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1. Gold has traded between $1,494 and $1,509 so far today…as of 7:00 am Pacific, bullion is up $9 an ounce at $1,504…the Fed’s minutes from its July policy meeting are due tomorrow with investors also keeping a close eye on the central bank’s Jackson Hole seminar and this weekend’s Group of 7 summit…inflows into Gold ETFs are being greatly eclipsed by the inflows into Silver ETFs…the Silver ETFs tracked by Bloomberg increased their holdings by 687 tons last week alone, with holdings surging “from one record high to the next,” Commerzbank noted…Silver has climbed 25 cents to $17.09 and could be starting a trend of outperformance vs. Gold through the balance of 2019…nearest Fib. resistance for Silver is in the $17.20’s – that’s the key area to watch…Nickel has added another 5 cents to $7.29 while Copper and Zinc are both down slightly at $2.59 and $1.01, respectively…Crude Oil has slipped 91 cents a barrel to $55.30 while the U.S. Dollar Index is up slightly at 98.41…traders see about an 83.8% chance of a 25 basis-point interest rate cut by the Fed in September and a 10% chance of a 50 basis-point cut…SNC-Lavalin (SNC, TSX) has been reduced to junk status by S&P Global Ratings, the latest blow for the Canadian engineering firm at the centre of a controversy that’s ensnared Prime Minister Trudeau…S&P cut the Montreal-based company’s credit rating by 1 level to BB+, the highest non-investment grade rating, according to a statement yesterday…the downgrade reflects SNC’s significant losses on lump-sum turnkey projects which it plans to exit when its current backlog is complete…does this come as surprise?…as Canadians prepare for an October election, a union (Unifor) representing 12,000 journalists and media workers in Canada has announced that it will run an aggressive anti-Conservative campaign asking voters to “think twice about supporting the Scheer agenda”…media bias in Canada is rampant…Statistics Canada reported this morning that manufacturing sales across the country fell 1.2% to $58 billion in June, led lower by a drop in the petroleum, coal and food sectors…sales were down in 16 of 21 industries…the only consolation is that those numbers weren’t quite as bad as expected…
2. Interesting data from JP Morgan’s quant guru regarding last Wednesday’s sell-off on Wall Street that the mainstream media was making such a fuss about…the unusual single-session moves in stocks and yields were merely driven by technical flows in an environment of poor liquidity, according to Marko Kolanovic, the bank’s global head of macro quantitative and derivatives strategy…“Despite fundamental risks, recent equity and bond moves were mostly technically-driven,” Kolanovic said in a note to clients this morning…“More than half of equity moves were driven by systematic rather than fundamental trading”…the strategist estimated that last Wednesday’s stock meltdown resulted from $75 billion in algorithmic selling…about half of it came from index option delta and gamma hedging, 20% from trend-following strategies, 15% from volatility targeting strategies and the remaining 15% from other products…he added that more than half of the move in interest rates, including the brief inversion of the 2–10 yield curve, was caused by “technical drivers” like hedging by banks…Kolanovic, who has a Ph.D. in theoretical physics, has correctly called some big market moves up and down the last 2 years, gaining him a following on Wall Street…he’s predicting that equities will continue their comeback from last week’s sell-off…
3. Unlike other base metals, demand for Nickel from the top consumer China has not dampened during the ongoing trade standoff with the United States…prices have been insulated from any weakness due to a variety of dynamics, from developments in Indonesia to a buoyant outlook from the stainless steel industry…significant stock accumulation by Chinese companies to supplement their own output is reflected in LME inventories as well…stocks at LME warehouses have plummeted to their lowest level since January 2013 with inventories shedding about 70% since they peaked in mid-2015 near the bottom of the bear cycle…Nickel’s bull market started in early 2016…meanwhile, in Indonesia, authorities are contemplating whether to move forward a ban on exports of unprocessed ore originally scheduled to begin in January 2022…this move is expected to exacerbate a supply shortage…as per government data, Indonesia now has 13 operating smelters with an operational capacity of 24.52 million tonnes that mostly produce Nickel pig iron…also, 22 more Nickel miners are being developed with an additional capacity of 46.33 million tonnes…China is investing heavily in that country…almost 70% of global Nickel is used for making stainless steel and most of it in China….demand for Nickel from the electric vehicle revolution is going to be a game-changer for the metal next decade…
4. After 3 straight winning sessions, the Dow is off 87 points through the first 30 minutes of trading…BHP (BHP, NYSE) announced today that it would pay a record dividend to shareholders, making it the latest global miner to lift returns even as data point to a global slowdown in economic growth…BHP reported an $8.31 billion net profit for the 12 months through June – its highest in 5 years – reflecting higher Iron ore prices and one-off charges much lower than a year earlier…in Toronto, the TSX has lost 82 points, despite a higher Gold Index, while the Venture has climbed 4 points to 574…historically, August has been a volatile month for the Venture but it has ended on a strong note in 14 out of the past 15 years…Garibaldi Resources (GGI, TSX-V) is now at the lower end of its current trading range defined by strong support at and just below $1.50 and nearest resistance in the $1.80’s…with results from hole EL-19–53 due soon, GGI is one of the Venture plays that can be expected to help lead the Index higher going into month-end…theScore (SCR, TSX-V) has hit a new multi-year high of 66 cents in early trading and is up a nickel at 64 cents as of 7:00 am Pacific…next measured Fib. resistance on the long-term chart is 80 cents…theScore has caught fire with traders this month after the company announced July 31 that it’s undertaking a major expansion of its U.S. mobile sports betting platform through a multi-state market access framework agreement with Penn National Gaming, North America’s largest regional gaming operator…in connection with the framework agreement, Penn National also agreed to take a strategic equity stake in theScore…the 20-year framework agreement provides theScore with the right to obtain market access to offer on-line and mobile sports betting and i-gaming applications in 11 states where Penn National operates casinos and racetracks…Organigram Holdings (OGI, TSX-V) has received final approval for the listing of its shares on the TSX beginning this Thursday…tomorrow will be the last day of trading for OGI on the Venture…
5. Colorado Resources (CXO, TSX-V) and Buckingham Copper have completed their previously announced plan of arrangement under the Business Corporations Act (British Columbia), pursuant to which Colorado acquired all of the issued and outstanding common shares of Buckingham and, in exchange, shareholders of Buckingham received 0.5 of a common share of Colorado for each Buckingham share held…Joseph Mullin, the incoming CEO of Colorado, commented, “Our exploration program will begin immediately. My team and I have assumed the management of day to day operations. It is a great time to be advancing exploration on Colorado’s top tier assets in B.C’.s Golden Triangle“…CXO, which raised nearly $4 million, will soon be drilling its Kinaskan-Castle Property contiguous to GT Gold’s (GTT, TSX-V) Tatogga Project which hosts the Saddle North/Saddle South discoveries…
6. Aben Resources (ABN, TSX-V) is under mild pressure in early trading after uninspiring initial results from ongoing 2019 drilling at its Forrest Kerr Project in the Eskay Camp…drill hole FK19–50, testing the downward extension of a mineralized horizon discovered in 2 drill holes last year, cut 11.6 g/t Au over 1 m within a broader interval of 61.7 m grading 0.46 g/t Au…meanwhile, FK19–46, drilled oblique to the main mineralized corridor at North Boundary to test for continuity of mineralization between recently discovered mineralization and historic high-grade Gold mineralization reported by Noranda in 1991, returned 12.4 g/t Au between 203 and 204 m with an overall average of 0.12 g/t Au over its entire length of 500.5 m…they need to do better…Aben has nonetheless decided to expand its budget for the program and intends to continue drilling into September…5000+m has now been completed in 10 holes, with numerous sample shipments now in the laboratory…
7. How could Canada do this to itself?…the Canadian energy sector is sinking to unprecedented depths, as an exodus of investors and foreign companies from the Oil patch continues, though Prime Minister Trudeau boasts about how he “stands up for Canadian jobs” (in his home province of Quebec) in trying to defend his actions in the SNC-Lavalin scandal…the downside in the Oil and gas sector in this country has accelerated dramatically in recent years under the anti-fossil fuel Trudeau regime, and multiple exploration and production companies have recently seen their stocks completely dislodge from Crude Oil prices and sink to record lows…the gap between Canadian energy stocks and Oil prices, based on the ratio of the S&P/TSX Capped Energy Index to WTI, has now widened to its largest ever, according to Bloomberg…“It’s just been a bloodbath, especially this year,” said Christopher Blumas at GlobeInvest Capital Management told the Globe and Mail…“There’s only so much pain people can take before they have to cut their losses”… without significant progress on expanding pipeline capacity, Oil and gas stocks could continue to be “dead money” for years, Blumas said…since 2014, the index comprising the Canadian energy industry has declined by 73%…the list of exploration and production companies hitting record-low share prices last week included ARC Resources, Baytex, TORC, Kelt Exploration, NuVista, Athabasca Oil and Pengrowth…to a significant extent, this is Canada’s self-inflicted wound due to politicians consumed by climate change extremism – an effective strategy for “progressives” to redesign an economy where government plays a much bigger role in our lives (the Democrats’ proposed “Green New Deal” in the U.S. says it all)…the more power a government accumulates, the more dangerous it becomes…results of “progressive” policies in terms of economic growth during the Trudeau reign have been poor, in sharp contrast to the performance of the Trump economy…
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Jon, have you forgotten about CCW? You do not mention it anymore?…
Comment by Don — August 20, 2019 @ 9:21 am
That’s a little funny, Don, “have I forgotten about CCW”…obviously you didn’t read Daniel’s Den over the weekend, that’s all you need to know at the moment…it’s very much top of mind for me and I’m excited at how things are going to unfold shortly…we’re in a Silver bull market, which is really going to propel CCW, and Cobalt prices are also starting to recover…have been adding to my position at these favorable levels…just relax and watch what unfolds…
Comment by Jon - BMR — August 20, 2019 @ 10:42 am
Maybe a good buying op for abn at this time, forest kerr is the one we’re waiting on…..
Comment by Laddy — August 20, 2019 @ 11:34 am
Did Steve make it to camp?
Comment by Rod — August 20, 2019 @ 2:40 pm
Regarding CCW, you have to manage time expectations. I have posted before that I didn’t expect any great improvement until the 4th quarter and I stick by that. Things generally don’t move forward as much in the summer, decision makers are on holidays etc. etc. Jon, you have many times indicated that you expect news shortly which only increases expectations and then disappointment when things don’t happen. You need patience with this one.
Comment by Danny — August 20, 2019 @ 2:47 pm
Yes, Rod, that’s the word…and to the top of Nickel Mountain as well, apparently…just speculation of course, but I don’t believe that would have occurred so suddenly without some sort of major event(s) triggering it…
Comment by Jon - BMR — August 20, 2019 @ 2:48 pm
My time expectations are sooner than that, Danny…can’t imagine September is not going to be a rock ’em, sock ’em month for CCW…Silver and Gold are looking too good now – the time to pull the trigger has almost arrived IMHO, and there’s a group that’s going to make it happen as we’ve been speculating…
Comment by Jon - BMR — August 20, 2019 @ 2:53 pm
CCW urgently need the amendment to their permission so they can start the silver tailings project. Any idea when that is going to happen. Keep hearing about how favorable the local government is to this but that permission is needed to stop the rot.
Comment by Patrick — August 20, 2019 @ 3:08 pm
The market doesnt think much of Steve’s visit. Hopefully the next NR changes that.
Thanks Jon
Comment by Rod — August 20, 2019 @ 3:35 pm
Well, Rod, that’s kind of a foolish thing to say, actually – kinda like how some people insisted the drill results weren’t going to be good when the stock was sitting in the high $1.20’s a little while ago…classic case of, you are staring at the puck and have no idea how the play is going to unfold…GGI right now is trading very nicely/normally within its current technical range (the low end of its range) as indicated in 7 @ 7:00 this morning…little do some people know, this is their ticket to retirement…
Comment by Jon - BMR — August 20, 2019 @ 3:59 pm
Everything’s on track, Patrick, and some astute investors have been taking advantage of other investors’ impatience recently…that’s how money is made in the markets…
Comment by Jon - BMR — August 20, 2019 @ 4:01 pm
Just got word that CLM is doing an investor event tomorrow post-market in Vancouver…by invitation only and limited space, but if there are BMR subscribers in town and interested, we’ve reserved a few spots…send an email to [email protected]…
Comment by Jon - BMR — August 20, 2019 @ 4:10 pm
Jon, curious as to why CLM would do an investor event in the middle of a drill campaign with no results back yet? I live too far away to attend but very interesting given the timing…..
Comment by Dan1 — August 20, 2019 @ 4:26 pm
Lots of folks interested in the goings-on of the Eskay Camp and CLM is in the thick of it, Dan1…no shortage of things to talk about, even just within the context of what has been disclosed…I recall last year, at almost the exact same time, GT Gold did an event in Vancouver in the middle of their drill program, just before their huge discovery at Saddle North…
Comment by Jon - BMR — August 20, 2019 @ 4:36 pm
Hmmm….Interesting for sure Jon.
Comment by Dan1 — August 20, 2019 @ 4:46 pm
Mr. Jon, last few little shake-outs for GGI?
Comment by Jean — August 21, 2019 @ 8:18 am
Just normal range-bound trading like we’ve been seeing, Jean…strong support at the 50-day and resistance in the $1.80’s…make sense it’ll climb back up the ladder as news edges closer going into month-end…
Comment by Jon - BMR — August 21, 2019 @ 8:28 am
Strange trading in CLM. Very strange given the highly touted and supposedly successful on going drill program. Someone in the know unloading?
Comment by Dan1 — August 21, 2019 @ 8:42 am
Dan1, we’ve looked into this extensively and our research this morning (which explains the late 7 @ 7:00 posting) confirms that this is 1 trader in distress, got tripped up in another deal…that’s what can happen in any market…has nothing to do with anything on the ground up in the Eskay Camp and I’m sure my interview with Peter Lightfoot, which takes place tomorrow, will open a lot of eyes in terms of what’s unfolding at Burgundy Ridge and the rest of the Newmont Lake Project…
Comment by Jon - BMR — August 21, 2019 @ 9:27 am
Jon, wondering how the CLM investor event went this evening?
Comment by Dan1 — August 21, 2019 @ 5:19 pm
Very well, Dan1, some things still in progress, will elaborate in am…
Comment by Jon - BMR — August 21, 2019 @ 7:17 pm