Check back later this morning for today’s BMR Morning Market Musings.
1. Gold has traded between $1,251 and $1,258 so far today after hitting a 3-week low in the wake of Wednesday’s Fed rate hike…however, Gold’s immediate moves right after Fed meetings have often not been reliable indicators of the yellow metal’s direction over the short to medium-term…main support levels are around $1,260 followed by the $1,230’s…as of 7:00 am Pacific, Gold is up $1 an ounce at $1,255…Silver is headed for its biggest weekly decline in 6 weeks…it’s down a nickel at $16.68, hovering around nearest support…holdings in SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, have fallen 1.5% to 27.4 million ounces this week (through yesterday)…
2. Oil prices are edging higher this morning, bouncing off their 2017 lows, but an ongoing supply excess puts WTIC on track for its 4th consecutive week of losses despite OPEC-led production cuts to support the market…data from the U.S. Energy Information Administration (EIA) this week showing growing gasoline stocks and shaky demand, despite the peak summer driving season, kept Oil prices under continued pressure…traders will be watching for the updated rig count out of the U.S. later this morning from Baker Hughes…the number of operational rigs has climbed for 21 straight weeks…
3. Preliminary June consumer sentiment in the U.S. has fallen to its lowest since November with the University of Michigan sentiment index reading at 94.5 as reported moments ago…that’s below the consensus estimate of 97…meanwhile the expectations measure decreased to 84.7 in June, the lowest since October…in other economic news, preliminary U.S. homebuilders slowed down the pace of construction for the 3rd straight month in May, a possible sign that the shortage of houses for sale might worsen…home construction is still 3.2% higher year-to-date, but that increase has been too modest to address the dwindling supply of homes…
4. The Venture, trying to snap a 7-session losing skid, has been impacted by a 5% slide in Oil prices in each of the past 2 weeks but RSI(2) conditions on the daily chart are at their most oversold extreme levels since the bottom of the bear market in January 2016…in addition, Venture technical support is exceptionally strong around 770 and near the rising 300-day moving average (SMA), currently 768…every Venture bull market has touched its 300-day SMA at least once, the last example being 2010 when the Index briefly slipped below the 300-day before quickly reversing out of a correction and embarking on one of its greatest runs ever over the next 7 months…as of 7:00 am Pacific, the Venture is up slightly at 773…the TSX has slipped 38 points while the Dow is off 34 points in early trading…Amazon (AMZN, NASDAQ) is on track to dominate foot retail within the next couple of years after announcing this morning that it’s acquiring Whole Foods Market (WFM, NASDAQ) for $42 a share in a deal valued at $13.7 billion…
5. Ascot Resources (AOT, TSX-V), in the midst of a major drill program at its Premier Property near Stewart, announced this morning that it has added $8.45 million to its treasury through the exercise of all warrants that expired yesterday…the company now has $32 million in in cash…Ascot has 6 rigs operating at Premier…more than 100 holes (35,000+ m) have been completed so far this year with results pending for almost half of those (results from 23 reported already)…the company’s planned 120,000 m program commenced in March after some aggressive snow clearing and is targeted to establish an initial 2 to 3 million ounce high-grade resource…
6. Taku Gold (TAK, CSE) which has been firming up recently in conjunction with a private placement, is “contemplating a certain mineral property acquisition in the White Gold area of the Yukon from an arm’s length party, Golden Predator Mining (GPY, TSX-V). In conjunction with the transaction, the vendor intends to invest in Taku, subject to the successful execution of the acquisition.” TAK hit a new 52-week high of 19 cents in trading this week and is off half a penny at 16.5 cents as of 7:00 am Pacific…
7. Trifecta Gold (TG, TSX-V), a spinout of Strategic Metals (SMD, TSX-V), enjoyed an encouraging first day of trading on the Venture yesterday with the stock closing at 27 cents on total volume of just under 300,000 shares…through the first 30 minutes this morning, TG is up 2 pennies at 29 cents…once the stock’s trading range has been established in the near future, management will be carrying out a private placement to advance the company’s 4 Gold properties in the Yukon’s White Gold district…Strategic distributed a total of 19,872,254 common shares of Trifecta to SMD shareholders (4.5 SMD shares for 1 TG share) and continues to hold 2,127,747 TG shares for investment purposes…SMD therefore owns 9.19% of the 23,150,001 shares of Trifecta currently issued and outstanding (22 million are free of any resale restrictions)…
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Hello Jon. I just started dipping my toe in investing in junior miners. GGM, specifically. I wanted to ask you if you feel there is a knock on effect for regions that can distort sentiment? I.E BC v QC in terms of seeing richer valuations?
Comment by Karim — June 16, 2017 @ 8:47 am
Will we see an after market release by GGI?
Comment by Dan1 — June 16, 2017 @ 11:48 am
Not on a Friday afternoon, Dan1, I would very much doubt that.
Comment by Jon - BMR — June 16, 2017 @ 12:54 pm
I don’t expect a release on the VTEM, but maybe a release on the closing of the PP. Isn’t their lawyer back today?
Comment by Dan1 — June 16, 2017 @ 1:06 pm
750k at 0.09 in CPO… Puh
Comment by Kalkan — June 16, 2017 @ 1:09 pm
GGI – at a 13.5 cent ask today tough not to be a buyer. I was.
Comment by Charles — June 16, 2017 @ 1:10 pm
Yes, today or Monday, Dan1, is what I heard, so we will get a closing from GGI next week…then it’s on the ground – as quickly as the snow is gone, and the latest we’ve heard is the window should open during the last week of the month…
Comment by Jon - BMR — June 16, 2017 @ 1:48 pm
$200 million Cobalt deal
Mr. Anthony Milewski reports
COBALT 27 CAPITAL CORP. PRICES $200 MILLION PUBLIC OFFERING OF COMMON SHARES AND FILES FINAL PROSPECTUS
Cobalt 27 Capital Corp. has priced its public offering of 22,222,225 postconsolidated common shares at a price of $9 per share. The $200-million offering will consist of 10,924,420 shares being sold for gross cash proceeds of $98,319,780, and 11,297,805 shares being issued to acquire 1,205.6 tonnes of physical cobalt for a total cost of $101,680,245. Cobalt 27 has filed its final long-form prospectus dated June 16, 2017, with the securities commissions in each of the provinces and territories of Canada, except Quebec, in connection with the offering.
The offering is being made through a syndicate of underwriters led by Scotia Capital Inc., Canaccord Genuity Corp. and TD Securities Inc., and includes BMO Nesbitt Burns Inc., GMP Securities LP, Haywood Securities Inc., Cormark Securities Inc., Eight Capital, PI Financial Corp., Sprott Private Wealth Inc. and Numis Securities Inc. The company has entered into an underwriting agreement with the underwriters for the offering.
The company has granted to the underwriters an overallotment option, exercisable in whole or in part for a period of 30 days following the closing of the offering, to purchase up to an additional 3,333,333 shares at the offering price.
The company has provided notice to each of the vendors of physical cobalt that the company will be acquiring the full amount of cobalt previously optioned. Pricing under each contract has been established, and in aggregate the company will be acquiring 2,157.5 tonnes of physical cobalt consisting of 1,486.5 tonnes of premium-grade cobalt and 671.0 tonnes of standard-grade cobalt. A total of 951.9 tonnes of cobalt are being acquired for cash consideration, with the balance of 1,205.6 tonnes of cobalt being acquired for shares. An aggregate of 11,297,805 shares will be issued to and held by the vendors of cobalt, which will represent approximately 47 per cent of the company’s total issued and outstanding shares upon closing of the offering and the cobalt contracts.
The net proceeds realized from the shares sold for cash will be used toward the acquisition of physical cobalt ($78,519,245), three years of expected general and administrative costs (expected to be approximately $2-million per year), and a reserve to evaluate and acquire streams, royalties and direct interests in mineral properties containing cobalt.
Both the offering and the purchase of physical cobalt under the cobalt contracts are expected to close concurrently on or about June 23, 2017, subject to customary closing conditions, including the receipt of all necessary regulatory approvals. The TSX Venture Exchange has conditionally approved the listing of the shares being sold under the offering. The company’s shares will resume trading on the TSX-V on closing of the offering, on a postconsolidated basis. As a condition of undertaking the offering, the company’s shares will be consolidated on the basis of one new share for every 20 shares previously outstanding immediately prior to closing. There will be a total of 23,881,394 shares outstanding after closing of the offering.
The offering is only made by the prospectus. The prospectus contains important information about the securities being offered. Potential investors should read the prospectus prior to making an investment decision. A copy of the prospectus is available under the company’s profile on the SEDAR website.
About Cobalt 27 Capital Corp.
Cobalt 27 Capital is a minerals company that offers pure-play exposure to cobalt, an integral element in key technologies of the electric vehicle and battery energy storage markets. The company intends to acquire and hold physical cobalt, as well as manage and grow a cobalt-focused portfolio of streams, royalties and direct interests in mineral properties containing cobalt.
Comment by Jon - BMR — June 17, 2017 @ 9:48 am
All the firms in town lined up to fund this. Does it trickle down in a substantial way? Does Cobalt 27 compete w China IF CSR can get cobalt ready for mkt?
Comment by david — June 17, 2017 @ 10:51 am
Hi Jon Does that mean 11 m shares will be free trading in x? Months?
Comment by Donald — June 17, 2017 @ 12:45 pm
Well, Donald, what this looks like to me is 11 million free trading in 4 months…the shares for the physical Cobalt, not sure about the mechanics for that in terms of the hold period…will be announced on closing.
The fact that this kind of a deal is putting put together underscores the opportunity in the Cobalt space.
Comment by Jon - BMR — June 17, 2017 @ 1:09 pm
Are they lining up because it’s promising or just lucrative commissions on 200 m issue – 8% is 16 million + warrants?
Comment by Donald — June 17, 2017 @ 6:17 pm
What’s happening with Csr and Cpo ? Doesn’t Csr need a bulk sample of several thousand tons to impress mr. market?
Comment by Donald — June 17, 2017 @ 6:27 pm
They obviously like the idea of investing in physical cobalt, Donald, given price predictions for the next few years. Will be one of the best performing metals.
Comment by Jon - BMR — June 17, 2017 @ 10:41 pm
2017-06-19 07:40 ET – Halt Trading
Engold Mines Ltd. has been halted at the open on June 19, 2017, at the request of the company, pending an announcement.
Comment by Jon - BMR — June 19, 2017 @ 6:47 am