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1. Gold has traded between $1,495 and $1,509 so far today…as of 7:00 am Pacific, bullion is off $4 an ounce at $1,497…precious metal funds recorded the 4th-largest inflows ever in the week to Wednesday, Bank of America Merrill Lynch said this morning, as rising trade tensions and global growth concerns prompted a dash for safe havens…Gold is poised for its best week since 2016 as the metal holds onto gains that propelled it past $1,500 an ounce while Silver trades near a 14-month high…Nickel has eased off 17 cents after a huge climb in recent days…Copper is off a penny at $2.59 while Zinc is 2 cents lower at $1.02…Crude Oil has jumped $1.72 a barrel to $54.26 while the U.S. Dollar Index is down slightly at 97.56…this week’s flight from stocks to bonds on U.S.-China trade and currency worries were weighing on the Treasury yield curve – the obscure plot of U.S. interest rates based on maturity dates – and threatening to send 10-year rates below 2-year rates…an inversion of the 2-year and 10-year yields has preceded every recession over the past 40 years…other parts of the yield curve have been inverted for months, with the rate on the 3-month Treasury bill first rising above that of the 10-year note in March…the UK economy contracted in the 2nd quarter for the first time in almost 7 years amid rising Brexit uncertainties and weakening global growth…output fell 0.2% in Q2, worse than the flat performance expected by economists and down from a 0.5% expansion recorded in Q1, according to data from the Office for National Statistics…Britain’s economy has not contracted since the final 3 months of 2012…meanwhile, in Canada, the Trudeau economy lost 69,300 private sector jobs last month while the public sector gained 17,500 jobs, another example of what’s wrong with the Canadian economy thanks to over-regulation, high taxes and a host of other problems…
2. A spectacular drill hole this morning from Garibaldi Resources (GGI, TSX-V) at Nickel Mountain, likely among the very best in Nickel sulphide exploration in many years, even better than EL-17–14 that drove GGI to $5 a share in 2017…EL-19–53, the 7th hole drilled this summer at the E&L deposit, has hit 18 m of textbook massive sulphide plus sections of semi-massive sulphide in addition to 56.5 m of mineralized orbicular gabbro (moderate to strongly disseminated) in a continuous 86-m intersection (more than twice the core length of the EL-17-14 interval)…EL-19-53 thickens and extends the robust Lower Discovery Zone (LDZ) along a shallow western plunge on the south flank of the E&L Intrusion…estimated true width is impressive at 80% (68.8 m)…assays are pending for EL-19–53 but given the known Nickel tenor in this part of the system (7% to 8%), with unusually high Copper, PGE’s, Gold and Silver as well, the grades are almost certain to be world class…the 86-m interval is also very close to surface, having started at just 67 m, with increasing sulphide percentage downhole (Nickel-Copper-rich mineralization continued to 153 m with the hole ending at 171 m)…EL-19–53 was described in this morning’s news as “the most extraordinary hole drilled so far at Nickel Mountain”…the “leopard print” massive sulphides feature large loop textured pyrrhotite-pentlandite-chalcopyrite with grains of pentlandite up to 4.5 cm in diameter…it’s a geologist’s dream to hit a hole like this, and no doubt Dr. Lightfoot will be showing this one off very soon…
3. EL-19-53 has also provided important information that the main axis of the mineralized system at Nickel Mountain may be controlled by SW-NE trending domains which guides future drilling and geologic models…meanwhile, assays have been received for the first hole of this summer’s program…EL-19–47 cut 7.6% Nickel and 3.2% Copper, plus Cobalt, Platinum, Palladium, Gold and Silver, over 6.1 m (and 6.1% Ni and 2.8% Cu over 9.3 m) within a broader core interval of 50.57 m grading 1.5% Ni and 0.94% Cu (true width estimated at 40.45 m)…this hole successfully extends the Lower Discovery Zone to the southeast…the massive sulphide intercept in EL-19–47 is 64 m southeast of the EL-17-14 massive sulphide intercept…Jeremy Hanson, VP Exploration for Garibaldi, commented, “2019 drilling is off to a highly successful start as we test for new mineralized structures. Lab efficiencies are speeding up delivery of assays compared to 2018 and 2017. Beginning with these SGS results from our first hole, we expect they will be ab le to sustain better turnaround times this month for completed holes, including EL-19-53“…it also appears, based on this morning’s news, that GGI has found another olivine gabbro chamber below the Lower Discovery Zone…this is classic evidence of an extensive Nickel Mountain “magma highway”, driving volume…GGI is up 11 cents at $1.71 as of 7:00 am Pacific…the GGI long-term chart, which has been remarkably accurate, is pointing to a breakout in the near future above the key $2.25 Fib. level…the fundamentals support that technical interpretation more than ever after this morning’s news…
4. The largest high-grade Nickel ore supplier in the Philippines, SR Languyan Mining, will stop mining in October, due to resource depletion, according to a report this morning from SMM (Shanghai Metals Market)…the miner, located in Tawi-Tawi, now can ship about 600,000 wmt of Nickel ore in a month, with an average Ni grade above 1.5%…another mine nearby, Altawitawi Nickel, is also verging on resource exhaustion…it has stopped output of high-grade ore, and medium-grade tailings are its major products…resource depletion or degradation have been major concerns for mines in Tawi-Tawi, given the early start of exploitation…the potential shutdown of SR Languyan, together with developments in Indonesia, is set to tighten supplies of high-grade Nickel ore and increase the possibility of a supply shortage…Nickel prices enjoyed their biggest daily advance in a decade this week on fears that Indonesia could bring forward a ban on exports of unprocessed ore…
5. Follow the money: In yet another sign of the huge turnaround in sentiment in the Gold sector, New Gold (NGD, TSX), which was really struggling just a year ago, has announced a bought deal financing of $150 million at $1.60 per share through a syndicate of underwriters led by BMO Capital Markets…the offering is expected to close on or about August 30th…New Gold, which appears to be getting its Rainy River mine on track, will use the net proceeds to enhance financial flexibility and strengthen its balance sheet (including debt repayment)…NGD is down 14 cents…
6. Oil prices rose this morning, supported by expectations of more OPEC production cuts despite the International Energy Agency (IEA) reporting weak demand growth…the IEA said global Oil demand in the 1st half of 2019 grew at its slowest pace since 2008, hurt by mounting signs of an economic slowdown and a ramping up of U.S.-China trade tensions…Oil prices have lost more than 20% from peaks reached in April, putting them in bear territory…Saudi Arabia, de facto leader of OPEC, plans to maintain its Crude Oil exports below 7 million barrels per day in August and September to bring the market back to balance and help absorb global oil inventories…market focus in Oil has clearly shifted…it is squarely on future demand, rather than on supply…the United Arab Emirates also will continue to support actions to balance the Oil market, according to the UAE’s energy minister…the OPEC and non-OPEC ministerial monitoring committee is scheduled to meet in Abu Dhabi on Sept. 12 to review the Oil market…cheap Oil means timid inflation which gives the Federal Reserve more flexibility to cut rates…
7. The Dow has rebounded 137 points through the first 30 minutes of trading…chip stocks are under pressure…President Donald Trump said this morning that the U.S. will cut ties with Chinese telecom giant Huawei, but that could change if there’s a trade deal with China…the move on Huawei came after China halted buying American agricultural products in retaliation for Trump’s surprise tariffs threat last week…China also allowed its currency to drop against the dollar to a key level unseen since 2008…in Toronto, the TSX is down 75 points while the the Venture is flat at 596…Eskay Camp stocks are firming up after news from Garibaldi…GGI neighbor Metallis Resources (MTS, TSX-V), which reported new surface discoveries at Thunder North earlier this week, is up 6 cents at 88 cents…Crystal Lake Mining (CLM, TSX-V) is up half a penny at 35.5 cents while Tudor Gold (TUD, TSX-V) has added 4 cents to 90 cents…CLM and TUD are in the midst of drill programs and could have fresh news anytime now…further north, GT Gold (GTT, TSX-V) is up a penny at $1.21 while Brixton Metals (BBB, TSX-V) has eased off half a penny to 35.5 cents but looks strong…
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