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May 12, 2017

7 @ 7:00

Check back later this morning for Daniel’s Den (BMR Morning Market Musings returns soon) and other potential posts today.

1. Gold has traded between $1,226 and $1,232 so far today…as of 7:00 am Pacific, bullion is up $5 an ounce at $1,230…a weekly close in the $1,230’s would certainly be a bullish sign going into the final half of May, but critical for Gold this week was bouncing off key support at $1,215…commodity traders will be keeping an eye on a host of Chinese macro releases due over the weekend…meanwhile, traders are expecting a 100% probability of an interest rate increase next month, according to CME Group’s FedWatch prior to fresh economic data released this morning…a rate hike June 14 has the potential to ignite a summer rally in the metal…

2. U.S. consumer sentiment for May, reported just moments ago, slightly exceeded expectations with the University of Michigan’s Consumer Sentiment Index rising to 97.7…that’s up from 97 in April and shows that the “Trump Bump” continues, much to the bewilderment of the mainstream media…meanwhile, the Commerce Department announced retail sales increased 0.4% in April from March…that was below expectations of 0.6%; however, sales had ticked up just 0.1% in March and fell in February…the increase suggests consumers may spur faster growth in the quarter of April through June after the economy just barely expanded in the first 3 months of 2017 despite a surge in consumer and business sentiment…

3. Net length in open Crude Oil futures positions is at its lowest level since November 2016 which sets the stage for further gains in Crude ahead of OPEC’s meetings later this month when the cartel and certain non-OPEC countries are expected to extend production cuts implemented at the beginning of this year…Crude has rebounded this week, thanks in part to the expectation of bullish news in a couple of weeks regarding the extension of production cuts while the latest U.S. inventory report has also helped…meanwhile, Norwegian consultancy Rystad Energy, commenting on how U.S. Oil production has gained “significant momentum“, predicts that U.S. Lower 48 (all states excluding Alaska and Hawaii) Oil production is set to expand by an additional 390,000 bpd from May 2017 to December 2017, assuming a WTI price of $50 per barrel…WTI is hovering just below near-term resistance at $48 this morning…

4. Commodity corruption: The Wall Street Journal reported this morning that money from state-run Chinese companies was used to help finance the buildup of a massive Aluminum stockpile that has crisscrossed the globe, depressed prices and sparked a U.S. criminal investigation…any such involvement by these state-run entities has the potential to strain relations between the U.S. and China as the latter is clearly undercutting global competition by giving government assistance to its commodity companies…Aluminum is among several commodities that the Trump administration has singled out for potential protectionist policies against cheap Chinese imports…the stockpile in question involves nearly a million tons of Aluminum products from China that began accumulating outside a factory in a Mexican desert and was later transferred to Vietnam…WSJ tied the cache to Chinese billionaire Liu Zhongtian and his China Zhongwang Holdings Ltd. Aluminum company…his apparent goal, American competitors allege in federal complaints, was to disguise the origin of the metal, which could have faced U.S. tariffs as high as 374%…he was planning for retirement in Switzerland by shifting assets out of China where citizens can move only a limited amount of money out of the country…

5. The Venture is set to snap a 3-week losing skid which shaved 53 points or 6.3% off the Index in a mini-correction that closely mirrored the weakness in March…further evidence of strong support in the 780’s with the Venture up 3 points at 791 as of 7:00 am Pacific, 21 points above the weekly intra-day low during B.C. election day on Tuesday…the TSX has added 21 points in early trading with the Gold Index set to post a very strong week, currently up 6% from last Friday’s close…Markham, Ontario-based Real Matters Inc. closed its initial public offering of $156.7 million yesterday, the largest technology IPO on the Toronto Stock Exchange in a decade and only the 3rd tech company since 2014 to raise more than $100 million in its IPO. ..90% of the company’s business comes from the United States where it is a leading player in the network management services platform sector for the mortgage and insurance industries…

6. Transition Metals‘ (XTM, TSX-V) Canadian Gold Miner Corp., not yet publicly listed, has closed a private placement totalling $817,250 by way of the issuance of 5,294,998 units, each consisting of a common share and common share purchase warrant exercisable for 3 years at 25 cents per share at a price of 15 cents per unit, and the issuance of 115,000 flow-through eligible shares at a price of 20 cents….concurrent with the financing, Canadian Gold Miner has entered into a finder’s fee agreement with Gravitas Securities Inc., whereby Gravitas will endeavour to assist the company to complete additional flow-through financing of up to $1-million this spring…the planned use of proceeds includes drilling of the high-grade Bjorkman showing (Feb. 8, 2017, XTM news release) as well as a robust exploration program on Canadian Gold Miner’s South Kirkland project area…

7. Klondex Mines (KDX, TSX) has provided an updated mineral reserve estimate for its True North Gold mine in Manitoba…total Proven and Probable mineral reserve (underground) is 147,900 ounces, an increase of 25% from the prior estimate…the new figure is based on 7,877 drill holes totaling a whopping 1,504,878 m…this includes 131 drill holes totaling 18,065 m completed by Klondex since June 30, 2016. Brian Morris, Senior VP Exploration, stated: “This updated mineral reserve estimate is another milestone in the ramp-up of True North. As expected, the system is beginning to unveil its real potential as we continue to see robust grades and widths at depth as well as up-dip mineralization in the 710/711 zones. We continue to make good progress ramping up the mine at True North with infrastructure being put in place. We expect production to be weighted to the 2nd half of the year and remain on track to meet our annual production guidance.”

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May 11, 2017

7 @ 7:00

Check back later today for additional BMR posts.

1. Gold has traded between $1,219 and $1,225 so far today…as of 7:00 am Pacific, bullion is up $2 an ounce at $1,221…Gold doesn’t seem to be in agreement with the huffing and puffing of CNN, the New York Times and other Trump-hating liberal mainstream media that the President’s firing of FBI Director Comey threatens a constitutional crisis…nonetheless, Gold is starting to firm up after testing strong support at $1,215…Silver, which plunged to extreme oversold conditions earlier this week, is up 6 cents at $16.23…base metals are generally moving in a positive direction today, led by Copper ($2.50), Nickel ($4.20) and Zinc ($1.19)…

2. Global Silver mine production in 2016 recorded its first decline since 2002, largely the result of lower by-product output from the Lead/Zinc and Gold sectors, according to the latest study by the Silver Institute…the Institute said that Silver scrap supply to the market posted its lowest level since 1996; total Silver supply decreased by 32.6 million ounces in 2016…these findings, and other key components of the Silver market, are discussed in the World Silver Survey 2017 released today by the Silver Institute and produced by the GFMS Team at Thomson Reuters (GFMS). “Global Silver mine production declined by 0.6% in 2016 to a total of 885.8 Moz. A large proportion of the drop was attributable to the Lead/Zinc and Gold sectors, where production dipped by a combined 15.9 Moz,” the Institute said…

3. OPEC data released today showed the cartel reduced production further in April, even as top Oil exporter Saudi Arabia raised output by almost 50,000 barrels a day…overall, OPEC production decreased slightly in April to an average of 31.73 million barrels a day…meanwhile, data released by the Energy Information Administration (EIA) yesterday showed a much better than expected drop in U.S. Crude stockpiles in the week ended May 5…the EIA figures also revealed a surprise decrease in gasoline and distillate inventories, which helped mitigate worries that U.S. commuters weren’t soaking up enough gasoline to offset supply…gasoline demand rose to the highest level since late March to more than 9.2 million bpd, but still down 2.4% from the same period last year, according to the data…market participants are still watching the ramp-up in production from multiple producers, including the U.S. and Canada, which some fear may offset OPEC’s cuts…U.S. Crude production climbed for the 12th straight week for the 7 days ended May 5 and reached its highest level since mid-2015 at 9.3 million barrels a day, according to Commerzbank analysts…WTI is up 48 cents at $47.81 as of 7:00 am Pacific…

4. Multiple major banks are viewing the recent pullback in Oil and commodities in general as a tremendous buying opportunity based on the belief that the global economy is accelerating, and more evidence of the growth surge will be apparent during the 2nd half of the year (this view is consistent with how the Venture has been trading and its bullish long-term technical outlook). “For the first time since the Great Recession, we have a situation where all major economies are pulling in the same direction,” said Bart Melek, head of commodities strategy at TD Securities, referring to the period between 2007 and 2009…

5. Superb Venture support in the 780’s continues, and that bodes well for what could turn out to be a strong 2nd half of the month…the Index is up another 3 points at 786 through the first 30 minutes of trading…Quantum Numbers (QNC, TSX-V) is this morning’s volume leader, up 2 pennies at 17 cents as of 7:00 am Pacific on more than 3 million shares…John’s chart 3 weeks ago on QNC showed a good probability of a breakout above Fib. resistance at 17 cents…former Venture-listed NexGen Energy (NXE, TSX) announced this morning that its shares will begin trading on the NYSE under the NXE symbol May 17 in addition to its listing on the TSX…the TSX is off marginally in early trading, though the Gold Index has climbed 5 points to 210, while U.S. markets are in broad retreat after the S&P 500 and the NASDAQ both posted all-time closing highs yesterday…the Dow is off 124 points through the first 30 minutes of trading…

6. TomaGold (LOT, TSX-V) has made a nice moving in early trading, up 2 pennies at 10 cents as JV partner IamGold (IMG, TSX) reported results from the first 11 drill holes, totalling just over 5,100 m, from a total of 24 diamond drill holes completed this past winter at Monster Lake, 50 km southwest of Chibougamau in northern Quebec…results featured high-grade intercepts from 3 separate holes including 3.1 m grading 121.7 g/t Au in ML17–194 (includes 1.1 m @ 317 g/t Au)…IamGold says that once the remaining assay results are received, they will be assessed and may lead to an estimation of an initial mineral resource by year-end…further drilling will be required to evaluate the potential of the new mineralized areas, the timing of which will be dependent on ground conditions to allow the access of drilling equipment…

7. Ongoing drilling at Pure Gold’s (PGM, TSX-V) Russet South target at its 100%-owned Madsen Project at Red Lake continues to intersect Gold in multiple zones across a broad area spanning 650 m x 650 m, with all zones open for expansion…drill hole PG17–364 returned 27.1 g/t Au over 5.8 m along the lower contact of a key ultramafic unit, building continuity with a zone identified earlier as Alpha…the sparsely tested upper contact of the same unit returned 80.7 g/t Au over 1 m in hole PG17–391 and 11.3 g/t Au over 1 m approximately 200 m to the north. “The association of very high Gold grades along the contacts of folded ultramafic units is directly analogous to the setting of the High Grade Zone at Goldcorp’s Red Lake Mine as well as the 8 Zone at Madsen, which occurs 1,600 m down dip from Russet South,” said Darin Labrenz, President and CEO of Pure Gold. “To date, the Russet South Target has delivered an exceptional hit ratio, with 37 out of 101 holes drilled to date by Pure Gold showing visible Gold and reporting intercepts in excess of 5 g/t Gold.”

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May 10, 2017

7 @ 7:00

Check back later today for Daniel’s Den (Morning Musings resumes after editor returns from special assignment) and visit our comments section throughout the day for updates and helpful information.

1. Gold has traded between $1,221 and $1,227 so far today after bouncing off support yesterday at $1,215…as of 7:00 am Pacific, bullion is up $2 an ounce at $1,223…Silver, attempting to pull out of extreme oversold conditions, has added 6 cents to $16.22…Silver is very close to a turnaround given base support at $15.75 and extreme technical conditions not seen at any time since precious metals broke out early last year…any brief dip below $16 will be pounced on by bargain hunters…base metals are flat with Copper hovering around strong support in the high $2.40’s…

2. Current weakness in Gold is getting some support from buyers in India who have stepped up to the plate…India’s Gold imports in April more than doubled from a year ago to 75 tonnes on strong demand, according to provisional data from consultancy GFMS…Indians in the last week of April celebrated the holy festival of Akshaya Tritiya, when buying Gold is considered auspicious, while jewelers continue to stock up ahead of implementation of a new national sales tax (GST) in July…

3. Crude Oil prices have firmed up this morning after a larger-than-expected fall in U.S. Crude inventories, but concerns about rising output from the U.S., Libya and Nigeria continue to concern traders…the American Petroleum Institute, an industry group, reported yesterday that U.S. Crude inventories fell by 5.8 million barrels last week, more than the 1.8 million-barrel slide analysts predicted…investors are now waiting to see if those numbers are confirmed this morning by official figures on weekly U.S. Crude and Oil product inventories from the U.S. government’s Department of Energy…WTI is 65 cents higher at $46.53 as of 7:00 am Pacific…

4. A 5th straight majority government is still within the grasp of British Columbia’s Liberal Party…1 exceptionally close riding from yesterday’s election is going to a recount with absentee ballots also not yet factored in…preliminary results have given the Liberals a minority government with 43 seats vs. 41 for the NDP and 3 for the Green Party, despite polls that predicted an NDP victory…however, with all votes counted in the Courtenay-Comox riding on Vancouver Island with the exception of absentee ballots, the NDP leads the Liberals there by a razor-thin 9 votes…mainstream national media seem oblivious to the fact that this riding is still very much up for grabs and the final election result could be thrown into the courts…interestingly, the Liberal candidate is Jim Benninger, the former Base Commander at CFB Comox (2011 to 2014), and absentee ballots are often cast by military personnel who traditionally are not NDP voters…those ballots may not be counted for up to 2 weeks; combined with a full riding recount, the final outcome for Courtenay-Comox and the election will not be known until late this month, perhaps later in the event of a judicial review…odds seem to favor a Liberal victory in Courtenay-Comox but all votes must be respected and counted…the resource sector has been given a reprieve with the NDP blocked from victory but a 44th Liberal seat for the slimmest of majorities will be critical to give Premier Christy Clark and her party the ability to effectively push through legislation and fully protect the resource sector…

5. The Venture has gained 4 points to 778 as relief sets in that the NDP has not swept to victory in B.C.’s election…however, the Index could use a rebound in commodity prices and some great news somewhere on the exploration front…the TSX is up marginally in early trading while U.S. markets are off slightly in the wake of President Trump’s firing of FBI Director Comey late yesterday…the Volatility Index (VIX), also known as the market’s “fear gauge,” dropped to its lowest level since 1993 this week but contrarians should be wary of that…

6. Deveron UAS (DVR, CSE) is trading at levels not seen since last summer with DVR up 2 pennies at 55 cents as of 7:00 am Pacific…DVR’s moment seems to have finally arrived…the company is completing a game-changing $2+ million financing and the first $1.3 million tranche closed about 3 weeks ago…DVR is unique as it dominates and leads innovation in drone-data-related precision agriculture in Canada while the company is also breaking into the American market…the financing is giving Deveron the leverage it needs to expand its drone fleet and is also bringing more liquidity to the stock…

7. Osisko Mining (OSK, TSX) has released new high-grade results this morning from a continuing drill program at its 100%-owned Windfall Lake Gold Project in Urban township, Quebec…highlights include 421 g/t Au over 3.7 m, including 3.74 kilograms/t Au over 0.4 m containing spectacular visible Gold (27.8 g/t Au over 3.7 metres cut to 100 g/t) in DDH OSK-W-17–834; 11.7 g/t Au over 7.7 m in Lynx 4 discovery DDH OSK-17–816; and 10.4 g/t Au over 4.9 m in DDH OSK-17–802…the current 400,000 m drill program combines definition drilling above the Red Dog intrusion, expansion drilling above and below Red Dog, expansion drilling to the NE of the main deposit, and exploration drilling on the greater deposit and Urban-Barry Project area…OSK is up a dime at $4.46 through the first 30 minutes of trading…

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May 9, 2017

7 @ 7:00

Check for additional posts today, including B.C. election report tonight, and visit our comments section throughout the day for updates and helpful information.

1. Gold has traded between $1,219 and $1,229 so far today…as of 7:00 am Pacific, bullion is down $7 an ounce at $1,219 where it’s in the immediate vicinity of support at $1,215…extreme oversold conditions have emerged in Silver which often moves ahead of Gold…Silver, off a dime at $16.10, is very close to a turnaround given base support at $15.75 and extreme technical conditions not seen at any time since precious metals broke out early last year…any brief dip below $16 will be pounced on by bargain hunters…

2. Current weakness in Gold is getting some support from buyers in India where Gold imports in April more than doubled from a year ago to 75 tonnes on strong demand, according to provisional data from consultancy GFMS…Indians in the last week of April celebrated the holy festival of Akshaya Tritiya, when buying Gold is considered auspicious, while jewelers continue to stock up ahead of implementation of a new national sales tax (GST) in July…

3. Crude Oil prices are off modestly at $46.00 as of 7:00 am Pacific…weekly U.S. data on Crude production and inventories, plus monthly reports on supply and demand from OPEC and the U.S. Energy Information Administration (EIA) this week, should provide a detailed picture of how quickly global Crude inventories are falling…for now, WTI is in a new range between $43 (support) and $48 (resistance) even as Saudi Arabia, Russia and Kuwait suggested that OPEC and other major Crude-exporting nations were poised to extend their 6-month deal to cut output, perhaps into 2018…

4. The S&P 500 and the NASDAQ again hit new all-time highs in early trading today as earnings season nears an end…according to data from FactSet, 75% of the S&P 500 components that had reported as of last Friday had topped bottom-line expectations while 66% had beaten sales estimates…in Toronto, the TSX has slid 36 points while the Venture is off 4 points at 776…..

5. British Columbia Premier Christy Clark, one of Canada’s most talented political communicators, has effectively mobilized her liberal-conservative free enterprise base over the past 2 weeks and has put the B.C. Liberal Party on the verge of another majority government entering today’s election, according to BMR modeling…many polls, however, continue to suggest an NDP minority or even majority government…the Liberal Party, with a superior get-out-the-vote “ground game” than its NDP and Green Party opponents, has presided over the fastest-growing economy in Canada through low taxes, balanced budgets and a pro-resource agenda that includes a call for 8 new mines to be opened by 2020…Clark’s message has particularly resonated in the province’s resource rich Interior and North where the Liberals have gained momentum and will also benefit from NDP-Green vote-splitting…the Liberals are positioned to sweep at least 80% of that region’s 31 seats…combined with an expected solid performance in Metro Vancouver, as well as some bleeding of NDP support to the Greens on Vancouver Island, the Liberals are well positioned for a 5th straight election victory tonight…

6. Barkerville Gold Mines (BGM, TSX-V) released more high-grade results this morning from its continuing Phase 2 Island Mountain drill program at its Cariboo Gold Project…exploratory drill hole IM-17–101 has expanded the footwall extents of the Shaft Zone by intersecting numerous previously unidentified vein sets including 12.5 g/t Au over 3.75 m (130 m below surface), 13.3 g/t Au over 11 m (200 m below surface), and 7.6 g/t Au over 11.75 m (250 m below surface)…the new veining occurrences are open for expansion in all directions…4 drill rigs are currently delineating additional mineralization below the former Aurum and Cariboo Gold Quartz mines which have never been explored since mining operations ceased more than half a century ago…BGM is unchanged at 96 cents as of 7:00 am Pacific…

7. Mariana Resources (MARL, TSX-V), up sharply since the announcement of its pending acquisition by Sandstorm Gold (SSL, TSX), has reported further impressive high-grade Gold-Copper mineralization from infill and extension drilling at the Hot Maden Project in Turkey…drill hole TD-109 in the Main Zone cut 75 m @ 17.2 g/t Au + 1.89% Cu from 212 m downhole…meanwhile, the Southern Deposit discovery has been expanded as HTD-117 returned 3 separate high-grade Gold intercepts including 7 m at 16.5 g/t from 233 m downhole…a 3rd diamond drill rig has now arrived on site at Hot Maden and is operating in tandem with the original 2 drill rigs…

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May 8, 2017

7 @ 7:00

Check back later today for additional BMR posts.

1. Gold has traded between $1,228 and $1,237 so far today…as of 7:00 am Pacific, bullion is up $1 an ounce at $1,229…after breaking out in late March/early April above a downtrend line on the daily chart going back to last summer, and climbing as high as the $1,290’s, Gold has retraced in a normal throwback to that downtrend line, testing potential new support (including Fib.) around $1,230…next support is $1,215…hedge funds and other money managers cut their net-long position in COMEX Gold for the first time in 7 weeks, in the week to May 2, while they reduced their bullish stance in Silver to the lowest since January, U.S. government data showed on Friday…China’s Gold reserves were unchanged at 59.24 million ounces in April, the country’s central bank said over the weekend, and the euro hit a 6-month high against the U.S. dollar today after globalist Mannuel Macron comfortably won the French Presidential election…the Dollar Index, however, is still up one-fifth of a point at 98.98…

2. Crude Oil prices are slightly in the green again today after Friday’s rally that started after a plunge that took WTI as low as $43.76…Crude is trading at $46.28 as of 7:00 am Pacific, helped by Russia’s comments today that it’s discussing prolonging cuts with other producers beyond 2017, without giving a clear timeline…Saudi Arabia’s Energy Minister Khalid Al-Falih also talked of the possibility of prolonging curbs beyond this year…countering those efforts, U.S. drillers added Oil rigs for a 16th week in a row last week, extending a drilling recovery into a 12th month, energy services firm Baker Hughes confirmed on Friday…since a low point in May 2016, U.S. producers have added 387 Oil rigs, an increase of more than 120%…

3. The S&P 500 and the NASDAQ each notched new all-time highs in early trading to begin the new week this morning…the Venture, meanwhile, has recovered 3 more points to 784 as of 7:00 am Pacific after last week’s slide that sent the Index to a 4-month low of 774…

4. The mining sector has much at stake as British Columbians head to the polls tomorrow with Premier Christy Clark’s free enterprise coalition Liberal Party gunning for a 5th straight victory, though most polls have the NDP in the lead which has helped shape the media narrative in recent weeks…the pollsters and mainstream media will likely be discredited again tomorrow…in their platform, the Liberals say they want to see 8 new mines launched in B.C. by 2020, and point to new mines opened under their tenure and those under construction including the $811-million Brucejack Gold mine in the Eskay Heart of Gold Camp….the NDP has long been hostile to the resource industry in B.C. and hasn’t changed its tune in this election…it’s vigorously opposed to the TransMountain Pipeline expansion (construction for the approved project begins in September) and also says it will amend the environmental assessment process to “respect the legal rights of First Nations” and meet the public’s expectation of a “strong, transparent process”…the Green Party, equally hostile to the resource sector but likely to win at least a couple of seats on Vancouver Island, says it will establish a “natural resource sector-wide compliance and enforcement unit” in the province (the Green Gestapo, it seems, as compliance and enforcement are already part of the B.C. regulatory regime)…

5. Cartier Resources (ECR, TSX-V) has arranged a bought deal hard dollar financing at 27 cents per share to raise gross proceeds of $6 million…the funds will be used to fund further exploration on the company’s Chimo mine, Wilson, Benoist and Fenton properties in northwest Quebec, and for general working capital purposes…ECR is quiet this morning after closing Friday at 28.5 cents…

6. Ascendant Resources‘ (ASND, TSX-V) El Mochito Zinc mine in Honduras hoisted 52,912 tonnes of ore in the month of April, a 13% improvement vs. the month of March (1,960 tpd vs. 1,733 tpd), the company reported this morning…the 1,960 tpd figure exceeds guidance by 6%…Ascendant also announced that a new collective 3-year bargaining agreement with union leadership has been achieved to the satisfaction of all parties and ratified by the Minister of Labour of Honduras…the successful conclusion of negotiations without further disruption of work reflects the improving relations since the company’s acquisition of the El Mochito mine in Honduras in December of last year…ASND is up a penny at 74 cents through the first 30 minutes of trading…

7. Columbus Gold (CGT, TSX) issued a news release this morning congratulating Emmanuel Macron on being elected President of France. “In 2015, as the then French Minister of Economy, Emanuel Macron visited Columbus Gold’s Montagne d’Or Gold Project in French Guiana (a Region of France) and expressed his strong support for its development. His visit received coverage by national media…we would like to extend our congratulations on the occasion of your Presidential victory, and express our trust in your vision of guiding France through a future of economic growth and prosperity,” stated CGT CEO and Chairman Robert Giustra…

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