Check back later today for Daniel’s Den visit the BMR comments section throughout the day for updates and helpful information.
1. Gold has traded between $1,320 and $1,333 so far today…as of 7:00 am Pacific, bullion is flat at $1,324…Silver is off 15 cents at $16.46…Copper has slipped 5 cents to $3.14…Nickel has eased off 4 pennies to $6.02..Cobalt is steady at a decade high of $36.63 while Crude Oil has jumped 36 cents to $63.75…Crude inventories in the U.S. have fallen by 20% since hitting record highs in April 2017…the futures curve shows prompt prices for Oil are now above those for future delivery, suggesting investors are counting on demand outpacing supply…data yesterday showed U.S. Crude inventories fell by 1.1 million barrels in the week to February 2 to 418.4 million barrels, helping the Oil price…the U.S. Dollar Index ran into new resistance at 90 and is down slightly as of 7:00 am Pacific at 89.61…
2. The Wall Street Journal reports this morning that Congo’s state-owned mining firm, Gécamines SA, is pushing to re-nationalize the Central African nation’s rich natural resources, in a move that could roil some of the world’s largest mining companies and have implications for industries ranging from technology to auto production…Gécamines Chairman Albert Yuma Mulimbi, in remarks to the WSJ and at a mining conference in Cape Town, South Africa, yesterday, said that Congo – Africa’s biggest Copper and Cobalt producer but also one of the world’s poorest countries with an annual budget of roughly $5 billion (U.S.) – hasn’t benefited enough from its mining production…he alleges that companies have manipulated costs and production figures, resulting in lower dividends and royalty payments to the Congolese government…furthermore, he said audits being conducted of several foreign firms operating in the country have found possible criminal activity…he declined to name specific companies or details, but said he would reveal more next month when the audits would be complete…Yuma spoke at yesterday’s mining conference as he was flanked by members of both houses of Congo’s parliament, some of whom wrote the country’s controversial new mining code (yet to be signed by President Joseph Kabila) that will classify metals such as Cobalt and Tantalum, as “strategic substances”, allowing government to tax them at higher rates…robust Cobalt prices “give us full reason” to renegotiate joint ventures, said Yuma. “A bigger piece of the cake, that’s the ultimate goal,” he said, adding that eventually he would like to revert to 100% ownership of all mines in Congo…
3. Mark Bristow, CEO of Randgold Resources (GOLD, NASDAQ), which owns Gold mines in Congo, stated at yesterday’s mining conference in Cape Town, “As long as African countries offered mining codes and fiscal regimes that were reasonably investor-friendly, companies were prepared to take the risks of limited or nonexistent infrastructures and skills bases, as well as political volatility. Start making unreasonable demands, however, and investors will vote with their feet.”
4. Alberta has slapped an immediate halt on B.C. wine imports in response to the recent action by the B.C. government to thwart the already approved Kinder Morgan pipeline expansion…Alberta has other weapons in its arsenal, but why isn’t the federal government applying pressure against B.C.?…Canada must urgently get its resources to market, and the Green Monster on the left coast is defying the Constitution which gives the federal government authority over pipelines and rail that cross provincial boundaries…so this is much, much more than a battle between the country’s 2 westernmost provinces, governed unfortunately by incompetent NDP regimes…Alberta’s supposed big ally, Prime Minister Trudeau, has offered nothing but empty promises regarding Kinder Morgan and is more interested in being seen as a politically correct feminist, hence the headlines around the world showing Trudeau commenting at one of his recent town hall promos that it’s better to say “peoplekind” rather than “mankind”…his “inclusiveness” excludes Alberta, however, and is effectively targeted at areas of the country where Liberal seats are most critical and plentiful, such as Quebec, which is why Trudeau never pushed for Energy East, and the snowflake-filled British Columbia coast which he can’t afford to lose to the NDP…in all likelihood, both the Trudeau government and the Green Monster (the NDP-Green power B.C. power grab) are hoping that Kinder Morgan gives up in frustration, for “business reasons,” as other resource project proponents have done recently after enduring endless regulatory and political setbacks…when it comes to getting pot to market in this country, though, that’s a completely different story – then we see the feds move with urgency…
5. Philippine Nickel mine production in 2017 fell to a 6-year low of 230,000 metric tons (MT) after the government suspended and shuttered some mining operations, according to a report from the United States Geological Survey (USGS)…preliminary data released by the USGS indicated that the country’s total Nickel mine output in 2017 declined by 33.7% from 2016’s record of 347,000 MT…this is the country’s lowest Nickel mine output since 2012…despite the large cut in output from the Philippines, total global production in 2017 nearly remained unchanged at 2.1 million MT…the production drop in the Philippines was offset primarily by increased production in Indonesia, which in January eased an export ban on direct-shipping ore for companies that intend to construct Nickel-processing facilities…Indonesia’s Nickel mine output last year, mostly from low-grade ore, doubled to 400,000 MT as the country overtook the Philippines as the world’s top Nickel producer in 2017…keep in mind, though, that most Nickel in the global supply is not suitable for battery production which requires high-grade, high-quality Nickel sulphide (the Nickel Mountain type is the perfect example)…
6. The Dow is up another 112 points through the first 30 minutes of trading after a nearly 600-point gain during a volatile session yesterday when the Index changed direction 29 times and traded in a 1,200-point range…the TSX, trying to work its way out of very oversold conditions, is up 19 points while the Venture has added 13 points to 843 on strength in marijuana and tech stocks…Orca Gold (ORG, TSX-V) has received from the government of Sudan an exclusive permit for the exploitation of water from the area 5 aquifer, first discovered by the company in May 2017…the highly strategic permit for the Block 14 Project entitles the company to extract the necessary water to support a 6-million-tonne-per-year mining and processing operation, which is the basis of the feasibility study in progress…the water permit covers an area of 980 sq. km…through drilling and pump testing, Orca defined a resource of 100 million cubic m of fresh water within an area of 135 sq. km…the aquifer is open in all directions and would be available for additional production, if required…Barrick Gold (ABX, TSX, NYSE) says it will take a pre-tax $429 million impairment charge for the 4th quarter due to a reclassification of reserves at its Pascua-Lama Project located on the border between Argentina and Chile…last month, Chile’s Superintendencia del Medio Ambiente ordered the closure of existing infrastructure on the Chilean side of the project as part of a re-evaluation process ordered by the country’s Environmental Court…Barrick is appealing the resolution…
7. The 15 largest cryptocurrencies by market cap are showing double-digit gains today, with Neo leading the way with a 45% advance…Bitcoin, meanwhile, has pushed back above $8,000 after briefly dipping below $6,000…the gains followed a Senate Banking Committee hearing yesterday on virtual currencies in which the chairmen of the Securities and Exchange Commission and Commodity Futures Trading Commission emphasized consumer protection without a heavy-handed ban on development of cryptocurrencies…the chairmen also said Treasury Secretary Steven Mnuchin is bringing together several federal agencies to coordinate regulation on the fast-growing industry…
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Hi Jon, do you know how many levels of the Castle mine (throw in Beaver too) CSR has planned to be rehabbed/de-watered? I’m assuming the 1st level is good to go but not sure about the ones. Do you anticipate CSR will categorically be able to tell us how much Cobalt remains? I know you’ve said Agnico left out the low-grade silver which typically is attached with high-grade cobalt. Thanks.
Comment by flyinthruu — February 7, 2018 @ 8:02 am
flyinthru, the only way to categorically state Cobalt resources is through a NI-43-101, showing grade and tonnage, but some back-of-the-envelope calculations can get quite interesting when one considers the total footprint of the mine extends as much as 2,400 feet (727 metres) east-west, 1,500 feet (455 metres) north-south and 850 feet (258 metres) to depth…revisiting the first level has provided a lot of encouragement, and more extensive work including drilling is going to add a lot of important detail to that…after the name change they may reveal their plans for the other levels, we’ll see…I don’t see another company in Canada with a better opportunity on the Cobalt side given their underground access (a major competitive advantage), metallurgical prowess and the possibility of a mill on site that they won’t even have to pay for…Canada Cobalt Works is truly a fitting name…
Comment by Jon - BMR — February 7, 2018 @ 8:36 am
Thanks Jon. I’m sure they can mine the first level while congruently work on developing the lower levels? Yeah, other companies are going to have drilling from the ground with those veins…lol…hopefully cobalt prices stay up for a long time in case their operating costs rise…at least CSR can EASILY get to the cobalt.
Comment by flyinthruu — February 7, 2018 @ 8:54 am
I have been “loading the boat” BIG time with respect to crytpocurrencies since the recent drop. I still believe Bitcoin will hit between $30K-$40K this year and is on its way to $100K and beyond. One of the greatest keys to successful investing (I have learned over the years) is to buy substantial positions when a correction occurs. A gentleman by the name of Warren Buffet pioneered and mastered this concept. My advice to everyone is learn from masters of investing like him and see what they do and follow their example. Doing so will make you wealthy.
Comment by Raffi14 — February 7, 2018 @ 9:28 am
Hi Jon,
To build on flyinthruu’s question. Do we know the state of the other levels in the mine? If they do eventually decide to go further down, will a lot of work be required to bring it to safe working levels? Thanks.
Comment by Rafal — February 7, 2018 @ 9:43 am
It’s in generally very good condition, Rafal, as it was one of the last mines Agnico Eagle had in production in the northern Ontario Camp in the early 1990’s, and their highest grade Silver producer (tens of ounces per tonne)…the Silver cut-off was 3 oz per tonne, Cobalt veins were left untouched as they typically include Silver below cut-off…other levels would have to be dewatered with some rehab, but for now there’s a lot of real estate to work from on just the first level which extends 365 meters (1,200 feet) east-west and 360 metres north-south…
Comment by Jon - BMR — February 7, 2018 @ 10:27 am
Nice update by CRE.V
https://www.cecorp.ca/en/corporate-update-strategic-partner-discussions/
Comment by Sylvain — February 7, 2018 @ 10:41 am