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7 @ 7:00 - BullMarketRun.com

March 12, 2019

7 @ 7:00

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

1. Gold briefly touched $1,300 again this morning after the European Commission accepted amendments to the UK’s Brexit deal…the market still sees plenty of risk, however, as British PM Theresa May makes a desperate final bid to save her Brexit deal ahead of a crunch Commons vote…May is urging MP’s to back her “improved deal” or risk “no Brexit at all”as of 7:00 am Pacific, Gold is up $5 an ounce at $1,298…the yellow metal has traded between $1,294 and $1,300…Silver, last week’s top-performing metal, is up another 12 cents at $15.40…base metals are strong today…Copper, Nickel and Zinc have climbed to $2.96, $5.98 and $1.29, respectively…Crude Oil has gained another 38 cents a barrel to $57.17 while the U.S. Dollar Index has slipped one-quarter of a point to 96.74the U.S. Labor Department says its Consumer Price Index rose 0.2% in February, after an unchanged reading in January…the data are in line with consensus forecasts…inflation pressures for the year rose 1.5%, down from January’s increase of 1.6%…annual inflation is seeing its slowest growth in 2.5 years, according to some reports, despite the continuing economic expansion…stripping out volatile food and energy prices, core inflation remains muted at an annual rate of 2.1%, a fact not lost on the Fed which may abstain from increasing interest rates in 2019

2. Oil prices remain firm, supported by Saudi Arabia’s plan for further voluntary supply curbs in April and by a cut in exports from Venezuela due to widespread power outages (isn’t socialism wonderful?)…Saudi Arabia, seeking to drain a supply glut and support prices, plans in April to keep its Oil output well below the level required of it as part of an OPEC-led supply cutting deal…“This shows Saudi Arabia’s resolve to keep the Oil market balanced by keeping Oil supply tight,” stated Carsten Fritsch, analyst at Commerzbank…he added, “Additional buoyancy has come from news that the massive power outage in Venezuela is also hampering the country’s Oil exports”…a host of involuntary supply curbs among OPEC members caused by unrest in Libya, Venezuela’s economic incompetence and U.S. sanctions on Venezuela and Iran, have given Oil prices a fresh lift…offsetting these developments is the surge in U.S. supply, which the International Energy Agency said yesterday would continue to 2024, probably requiring OPEC and its allies to keep up their policy of market management…

3. Enough Gold, Copper and Silver for a century of production at KSM?…an updated independent mineral resource estimate for Seabridge Gold’s (SEA, TSX) Iron Cap deposit in the prolific Eskay Camp has substantially increased its size while also confirming higher-grade zones within the overall resource…Iron Cap is one of 4 large Gold/Copper porphyry deposits within Seabridge’s 100%-owned KSM Project and now hosts 5.6 million ounces of Gold, 62.5 million ounces of Silver and 2 billion pounds of Copper in the Indicated category (423 million tonnes @ 0.41 g/t Au, 0.22% Cu, 4.6 g/t Ag), and 27.5 million ounces of Gold, 159 million ounces of Silver, and 12.5 billion pounds of Copper in the Inferred category (1.9 billion tonnes @ 0.45 g/t Au, 0.30% Cu and 2.6 g/t Ag (any wonder Tudor Gold, on strike from Iron Cap, has increased its private placement to $3 million?)…wake up, everyone…Seabridge’s updated resource estimate incorporates all previous drilling plus 20,341 m of diamond core drilling completed in 18 holes during the 2018 program…based on the relatively consistent nature of the deposit along with geologic evidence amassed over the last 14 years of exploration work at the project and the current drill hole spacing at Iron Cap, the company believes it is reasonable to expect that the majority of Inferred mineral resources could be upgraded to Indicated mineral resources with further drilling…Seabridge Chairman and CEO Rudy Fronk noted that the new resource estimate has achieved the targeted size and grade which are likely to warrant moving the Iron Cap deposit ahead of the Kerr and Sulphurets deposits in the project’s mine plan: “Our exploration success at Iron Cap over the past 2 years gives us greater flexibility to optimize project economics.  Iron Cap is closer to infrastructure than Kerr and Sulphurets and its development could be faster and less costly.  Within the 1.9 billion tonnes of Inferred resource, there exist significantly higher-grade underground cave opportunities with substantial tonnage.  Iron Cap clearly has the size and grade to justify early inclusion in the mining sequence.  From our point of view, this is mission accomplished”

4. 48North Cannabis (NRTH, TSX-V) is the latest cannabis company to get a bought deal financing…NRTH has entered into a letter of engagement with Eight Capital, under which Eight Capital has agreed to purchase, as sole bookrunner and lead underwriter, along with a syndicate of underwriters, 18.4 million units of the company, on a bought-deal basis, at a price per unit of $1.36 for gross proceeds of $25 million…the news has put some temporary pressure on the stock with NRTH easing off 13 cents to $1.49 as of 7:00 am Pacific, but follow the money on this play…last month, after completion of a $3 million strategic investment from Canopy Growth (WEED, TSX; CGC, NYSE), 48North closed the $7 million final tranche of that 75-cent private placement for aggregate proceeds of $10 million…the $7 million came from a leading U.S.-based private investment fund to support the continued expansion of 48North, including the development of its 100-acre farm and large-scale extraction capabilities to significantly increase 2019 production and facilitate the rapid development of innovative, next-generation cannabis products…48North operates 2 indoor-licensed cannabis production sites in Ontario with over 86,000 sq. feet of production capacity…last week the company also announced that it had signed an exclusive licensing agreement with U.S.-based Arbor Pacific to bring its premium brand, Avitas, to Canadian consumers…Avitas, available in over 500 stores in Washington, Oregon and Colorado, is one of the bestselling single-strain vaporizer cartridges in the United States and completes 48North’s vaporizer strategy…

5. The Dow has retreated 46 points through the first 30 minutes of tradingBoeing (BA, NYSE), which has a major influence on the index, remains under pressure…more regulators and airlines have turned against Boeing’s 737 MAX jet, with the U.K., Australia, Singapore and carriers in several Latin American countries grounding the plane after the 2nd crash involving the model in less than 5 months…in Toronto, the TSX has added 26 points…Imperial Metals (III, TSX) is unchanged at $3.10, digesting its sharp gains yesterday after the announcement of a JV with Australia-based Newcrest which is one of the world’s largest Gold producers…it isn’t just that Red Chris has large resources of Gold (20 million ounces) and Copper (13 billion pounds) or that its 230 sq. km land package is lightly drilled, but that the resource, which has richer grades at depth, is particularly suited to Newcrest’s expertise in block caving and its experience with similar geologies…Newcrest has long harboured a desire for North American exposure and has explored both acquisitions and a listing to get access to premium investors who have historically awarded Gold miners with North American domiciles or listings…the fact that Northwest B.C. is their first foray into North America speaks volumes about what’s in store for the Golden Triangle…the Venture is 2 points higher at 622 as it again attempts to push through resistance…privately-owned Battery Mineral Resources has moved one step closer to potentially acquiring Canada Cobalt (CCW, TSX-V) or cutting a major deal with CCW…it was announced this morning that Battery has acquired an option to earn up to an 80% interest in Transition Metals’ (XTM, TSX-V) Gowganda Gold Project contiguous to Canada Cobalt’s Castle mine and property…Battery now completely surrounds CCW…the terms with XTM involve Battery incurring exploration expenditures of at least $3.4 million over the next 3 years…

6. Barclays says that when it comes to natural resources, the Canadian market is still home to some of the continent’s top stock picks, like Teck Resources (TECK.B, TSX) just below $30Barclays’ top mining pick not just in Canada, but around the world…with base metals prices in a downtrend for most of the past decade, the mining sector has been forced to cut costs and reduce debt…Teck is no exception…despite a relatively clean balance sheet and better free cash generation, Teck shares trade at a discount to peers across several different valuation metrics, according to Barclays‘ analyst Matthew Murphy…the company’s free cash predominantly flows from its metallurgical coal business, which is benefiting from elevated prices…meanwhile, a partnership deal to expand Teck’s Chilean Copper mine is nearing completion…“With a significantly de-levered and investment grade balance sheet, the company is well positioned to advance its key Copper growth project while at the same time returning cash to shareholders”, Murphy said…2 other Canadian companies made the Barclays‘ recommended list – Cenovus Energy (CVE, TSX) and Manulife Financial (MFC, TSX)…

7. Apple (AAPL, NASDAQ) yesterday invited media to a March 25 event at the Steve Jobs Theater on its campus in Cupertino, California, where it’s expected to launch a television and video service…sources previously told Reuters that the company is targeting April for the launch of a streaming television service that will likely include subscription TV service…Apple often launches products and services in the weeks following an event…in its invitation, Apple did not specify the focus of the event and gave a single-line description: “It’s show time”Apple has long hinted at a planned video service, spending $2 billion in Hollywood to produce its own content and signing major stars such as Oprah Winfrey…according to a Reuters’ report, the service may resell subscriptions from CBS, Viacom Lions Gate Entertainment’s Starz among others, as well as Apple’s own original content…

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  1. Jon, nice comment regarding Tudor Gold. It will be interesting to see who is taking down that pp. Those intercept lengths from their Goldstorm Zone in their recent PRs are looking pretty sweet. And I must admit I love the pricing of their warrants reflected in their MD&A. Walter Storm has a strong reputation. Any additional insight that BMR can share is most welcomed.

    Comment by BCCoastal — March 12, 2019 @ 3:23 pm

  2. Jon, what do you think of the IMT news posted today?

    Comment by Donnelly7 — March 12, 2019 @ 6:17 pm

  3. I’m not a big fan of that play, Donnelly7, given management and the fact they’re searching for a needle in a haystack.

    Comment by Jon - BMR — March 12, 2019 @ 9:20 pm

  4. Jon, are you saying you’re not that big of a fan of IMT AFTER seeing the latest news, or without having seen it? Thanks for clarifying. A few of us are watching it.

    Comment by Tad — March 12, 2019 @ 9:55 pm

  5. Yes, AFTER seeing it, Tad…this is a recycled story, and after a share consolidation…also, the stock may have traded 8.5 million shares yesterday, but the price didn’t move, despite only 29 million shares outstanding after the rollback…I can think of far better opportunities to jump into at 5-6 cents…

    Comment by Jon - BMR — March 12, 2019 @ 10:17 pm

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