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1. Gold has traded between $1,496 and $1,511 so far today…as of 7:00 am Pacific, the yellow metal is up $15 an ounce at $1,510, getting a lift from fresh U.S.-China trade concerns and an accommodative Fed…Bloomberg News reported this morning, citing unnamed sources, that Chinese officials have been casting doubt over the possibility of a long-term trade deal with the United States…the report put stock futures into reverse and gave precious metals a boost…meanwhile, it didn’t hurt yesterday that Fed Chairman Jerome Powell said, “We would need to see a significant move up in inflation before we could consider raising rates”…given how muted inflation is at the moment, and how the Fed has consistently over-estimated inflation prospects in recent years, it may be a long time before we see another rate increase based on Powell’s criteria…yesterday, the Fed cut rates by a quarter point for the 3rd time since July but began to downplay expectations of further cuts for now…Silver appears to be in the midst of confirming a key breakout above $18 an ounce as we’ve been predicting…it’s up 27 cents at $18.10 as of 7:00 am Pacific…Nickel, Copper, Zinc and Cobalt are all relatively unchanged at $7.63, $2.64, $1.15 and $16.10, respectively…Crude Oil is off 69 cents a barrel at $54.37 while the Dollar Index, under some technical pressure, has slipped one-third of a point to 97.31…world stocks edged to their highest in over 20 months yesterday…MSCI’s world equity index, which tracks shares in 47 countries, rose 0.1% to its highest level since early February 2018…a slew of U.S. economic data was just released within the last hour or so…consumer spending rose marginally in September, in line with expectations, while wages were unchanged…the Commerce Department said that consumer spending, which accounts for more than two-thirds of U.S. economic activity, gained 0.2% last month as households stepped up purchases of motor vehicles and spent more on healthcare…data for August was also revised up to show consumer spending climbing 0.2% instead of the previously reported 0.1% rise…meanwhile, the Core Personal Consumption Expenditures Index (PCE), the Fed’s key inflation gauge, was unchanged last month, missing expectations…it was down a tick from August’s reading at 1.7%…there’s simply no threat of inflation at the moment – low Oil prices are key…
2. U.S. corporate profits haven’t waned as much as pundits have feared, giving new life to a stock market rally that had largely stalled since the summer…although earnings are on track to decline for the 3rd consecutive quarter, about 75% of the 280 companies in the S&P 500 that have posted results through yesterday morning have beaten expectations, according to FactSet…that is slightly above the 5-year average of 72%…more than 100 companies report today and tomorrow…while overall profits are expected to fall about 3.2% from a year earlier, the steepest decline since 2016, most analysts have called a bottom…they project earnings growth to accelerate next year, helping to allay fears of a potential recession…
3. The Dow is off 91 points as of 7:00 am Pacific…in Toronto, the TSX has retreated 47 points but the Gold Index, threatening to break out above the key 250 level, is up 4 points to 247…the Venture is 1 point higher at 540…Wallbridge Mining (WM, TSX) has gained 3.5 cents to 61 cents in early trading…Wesdome Gold Mines (WDO, TSX), which released some stellar underground drill results the other day, is up another 7 cents at $7.89 after a 10% jump yesterday…Great Bear Resources (GBR, TSX-V) has also put out some great new numbers with new high-grade discoveries at 3 target areas at its Dixie Creek Project…GBR is steady at $6.95 and could be ready to overcome nearest resistance at $7…Alacer Gold (ASR, TSX), continuing to look strong with the stock at multi-year highs, recorded Q3 net earnings of $34 million (U.S.)…year-to-date production is 290,000 ounces at consolidated AISC of $714 (U.S.) an ounce…the company has also announced an increase to the 2019 Copler oxide plant production guidance range to 150,000 to 160,000 ounces from 125,000 to 145,000 ounces…Eric Sprott is investing $15 million into Gran Colombia (GCM, TSX) at $4.60 per unit…the jump in Silver needs to be watched closely as it will outperform Gold, and Silver stocks could really catch fire…one of those is Canada Cobalt (CCW, TSX-V) which has major developments happening on the Silver front as per the company’s news last Friday…it’s up half a penny at 35 cents in early trading…on the non-resource side, Bee Vectoring Technologies (BEE, TSX-V) jumped a nickel on news yesterday (another favorable decision for the company from the EPA in the U.S.) and is up another penny at 39 cents through the first 30 minutes of trading…
4. Calibre Mining (CXB, TSX) has released impressive high-grade drill results from its newly-acquired El Limon Property, including 9.2 g/t Au over a 28.1-m estimated true width in hole LIM-18–4227 at the Limon Central open-pit zone…B2Gold (BTO, TSX) was successful in extending Gold mineralization along the El Limon vein system for over 2.5 km, with high-grade intercepts at Limon Central, Limon Sur, Limon Norte, Tigra, Chaparral and Cacao, as well as from the newly developed Atravesada and Panteon underground targets…Calibre is currently processing ore at El Limon from the Santa Pancha underground mine and an open-pit developed on the Limon Central deposit, which covers approximately 500 m of the known 2.5-km-long El Limon vein system…it remains open along strike and at depth…Russell Ball, CEO of Calibre, stated: “The El Limon district has produced over 3.4 million ounces of Gold and I am confident that we are in a truly world-class, low-sulphidation epithermal system. B2Gold’s recent drilling intercepted high-grade mineralization over substantial widths and these targets represent an excellent opportunity to expand reserves and resources, both at depth and along strike. Calibre will commence drilling at Limon Norte in early November”…Calibre’s initial 7,000-m program for the 4th quarter of 2019 and 2020 will target extensions at Limon Norte, Tigra-Chaparral and Atravesada. Additional, concurrent target delineation exploration programs will commence at Lourdes, San Antonio and Guanacastal, which will include geological mapping, surface geochemical sampling and trenching for a total cost of approximately $2.9 million (U.S.)…
6. Pretium Resources (PVG, TSX-V) posted positive adjusted earnings for the 9th quarter in a row, but a negative surprise on Q3 and anticipated full-year production is weighing heavily on the stock in early trading with PVG down $3.45 a share to $12.63 (slipped as low as $11.94)…the rising 200-day SMA just above $13 should provide support…Pretium produced 88,227 ounces of Gold at Brucejack in Q3 at a mill feed of 9.1 g/t and a Gold recovery rate of 97%…total revenue for the quarter was $132.7 million (U.S.) at an AISC of $878 per ounce…net earnings were $6.3 million or 3 cents per share while adjusted net earnings were $34 million or 18 cents per share…Pretium also generated $77.8 million in cash from operating activities, its highest cash flow quarter yet (aided by high Gold prices)…the company has also now achieved and surpassed the initial debt repayment target of $140 million and is on track to repay $180 million of debt in 2019…however, Pretium will miss significantly on production guidance this year, lowering it to between 340,000 and 350,000 ounces from the previously anticipated range of 390,000 to 420,000 ounces…investors don’t like negative surprises like that…Joseph Ovsenek, President & CEO of Pretium, commented: “During the 3rd quarter, we continued to focus on opening up the mine while increasing grade to the mill. Pursuing both objectives simultaneously while stope inventory was constrained proved to be more challenging than anticipated, and we ended the quarter with Gold production below our own expectations. As a result of limited stope inventory, we now expect that the 4th quarter will be consistent with the 3rd quarter and have adjusted our full-year 2019 production guidance to between 340,000 to 350,000 ounces of Gold production, an approximate 15% decrease from the midpoint of our prior production guidance range of 390,000 to 420,000 ounces of Gold sold. We have adjusted our all-in sustaining cost guidance range to $900 to $950 per ounce of Gold sold, reflecting the lower anticipated Gold production and our spending, which is lower than previously guided. We do expect another quarter of robust cash flow in Q4“…
6. The Canadian Oil sector has been battered, but Cenovas Energy (CVE, TSX, NYSE) continues on the road to recovery…the company generated free funds flow of $622 million (U.S.) in the 3rd quarter while maintaining its industry-leading low cost structure and meeting mandatory production curtailment levels set by the government of Alberta…net earnings were $187 million versus a net loss a year prior…Oil sands operating costs were $6.90 per barrel (bbl), 21% lower than in the 2nd quarter of 2019 and 24% lower than in the 1st quarter…an 11% year-over-year increase in realized Crude Oil sales prices to an average of $55.13/bbl was driven by higher U.S. sales and narrower differentials…Cenovas has also achieved a further reduction in net debt to $6.8 billion with net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) decreasing to 1.9 times…Crude-by-rail volumes were more than 80,000 barrels per day (bbls/d) in September…“We’re continuing to do everything we said we would do,” said Alex Pourbaix, Cenovus President & CEO. “Through our focus on safe and reliable operations, cost leadership and capital discipline, we are generating strong results that support further debt reduction and increased shareholder value. In addition, our market access strategy is steadily increasing our exposure to global Oil pricing”…
7. Whether climate change alarmists like it or not, all studies point to a growing global demand for Oil over the next 2 decades – Canadians will decide whether they want to reap the full benefits of that or not, but what nation would not want to generate more wealth? (especially to pay for essential services, let alone all the extras that “progressives” want to distribute?)…”Oil Demand Deniers” have it wrong…the Canadian Association of Petroleum Producers’ most recent annual forecast projects the domestic Oil industry will produce 5.86 million barrels of Oil per day in 2035, up from 4.6 million bpd in 2018 (we should be able to do a lot better than that)…that’s a more modest projection than the federal government’s “Canada Energy Regulator” (CER) which estimated Canadian Oil production would reach 6.9 million bpd in 2040 in its base case, and it could rise to 9.1 million bpd in a scenario where Oil prices climb higher than expected…right now, and this is the crux of the problem in Canada, the Oil industry produces more than can fit into its pipeline network…the most recent data from the CER shows that 310,000 barrels of Oil per day were exported from Canada on railway cars in August, the last month for which data is available…the great irony is that the climate change alarmists, opposing new pipelines on the premise that they will only contribute to the “destruction of the planet”, are themselves contributing to environmental problems given the fact that pipelines have proven to be easier on the environment than Oil by rail (some studies have shown that transporting large volumes of Crude over long distances creates >50% more greenhouse gas emissions than Oil carried via pipeline)…
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