June 20, 2019
June 19, 2019
7 @ 7:00
Visit the BMR comments section throughout the day for updates and helpful information!
1. Gold has traded between $1,341 and $1,348 so far today…as of 7:00 am Pacific, bullion is off $3 an ounce at $1,343…yet another push to the upside faltered late yesterday with some bulls perhaps paring some length ahead of the Fed statement later today…one possibility for Gold is a temporary “sell on news” event if the Fed isn’t more dovish than expected…“A major driver of the Gold price rally since 4Q18 has been the Fed’s pivot from expecting rate hikes to expecting cuts,” stated Societe Generale in a note, though the firm could be underestimating other factors that have contributed significantly to Gold’s rise including record central bank demand…”We expect market participants to be disappointed by the Fed’s press conference. This would pressure Gold prices,” Societe Generale added…technically, Gold has a very strong new support band that begins at $1,313 and is clearly on a trajectory to reach $1,400…Silver is unchanged at $14.96…Copper and Nickel are pushing higher…Copper is up 3 pennies at $2.66 while Nickel has gained 6 cents to $5.43…Zinc is flat at $1.17…Crude Oil is off 53 cents at $53.37 but news is just out from the Energy Information Administration (EIA) that U.S. Crude inventories decreased by 3.1 million barrels last week…the EIA data was more bullish than previous supply data released yesterday from the American Petroleum Institute…the U.S. Dollar Index has dipped one-tenth of a point to 97.53…
2. Fed statement at 11:00 am Pacific, followed by a Jerome Powell news conference: The Fed is expected to clear the way for a July interest rate cut by downgrading its economic forecast, tweaking the language in its statement and reducing its interest rate forecasts…watch for the word “patient” to be removed from the Fed statement, signaling that the central bank is ready to move on interest rate cuts to help the U.S. economy make it through a period of possible slower growth and the potential impacts of trade tensions…Fed funds futures are pointing at odds of about 80% for a July cut and about 20% for a June cut…
3. Too little, too late from Trudeau: The Trans Mountain pipeline expansion finally got the go-ahead from Ottawa yesterday (it was easy to sense Trudeau’s reluctance), but the feds seem to have no real plan for construction…producers want to see shovels in the ground ASAP…however, the $9.3 billion pipeline still faces regulatory approvals and likely legal challenges…Moody’s commented, this adds up to “a tremendous amount of execution risk up until the Oil starts flowing”…meanwhile, news of the pipeline approval came as Spanish Oil giant Repsol announced it was cutting 30% of its staff in Canada, another sign of how the feds and others have damaged our international reputation and have chased investment away…Alberta Premier Jason Kenney stated yesterday, “This isn’t a victory to celebrate, it’s just another step in a process that has, frankly, taken too long. We’ll measure success not by today’s decision, but by the beginning of actual construction and, more importantly, by completion of the pipeline”…for Kenney, the question now becomes whether Trans Mountain will help Canada demonstrate to the world that it is a safe place to invest, create jobs and build infrastructure…“This is a test for whether Canada truly is an economic union where we can dream big and still do big things,” he correctly pointed out…meanwhile, the mainstream media continues to peddle the myth that the pipeline expansion is not supported by British Columbians…a new poll released yesterday suggests a strong majority of the province is in favor of the project…the poll, conducted last week by Ipsos on behalf of pro-development advocacy group Resource Works, found 60% of those surveyed support the expansion while only 29% oppose it (the 29% just happen to be more vocal, especially the radical fringe)…Ipsos senior vice-president Kyle Reid said while much of the rhetoric coming from B.C. may prove otherwise, this latest poll doesn’t actually show anything new…“Our polling, both for governments and industry along with other polls along the past couple of years, have all shown the same thing,” he said…what a great example of how incompetent career politicians have messed things up in Canada…
4. Lots of talk about Facebook’s (FB, NASDAQ) new digital currency, Libra, which was formally announced yesterday…Facebook is promising a secure blockchain-based payment system backed by hard assets and designed for mainstream users…the company named a series of big corporate partners, including financial services heavyweights Mastercard and PayPal and tech giants Uber and Spotify, that it said will help it create a “secure, scalable and reliable” crytocurrency…the Wall Street Journal reported in May the initiative involved the creation of a “stablecoin” – a digital asset backed by a basket of global currencies or other investments…Mark May, senior Internet analyst at Citigroup, took yesterday’s news as a bullish sign in terms of Facebook’s long-term prospects…“It’s very different from what we’ve seen with other cryptocurrencies. It’s meant to be quite stable, to reduce volatility. There are a lot of significant Fortune 100 companies that are part of the association that is going to be backing this. So, it does feel much less speculative and much more trying to build a real-life substitute asset here – currency – for remittance payments, for merchant transactions and the like. And it plays right into, I think, Facebook’s wheelhouse. They’re playing the long game here. This is not about trying to drive e-commerce transactions on day one. I think it’s about trying to build the community and really matching consumers with businesses in a different way than what’s existed in the past, and ultimately trying to close the loop with the ad business that Facebook has built its entire enterprise on. So, I think it is a watershed moment”…
5. Chibougamau Independent Mines (CBG, TSX-V), which has been a strong performer this year, announced this morning that drilling has started at its C-3 Copper/Gold zone, located east of Chibougamau, Quebec…the C-3 zone is a significant Copper/Gold discovery in the heart of the Chibougamau mining camp…the last 2 drill holes, as reported in news releases April 4 and April 22, returned significant mineralized intersections: BJ-19–17 cut 4.3% Cu, 3.7 g/t Au and 19.6 g/t Ag over a 22-m core length…BJ-19–18 intersected 7.7% Cu, 3.6 g/t Au and 33.3 g/t Ag over a 9-m core length…
6. The Dow is up 75 points through the first 30 minutes of trading…equity markets have already priced in a dovish shift by the Fed, with the S&P 500 index gaining 6% so far this month…in Toronto, the TSX has added 12 points while the Venture has backed off 1 point to 583…Midas Gold (MAX, TSX) has closed its previously announced bought deal financing, issuing 33.2 million shares at a price of 60 cents per share for gross proceeds of $19.9 million…net proceeds will be used to advance the feasibility study on, and permitting for, the redevelopment and restoration of the Stibnite Gold Project in Idaho…Sirona Biochem (SBM, TSX-V), a hot play this year, is the early price and volume leader on the Venture this morning after announcing that it has signed a non-binding term sheet with San Francisco-based, industry leading Rodan + Fields for the commercial sales of novel ingredient TFC-1067 (skin-lightening agent)…the term sheet covers all material terms and conditions of a definitive agreement and is expected to be signed in the 3rd quarter of 2019…
7. Saskatchewan Copper play: The Canadian arm of Rio Tinto (RETC) says it will commence a $3 million exploration program at the Janice Lake sedimentary hosted Copper project, music to the ears of Transition Metals (XTM, TSX-V) which optioned the property in February to Forum Energy (FMC, TSX-V)…Forum then brought in Rio Tinto…the initial program will consist of an airborne geophysical survey followed by drilling…Transition holds a 2% NSR on the property and is entitled to downstream milestone cash payments…Forum has also issued Transition 8 million shares which currently represents approximately 7.5% of Forum shares outstanding…Transition President and CEO Scott McLean stated, “Transition has long recognized the potential of the emerging Wollaston Basion Copper District which is exemplified by results from the Janice Lake Project and the significant investment RTEC will be making in the project. RTEC has nearly doubled the size of the property since executing the agreement with Forum, which has greatly expanded the extent of our royalty coverage”…Transition (43 million shares outstanding) closed at 19 cents yesterday and has multiple catalysts…Forum has over 100 million shares outstanding and closed at a nickel yesterday…
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June 18, 2019
7 @ 7:00
Visit the BMR comments section throughout the day for updates and helpful information!
1. Gold shot up as high as $1,355 this morning where it ran into resistance once again…as of 7:00 am Pacific, bullion is up $1 an ounce at $1,341…European Central Bank President Mario Draghi said today that the ECB will ease policy again if inflation fails to accelerate, signalling one of the biggest policy reversals of his 8-year tenure…Gold priced in euros also jumped to its highest level since April 2017…Silver is up 5 cents at $14.87…base metals are rebounding with Copper up 3 pennies at $2.67 while Nickel has added 4 cents to $5.37…Zinc is unchanged at $1.17…Crude Oil has jumped $1.19 a barrel to $53.12 while the U.S. Dollar Index is steady at 96.67 ahead of tomorrow’s Fed announcement…equity markets are pushing higher today on fresh optimism surrounding U.S.-China trade talks…President Trump said he’ll be meeting with his Chinese counterpart, Xi Jinping, at the upcoming G-20 summit, with their respective teams holding talks prior to that meeting…
2. Goldman Sachs is upbeat about Gold prices, looking for the metal to draw support from emerging market demand and rise to around $1,425 in 12 months…in a research report late yesterday, Goldman was bullish on commodities generally due to easier monetary conditions, calling for a 10% 3-month return on the S&P Goldman Sachs Index and a 9% return on a 12-month basis…“In our view, risks are starting to shift to the upside, particularly in emerging markets,” Goldman said…“Unlike last year, the Fed is on hold, interest rates are lower and Oil prices are weaker, all combining for easier financial conditions than last summer/fall. In addition, during the past several weeks, policymakers have demonstrated a willingness to underwrite any demand weakness stemming from trade-war concerns”…
3. Justin Trudeau, trying to be all things to all people, is widely expected to give the green light today to the expansion of the Trans Mountain pipeline, a day after the House of Commons declared a “national climate emergency” (what we really have, something most politicians are simply afraid to address, is a “national competitiveness emergency” which is why the economy is underperforming)…Canadians have never been so poorly served by their elected representatives…meanwhile, anti-resource Bills C-69 and C-48 are closer to becoming law…Trudeau, who has strategically fed anti-Oil rhetoric and climate change hysteria, lacks the desire, courage and skill sets to stand up to the radical far left to ensure that the Trans Mountain expansion actually gets built…more court challenges and delays are certain…Canadians should take pride in being an energy superpower, like its neighbor to the south, but the globalist left in this country (mostly confined to the largest cities) wants nothing to do with that…in the meantime, increasing Oil sands production next year could force a record number of barrels onto rail cars, prolonging financial pain in the Oil patch well before any new pipeline projects come online…Canada could be shipping as much as 500,000 barrels per day of Oil by rail car next year, according to a recent estimate by IHS CERA in Calgary, or roughly 1 out of every 9 barrels produced in the country…in 2016 that ratio was closer to 1 in every 43 barrels produced…shipping by rail is more expensive and actually less environmentally friendly…
4. Cobalt 27 (KBLT, TSX-V) jumped as much as 33% in early trading after a friendly takeover offer…Pala Investments is acquiring Cobalt 27, the 81% it doesn’t already own, for total consideration of approximately $501 million (CDN)…Cobalt 27 shareholders will receive $5.75 per common share, comprising $3.57 in cash plus $2.18 in shares of a newly-listed company to be named Nickel 28 Capital…Nickel 28 will be created to hold Cobalt 27’s joint venture interest in Ramu, a low-cost, long-life producing Nickel-Cobalt mine, and its royalty portfolio on various projects (not including Voisey’s Bay) and certain equity positions…Nickel 28 will be funded with $5 million (U.S.) in cash at inception with no corporate debt…Anthony Milewski, Chairman and CEO of Cobalt 27, commented, “We believe this is a highly compelling offer for Cobalt 27, as the transaction provides shareholders with a large upfront premium. It is also clear that Nickel will be an increasingly critical component of the electric battery revolution, and the creation of Nickel 28 provides shareholders with significant incremental value and continued exposure to the strong fundamentals of battery metals”…Pala will retain a 4.9% interest in Nickel 28, and the current Cobalt 27 leadership team will continue as the board and management of Nickel 28…KBLT is up 93 cents a share at $4.40 as of 7:00 am Pacific…
5. Beyond sense?…shares of Beyond Meat (BYND, NASDAQ) opened at $200 this morning…at the beginning of May, the maker of plant-based meats priced its IPO at $25 per share..excluding this morning’s activity, the company’s stock is up 579% since its IPO, a market value of $9.9 billion…Beyond’s stock price remains well above the price targets of analysts, the highest of which is $123…no one on Wall Street recommends buying the stock anymore because of its hot streak…BYND has been gyrating as analysts have raised concerns about its monster run and short sellers have taken an interest…while the market for meat alternatives is growing more crowded as Tyson Foods and Nestle prepare to launch their own plant-based meat imitations, Beyond has been expanding and improving its own products…
6. The Dow has surged 339 points through the first 30 minutes of trading…Facebook (FB, NASDAQ) formally announced plans this morning to launch a cryptocurrency called Libra, promising a secure blockchain-based payment system backed by hard assets and designed for mainstream users…Facebook named a series of big corporate partners, including financial services heavyweights Mastercard and PayPal and tech giants Uber and Spotify, that it said will help it create a “secure, scalable and reliable” crytocurrency…the Wall Street Journal reported in May the initiative involved the creation of a “stablecoin” – a digital asset backed by a basket of global currencies or other investments…in Toronto, the TSX has added 140 points…the TSX Gold Index climbed as high as 210 in the first 30 minutes of trading, its best level since 2017…key resistance is 213…the Canadian Marijuana Index is starting to recover out of oversold conditions…the Venture is up 3 points at 588 after testing important support yesterday at 585…GoldON Resources (GLD, TSX-V) is adding a 2nd crew to the on-going exploration program at its West Madsen Gold Property recently optioned from Great Bear Resources (GBR, TSX-V)…the 2nd crew will mobilize to West Madsen Block B while the 1st crew continues its focus on West Madsen Block A that is on-strike and contiguous with Pure Gold’s (PGM, TSX-V) Madsen Project…Mars Napoli, with 3 decades’ exploration experience with Inco and Vale, has been appointed VP Exploration for Crystal Lake Mining (CLM, TSX-V)…Napoli is a Gold and Nickel specialist, having started his career in Northern Ontario with the Ministry of Northern Development of Mines, and comes highly recommended by Dr. Peter Lightfoot…“We searched hard for the right candidate and we’re thrilled to have Mars join our team as VP Exploration,” stated Richard Savage, Crystal Lake President and CEO…“His experience with high-grade Gold systems and a broad array of other deposit types will help drive our success this summer with the Newmont Lake Project in the Eskay Camp“…
7. American Pacific Mining’s (USGD, CSE) joint venture partner at the Tuscarora Gold Project, OceanaGold (OGC, TSX), has commenced a comprehensive geophysical survey, known as CSAMT (Controlled Source Audio-frequency Magneto-tellurics)…the study will be conducted by Zonge International, a well-known geophysical services company based in Reno…“This non-intrusive, low-impact CSAMT survey will highlight key target exploration zones, showing the electrically resistive and conductive areas throughout the entire Tuscarora Project area,” commented Eric Saderholm, American Pacific President…“Layering this information with previously collected data will be essential in the design of the fast-approaching drill campaign that OceanaGold will conduct this summer”…CSAMT raw data will be processed and interpreted, with results anticipated in early July…the gravity survey that commenced in May has also been completed and data interpretation is in progress…USGD is unchanged at 15 cents in early trading…
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June 17, 2019
7 @ 7:00
Visit the BMR comments section throughout the day for updates and helpful information!
1. Gold has a traded between $1,332 and $1,344 so far today…as of 7:00 am Pacific, bullion is off $1 an ounce at $1,340 after Friday’s 14-month high…Silver is flat at $14.83…the Gold-Silver ratio remains at an historically high 90.4, meaning Silver has not been this undervalued relative to Gold since the first year of Bill Clinton’s first term…Copper is unchanged at $2.63…Nickel has slipped 6 pennies to $5.34 while Zinc is off 1 cent at $1.16…Crude Oil has retreated 36 cents to $52.15 while the U.S. Dollar Index has fallen one-fifth of a point to 97.40…the Fed meeting tomorrow and Wednesday is expected to be the biggest event for markets this week…there is also some data, including manufacturing and services PMIs on Friday, as well as housing starts tomorrow and home sales on Friday…Iran will surpass the internationally agreed limit on its low-enriched Uranium stockpiles in 10 days, the country’s atomic energy body said today…a spokesperson for the Iranian Atomic Energy Organization said that the country would increase enrichment levels to 20% – significantly closer to weapons-grade material – for use in local reactors, but emphasized that Europe still had a chance to rescue the 2015 nuclear deal if its remaining signatories found a way to shield the Islamic Republic from the crippling effect of U.S. economic sanctions…continued problems with Iran will help support Gold and Oil markets…
2. This speaks volumes – China has halted a dispute at the World Trade Organization over its claim to be a market economy, a panel of 3 WTO adjudicators said this morning, meaning Beijing must accept continued EU and U.S. “anti-dumping” levies on cheap Chinese goods…according to Reuters, 1 trade official close to the case said so much of the ruling had gone against Beijing that it had opted to pull the plug before the result became official…“They lost so much that they didn’t even want the world to see the panel’s reasoning,” the official said…without a WTO ruling in Beijing’s favor, the EU and United States can keep imposing duties on cheap imports from China while disregarding its claim that they are fairly priced…China had insisted that they treat it as a “market economy”, countering the view that the price of Chinese exports could not be taken at face value due to state interference in the economy…
3. The Federal Reserve, facing fresh demands by President Trump to cut interest rates, is expected to leave borrowing costs unchanged this week but it could lay the groundwork for a rate cut as early as next month…new economic projections that will accompany the U.S. central bank’s policy statement Wednesday will provide the most direct insight yet into how deeply policymakers have been influenced by the U.S.-China trade battle, Trump’s insistence on lower interest rates, and recent weaker economic data…analysts expect the “dot plot” of year-end forecasts for the Fed’s benchmark overnight lending rate – the federal funds rate – will show a growing number of policymakers are open to cutting rates in the coming months, though perhaps not as as aggressively as investors expect or Trump wants…the Fed is also widely, though not universally, expected to remove a pledge to be “patient” in taking future action on rates, opening the door to a possible cut as early as next month…
4. The Dow is up 11 points through the first 30 minutes of trading…equities posted slight gains last week, adding to this month’s strong rally…the Dow is up 5.1% this month while the S&P 500 and NASDAQ have both advanced more than 4%…in Toronto, the TSX has added 30 points to begin the new trading week…the TSX Gold Index is up 1 point at 206 with key resistance at 211…the Venture is flat at 588…the Venture has been holding up much better than the Canadian Marijuana Index which is off again slightly in early trading today and has tumbled more than 30% since March 19…the Marijuana Index lost another 34 points or 6.4% last week after declines of 2.6% and 10.3% the previous 2 weeks, respectively…normally, such a drop in the Marijuana Index would have translated into a big loss for the Venture…however, strength on the resource side has offset much of the weakness in cannabis stocks with the Venture down just 7.5% during the same 3-month period…Garibaldi Resources (GGI, TSX-V) continues to firm, up another 4 cents at $1.10 as of 7:00 am Pacific with drilling underway at Nickel Mountain…
5. Osisko Mining (OSK, TSX) has cut more high-grade Gold at Windfall Lake…highlights from new infill drilling at the Lynx deposit, located immediately northeast of the main Windfall Gold deposit, include 132 g/t Au over 5 m; 51 g/t over 6.3 m; 56.2 g/t over 4.7 m; 106 g/t over 2 m; 82.9 g/t over 2.3 m; 85.3 g/t over 2 m; 36 g/t over 4.1 m; 23.4 g/t over 6.3 m; 63.6 g/t over 2.1 m; 59.3 g/t over 2.2 m; 37 g/t over 3.5 m; and 42.1 g/t over 3 m (true widths estimated at 80%)…Windfall Lake is located between Val-d’Or and Chibougamau in the Abitibi region…the mineral resource defined by Osisko, as disclosed in the Windfall Lake Technical Report and November 27, 2018, Lynx resource update, comprises 2,874,000 tonnes at 8.2 g/t Au (754,000 ounces) in the Indicated category and 10,352,000 tonnes at 7.1 g/t Au (2,366,000 ounces) in the Inferred category…
6. Westhaven Ventures (WHN, TSX-V) has resumed drilling at its 155 sq. km Shovelnose Gold Property near Merritt in B.C.’s southern interior…Westhaven completed 3,000 m of diamond drilling in 8 holes this past winter at Shovelnose…that program continued to return bonanza Gold grades, including the best hole ever drilled on the property (12.7 m of 39.3 g/t Au and 133.1 g/t Ag in SN19–01) and confirmed the potential for mineralization in the south fault block with the successful intersection of a Gold mineralized vein zone in SN19–07…in addition, recent property wide exploration, including geophysics, soil sampling, prospecting and mapping, has identified several new targets…the company has deployed a 2nd drill which will expedite defining and expanding the South Zone mineralization as well as drill testing prospective regional targets…Westhaven is planning on drilling 20,000 m at Shovelnose in 2019…since 2018 the company has completed 30 diamond drill holes for a total of 11,574 m in the newly discovered South zone…the limited drilling to date has located and traced substantial epithermal quartz veining over a strike length of 720 m and a vertical range of 320 m…the dimensions of this vein system remain to be determined and will require extensive drilling to test its full potential…the South Zone, as presently outlined, consists of two subparallel vein systems up to 490 m in length (Veins 1 and 2) and related zones of sheeted quartz veinlets…WHN is up 2 pennies at 65 cents as of 7:00 am Pacific…
7. Canadian companies reluctant to reinvest excess cash are instead buying back their own shares at a furious pace…buybacks by companies on the TSX soared to nearly $50 billion in the 12 months up to the end of the 1st quarter…as a proportion of the whole stock market, that is around 50% higher than the previous record set a decade ago, according to a report by Ian de Verteuil, head of portfolio strategy for CIBC World Markets…“It has taken some time, but C-suite executives in Canada appear to have found religion on buybacks,” he said…it is a devotion with a potential downside, however…while buybacks are a quick way to deploy extra cash, reward shareholders and support an undervalued stock, the corporate sectors in Canada and the United States have a poor record of timing buybacks, historically resorting to them most aggressively at market peaks…“Buybacks are a bull market phenomenon,” said Jason Mann at Edgehill Partners…“Confidence is high, excess profits are high, but so are valuations”…however, for many Canadian companies, especially in the beaten-up energy sector, buybacks may make good sense at the moment…
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June 16, 2019
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