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March 31, 2019

Sunday Sizzler Report!

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The Week In Review And A Look Ahead!

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March 28, 2019

Daniel’s Den

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7 @ 7:00

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1. Gold has traded between $1,291 and $1,312 so far today, under pressure as the greenback strengthens…as of 7:00 am Pacific, bullion has retreated $17 an ounce to $1,292…Silver has slipped 22 cents to $15.04…Copper is steady at $2.89…Nickel is off modestly at $5.81 while Zinc is up slightly at $1.33…Crude Oil has lost 39 cents a barrel to $59.02 while the U.S. Dollar Index has jumped one-fifth of a point to 97.13…the U.S. economy is still a bright spot in the world, and that’s keeping a firm bid under the greenback…China has made unprecedented proposals in talks with the U.S. on a range of issues including forced technology transfer as the 2 sides work to overcome remaining obstacles to a deal to end their protracted trade battle, according to a report from Reuters…President Trump imposed tariffs on $250 billion of Chinese imports last year in a move to force China to change the way it does business with the rest of the world and to pry open more of China’s economy to U.S. companies…that strategy will likely yield results…among Trump’s demands are for Beijing to end practices that Washington alleges result in the systematic theft of U.S. intellectual property and the forced transfer of American technology to Chinese companies…

2. Economic growth in the U.S. slowed to 2.2% in the final quarter of 2018, in line with expectations but down from the previous estimate of 2.6% and well below Q3 growth of 3.4%…however, by all measurements 2018 was the best year for the U.S. economy in many years and well above the 2.2% increase in 2017, President Trump’s first year in office…consumer spending as well as government expenditures at both the state and national levels, and non-residential fixed investment, all were revised down in Q4 and subtracted from GDP…imports also were revised lower amid continuing trade tensions between the U.S. and some of its global trading partners…corporate profits after tax, without inventory valuation and capital consumption adjustments, fell 1.7% from the prior quarter, snapping 2018’s growth streak and marking the first quarter-over-quarter decline in profits since the final quarter of 2017…however, profits were up 11.1% in the 4th quarter from a year earlier, which was the largest year-over-year gain since the 1st quarter of 2017…per-share profits rose 16.9% year-over-year in Q4 for the biggest U.S. publicly traded companies, according to financial-data firm Refinitiv…that was the slowest growth rate of the year, but the 5th straight quarter of double-digit earnings growth for companies in the S&P 500

3. The Dow is up 65 points through the first 30 minutes of trading…in Toronto, the TSX has added 16 points while the Venture has pulled back 7 points to 620 on weakness in marijuana stocks and Gold…however, one of the top movers on the Venture in early trading is Compass Gold (CVB, TSX-V) which has reported 3 discrete and impressive mineralized zones within an 18-m interval at its Sikasso Property in Mali – 4 m at 83.8 g/t Au, starting just 63 m downhole including 1 m @ 329.9 g/t, 4 m @ g/t Au (from 74 m) and 3 m at 4.2 g/t Au (from 78 m)…true widths are estimated at 60% to 90%…mineralization correlates well with adjacent RC drill holes and a 1,600-m target structure identified through recent ground geophysics…more drilling is planned to start soon…the stock has responded well to the news with CVB up 13 cents to 24.5 cents as of 7:00 am Pacific…only 30 million shares outstanding…Mali is not Nevada, Ontario or the Eskay Camp in terms of preferred jurisdictions, but this speculative play for traders could have some legs…at the other end of the spectrum, disappointing initial drill results from Miramont Resources (MONT, CSE) at its Cerro Hermosa Project in Peru have sent that stock plummeting (and deservedly so) this morning…although drilling has confirmed the basic geologic model that Miramont had developed for this district, significant mineralized drill intercepts from the first 9 holes are intermittent and discontinuous…drilling was planned to test 3 principal targets of the 5 targets currently identified…the existence of a deep-rooted hydrothermal system was determined, as was the presence of a buried intrusion as surmised from geophysical studies, but at the of the day it’s numbers that count and Miramont came up far short on this first round…

4. California Gold to California “hemp” – a sign of the timesCalifornia Gold Mining’s (CGM, CSE) board of directors has approved a high-CBD (cannabidiol) industrial hemp seed propagation project on a portion of its 100%-owned 3,351-acre Fremont Gold Property, located in Mariposa county…the company also announced receipt of confirmation from Mariposa County’s Planning Department that CGM will not be required to (1) seek re-zoning of the property; (2) obtain a Conditional Use Permit; or (3) complete a California Environmental Quality Act review in order to implement its proposed plan to launch the industrial hemp project operations at Fremont…with the recent passage of the 2018 U.S. Farm Bill, which removed federal prohibitions on the cultivation and sale of industrial hemp in the U.S., subject to compliance with applicable regulations, CGM’s management believes the timing of the County’s confirmation is a very positive development for shareholders…industry research organizations have been projecting substantial growth in the hemp-derived cannabinoid market over the next several years…one such organization, the Brightfield Group, published an article in September 2018 projecting the industrial hemp-derived CBD market could increase to over $22 billion (U.S.) by 2022…Vishal Gupta, CGM’s President and CEO stated, “Given the prolonged down-trend in the junior mining sector, and scarcity of public capital for exploration-stage mineral resource companies, the Company has been contemplating monetization of the Property with a view towards generating positive cash flow.  Our 100% ownership of the land, the availability of water and power, the highway connectivity, the close vicinity of skilled and unskilled labour, and our location within the most populated state in the U.S., makes Fremont an ideal launchpad for CGM’s high-CBD industrial hemp operations”…on the other hand, how can investors have confidence that a management team that has failed in the resource sector can suddenly find business success with a hemp operation?…maybe they’ll get lucky – perhaps, at the very least, they can turn this into a promo play for investors…

5. A First Nations-led group is putting together a bid to buy a 51% interest in Ottawa’s Trans Mountain Oil pipeline with the aim of kick-starting the expansion by giving indigenous communities a financial interest…all First Nations in Saskatchewan, Alberta and British Columbia are being invited to participate in the $6.8 billion plan, which values the project at more than $13 billion…the effort is led by Delbert Wapass, former chief of the Thunderchild First Nation in Saskatchewan and current Vice-Chairman of the Indian Resource Council…the group, called Project Reconciliation, hopes to build support for the massive Oil export project…the group is in talks with Canadian banks to lead a syndicated debt issue to finance the acquisition and its share of the expansion costs…the senior secured debt would be underpinned by the long-term shipping contracts that energy companies have signed with Trans Mountain, as well as guarantees that governments have offered to cover construction risks, the group says…that would eliminate any need for taxpayer subsidies or upfront payments by the indigenous communities…

6. A Minnesota regulator has confirmed its approval of Enbridge’s Line 3 Crude Oil pipeline replacement, allowing the $9 billion project that will ship more barrels out of western Canada to move forward, the company said yesterday…the Minnesota Public Utilities Commission (PUC) initially approved Enbridge’s plan to rebuild the aging 1,031-mile (1,660-km) pipeline that runs from Alberta to Wisconsin in June, but that decision was challenged by Minnesota’s anti-Oil governor in February…on Tuesday, the PUC denied all petitions asking for its decision to be reconsidered, according to minutes of the meeting…Minnesota PUC spokesman Dan Wolf said a formal order will be issued soon.  “The PUC confirmed its decision to approve the conditions placed on L3R’s (Line 3 Replacement) Certificate of Need – conditions meant to protect Minnesotans – allowing this critical energy infrastructure modernization project to move forward,” Enbridge said in a statement…

7. Canada’s cannabis industry could see its first-mover advantage cut short if a piece of legislation that would open the U.S. banking sector to cannabis companies is eventually passed, some industry watchers say…the Secure and Fair Enforcement (SAFE) Banking Act, which would protect U.S. banks working with cannabis companies from criminal scrutiny by regulators, is due to face a markup in front of the House Financial Services Committee today…that process, in which a congressional committee debates and amends proposed legislation before voting on the version of the bill that will be submitted to the House, is one of the final steps in a years-long campaign by marijuana activists to allow cannabis companies to gain full access to financial services – everything from bank accounts, to lines of credit, to credit cards…if that happens, some argue that Canadian cannabis companies will face intense competition from their American counterparts, who would finally have access to major lines of financing, enabling them to grow quickly and fully leverage domestic demand for cannabis…

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March 26, 2019

Daniel’s Den

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7 @ 7:00

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

1. Gold has traded between $1,312 and $1,321 so far todayas of 7:00 am Pacific, bullion has retreated $an ounce to $1,314 on profit-taking after hitting a 4-week high yesterday…the TSX Gold Index closed above 200 for the first time in 14 months yesterday and remains above that key level this morning…Silver is off 12 cents at $15.40…Copper is flat at $2.89…Nickel has added 4 cents to $5.89 while Zinc is a penny higher at $1.31…Crude Oil prices continue to push higher, up $1.36 a barrel to $60.18…concerns about demand have taken a back seat to a tight supply situation again…the U.S. Dollar Index has gained one-tenth of a point to 96.70…the U.S. Conference Board reported this morning that its Consumer Confidence Index fell to a reading of 124.1, down from February’s 131.4 and missing expectations…economists were expecting a reading around 132.1

2. Canadian Oil field services companies with operations in the U.S. are now earning more of their revenue south of the border than they have for at least 6 years – what does this say about Canadian government policies?…our politicians just keep driving business south…an AltaCorp report says that trend is expected to continue as Oil-and-gas spending weakness in Canada is balanced against steady activity in the United States…capital moves to where it’s wanted…12 of the largest Canadian energy-services companies with U.S. operations earned 54% cent of their revenue in the U.S. in 2018, the first time the percentage climbed above half since at least 2013, when it was just over 40%…AltaCorp forecasts a 16% decline in Canadian drill rig activity this year to an average of 159 active rigs…the survey includes large Calgary-based drilling companies like Precision Drilling and Ensign Energy Services, as well as well completion firms such as Calfrac Well Services…the industry relocated 16 Canadian rigs to the U.S. in 2018, up from 6 in 2017, and is continuing to send rigs south of the border this year…

3. The Dow has jumped 238 points through the first 30 minutes of trading, led by a gain in Apple as investors digest the company’s launch of a slew of different services…tech, financial and energy sectors are outperforming this morning… in Toronto, the TSX is up 112 points…Canadian equities are off to their best start to a year in nearly 2 decades, with the S&P/TSX Composite Index clinging to a lofty 12% gain while the Venture is up 13.6%..Newmont Mining (NEM, TSX) has won the support of some key investors for its $10 billion takeover of Goldcorp (G, TSX) after offering to sweeten the deal with an 88-cent per share special dividend if shareholders approve the transaction…the immediate cash payment would represent a portion of the anticipated savings from a separate agreement with Barrick Gold (ABX, TSX; GOLD, NYSE), Newmont said…drill results released this morning include 30 m @ 3.9 g/t Au on the Courvan Gold trend at Probe Metals‘ (PRB, TSX-V) Val d’Or East Project, while Barkerville Gold (BGM, TSX-V) cut 19.34 g/t Au over 17.9 m in IM-19013 at its Cariboo Gold Project, extending a mineralized vein corridor on the Shaft zone 70 m down dip…Solar Alliance Energy (SOLR, TSX-V) is the top trader on the Venture this morning, nearly doubling in value on big volume after announcing that it is now an approved Tesla vendor and has signed an agreement to install 6 Tesla charging stations combined with a solar system at a commercial project in Nashville, Tennessee…“Becoming a Tesla-approved vendor provides Solar Alliance customers with the opportunity to access a high-quality electric vehicle charging station installation,” stated CEO Myke Clark.  “We now have the ability to install stand-alone Tesla charging stations for homeowners, but more importantly, we can integrate Tesla electric vehicle chargers into our residential and commercial solar system products”SOLR is up 4 cents at 7 cents as of 7:00 am Pacific

4. Continuing drilling of the Eastern gold zone (EGZ) at Amex Exploration’s (AMX, TSX-V) Perron Project continues to intersect high-grade Gold mineralization in additional step-out drill holes…PE-1936 cut 11 g/t Au over 10.3 m including 99.2 g/t over 0.5 m, 18.3 g/t over 0.5 m, and 77.6 g/t over 0.6 m on the company’s furthest east 25-m step-out testing the High Grade zone (“HGZ”)…the intersected mineralization, which is characteristic of the HGZ, consists of 2 Gold-bearing quartz veins located on either side of a narrow mafic intrusive crosscutting a large unit of silicified rhyolite…these 2 quartz veins typically contain sphalerite, pyrite and visible Gold as coarse grains, flakes, or specs…with the high-grade results from PE-1936 and additional mineralization encountered in PE-1935, the company has now confirmed an additional 25 m of strike of the HGZ mineralized system…the zone has now been intersected over a vertical distance of 300 m with a lateral distance of over 50 m pierce point to pierce point with a spacing varying from 25 to 50 m…the HGZ remains open along strike, toward surface and to depth…AMX has been consolidating since soaring as high as $1.52…at 93 cents, it’s now hugging its rising 50-day moving average (SMA) about 15 cents above the recent financing price (75 cents) – a broad area of strong technical support…

5. Seabridge Gold’s (SEA, TSX) environmental assessment (EA) certificate for its Eskay Camp KSM Project issued by the Province of British Columbia has been extended to July 29, 2024…the original KSM EA certificate was issued by the Province for an initial 5-year term on July 29, 2014, following a comprehensive independent environmental assessment review…Seabridge initiated the renewal process in October 2018 following a thorough engagement with local Indigenous groups…the new 5-year certificate was approved with the same terms and conditions as the original certificate, including the requirement to commence construction of the Project within the 5-year period…Seabridge Chairman and CEO Rudi Fronk stated: “We are pleased that our EA Certificate has been renewed until 2024 under the same terms and conditions, reaffirming the Government of British Columbia’s support for KSM and the robustness of the original 2014 EA.  The extension highlights that KSM is a well-designed, environmentally responsible project offering significant economic benefits for British Columbia and Canada.  The receipt of the extension allows us to continue our engagement with prospective joint venture partners for KSM.  On behalf of Seabridge and our shareholders, I would like to thank the Nisga’a Nation, and the Tahltan and Gitxsan Nations for their ongoing guidance and support of KSM during the extension review process”

6. What’s another 25 million shares when you already have nearly half a billion outstanding?Royal Nickel (RNX, TSX) is under pressure in early trading after announcing a $24.49 million bought deal at 49 cents this morning with a syndicate of underwriters co-led by Haywood Securities and Cantor Fitzgerald Canada…net proceeds from the offering will be used for exploration drilling and development at Beta Hunt and to finance a portion of the cash component of the purchase price in the event that the company closes this morning’s proposed acquisition of the Higginsville Gold operations (HGO) from Westgold ResourcesRoyal Nickel says the acquisition of the Higginsville operations and its modern, low-cost 1.3-million-tonne-per-annum Gold mill would provide a key piece of the company’s strategy to unlock the significant potential of its Beta Hunt mine (processing cost savings would be in excess of $15 per tonne, or a 35% reduction, according to the company), and would add an expected 40,000 to 45,000 ounces of Gold production in 2019…HGO has a 367,000 ounce reserve within a 1.2-million-ounce Measured and Indicated Gold resource, and a further 900,000 ounce Inferred resource, all located on a 386 sq. kmland position in the Kalgoorlie Gold region…Royal Nickel successfully tolled Beta Hunt material through the HGO mill in 2018, achieving 94% Au recovery…

7. Canada’s cannabis industry could see its first-mover advantage cut short if a piece of legislation that would open the U.S. banking sector to cannabis companies is eventually passed, some industry watchers say…the Secure and Fair Enforcement (SAFE) Banking Act, which would protect U.S. banks working with cannabis companies from criminal scrutiny by regulators, is due to face a markup in front of the House Financial Services Committee today…that process, in which a congressional committee debates and amends proposed legislation before voting on the version of the bill that will be submitted to the House, is one of the final steps in a years-long campaign by marijuana activists to allow cannabis companies to gain full access to financial services – everything from bank accounts, to lines of credit, to credit cards…if that happens, some argue that Canadian cannabis companies will face intense competition from their American counterparts, who would finally have access to major lines of financing, enabling them to grow quickly and fully leverage domestic demand for cannabis…

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March 25, 2019

Sizzler Report! (Part 2)

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7 @ 7:00

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1. Gold has traded between $1,315 and $1,320 so far todayas of 7:00 am Pacific, bullion is up $an ounce at $1,319Gold has gained more than 13% since touching 1.5-year lows last August, buoyed by a host of factors including aggressive central bank buying…heading into a busy week of macroeconomic updates, Gold ETFs added to their holdings for a 3rd straight day Friday, bringing total year-to-date net inflows to 1.02 million ounces…Bloomberg data shows that total Gold held by ETFs has risen 1.4% this year to 72.1 million ounces…meanwhile, the bullish-looking TSX Gold Index is in a position today to close above 200 for the first time since January of last year…Silver has added 11 cents to $15.51…Copper prices touched their lowest levels in more than a month today on worries about global economic growth, but falling inventories and the upcoming peak demand season for industrial metals are expected to limit the pullback…Copper and Nickel are off slightly at $2.88 and $5.81, respectively, while Zinc is unchanged at $1.29…Crude Oil has pulled back 26 cents a barrel to $58.78 while the U.S. Dollar Index has lost one-tenth of a point to 96.52…a better-than-expected business confidence survey came out of Germany this morning, easing some of the concerns regarding slowing growth in the euro zone…

2. “Collusion Delusion”:  The findings of the Mueller report released yesterday prove that Democrats, with the help of their discredited friends in the mainstream media, conducted a fraud against the American people for much of the past 2 years, falsely accusing President Trump of colluding with Russia or Russians to win the 2016 election  and then “obstructing justice” to try to cover up a crime that was never committed (the left has consistently tried to delegitimize the Trump victory and presidency)…will there ever be a full accounting of how Democrats colluded with the media, the “deep state” and international elites to pull off this scam that included illegally obtained warrants from FISA court judges thanks, in part, to a Fake Dossier funded by the Clinton campaign?…the end result will likely be a Trump landslide win in 2020 (the White House, the House and the Senate), something the markets can be expected to factor in as 2019 progresses…with the Mueller fiasco now behind him, Trump can focus on completing a trade deal with China in Q2 which will further bolster his re-election chances while also giving the metals sector a big lift…

3. Tom Bradley, President of Steadyhand Investment Funds, says 2 global forces will shape investment returns over the next decade – debt fatigue, and the world’s expanding middle class…last week it was reported that consumer debt as a percentage of disposable income hit a new high in Canada…high levels of consumer, business and government debt, not just in Canada of course but across many parts of the globe, are unsustainable…there will be a day of reckoning as the world carries a heavier debt load today (relative to incomes and size of economy) than it did before the 2007-08 debt crisis…on a more positive note, there’s a big, dynamic world out there…indeed, a vast majority of the 7.5 billion people on the planet live in regions that are growing…and more importantly, the middle class in India, China and other parts of Asia is expanding rapidly…according to Consensus Economics, 12% of India’s population was middle class in 2017…by 2030, the percentage is expected to be close to 80%…think about it – there will be an additional 350500 million people in India alone who might buy an appliance, subscribe to a streaming service, take a vacation or buy stocks…even if the number turns out to be just 50%, the potential is incredible for global sellers of products and services, and the resource sector (somehow) will have to provide the metals necessary to feed all of that demand…

4. The Dow has fallen another 103 points through the first 30 minutes of trading after Friday’s tumble…in Toronto, the TSX is down 60 points, though Gold stocks are pushing higher with the TSX Gold Index up 3 points at 202Atlantic Gold (AGB, TSX) reported this morning that Proven and Probable Reserves at its Moose River Consolidated mine in Nova Scotia have increased by 401,000 ounces or 27% of the depleted Reserve base (as at December 31, 2018) as a result of additions to Reserves at the Touquoy, Fifteen Mile Stream and Cochrane Hill deposits…total Reserves for all deposits are now approximately 1.9 million ounces…mine life now exceeds 10 years and compound annual growth in production at MRC is 21%…the Venture has retreated 7 points to 631 but the winning strategy in 2019 will continue to be to buy the dips the technical and fundamental underpinnings of this market are looking better than they have in a long time…it’s a typical bland Monday morning on the Venture but there’s every reason to expect this market to heat up going into month-end and quarter-end on Friday…

5. It was announced this morning that Eric Sprott will retire as Chairman and a member of the board of Kirkland Lake Gold (KL, TSX) following the company’s 2019 AGM on May 7…Sprott has served as the Chairman of the Board since November 2016 and was the Chair of KL since February 2015…Tony Makuch, President and CEO of Kirkland Lake Gold, commented:  “I consider myself very fortunate to have had the opportunity to work with Eric over the last 2.5 years.  Not only is he a great business leader with an accurate and informed view of the market, he has been a mentor and confidant to me, providing solid advice and direction.  I will certainly miss our early morning calls and meetings.  During his tenure as Chairman, Kirkland Lake Gold has emerged as a top performing Gold company, one that is well positioned for continued growth and value creation in the years to come.  On behalf of the Company’s Board of Directors, management, employees and stakeholders, I would like to express our thanks to Eric for his dedication and leadership over the past five years and wish him all the best in his retirement.  As we advance our growth plans, we look forward to receiving his continued input and support”…Sprott stated, “During the past 5 years, we have succeeded in creating a truly unique Gold company which continues to have significant upside potential.  While I have decided that now is the right time for my retirement, I fully expect to remain a very interested and engaged shareholder of the coompany”

6. Vote buying?…Newmont Mining’s board of directors has declared a one-time special dividend of 88 cents per share of common stock, conditional upon approval of the Goldcorp transaction which has been getting some pushback…the dividend will be paid to Newmont shareholders of record as of April 17, 2019, which is prior to closing of the proposed Newmont-Goldcorp combination…the special dividend is conditional upon the approval by both Newmont’s and Goldcorp’s shareholders of the resolutions to be considered at their shareholder meetings on April 11 and April 4, 2019, respectively, in connection with the proposed transaction…the special dividend will be paid, subject to satisfaction of the conditions, on May 1, 2019…closing of the NewmontGoldcorp transaction is expected shortly after the 2 shareholder special meetings if shareholders of both companies approve the resolutions…Newmont says the special dividend delivers value to existing company shareholders with an immediate cash payment for a portion of the synergy potential arising from the Nevada joint venture announced with Barrick Gold (ABX, TSX; GOLD, NYSE) on March 11, 2019…the dividend will be paid to the holders of Newmont’s currently outstanding shares as of the record date, and not in respect of shares to be issued in connection with the proposed Newmont-Goldcorp transaction…

7. Pharmacy giant CVS Health Corp. (CVS, NYSE) is jumping on the CDB bandwagon…the mammoth American drugstore chain has announced that it will sell CBD-infused products in 800 stores across 8 U.S. states – Alabama, California, Colorado, Illinois, Indiana, Kentucky, Tennessee and Maryland…“We are carrying hemp-derived CBD products in select states to help meet consumer demand for alternative care options,” said CVS spokesperson Mike DeAngelis…a psychoactive but non-intoxicating cannabis-derived cannabinoid, CBD has been legal since late last year when the federal farm bill was passed, allowing the compound to be added to topical and cosmetic products if derived from hemp…the drugstore will be adding CBD balms, salves, creams, sprays, and roll-ons to its inventory in what CVS refers to as providing consumers with an “alternative source of relief”CNBC reports that CVS says the claims of effectiveness “will vary from product-to-product” but that the drugstore has no intention of marketing CBD-infused goods as a “cure-all”

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