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Visit the BMR comments section throughout the day for updates and helpful information!

1. Gold has traded between $1,479 and $1,504 so far today…as of 7:00 am Pacific, bullion is off $13 an ounce at $1,481 as some optimism returns to U.S.-China trade talks…Silver is steady at $17.46 while base metals are all pushing higher…Nickel has jumped 11 cents to $8.15…Copper is up 2 pennies at $2.62 while Zinc, enjoying a good week, has added another 2 cents to $1.11…Cobalt has climbed 34 cents to $15.76…Oil prices are firmer today after an Iranian tanker near the Saudi Arabian coast suffered damage in what the ship’s owner suggested may have been a missile attack…Brent Crude, the global benchmark, and WTI both jumped by as much as about 2% with WTI currently up 65 cents (1.2%) to $54.20…the National Iranian Tanker Co., which owns the Oil tanker Sabiti, said the vessel was 60 miles from the Saudi Arabian port of Jeddah, when it was likely hit by missiles that damaged its main tanks…the incident is the latest flashpoint in the Middle East amid heightened tensions just under a month after Washington and Riyadh accused Tehran of being behind attacks on Saudi Oil-processing facilities at Abqaiq and Khurais that drastically cut the nation’s output…Canada’s private sector keeps bleeding, shedding 21,000 jobs last month…overall, the economy added 54,000 jobs but most of those came from the public sector (health care)…growing the size of government is not the way to grow the economy…on the U.S. data front, the University of Michigan’s consumer sentiment index came in at 96 for October, nicely topping the consensus estimate of 92…the American consumer remains strong and that’s going to keep driving the U.S. economy…

2. The U.S. and China appear close to a limited trade deal, according to media reports this morning, leaving more controversial issues for later negotiations…the trade talks, which President Trump in a news conference yesterday said were “going really well”, extended into the 2nd day this morning…a slew of reports overnight suggest that the world’s 2 largest economies could agree to a partial agreement on issues such as currency and agriculture buying, and it could also include a delay in the tariff hike scheduled for next week…day 2 of the talks now includes a key meeting betwen Trump and Chinese Vice Premier Liu He, which is scheduled to take place at 2:45 pm ET…the additional meeting renewed hopes for positive trade progress as past meetings between the 2 have yielded a delay in tariffs and agriculture buying…

3. How high of a carbon tax do you want to pay to “save the planet”?…even if Canadian federal and provincial governments increase their carbon taxes to $75 (U.S.) a tonne, they will fall far short of reaching greenhouse gas emission targets, according to a new report by the International Monetary Fund…countries that rely more on Coal than Canada will see a greater impact from carbon taxes on their emission levels because the monetary bite will be deeper, the IMF says…some would see a $75 (U.S.) a ton carbon tax balloon Coal prices by 200% by 2030, the report released today showed…“Whereas a $25 (U.S.) a ton price would be more than enough for some countries (for example, China, India, and Russia) to meet their Paris Agreement pledges, in other cases (for example, Australia and Canada) even the $75 (U.S.) a ton carbon tax falls short,” the Washington, D.C.-based lender said…“Emissions are more responsive to pricing in Coal-reliant countries such as China, India, and South Africa than in other countries”…

4. Canada Cobalt (CCW, TSX-V), the world’s top-performing Cobalt stock the past 2 years, has inked a transformational deal that will further unlock the power of its proprietary and environmentally friendly Re-2OX process for Cobalt and other metal extraction while also giving the company multiple near-term revenue streams through the acquisition of the Northern Ontario Silver-Cobalt District’s only permitted and fully operating analytical lab and mineral processing facility in the town of Cobalt…the deal, very non-dilutive and strategically timed, unquestionably makes CCW the undisputed vertically integrated leader in Canada’s Silver-Cobalt heartland at a time when Silver is in the early stages of what’s likely going to be a record run…Re-2OX will be integrated into the 23,400 sq. foot facility which currently features 4 main profit centres – 1) Bullion pouring; 2) Bulk sampling; 3) Commercial assaying; 4) E-waste (on the e-waste front, where high-grade Gold and other metals are recovered, investors would be wise to check out how well MWX and ETI have been performing)…the PolyMet operational team, led by majority owner Gino Chitaroni, will be kept in place and incentivized…minor facility upgrades combined with an aggressive sales strategy are expected to help achieve a significant ramp-up in growth and profitability…a  high capacity bullion furnace can pour up to 10 Silver dore bars (90% to 95% fine) of 1,000 ounces each in an 8-hour shift, a feature that’s ideal for a company that has an underground Silver-Cobalt mine just a 1-hour drive down the highway…CCW is up a penny-and-a-half at 33.5 cents as of 7:00 am Pacific…the chart shows a continuation of a strong new uptrend and a breakout above key resistance at 33 cents…

5. The Dow is on track to snap a 3-week losing skid, up 363 points as of 7:00 am Pacific while the TSX has gained 58 points…the U.S. stock market continues to outperform the Canadian market handily…notably, over the past 10 years, the S&P 500 has delivered a total return (with dividends) of 238%, or more than 2.5 x times the 92% return for the S&P/TSX Composite Index over the same period…the Venture, hurt yesterday by plunging cannabis stocks, is off slightly at 542 as it trades at a 2019 low…high-grade Gold play MacDonald Mines (BMK, TSX-V) has been ignoring the Venture weakness, hitting its best levels in more than 2 years in recent sessions, while Giga Metals (GIGA, TSX-V), a Northern B.C. low-grade but high tonnage Nickel play, is trading in the mid-40’s near a 2-year high…

6. Discovery Metals (DSV, TSX-V) is raising $17 million through the issuance of common shares and subscription receipts at a price of 45 cents…Eric Sprott has agreed to invest $5 million in the private placement, maintaining his 19.9% interest in Discovery following the issuance of common shares…the balance of Sprott’s investment will be completed with the purchase of subscription receipts, which, if converted, will increase his interest in the company to approximately 22%, assuming the private placement is fully subscribed…Taj Singh, President and CEO, commented, “We are excited to have substantially expanded our European investor base as we transition into our next phase of growth.  We are also very appreciative of the continued support of Mr. Sprott and are pleased that he has significantly increased his ownership in Discovery. These investments ensure we are well funded to pursue exploration plans for our Cordero silver project and also for our Coahuila Silver-Zinc-Lead projects.  For Discovery shareholders, this private placement is a strong endorsement of our future business plans”…

7. More pain for the cannabis sector:  Hexo (HEXO, TSX) reported yesterday that it expects 4th quarter sales to be much lower than previously estimated…the stock plunged $1.12 to close at $3.76 and is off slightly in early trading today…Hexo expects to sell about $15.5 million worth of product in the quarter ending July 31, 40% less than previously forecast…as recently as June, it predicted $26 million in sales…Hexo also withdrew its previously predicted $400 million sales forecast for next year and did not provide a new estimate…CEO Sebastien St-Louis blamed the bleak sales forecast on a number of macro headwinds, including “slower than expected store rollouts, a delay in government approval for cannabis derivative products and early signs of pricing pressure”…Hexo’s warning had a negative impact across the entire sector…Canopy Growth, Aurora Cannabis and Aphria shares were all down sharply…Hexo is the latest Canadian cannabis company to blindside investors in the past few months…in August, Canopy posted a significantly bigger loss than expected in its latest quarter and pushed out the timeline to achieve profitability…

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Visit the BMR comments section throughout the day for updates and helpful information!

1. Gold has traded between $1,492 and $1,511 so far today…as of 7:00 am Pacific, bullion is off $10 an ounce at $1,495…2 of the biggest Gold purchasers this year – Russia and China – have bought a total of 251 tonnes of the yellow metal combined…China has added 106 tonnes of Gold to its official reserves so far this year while Russia has acquired an additional 145 tonnes…globally, central banks around the world have added more than 500 tonnes of Gold to their reserves through September, which puts 2019 on track to become another record year for central bank Gold buying…the biggest buyers aside from China and Russia have been Turkey, Poland and Kazakhstan…Silver has slipped 27 cents to $17.43…Nickel has climbed 8 cents to $8.08…Copper is 3 cents higher at $2.58 while Zinc has added 4 pennies to $1.08…Crude Oil has gained 69 cents a barrel to $53.28 despite the fact that OPEC has trimmed its forecast for Oil demand growth for the 3rd month in a row, citing weaker-than-expected data in the Asia Pacific region as well as advanced economies in the Americas…the move is likely to add to growing pressure on the Middle East-dominated group to impose a deeper round of production cuts at its December meeting…in a closely-watched monthly report, OPEC cut its forecast for global Oil demand growth for the remainder of this year to 0.98 million barrels per day (b/d)…that’s down 40,000 b/d from its September estimate…

2. The prolific and under-explored Eskay Camp is capable of all sorts of geological surprises…an extensive field program carried out at Crystal Lake’s (CLM, TSX-V) Chachi Corridor, where there has been major glacial retreat, has revealed an entirely new multi-element hydrothermal system (including Nickel) over an area 8 km long x 4 km wide east of the Newmont Lake Gold Corridor…at least 3 different styles of mineralization have been confirmed through assays from surface samples (in-situ grab and chip samples) at multiple occurrences…assays ranged up to 21 g/t Au, 2,350 g/t Silver, 5.4% Copper, 7.7% Nickel, 0.85% Cobalt, 15.2% Zinc and 6.2% Lead…mineralization runs along the eastern side of the McLymont Fault and is coincident with a large geochemical anomaly, a continuous >2 km-long chargeability IP anomaly and an aeromagnetic anomaly entered on a major fault system associated with high-grade Gold mineralization to the southwest…Mars Napoli, President and CEO, commented, “The presence of high-grade VMS style and Ni-Co-Cu arsenide mineral occurrences highlights the potential for the discovery of base metal deposits along this richly endowed metal corridor”…CLM is the early volume leader on the Venture, up 4.5 cents at 21 cents as of 7:00 am Pacific…

3.  Great Bear Resources (GBR, TSX-V) has released more results from its continuing 90,000-m drill program at its 100%-owned Dixie Project in the Red Lake district…drill hole BR-043, located between the Bear-Rimini and Yuma sub-zones, intersected multiple Gold intervals along 253.9 m of core length including 125 m of 1.08 g/t…drill hole BR-035, located between the Auro and Yuma sub-zones, also cut multiple Gold intervals including 15 g/t over 2.5 m within a broader interval of 26 m of 2.5 g/t…Chris Taylor, President and CEO of Great Bear, stated, “In a district where Gold is usually mined from discontinuous veins averaging a few metres in width, often at kilometre-scale depths, the near-surface, multi-kilometre extent of our LP Fault discovery instead resembles other Archean-age Gold deposits across Ontario and Quebec.  We continue to intersect high-grade Gold intervals with comparable widths and grades to what have been mined at the major high-grade deposits in Red Lake, however these occur within wide envelopes of moderate to low grade Gold mineralization, which we observe projecting to surface.  During September and October, mapping crews discovered outcrop exposures of our felsic target geology, similar to what we’re drilling from Bear-Rimini to Auro, along approximately 15 km of strike length.  We have also now drilled the same units 1 km to the southeast of the Auro zone, with assays pending, and through examination of historical drill core we see that Noranda in 1993, drilled similar rocks 8 km to the southeast of the Auro zone”…

4. Gran Colombia Gold (GCM, TSX), one of the top-performing Gold stocks this year, produced a total of 19,395 ounces of Gold in September, bringing the total for the 3rd quarter to 56,271 ounces…for the 1st 9 months of 2019, the company has churned out 174,754 ounces, up 7% over the first 9 months last year…CEO Lombardo Paredes commented, “Our 3rd quarter production continued to be steady as we incorporated our expanded plant capacity at Maria Dama and opened up new areas within our company mines through our ongoing development programs at Segovia.  Based on our results to date, and expectations for the remainder of the year, we remain well positioned to meet our full year production guidance of between 225,000 and 240,000 ounces for 2019.  Our solid operating performance and better spot Gold prices in the 3rd quarter of 2019 positively impacted our free cash flow and balance sheet, raising our cash balance at the end of September to $63 million (U.S.), up from $51 million at the end of the 2nd quarter.  The aggregate principal amount of our Gold Notes outstanding decreased to $73.6 million (U.S.) at the end of September and we have $20 million (CDN) of convertible debentures currently outstanding”…

5. The Dow, trying to snap a 3-week losing skid, is up 135 points as of 7:00 am Pacific while the TSX has gained 21 points…futures were volatile overnight with investors’ heads spinning due to conflicting headlines regarding U.S.-China trade talks…Fidelity Investments has eliminated trading commissions on its online brokerage, matching a step some of its biggest rivals unveiled last week…beginning this morning, Fidelity stopped charging individual investors commissions on online trades of U.S. stocks, exchange-traded funds and options trades…for investment advisers, commissions will be cut to zero by early November…Fidelity’s online brokerage has 21.8 million accounts…New Gold (NGD, TSX) has reported Q3 production of 129,000 Gold equivalent ounces (91,000 ounces of Gold, 168,000 ounces of Silver and 20.1 million pounds of Copper)…2019 production now sits at 384,000 Gold equivalent ounces and is on track to meet annual guidance of 465,000 to 520,000…high-grade producer Ero Copper (ERO, TSX) has reported a 106% increase in Proven and Probable mineral reserves to approximately 38 million tonnes and a 69% increase in Measured and Indicated resources to approximately 72 million tonnes…the Venture is off 1 point a 552…Discovery Metals (DSV, TSX-V) has been halted pre-market, pending news…cannabis stocks are under renewed pressure with the Canadian Marijuana Index down sharply in early trading…since recreational cannabis became legal on October 17, 2018, the shares of what were then the 10 largest Canadian cannabis producers by market capitalization have been bludgeoned, yielding an average negative return of more than 57% for investors…

6. Marijuana stocks have taken a tumble from their highs a year ago, and the skid isn’t just spooking investors…earlier this week, MedMen Enterprises (MMEN, CSE)- a seller of legal cannabis in California and 11 other states – announced they were backing out of a blockbuster deal to buy PharmaCann, a Chicago-based marijuana company that has operations in 8 states…in its announcement, MedMen, which is based in Los Angeles, cited the steep pullback in U.S. and Canadian cannabis stocks this year…it noted the Horizons Marijuana Life Sciences Index, a Canadian exchange-traded fund that tracks cannabis stocks, is down 47% since March…MedMen closed yesterday at $1.85, which is a steep decline from its 52-week high of $7.57...“The underperformance has made it increasingly more critical to allocate capital efficiently, given the current industry headwinds,” MedMen said in a news release…the company also said it intends to focus on building its retail brand and online business…in exchange for forgiving some debt, MedMen is taking certain cannabis licenses and other assets in Illinois and Virginia from PharmaCann…“Looking at the PharmaCann portfolio today, Illinois has emerged as the most attractive opportunity for our longer-term, strategic growth plan,” said Adam Bierman, MedMen co-founder and CEO…“The cannabis sector has evolved tremendously since we first announced the PharmaCann transaction and based on the current macro-environment and future opportunities that exist for our business, we believe it is now in the best interest of our shareholders to deepen, rather than widen, our company’s reach”…Medmen still has access to $170 million (U.S.) of capital as it works towards profitability…however, the company does not expect to break even on adjusted EBITDA until the end of calendar 2020…

7. 19% of mines run 100% over budget due to unrealistic feasibility studies, according to consulting firm McKinsey & Company…McKinsey classified mines that were 15% to 100% over-budget as project disasters, and mines 100% over-budget were corporate disasters….only 20% of mines surveyed actually came in at or under budget…McKinsey blames the feasibility study process, which “lacks rigor.  Many mining executives still rely on the same FS processes they did years ago, when resources were more accessible and projects less risky to plan and execute,” said the study’s authors…“That’s a problem because today’s projects are becoming larger, more complex, and often more remotely located—making them more susceptible to cost overruns.”…feasibility studies could be improved with better and more comprehensive data…“While some standards exist for resource estimation and reporting at FS stage, companies have few benchmarks to go by for a wide swath of other elements, such as engineering definition, execution and operational readiness, business objectives, or commodity price predictions – all of which can change a project calculus significantly.  Other culprits driving up costs are sub-par management practices, lack of proper contractor incentives and poor familiarity with the current state of technology”…McKinsey said old methodologies no longer suffice when only a fifth of mines built meet their predicted financial returns….fixing the feasibility problem could be an economic win with McKinsey estimating that a change could be worth over $100 billion to the mining and metals project industry over coming 5 years…

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