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1. Gold has traded between $1,302 and $1,313 so far today…as of 7:00 am Pacific, bullion is up $5 an ounce at $1,311…Silver is unchanged at $15.53…Copper has added a penny to $2.78…Nickel has slid 9 cents to $5.56 while Zinc is off a penny at $1.18…Crude Oil has retreated 44 cents to $53.46 while the U.S. Dollar Index has lost one-fifth of a point to 97.04…something to keep an eye on – lawyers for Canada’s federal government and its supporters are to make their case today in a Regina court on why they believe Ottawa has the legal power to impose a carbon tax on Saskatchewan…Ottawa says it can put a price on carbon because climate change and the regulation of greenhouse gas emissions are a “national concern”, and that a section of the Constitution states it can pass laws for the peace, order and good government of Canada…groups that support that position in Saskatchewan’s court challenge of the carbon tax include, of course, the British Columbia government, environmentalists, Indigenous groups and the Canadian Public Health Association…meanwhile, former Liberal Cabinet minister Scott Brison has had enough of the socialist-leaning Trudeau government…he has fled to the private sector, hired by BMO Capital Markets as Vice-Chair, Investment and Corporate Banking…his primary responsibilities will include senior client coverage and business development…
2. Disappointing U.S. economic data this morning put minor pressure on the dollar, allowing Gold to rebound from its overnight lows…retail sales for December were down 1.2% from November, weaker than the expected rise of 0.1%…the reading was actually the steepest monthly decline in nearly a decade…meanwhile, the Producer Price Index (PPI) report for January showed a fall of 0.1%, short of expectations of a gain of 0.1%…this continues a string of non-problematic inflation data coming from the major world economies which plays into the hands of U.S. monetary policy doves who want to see the Fed hold off on raising interest rates, and maybe even lower them a bit in 2019…Barclays and J.P. Morgan have just reduced their estimates on U.S. economic growth in the final quarter of 2018 following this morning’s retail sales data…
3. China has reported exports and imports data for January that easily topped expectations, news that comes as Beijing’s trade dispute with the U.S. and other factors lead investors to worry that China’s economy – long an engine of global growth – may be facing a sharp slowdown…those concerns were compounded last month when China’s customs data showed exports and imports both fell surprisingly in December…January’s official data, however, painted a much more optimistic picture about Asia’s largest economy…dollar-denominated exports for the month rose 9.1% from a year ago, according to Chinese customs data, vs. an expected contraction of 3.2% from a year earlier…January dollar-denominated imports, meanwhile, fell 1.5% on-year, but that was far better than estimates of a 10% decline from a year earlier…China’s overall trade surplus was $39.16 billion in January…that easily topped the $33.5 billion expected…December’s trade surplus was much higher at $57.06 billion…China’s closely watched trade surplus with the U.S. fell to $27.3 billion in January from $29.87 billion in December…data from China during the first 2 months of the year must be treated with caution due to business distortions caused by the timing of the week-long Lunar New Year public holiday, which fell in mid-February in 2018 but started on February 4 this year…
4. 2018 financials and 2019 guidance this morning from New Gold (NGD, TSX)…the company, in the midst of an operational turnaround, reported a small adjusted net loss for 2018 ($10.6 million U.S.) on annual production of 315,483 ounces of Gold and 20.8 million pounds of Copper…total revenues were $604.5 million, and the company’s current liquidity of nearly $400 million secures the implementation of its 2019 operational plan…significantly, New Gold’s adjusted net earnings from continuing operations for the 4th quarter, excluding a couple of large impairment charges, were $22.7 million, or 4 cents per share, a turnaround from a 4-cent-per-share loss in the same period a year ago…New Gold expects to produce between 300,000 and 335,000 ounces of Gold in 2019 and 75 to 85 million pounds of Copper…the Rainy River mine is expected to deliver another year of production growth that builds on the progress achieved in the final 4 months of 2018…during 2019, the key objective will be on optimizing open-pit mining productivity and mill performance in order to achieve targeted availability, throughput and recoveries…during the year, the company is fully committed to completing all remaining construction in order to best position the operation for efficient and sustainable mining and long-term success…”2019 is a pivotal year for the company as we reposition New Gold for long-term success,” stated Renaud Adams, new President and CEO. “In 2019, we will work to establish Rainy River as a profitable and sustainable mining operation and renew our commitment to unlocking the potential of the New Afton C-zone. We will return our focus to advancing organic growth initiatives and launch strategic exploration programs at both assets with a view of enhancing the quality of our resource base and extending mine life. Our available liquidity position secures the execution of our 2019 operational strategy that is focused on optimizing both operations in order to deliver increased margins and positive future cash flow streams that will drive long-term, sustainable shareholder value”…NGD is off 31 cents at $1.32 as of 7:00 am Pacific as the stock stages a healthy retreat to its rising 50-day moving average (SMA) after a doubling of the share price from late October…
5. Hecla Mining (HL, NYSE) has reported the highest Silver, Gold and Lead reserves in its 128-year history…for the end of 2018, the company lists record Proven and Probable Gold reserves of 2.85 million ounces, an increase of 26% from 2017…Proven and Probable Silver reserves are 191 million ounces, an increase of 8%…Lead Proven and Probable reserves have hit 774,000 tons, an increase of 5% while Proven and Probable Zinc reserves are 931,730 tons, representing an increase of 11% – the highest in nearly a decade…“We have achieved this while the industry has generally seen declining reserves and we were able to use among the most conservative price assumptions in the industry because of the strong economics of these deposits,” stated Phillips S. Baker, Jr., President and CEO…“It is particularly important that this growth comes at Greens Creek and Casa Berardi, who generate approximately 85% of our revenue and most of our operations’ free cash flow. These mines are Hecla’s best”…
6. The Dow has lost 176 points through the first 30 minutes of trading, led by losses in Coca-Cola…in Toronto, the TSX has gained 39 points, thanks in part to strength in Gold…Kirkland Lake Gold (KL, TSX) will release its financial and operating results for the 4th quarter and full-year 2018 after the market close a week from today, February 21…the company will then host a conference call to review the results the next morning (Friday, February 22, 2019) at 5:00 am Pacific…rumors continue to swirl around Imperial Metals (III, TSX) which touched a new multi-month high of $2.16 in early trading…the Venture is 2 points lower at 608…activity in the Gowganda Gold play remains brisk as iMetal Resources (IMR, TSX-V) has been one of this week’s top gainers and volume leaders, while Canada Cobalt (CCW, TSX-V) immediately to the east has broken out technically as well…on the CSE, Tidal Royalty (RLTY, U, CSE) has just come out with important news (see below)…the stock will remain halted until the CSE has reviewed and approved the proposed transaction with a privately-held major U.S. multi-state operator…Chemesis International (CSI, CSE) continues to show signs of gaining traction above key resistance at $2…
7. Tidal Royalty (RLTY.U, CSE), a BMR favorite in the cannabis sector, has signed an LOI to merge with MichiCann Medical Inc., a privately-held cannabis retailer and producer, in a deal that would create a major U.S. multi-state operator worth an estimated $800 million (U.S.)…the deal will combine Toronto-based Tidal Royalty’s cannabis portfolio assets in several U.S. states, including Massachusetts and California, with those of MichiCann, which operates in Michigan under the Red White & Bloom trade name…MichiCann owns or controls 11 medical cannabis dispensaries in Michigan and is in the final stages to acquire another 11 shops, as well as 3 indoor cultivation facilities in the state, according to MichiCann Medical CEO Brad Rogers, who will be the CEO of the combined company…“Our acumen in selling cannabis is second to none,” Rogers said in a phone interview with BNN Bloomberg…“We’re looking to build and scale an operation not just in Michigan but throughout the United States”…to complete the merger, Tidal Royalty will consolidate its issued and outstanding shares on an 8:1 basis…Tidal will then issue 2.08 of its consolidated shares for every one of MichiCann shares…MichiCann shareholders will own 80% of the combined company, which will take on the Red White & Bloom moniker, while Tidal will own the remaining 20%…bottom line is that Tidal is expected to have a significantly higher valuation than the $68 million it currently has (last traded at 26 cents before Monday’s pre-market halt)…
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