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7 @ 7:00 - BullMarketRun.com

March 5, 2019

7 @ 7:00

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

1. Gold has traded between $1,283 and $1,290 so far today…as of 7:00 am Pacific, the yellow metal if off $1 an ounce at $1,285 as it tries to rebound from a bout of profit taking…some stronger than expected U.S. economic data, the possibility of a near-term U.S.-China trade deal, and rumors of potential monetary accommodation in China all contributed to a sudden correction in Gold after a strong run to key resistance at $1,350TD Securities commented, “The combination of higher U.S. dollar opportunity costs, the redirection of capital flows into equities and the recent rejection at $1,350/oz all helped to persuade traders to take profits”…the $33 billion SPDR Gold Shares ETF, or GLD, saw a net withdrawal of $496 million on Friday, the most in a single day since February 2018…that pushed the 5-day total to about $720 million, marking the 4th consecutive week of outflows…Silver is off a penny at $15.06…the Gold-Silver ratio is now at its highest since late December…base metal prices are firm…Nickel has shot up 19 cents a pound to $6.17…Copper is 4 cents higher at $2.97 while Zinc is up slightly at $1.28…Crude Oil has added 25 cents a barrel to $56.84 as OPEC-led efforts to tighten supply offset the restart of Libya’s biggest Oilfield…Russia’s energy minister says his country plans to speed up its output cuts this month…the U.S. Dollar Index has gained one-tenth of a point to 96.74

2. Jeff Currie, Goldman’s global head of commodities research, says Gold has sold off on overly optimistic views that Washington and Beijing will soon resolve their ongoing trade dispute…“We actually think this is a pound-the-table time to be buying Gold right now,” Currie told CNBC“We’re sticking to our $1,450 target”

3. Embattled Canadian Prime Minister Justin Trudeau is in Toronto…however, in rather bizarre timing given PDAC, Trudeau and his Minister of Mother Nature last night delivered Alexandria Cortez-Ocasio-style speeches on the environment and the need for drastic action to combat “climate change” and prevent the world from imploding within 12 years (Trudeau’s rally was just a short distance away from PDAC at the Danforth Music Hall)…not once did Trudeau mention the word “pipeline” in his speech…the fact he would choose the middle of PDAC to push his jobs-killing carbon tax and National Energy Program which includes controversial Bill C-69 is yet another example of how he has contempt for an industry that has built our country…Trudeau’s “climate strategy” is costing Canada billions of dollars and tens of thousands of jobs, and Canadian Association of Petroleum Producers (CAPP) President and CEO Tim McMillan warns that Bill C-69 represents “an existential threat to the resource sector in Canada”…meanwhile, Canada continues to slip further behind the United States in economic growth…U.S. GDP annualized growth in Q4 was 2.6%…Canadian GDP annualized growth in Q4 was a meagre 0.4%…Trudeau is carrying out a devastating program that is wreaking havoc across the Oil and gas industry, the biggest single contributor to Canada’s GDP, while making Canadian businesses in general less competitive vs their U.S. counterparts…

4. China must be prepared for a “tough struggle” as the country faces a “grave and more complicated environment”Premier Li Keqiang said at today’s opening of the country’s annual parliamentary meeting (National People’s Congress)… “We must be fully prepared for a tough struggle”, Li told a delegation of nearly 3,000 representatives…“The difficulties we face must not be underestimated, our confidence must not be weakened, and the energy we bring to our work must not be allowed to wane”…this year’s meeting comes amid serious trade tensions with the U.S., China’s largest trading partner, which have placed immense pressure on China’s economy and financial markets…in prepared remarks, according to an official English handout, Li warned that there will be greater risks ahead for the world’s 2nd-largest economy…“A full analysis of developments in and outside China shows that in pursuing development this year, we will face a graver and more complicated environment as well as risks and challenges, foreseeable and otherwise, that are greater in number and size”

5. Barrick Gold (ABX, TSX; GOLD, NYSE) CEO Mark Bristow says he’s open to a joint venture with Newmont Mining (NME, NYSE) to combine the companies’ Nevada operations instead of doing a takeover…“We would be delighted to meet Newmont to see if they’re sincere, and see if a JV can be agreed upon. We’ll consider (dropping the hostile bid) when we get a workable JV”...hmm…Barrick last week proposed acquiring Newmont for $17.8 billion (U.S.) in a deal valued at 8% below Newmont’s stock price…Barrick made the questionable argument that no takeover premium was necessary because the combination of the 2 giants would generate at least $750 million (U.S.) a year in cost savings over the first 5 years…most of those savings would be in Nevada, where they both have large mines in the same region…yesterday, Newmont formally rejected Barrick’s takeover offer, criticizing its “high risk” mine portfolio and its governance record, and calling out new CEO Bristow for his inexperience in running a global miner…“The emperor doesn’t have anything to sell,” Gary Goldberg, CEO of Newmont, said regarding Bristow’s attempts to woo investors…

6. The Dow has retreated 66 points through the first 30 minutes of trading…in Toronto, the TSX is up 51 points while the Venture has added 1 point to 623 as it continues to grapple with key resistance in the low 620’sOrganigram Holdings (OGI, TSX-V) has hit a new high of $9.27 in early trading…48North Cannabis (NRTH, TSX-V) is off 3 pennies at $1.24 as of 7:00 am Pacific after surging to a new high yesterday on big volume…Ventripoint Diagnostics (VPT, TSX-V) is one of this morning’s top gainers…the company announced that its VMS system used to analyze the right ventricle (RV) of the heart has been approved for use in China…“We commend our Chinese partners for their diligence in achieving approval for the VMS,” lauded Dr. George Adams, CEO…“Now all 32,000 hospitals in China and its territories have access to a 2D ultrasound analytical system to accurately assess right-heart function”Atlantic Gold (AGB, TSX) earned $27.9 million (13 cents per share) in 2018 on total net revenue of $128 million in its first year of commercial operations…annual cash costs of $558 (CDN) per ounce and annual AISC of $731 (CDN) per ounce were both within 2018 guidance…Gran Colombia (GCM, TSX) has announced a $20 million (CDN) convertible debenture bought deal to replace its previously announced equity offering…

7. CIBC analyst John Zamparo says Canopy Rivers (RIV, TSX-V) provides “compelling value for investors in the cannabis space, particularly for those concerned about sector valuations, which are approaching all-time highs”…Zamparo jacked his share target up a loonie to $8, stating, “We consider RIV undervalued for two reasons.  First is a deemed lack of U.S. exposure, which we believe to be misguided.  We count four main avenues to the U.S.  First, RIV’s PharmHouse partners own a significant amount of greenhouse space in America, which could be converted quickly upon a legalization event, at an attractive cost.  Second, RIV’s TerrAscend asset already generates U.S. revenues and EBITDA, and is accompanied by a leadership team with a solid track record in an adjacent industry.  Recent investments in Greenhouse Juice and Headset comprise the final two avenues.  These are relatively immaterial for now, but we believe they could grow substantially larger, particularly Greenhouse, following the 2018 Farm Bill that moves forward the production and sale of CBD-based beverages”Canopy Rivers earned $1.42 million in Q3 and just recently closed a $93.5 million financing…the stock is up 3 cents at $4.53 as of 7:00 am Pacific

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5 Comments

  1. https://ceo.ca/@nasdaq/pdac-welcomes-prime-minister-justin-trudeau-to-worlds

    Comment by Gojira — March 5, 2019 @ 12:23 pm

  2. Hi Jon,
    Are you still expecting a follow-up NR to last Friday’s news for CCW? I believe that the market is also waiting. Even though it sounds great, a deal, or a LOI would make all the difference. However, if assays also come in, that would also do the trick. Any thoughts?
    Best regards,
    Frank

    Comment by Frank — March 6, 2019 @ 4:30 am

  3. That was nice to see, Gojira, the least Trudeau could do. However, his speech the previous night not far from PDAC undermined his own visit to the event.

    Comment by Jon - BMR — March 6, 2019 @ 4:57 am

  4. Busy wrapping up at PDAC this morning, Frank – we’ll have a market update later in the day today…short on posts the last few days but that’s only because we’ve been very busy doing what we need to do which is researching and meeting with different companies and groups…

    Busy show and I believe a big success…one thing you have to keep in mind about PDAC, it’s so incredibly busy and fast-moving here – the key is for companies to build relationships and connect with investors with those benefits flowing in down the road, whether it’s a week later, a month later or 6 months later…the idea that any company could do a presentation at PDAC and then investors immediately start buying the stock – that’s just not the way it works…there are companies here, including some of the ones we’re following closely, that have enjoyed tremendous success these last few days at PDAC and we’re going to see the results of that in the market soon enough…

    By the way, media advisory just came out from PDAC a short while ago – statement coming from Sask. and Manitoba at 11:00 am EST re: Bill C-69…

    Comment by Jon - BMR — March 6, 2019 @ 7:47 am

  5. Thanks Jon.
    Excellent explanation of what is happening inside PDAC. From the outside looking in PDAC appears as a non-event with next to no news from Junior Miners and very quiet on the stock trading front.
    Looking forward to an information flow and activity as this is what is needed from these junior miners if they want the support of investors.

    Comment by Murray — March 6, 2019 @ 7:59 am

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