May 16, 2019
May 15, 2019
7 @ 7:00
Visit the BMR comments section throughout the day for updates and helpful information!
1. Gold has traded between $1,292 and $1,301 so far today…as of 7:00 am Pacific, the yellow metal is up $2 an ounce at $1,298 as it continues to contemplate its next move…a key resistance band exists between $1,300 and $1,313 (Fib.)…that’s Gold’s big immediate/near-term test…Silver is up a penny at $14.77…Nickel is leading the base metals this morning, up 7 cents at $5.45, while Copper and Zinc are both flat at $2.73 and $5.45, respectively…Cobalt remains steady at $15.76…Crude Oil has fallen 40 cents a barrel to $61.38 while the U.S. Dollar Index is relatively unchanged at 97.48…the American Petroleum Institute has just reported that U.S. Crude stockpiles rose last week by 8.6 million barrels, compared with expectations for a decrease of 800,000 barrels…alternative cryptocurrencies are flying high while Bitcoin is having a breather above $8,000…BREAKING NEWS just hitting the wire – the Trump administration plans to delay auto tariffs by up to 6 months (this will likely give the markets a lift)…the White House faces a May 18 deadline to decide whether to slap duties on car and auto part imports…by law, the administration has another 180 days to come to a decision as long as it is negotiating with its counterparts…
2. Australian Gold producer St. Barbara (SBM, ASX) is paying approximately $800 million (total consideration) to acquire Atlantic Gold (AGB, TSX-V), which gave the Venture a boost at the open this morning as a wave of consolidation continues in the mining sector…St. Barbara offered $2.90 a share for Atlantic Gold, about a 40% premium to yesterday’s close, and will fund the deal from cash reserves and by raising about $340 million (U.S.) in a share sale to existing holders…the bid, which has the backing of Atlanticâs board, comes after Australian Gold miner Newcrest Mining (NCM, ASX) bought a 70% interest in Imperial Metals‘ (III, TSX) Red Chris mine 2 months ago in a deal that’s expected to close soon…Australian dollar denominated Gold is just shy of Januaryâs record of A$1,894 an ounce and up about 9% from a year ago, while U.S. dollar Gold is virtually flat…âThe high AUD Gold price has benefited Aussie Gold miners but they have also done very well operationally,â said UBS analyst Dan Morgan in Sydney…Atlantic shareholders will receive $2.90 in cash per Atlantic share held plus shares in a company (SpinCo) that holds Atlantic’s interests in Velocity Minerals (VLC, TSX-V), which will be distributed to Atlantic shareholders on a pro rata basis following completion of the transaction…the SpinCo will then raise funds via a private placement and apply for a listing on the Venture…
3. The German economy received a welcome impetus today with the announcement that the country’s GDP grew by 0.4% in the 1st quarter of 2019…this followed a poor performance in the 2nd half of 2018 – 2 quarters without expansion…expectations for growth in 2019 had been lowered to 0.5% from 1%, but Q1 could suggest a slightly more optimistic year ahead for Europe’s largest economy and the 4th biggest in the world…this latest development will allay fears, at least for now, that Germany will fall into a recession…
4. China claims that domestic spending by its own citizens will minimize the economic damage of its trade fight with the United States…yet, demand from consumers and factories is looking shaky…even before a ratcheting up in trade tensions in the past 10 days, China was facing headwinds as it worked to expand the middle class and make the worldâs No. 2 economy more consumer-driven…fresh economic figures released this morning and in recent weeks show slowing activity by consumers, as well as factories, and add to doubts about Chinaâs domestic playbook for the protracted trade dispute…a 7.2% rise in retail sales last month from April 2018 marked a substantial 1.5 percentage point reduction from the year-over-year rate in March…Aprilâs pace of consumer activity was last seen when China ordered people to stay home to stop the spread of the deadly SARS pneumonia more than a decade and a half ago…some economists had predicted April sales would grow 8.8%…now they expect the government to expand the stimulus measures employed last year and at the start of this one…meanwhile, growth in industrial production slowed to 5.4% in April, lower than the 6.5% increase that had been forecast and level with November’s figure, which was the weakest rate since the global financial crisis a decade ago…
5. Canadian Oil producers’ coffers are the fullest they’ve been since 2014, but government intervention has hamstrung their spending abilities, starving them of opportunities to grow output (instead of reinvesting in the industry, they are buying back shares and paying down debt)…the energy sectorâs cash flow is projected to be $52.7 billion this year, the highest in 5 years, yet spending is declining year-on-year, according to ARC Financial…billions of dollars in foreign investment has also fled Canada since 2017 because of delays in building new pipelines…Canadian Natural, the largest Canadian energy producer, is the only Oil sands major adding a new project this year with the ramp-up of its Kirby North plant…but to do so, the company will have to cut production elsewhere because of Albertaâs limits on output, President Tim McKay said…âInvestment in Canada is stymied,â McKay said…âYou have regulatory uncertainty and a system where market access doesnât exist”…Canada’s lack of political leadership, and climate change extremism that’s driving decision making and killing jobs and investment, was in evidence again yesterday when Federal NDP leader Jagmeet Singh did a flip-flop and expressed concerns about the largest private sector project in Canadian history, the planned $40 billion LNG facility in northwest British Columbia…in January, Singh told CTVâs Evan Solomon that âthe vast majority of Indigenous elected bands and chiefs have all shown support and the consultation process was done in a very meaningful way”…of course what has changed since then is that the federal NDP, also against the Trans Mountain pipeline expansion, lost a seat to the Green Party in a by-election last week on Vancouver Island…
6. The Dow is off 147 points through the first 30 minutes of trading…in Toronto, the TSX is 29 points lower while the Venture has added 6 points to 607, pushing above its 10 and 20-day moving averages (SMA’s) for the first time in more than a month…“Cash Crunch: Canada’s Shrinking Junior Mining Sec tor Struggles For Relevance – And Deals”…when you see bearish headlines like that one this morning in the Financial Post, it’s often a sign that a major turnaround in the market is near at hand…FP pointed out that in 2018, total dollars raised in the mining sector amounted to $2.8 billion (the lowest since the end of the last bear market in 2015)…$4.8 billion was raised in 2016 followed by $4.6 billion in 2017…$635 million has been raised so far this year…Sirona Biochem (SBM, TSX-V), already in technically overbought conditions entering trading this morning, gapped up to 44 cents at the open after announcing that it has received positive clinical results of its skin lightening compound TFC-1067 from China…SBM, a cosmetic ingredient and drug discovery company with a proprietary platform technology, has been a top Venture performer this year with a 5-fold move…
7. Azimut Exploration (AZM, TSX-V) and SOQUEM Inc., a subsidiary of Ressources Quebec, have signed the final agreement of their expanded strategic alliance, following the execution of a letter agreement previously announced at the end of February…the alliance comprises 9 Gold and Copper-Gold properties totalling 7,149 claims with a surface area of 3,277Â sq. km…the properties are located in the prospective James Bay and Nunavik regions of Quebec, part of the Plan Nord strategy implemented years ago by the Quebec government…the alliance represents a major change in the activity level of both companies and will combine their strengths, specifically Azimut’s big data analytics expertise in mineral exploration and SOQUEM’s mining exploration and development expertise…a key component of the alliance will be the continued development of close ties with local communities in the Nunavik and James Bay regions…AZM has been one of the top performing juniors this year, more than doubling in value…it’s unchanged at 39.5 cents in early trading this morning…
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May 14, 2019
7 @ 7:00
Visit the BMR comments section throughout the day for updates and helpful information!
1. Gold has traded between $1,295 and $1,301 so far today…as of 7:00 am Pacific, the yellow metal is down $2 an ounce at $1,298 as it digests yesterday’s sharp move…a key resistance band exists between $1,300 and $1,313 (Fib.)…that’s Gold’s big immediate/near-term test, to power its way through that area…improved sentiment toward Gold is reflected in the holdings of SPDR Gold Trust, the world’s largest Gold-backed ETF, which rose 0.44% yesterday in the biggest 1-day rise in nearly 2 months…Silver is 5 cents higher at $14.79…Copper is flat at $2.74 while Nickel and Zinc are up slightly at $5.36 and $1.23, respectively…Cobalt remains steady at $15.76…Crude Oil has jumped 46 cents a barrel to $61.50 while the U.S. Dollar Index is up one-tenth of a point at 97.48…Bitcoin hit a fresh 10-month high of $8,335 on Bitstamp earlier today and is currently reporting its largest monthly gain since November 2017…on a note to clients yesterday, Citi said its China economists are âcautiously optimistic that a trade deal can eventually be signed” with the United States, but added that the âwindow to avoid further escalations in U.S.-China tensions is closing fast”…
2.  Speaking at a White House event last night, President Trump offered a projection about how much longer Washington and Beijing could be locked in heated trade negotiations:  âWeâll let you know in 3 or 4 weeks if itâs successful,” he said to reporters…that comes after last weekâs trade talks in Washington concluded without a deal and, instead, featured Trump putting additional pressure on China by hiking American tariffs on $200 billion of Chinese products from 10% to 25%…China, for its part, retaliated with its own raft of tariff hikes on a wide-ranging list of American goods, but of course there’s a huge trade imbalance…investors are closely watching to see if the trade battle grows even more punitive:  The Office of the U.S. Trade Representative is taking steps to prepare to slap tariffs on the remaining billions of dollars worth of Chinese goods coming into America…Trump is trying to use maximum leverage against China…he knows he has to cut a deal in the not-too-distant future in order to keep markets strong through 2020…
3. China’s auto sales sank 17.7% in April from a year earlier, the 10th straight monthly decline…drivers in the industry’s biggest global market bought 1.6 million sedans, SUVs and minivans, according to industry group China Association of Auto Manufacturers…total vehicle sales, including trucks and buses, fell 14.6% to 2 million…jittery consumers appear to be less willing to make big purchases amid a tariff battle with Washington and unease about China’s economic outlook…growth in the 2nd-largest global economy held steady in the latest quarter but that was supported by government stimulus spending and higher bank lending…the downturn is squeezing Chinese and global automakers that are pouring money into meeting government targets to develop electric vehicles…auto sales for the first 4 months of the year are off 14.7% from a year earlier at 6.8 million, according to CAAM…sales by Chinese brands in April plunged 27.9% from a year earlier to 585,000…their market share contracted by 5.2 percentage points to 37.1%….purchases of electric and gasoline-electric hybrid SUVs and sedans rose 18.1% to 97,000…that was a bright spot for the industry but well below growth rates of as much as 100% in previous months…
4. Bomb-laden drones target Oil infrastructure:  Oil prices took off this morning on reports of a drone attack at Oil pumping stations in Saudi Arabia…the incident is an âact of terrorism,â stated Saudi Energy Minister Khalid al-Falih in describing attacks on 2 Oil pumping stations near Riyadh for the countryâs East-West pipeline carried out with bomb-laden drones…the fire has since been contained, according to news reports, and Al-Falih asserted that Oil production was not interrupted…âThis act of terrorism and sabotage in addition to recent acts in the Arabian Gulf do not only target the Kingdom but also the security of world Oil supplies and the global economy,â al-Falih added…no one has yet been directly accused of carrying out the attack, but a Houthi-run TV channel announced this morning it had launched drone attacks on several Saudi installations…the channel Masirah TV, citing a Houthi military official, reported that â7 drones carried out attacks on vital Saudi installations”…meanwhile, the Wall Street Journal reported this morning that an initial U.S. assessment indicated Iran likely was behind the attack on 2 Saudi Arabian Oil tankers and 2 other vessels damaged over the weekend near the Strait of Hormuz…if confirmed, this would further inflame military tensions in the Persian Gulf…
5. The Dow has rebounded 136 points through the first 30 minutes of trading after yesterday’s big drop… in Toronto, the TSX is up 41 points while the Venture has added 4 points to 600…drill results continue to demonstrate strong growth potential at GoGold’s (GGD, TSX) recently acquired Los Ricos Project located about 100 km northwest of the city of Guadalajara…diamond drill hole LRGG-19–009 intersected 21.2 m averaging 7.7 g/t Gold, 1,270 g/t Silver and 24.60 g/t Gold equivalent, including 6.9 m averaging 22 g/t Au, 3,718 g/t Ag and 71.5 g/t Gold equivalent (true width unknown at this time)…the drill hole was laid out to twin an historic RC drill hole from 2003 with the GoGold core hole returning 70% higher Gold equivalent grade…“We continue to see high grade ore from our drilling program which is near surface.  Our diamond drilling holes which are twinning historical RC holes continue to provide much higher grades than the historical results.  These results, coupled with the strong assay results that the historical 6,000 channel samples are showing as our exploration team works through the data, are showing a very promising project at Los Ricos,” stated Brad Langille, President and CEO…GGD closed the quarter in a strong financial position with $16 million in cash and marketable securities…American Pacific (USGD, CSE) is pushing higher on news regarding its Tuscarora Project in Nevada, a high-grade, low sulphidation epithermal property in Elko, Nevada, recently optioned to OceanaGold (OGC, TSX)…ongoing mapping and assessment of visible veins, shafts, roadcuts and workings will incorporate large faults and regional structures into a planned geophysical program…a gravity survey begins late this month while a CSAMT Geophysics (Zonge International) onsite survey is targeted for mid-June ahead of summer drilling…Tuscarora is 20 km southwest of the Jerritt Canyon mine, a private, underground mid-tier Gold producer with over 8 million ounces of Gold produced since first pour in 1981…
6. Onex, the private equity company led by Gerry Schwartz, has struck a deal to buy WestJet Airlines (WJA, TSX) for $3.5-billion…WJA soared more than 60% on that news yesterday, a clear indication that Canadian airlines have been persistently undervalued relative to firms in other countries…with WestJet’s debt included, the deal is the biggest private equity takeover of an airline in history…it also marks a major shift in the direction of an airline that, after launching in 1996, built an image as a scrappy Western rival to Air Canada and has been a public company for most of its history…WestJet has struggled in recent years because of a confluence of issues, including a soft economy in Alberta and a successful movement by some groups of employees to unionize…WestJet employs 14,000 people and has a fleet of 180 planes that fly to more than 100 destinations…it is embarking on a period of expanding its fleet, adding new routes and focusing on higher-priced, business-class tickets…last year it launched a discount subsidiary called Swoop in a bid to compete with no-frills airlines flying to the United States, Mexico and the Caribbean…the expansion has come with growing pains, including unionized staff, rising fuel costs and the end of a partnership with American Airlines (AAL, NASDAQ)…
7. Alberta is open for business again:  The first in a series of tax cuts for Alberta businesses is slated for July 1, Premier Jason Kenney announced yesterday, with a goal to hit an 8% tax rate by 2022…flanked by Finance Minister Travis Toews at a construction company in south Edmonton, Kenney said the first rollback will make Albertaâs general business tax rate the lowest in the country…Albertaâs 12% corporate tax rate is currently the 2nd lowest in the nation, sitting half a percentage point higher than Ontario and the Northwest Territories…meanwhile, environmentalists are raising the alarm over a suite of more than 250 amendments proposed for the Trudeau governmentâs environmental review legislation, warning the industry-inspired changes could alter the bill beyond recognition…last night the Senate energy committee began combing through as many as 300 proposed amendments to Bill C-69, which has been referred to as the “no more pipelines” bill…it would completely overhaul the environmental review process for major resource projects…the committee now has just 3 days to consider several packages of proposed amendments from both Conservative and Independent senators which, if accepted, would need to be sent back to the House of Commons for approval…
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May 12, 2019
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