Visit the BMR comments section throughout the day for updates and helpful information, and check back later for an additional post.
1. Gold has traded between $1,244 and $1,250 so far today…as of 7:00 am Pacific, bullion is up $2 an ounce at $1,245…a strong band of resistance stretches from about $1,250 to $1,270 on various charts which includes Fib. and the still-declining 200-day moving average…however, it’s really just a matter of when, not if, bullion conquers that wall given its bullish new primary trend following important lows over the summer…money managers cut their net-bearish positioning in Gold futures by 83% during the most recent reporting week for data compiled by the Commodity Futures Trading Commission…“As such, they played a major part in driving up the Gold price,” said Commerzbank…“Given that Gold has risen even further in the meantime, further short positions are likely to have been closed”…Silver has added 18 cents to $14.68…Copper and Nickel are each up 4 cents at $2.80 and $4.90, respectively, while Zinc is a penny higher at $1.22…Cobalt remains steady at $25.06…Crude Oil prices appear to have stabilized above $50 a barrel…WTI has jumped $1.29 a barrel to $52.29…the U.S. Dollar Index is up slightly at 97.25…socialism never works – Goodyear has decided to join the list of multinationals who are leaving Venezuela for good…laid-off workers are to get 10 tires each (serious) plus severance pay…tires (and toilet paper) are of enormous value amid the country’s chronic shortages of just about everything…
2. President Trump, in a morning tweet, hinted at “important announcements” regarding his administration’s high-stakes trade talks with China…“Very productive conversations going on with China! Watch for some important announcements!”, the President stated…Trump’s optimistic tweet gave markets a much-needed boost at the open and came soon after Bloomberg News reported that China’s government would consider slashing tariffs on U.S. car imports to 15% from 40%…Trump tweeted last week that China had agreed to slash the tariffs, although the Chinese government did not confirm or deny it at the time…other signs of potential progress emerged this morning…according to The Wall Street Journal, which cited Chinese officials, President Xi Jinping has told senior members of his government to follow through on his recent agreement with Trump…Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are the main U.S. negotiators in calls with Chinese negotiators…as part of the trade “truce”, Chinese officials are also considering making changes to the Made in China 2025 Plan, a state-led industrial policy aimed at enabling Chinese companies to dominate a number of industries such as artificial intelligence and robotics…the policy is a focal point of the U.S.’s complaints that Beijing engages in unfair trade practices that put foreign firms at a disadvantage to Chinese companies…
3. Optimism among U.S. small-business owners fell slightly in November for the 3rd straight month, mainly due to concerns about slower economic growth and moderating expectations for sales, according to a survey released this morning by the National Federation of Independent Business…the NFIB Small Business Optimism Index had a November reading of 104.8, down 2.6 points from the prior month and its lowest level since April…the NFIB said it expects solid economic growth in the 4th quarter but that growth appears to have peaked and will moderate in 2019…the tight labor market was among the top reasons for declining optimism as about 25% of owners surveyed said finding qualified workers was their most important problem…the percentage of employers who plan to raise wages (sign of a tight labor market) tied a near 30-year high…
4. Slowing global growth and uncertainty about the chance of a near-term permanent settlement in the China-U.S. battle might not prevent the development of a Copper shortage and a higher price for the world’s most important industrial metal…hints of Copper entering a period of short supply can be seen in the collapse of stockpiles of the metal held in the warehouses of commodity exchanges…Reuters reported this morning that headline stocks of Copper in warehouses monitored by the London Metal Exchange (LME) have hit their lowest levels since July 2008, far below the 380,000 tons held early in 2018…this decline was a feature of a briefing delivered to investors last week by Glencore CEO Ivan Glasenberg who said inventories of metals such as Copper and Zinc had dropped to near record lows…Morgan Stanley last week noted in a research report that a number of Copper projects had started appearing, though their “time to first production” is a problem…“Copper is clearly a preferred commodity. However, the time to market for many of these projects is at least 4 years and up to 10 years from today”…
5. Kirkland Lake Gold (KL, TSX), which has climbed for 9 straight sessions, released updated 2019 full-year guidance this morning, highlighted by strong production growth and improved unit costs, while the company also gave 3-year production guidance…the 3-year outlook includes the Fosterville mine achieving over 500,000 ounces of production by 2020 and demonstrates the potential for consolidated production to reach 1 million ounces by 2021…for 2019, KL production is estimated at between 740,000 and 800,000 ounces, driven largely by higher numbers at Fosterville…all-in-sustaining costs per ounce sold are expected to improve to between $630 and $680 (U.S.)…Kirkland Lake is targeting consolidated production growth of 10 to 15% per year over the next 3 years, with production of 740,000 to 800,000 ounces in 2019 to be followed by 850,000 to 910,000 ounces in 2020, and 945,000 to 1,005,000 ounces in 2021…Tony Makuch, President and CEO, commented: “While achieving 1 million ounces of production (2021) will be a significant milestone, it is more important that the growth we achieve continues to drive down unit costs, increases margins and positions us to generate substantial amounts of free cash flow going forward. Not surprisingly, the key driver of our 3-year growth is Fosterville, where we expect to achieve over half a million ounces of annual Gold production by 2020 and close to 600,000 ounces in 2021. As demonstrated from recent drilling and production results, the Swan Zone is a truly unique, high-grade zone that we are continuing to grow. We continue to explore for more zones like Swan at Fosterville and are encouraged by the fact that similar mineralization has been intersected in multiple locations”…
6. The Dow is off to a strong start today, up 246 points as of 7:00 am Pacific…the Dow and S&P 500 were both down more than 1% for the year entering today after a rough start to December…yesterday, the Dow eked out a slim 34-point gain after falling 1,427 points or 5.6% the previous 3 sessions…the TSX has climbed 131 points while the Venture has added 2 points to 566…White Gold (WGO, TSX-V) is up another 4 pennies to $1.39 (a 700,000 share block was just crossed through Clarus) through the first 30 minutes of trading after reporting more encouraging drill results yesterday from its JP Ross Property in the Yukon where it has expanded its high-grade Gold discovery…Chemesis International (CSI, CSE) has firmed up on news this morning that revenues for its Puerto Rico operation were $336,600 during the 1-month period ending December 6…since the company announced the transfer of the state cannabis licence, Chemesis has been aggressively expanding Natural Ventures‘ operations to increase its ability to serve the growing number of patients on the island…Natural Ventures is a fully integrated medical cannabis company, with 100,000 square feet of cultivation and 35,000 sq. feet of carbon-dioxide-based extraction…Natural Ventures is servicing approximately 90% of the dispensaries in Puerto Rico and in 2018 is on pace to be the largest 3rd party manufacturer based on volume…
7. Copper bulls should be keeping an eye on Brazil-based Ero Copper (ERO, TSX)…the stock has held up reasonably well during recent market volatility and the company has a low capex runway to further organic production growth through increased mining rates as it continues to develop its existing sites…this morning, Ero reported that it has drilled into near-surface extensions of its recently announced Vermelhos East Zone highlighted by 3 holes including FVS-311 that intersected 27.4 m grading 8.4% Copper including 17.7 m grading 10.8% Copper from 81.2 m downhole…Ero’s strategy is centered upon aggressively increasing its high-grade mineral reserves, extending mine life, maximizing mill throughput and leveraging the excess capacity of current infrastructure…the company recorded net income of $9.8 million (U.S.) in Q3 on total Copper production of 7,792 tonnes…ERO is up 76 cents at $10.27 as of 7:00 am Pacific…
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Hi Jon Do you know what is going with CCW SP? Is there a PP in the works? When will they need a PP?
Thanks
Comment by donmac2117 — December 11, 2018 @ 10:43 am
There is no PP in the works, donmac2177…unless of course they hit the Cobalt motherlode or of course a big intersection of high-grade Gold and a well known investor decides he wants a bundle of this, in which case we’re looking at a much higher share price…more weak hands into strong hands this morning…
Comment by Jon - BMR — December 11, 2018 @ 10:57 am
Jon….just wondering if you had a geo give you some interpretation of the the core Frank put up on the website? Thanks
Comment by bob — December 11, 2018 @ 11:07 am
Not sure which photo u are referring to specifically, Bob, but yes…from what was posted earlier, we’ve mentioned this b4 and we’ve checked with multiple geos…CCW is into a Gold discovery east of the mine…there could be much more there as well because the Archean is likely the source of what’s in the Nipissing diabase…what’s unfolding at Gowganda West (IMR) plus additional research we’ve done out here with regard to the area provides ample additional evidence/confirmation…
Comment by Jon - BMR — December 11, 2018 @ 11:48 am
Thanks for the reply Jon, just curious since they have put down 5 deep holes, perhaps working on 6th? logic says they must be hitting. Difficult times getting lab results but wish Frank would give us an update.
Comment by bob — December 11, 2018 @ 12:00 pm
Jon, are you still at Gowganda? If you are and plan on being there until ccw assays are released you may have to spend Christmas there as well as a the New Year given the lab delays and Frank’s comment on his website. He said they may issue an update without assays which leads me to believe he doesn’t expect assays anytime soon?
Comment by Dan1 — December 11, 2018 @ 3:56 pm
Hi Jon,
I don’t think CCW investors would mind owning a gowganda type property for peanuts. Bring on the assays.
Comment by donald — December 11, 2018 @ 6:29 pm
Notice he used the word MAY, Dan1, which tells me they are close, anything’s possible. They are fired up with what they’re seeing to the east, and of course with the underground program, so I am sure they are hoping to include some numbers if possible with news (helps explain the delays). Failing that, a powerful update that effectively paints the picture.
Amazing…it took nearly 120 years from the time of the first Silver discovery in the Gowganda Silver Camp for someone to drill into high-grade Cobalt (it has been there since Day 1 and much more exists) and seriously explore and drill into Gold and other metals for a new discovery in the Archean rocks…
(Love Northern Ontario but won’t be staying here thru Christmas)…
Comment by Jon - BMR — December 11, 2018 @ 8:16 pm