclosed, however…this order will require PyroGenesis to produce specialty reactive metal powder using its plasma atomization expertise…first delivery is expected to occur Q1 2019…it is expected that, upon successful qualification, follow-on orders would occur…“Although small, under 1 ton, this commercial order reinforces the fact that we are, once again, the go-to company for an entity that has, at its fingertips, many options.  Not only does this opportunity allows us to expand our powder offerings but it also creates a potentially high value niche market, which, once again, highlights our competitive advantages,” stated Peter Pascali, President and CEO of PyroGenesis.  “This order is clearly a recognition of PyroGenesis’ strengths as an innovative plasma company, and further underscores our position, and value, to the additive manufacturing industry”…

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