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1. Gold is down just slightly this morning but is nonetheless headed for its sharpest weekly drop in 2-and-a-half months…as of 7:00 am Pacific, bullion is off $3 an ounce at $1,328…today’s trading range has been between $1,325 and $1,332…U.S. government yields have retreated further from Wednesday’s multi-year highs…a U.S. monetary policy forum is taking place in New York today with 4 major Federal Reserve officials due to speak on economic policy…Silver is down 9 cents at $16.50…Copper has slipped 2 cents to $3.19…Nickel, which continues to exhibit the largest speculative long position on the London Metal Exchange, is off 2 pennies at $6.19 while Zinc is flat at $1.60…Cobalt has added 23 cents to $36.29…Crude Oil is up 7 cents at $62.84 while the U.S. Dollar Index has gained one-tenth of a point to 89.90…President Trump addresses CPAC (Conservative Political Action Committee) this morning where he’s expected to announce the Treasury Department will unveil a massive new set of sanctions against North Korea targeting 56 vessels, shipping companies and trade businesses that are assisting the rogue regime…
2. Three Canadian provinces – Saskatchewan, Quebec and Ontario – are among the world’s top 10 mining jurisdictions according to the Fraser Institute’s just-released 2017 annual global survey of mining executives…Finland has climbed from 5th to 1st overall, followed by Saskatchewan, Nevada, Ireland, Western Australia, Quebec, Ontario, Chile, Arizona and Alaska…Ontario moved to 7th place from 18th last year…the worst mining jurisdictions are Guatemala, Kenya, Mendoza, Chubut, Mozambique, Bolivia, Venezuela, Romania, China, and Nicaragua…Alberta, which consistently used to be near the top of this survey before the NDP swept into power in 2015, is now mired in 49th place, immediately behind South Africa and just ahead of Tasmania and the Congo – Albertans should be embarrassed…Kenneth Green, senior director of the Fraser Institute’s energy and natural resources studies, stated, “Capital is fluid and one province’s loss can be another province’s gain because mining investors will flock to jurisdictions that have attractive policies.”
3. The Oil-hating NDP/Green-backed government in B.C. – the Green Monster – now says it will seek a “court reference” instead of moving forward with proposed regulatory restrictions on Alberta bitumen…this was a supposed “olive branch” to Alberta NDP Premier Rachel Notley who, in her naivety, has suspended her province’s recently imposed B.C. wine ban…the reality is, the Green Monster is merely engaging in delay tactics as noted by Alberta United Conservative leader Jason Kenney: “While some might celebrate the latest news from the B.C. NDP, the Alberta government would be wrong to let up the pressure,” stated Kenney. “It’s clear that the B.C. NDP has not changed its hostility to the Kinder Morgan Trans Mountain pipeline expansion. Instead, they are continuing to inject uncertainty into this critically important project.” Uncertainty is the key word – the Green Monster wants to inject so much uncertainty into the already approved project that Kinder Morgan will simply throw in the towel in frustration (that’s how the feds killed Energy East)…keep in mind that the last time the B.C. government asked a court for a “constitutional reference” (polygamy, 2009), it took 2 years for all the arguments to be made and the judges to conclude their deliberations…court is just another tool in the Green Monster’s toolbox…as the NDP/Green power sharing agreement states, the new government will “employ every tool…to stop the Kinder Morgan pipeline expansion.”
4. Canada’s “War on Oil” and its pipeline, regulatory and political fiascos are taking their toll on energy stocks which slumped to their lowest level in almost 2 years this month…tellingly, the iShares S&P/TSX Capped Energy Index ETF (XEG, TSX), which tracks Canadian energy companies, has seen about $56 million (U.S.) in outflows already this year versus $32 million (U.S.) in inflows for an ETF focused on U.S. energy stocks…the research team at GMP FirstEnergy, a major investment bank to the energy sector, sums it up this way: “A lack of hard timelines and a regulatory process that has been subject to dithering and near endless legal challenges will become the major stumbling block for domestic and international investor confidence in the Canadian energy sector.” Canada’s new National Energy Program is all about transitioning away from fossil fuels, not about driving up investment in Oil and gas – a major political and economic gamble while the United States is moving in the opposite direction…
5. The Dow, which has climbed in 8 out of the last 10 sessions, is up 130 points as of 7:00 am Pacific…there’s money in pets – General Mills is buying natural pet food company Blue Buffalo for about $8 billion in cash…in Toronto, the TSX is 60 points higher in early trading…Centerra Gold (CG, TSX) has recorded 2017 net earnings of $209.5 million (U.S.) or 72 cents (U.S.) per share on revenues of $1.2 billion…this compares to net earnings of $151.5 million or 60 cents per share in on revenues of $757.7 million in 2016…the increase in earnings in 2017 reflects a full-year of operations at Mount Milligan and increased production at Kumtor…all-in-sustaining costs on a by-product basis were $688 (U.S.) per ounce sold, beating the low-end of AISC guidance for the year…the Venture is 1 point higher at 830 as of 7:30 am Pacific…eCobalt Solutions (ECS, TSX) has closed a $30 million bought deal financing at $1.30 per unit…the company continues to advance due diligence for potential off-take of its clean Cobalt concentrate to be produced from the company’s 100%-owned Idaho Cobalt Project…also on the Cobalt front, Castle Silver Resources began trading this morning as Canada Cobalt Works (CCW, TSX-V) with no change in the capital structure…Canada Cobalt is the only company in the northern Ontario Cobalt Camp with underground access and plans to use that advantage to become the first company in that district to get product to market…
6. Tahoe Resources (THO, TSX), dealing with a shutdown of its giant Escobal Silver mine in Guatemala due to environmental terrorists and a corrupt government and legal system, is threatening to hit new multi-year lows after announcing a 4th quarter loss of $18 million…the company had no Silver output in the 4th quarter while Silver production for the full year fell to 9.9 million ounces from 21.3 million…however, Tahoe did ramp up its Gold production to record levels (446,000 ounces), thanks to La Arena in northern Peru, and was therefore able to post net earnings for 2017 of $81.8 million or 26 cents per share…Ron Clayton, President and CEO, commented: “We remain optimistic that based on legal precedent, the Guatemalan Constitutional Court will issue a favorable ruling reinstating the Escobal mining license.”
7. Canada’s industrial real estate sector remains hot, and the legalization of recreational pot will only add to the demand…the country’s 8 biggest weed companies will require more than 8 million sq. feet of space for growing marijuana by 2020, up more than 5-fold from current levels, according to a report from brokerage Jones Lang LaSalle Canada…the estimate, which excludes logistics and distribution centers, would be about the size of Amazon.com’s Seattle headquarters which houses about 40,000 workers across multiple buildings…Canopy Growth (WEED, TSX), the world’s largest publicly traded cannabis producer, used to hunt mainly for massive, empty industrial warehouses but the company is now eyeing outdoor greenhouses in an effort to reduce costs…
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BMR, seems like Fintech and WEED plays have simmered a bit. Do you think the market will get an appetite for resources soon? Folks have got to get excited about something right? Sure a lot of info coming out on Cobalt recently…even the “Casey Research” and “Katusa” folks are pumping it…I know you said we are in a great season for it…
Comment by flyinthruu — February 23, 2018 @ 8:05 am
JOn … where is the powerful locked and loaded Q1 for the venture??? can you find it please:)
Comment by Jeremy — February 23, 2018 @ 8:25 am
Hi Jon, from your years of experience, how many weeks it will take approximately to do the GGI VTEM run. It has been asked around and not many people have that knowledge of the tech and the time it takes to do such an undertaking.
In a second tranche did you had the time to identify a good copper prospect for 2018?
Thanks!
Comment by roychr — February 23, 2018 @ 10:33 am
Interesting to see E-Cobalt solutions won’t be producing until 2019/2020 – about the same time as Castle should come on board I’d guess. Be interesting to see the 43-101 for that Castle mine with 11 levels.
Comment by flyinthruu — February 23, 2018 @ 12:04 pm
roychr, in ideal conditions it can completed in just a matter of days…up in the Eskay Camp, and in the Nickel Mountain area, weather of course is very changeable, even within a single day…so conceivably it could take a couple weeks to get everything done, taking into account down-time…
Comment by Jon - BMR — February 23, 2018 @ 12:31 pm
Keep in mind also, they will e covering almost all their property this time around so will take a little longer. All good though and can hardly wait to find out what they will discover in addition to what’s already known.
Comment by Dan1 — February 23, 2018 @ 12:37 pm
AIS – Another 2 million shares traded today so the cheap paper is getting absorbed here in the 30’s. Just have to hang in there until the storm passes.
Comment by Dan1 — February 23, 2018 @ 12:40 pm
GGI – all the property this time ! wow – all the way up to PSP + SID, that would be nice . But the NR says only 3x what was flown last year and that seemed to barely cover A B C + D. Do they fly a bit at a time or is it cheaper to do it once, when the weather allows for continuous flying? I assume they charge to go back and forth if the weather is spotty
AIS – gotta take out the BOT and day traders, so still going to take a while to suck it all up and then , just like GGI, to feel bold enough to move it up again.
Comment by David — February 23, 2018 @ 1:46 pm
As my old ” prospecting friend ” used to say, ” they’re cleaning up the Market ” , and in this case ( AIS ) I’m actually helping doing just that …. cleaning up the Market at .36 ….. Now we just have to hear that the Drilling Program is getting underway and all these opportunities will pan out !!! Farmer Tom
Comment by farmer — February 23, 2018 @ 6:42 pm
Jon:
Are there any metrics/indicators/reports available that can help with moneyflow into specific sectors?
Any way of being able to see if money is flowing out of pot stocks,crypto stocks and moving into resource stocks?
Just curious,it just seems like volumes have dried up and things are quieter.(My perception).Definetly feels like a lull .Any historical comparables? Any slingshot comparables or similarities?
Comment by GoldenFalcons — February 23, 2018 @ 8:36 pm