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7 @ 7:00 - BullMarketRun.com

May 15, 2019

7 @ 7:00

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1. Gold has traded between $1,292 and $1,301 so far todayas of 7:00 am Pacific, the yellow metal is up $2 an ounce at $1,298 as it continues to contemplate its next move…a key resistance band exists between $1,300 and $1,313 (Fib.)…that’s Gold’s big immediate/near-term test…Silver is up a penny at $14.77Nickel is leading the base metals this morning, up 7 cents at $5.45, while Copper and Zinc are both flat at $2.73 and $5.45, respectively…Cobalt remains steady at $15.76…Crude Oil has fallen 40 cents a barrel to $61.38 while the U.S. Dollar Index is relatively unchanged at 97.48…the American Petroleum Institute has just reported that U.S. Crude stockpiles rose last week by 8.6 million barrels, compared with expectations for a decrease of 800,000 barrels…alternative cryptocurrencies are flying high while Bitcoin is having a breather above $8,000…BREAKING NEWS just hitting the wire – the Trump administration plans to delay auto tariffs by up to 6 months (this will likely give the markets a lift)…the White House faces a May 18 deadline to decide whether to slap duties on car and auto part imports…by law, the administration has another 180 days to come to a decision as long as it is negotiating with its counterparts…

2. Australian Gold producer St. Barbara (SBM, ASX) is paying approximately $800 million (total consideration) to acquire Atlantic Gold (AGB, TSX-V), which gave the Venture a boost at the open this morning as a wave of consolidation continues in the mining sector…St. Barbara offered $2.90 a share for Atlantic Gold, about a 40% premium to yesterday’s close, and will fund the deal from cash reserves and by raising about $340 million (U.S.) in a share sale to existing holders…the bid, which has the backing of Atlantic’s board, comes after Australian Gold miner Newcrest Mining (NCM, ASX) bought a 70% interest in Imperial Metals‘ (III, TSX) Red Chris mine 2 months ago in a deal that’s expected to close soon…Australian dollar denominated Gold is just shy of January’s record of A$1,894 an ounce and up about 9% from a year ago, while U.S. dollar Gold is virtually flat…“The high AUD Gold price has benefited Aussie Gold miners but they have also done very well operationally,” said UBS analyst Dan Morgan in Sydney…Atlantic shareholders will receive $2.90 in cash per Atlantic share held plus shares in a company (SpinCo) that holds Atlantic’s interests in Velocity Minerals (VLC, TSX-V), which will be distributed to Atlantic shareholders on a pro rata basis following completion of the transaction…the SpinCo will then raise funds via a private placement and apply for a listing on the Venture

3. The German economy received a welcome impetus today with the announcement that the country’s GDP grew by 0.4% in the 1st quarter of 2019…this followed a poor performance in the 2nd half of 2018 – 2 quarters without expansion…expectations for growth in 2019 had been lowered to 0.5% from 1%, but Q1 could suggest a slightly more optimistic year ahead for Europe’s largest economy and the 4th biggest in the world…this latest development will allay fears, at least for now, that Germany will fall into a recession…

4. China claims that domestic spending by its own citizens will minimize the economic damage of its trade fight with the United States…yet, demand from consumers and factories is looking shaky…even before a ratcheting up in trade tensions in the past 10 days, China was facing headwinds as it worked to expand the middle class and make the world’s No. 2 economy more consumer-driven…fresh economic figures released this morning and in recent weeks show slowing activity by consumers, as well as factories, and add to doubts about China’s domestic playbook for the protracted trade dispute…a 7.2% rise in retail sales last month from April 2018 marked a substantial 1.5 percentage point reduction from the year-over-year rate in March…April’s pace of consumer activity was last seen when China ordered people to stay home to stop the spread of the deadly SARS pneumonia more than a decade and a half ago…some economists had predicted April sales would grow 8.8%…now they expect the government to expand the stimulus measures employed last year and at the start of this one…meanwhile, growth in industrial production slowed to 5.4% in April, lower than the 6.5% increase that had been forecast and level with November’s figure, which was the weakest rate since the global financial crisis a decade ago…

5. Canadian Oil producers’ coffers are the fullest they’ve been since 2014, but government intervention has hamstrung their spending abilities, starving them of opportunities to grow output (instead of reinvesting in the industry, they are buying back shares and paying down debt)…the energy sector’s cash flow is projected to be $52.7 billion this year, the highest in 5 years, yet spending is declining year-on-year, according to ARC Financial…billions of dollars in foreign investment has also fled Canada since 2017 because of delays in building new pipelines…Canadian Natural, the largest Canadian energy producer, is the only Oil sands major adding a new project this year with the ramp-up of its Kirby North plant…but to do so, the company will have to cut production elsewhere because of Alberta’s limits on output, President Tim McKay said…“Investment in Canada is stymied,” McKay said…“You have regulatory uncertainty and a system where market access doesn’t exist”…Canada’s lack of political leadership, and climate change extremism that’s driving decision making and killing jobs and investment, was in evidence again yesterday when Federal NDP leader Jagmeet Singh did a flip-flop and expressed concerns about the largest private sector project in Canadian history, the planned $40 billion LNG facility in northwest British Columbia…in January, Singh told CTV’s Evan Solomon that “the vast majority of Indigenous elected bands and chiefs have all shown support and the consultation process was done in a very meaningful way”…of course what has changed since then is that the federal NDP, also against the Trans Mountain pipeline expansion, lost a seat to the Green Party in a by-election last week on Vancouver Island…

6. The Dow is off 147 points through the first 30 minutes of trading…in Toronto, the TSX is 29 points lower while the Venture has added 6 points to 607, pushing above its 10 and 20-day moving averages (SMA’s) for the first time in more than a month…“Cash Crunch: Canada’s Shrinking Junior Mining Sec tor Struggles For Relevance – And Deals”…when you see bearish headlines like that one this morning in the Financial Post, it’s often a sign that a major turnaround in the market is near at hand…FP pointed out that in 2018, total dollars raised in the mining sector amounted to $2.8 billion (the lowest since the end of the last bear market in 2015)…$4.8 billion was raised in 2016 followed by $4.6 billion in 2017…$635 million has been raised so far this year…Sirona Biochem (SBM, TSX-V), already in technically overbought conditions entering trading this morning, gapped up to 44 cents at the open after announcing that it has received positive clinical results of its skin lightening compound TFC-1067 from China…SBM, a cosmetic ingredient and drug discovery company with a proprietary platform technology, has been a top Venture performer this year with a 5-fold move…

7. Azimut Exploration (AZM, TSX-V) and SOQUEM Inc., a subsidiary of Ressources Quebec, have signed the final agreement of their expanded strategic alliance, following the execution of a letter agreement previously announced at the end of February…the alliance comprises 9 Gold and Copper-Gold properties totalling 7,149 claims with a surface area of 3,277 sq. km…the properties are located in the prospective James Bay and Nunavik regions of Quebec, part of the Plan Nord strategy implemented years ago by the Quebec government…the alliance represents a major change in the activity level of both companies and will combine their strengths, specifically Azimut’s big data analytics expertise in mineral exploration and SOQUEM’s mining exploration and development expertise…a key component of the alliance will be the continued development of close ties with local communities in the Nunavik and James Bay regions…AZM has been one of the top performing juniors this year, more than doubling in value…it’s unchanged at 39.5 cents in early trading this morning…

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2 Comments

  1. Jon,
    As we’ve seen, CCW did release 4 updates in the past month. Something we haven’t seen in a long time. Even though those updates aren’t market breaking, per say, I believe that it does constitute a build up for what’s to come and for the big News we’ve all been waiting for many months now (almost a year for those mysterious assays). Do you think it would make more sense for them to release those in May, to ride on the table table they did just dress with those updates or do you think they are more likely to make us wait a bit more and release them somewhere in the middle of Q3? IMO, it would be smarter to beat the iron while it’s hot (and that we’ve waited for a long time), but I’d like your take on it.

    Comment by roychr — May 15, 2019 @ 12:59 pm

  2. Last release said they were EAGER to release further details about there property. That sounds to me like this month.

    Comment by Carl — May 15, 2019 @ 8:29 pm

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