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February 5, 2019

7 @ 7:00

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

1. Gold has traded between $1,310 and $1,314 so far todayas of 7:00 am Pacific, bullion is up $2 an ounce at $1,314…Silver is off a penny at $15.83…red-hot Nickel climbed as high as $5.90 overnight before pulling back to $5.78…Copper is up 3 pennies to $2.80 while Zinc has slipped 2 cents to $1.25…Crude Oil has retreated 54 cents a barrel to $54.02 while the U.S. Dollar Index has gained one-tenth of a point to 95.97…in economic news, U.S. non-manufacturing PMI cooled off slightly in January to a reading of 56.7%, down from December’s 58%…respondents remained mostly optimistic, however, about overall business conditions…U.S. retail sales, which account for about 60% of GDP, could climb between 3.8% and 4.4% in 2019, “despite threats from an ongoing trade war, the volatile stock market and the effects of the government shutdown,” according to a report released today by the National Retail Federation…that would be only modestly less than growth of 4.6% in 2018, which NRF says is its preliminary estimate for retail sales last year…

2. Wall Street expectations for earnings growth for Q1 have turned negative, which would mark the first decline in more than 2 years, according to FactSet…Wall Street analysts now expect S&P 500 companies to report an average 0.8% decline in 1st quarter profits…at the end of September, analysts expected Q1 profits to increase by 6.7%, on average…6 of the 11 sectors are expected to report a decrease in earnings for the 1st quarter, with the information technology sector projected to decline the most by 8.9%…lower expectations creates the potential for greater upside surprises…

3. Sun Metals (SUN, TSX-V) is acquiring Lorraine Copper (LLC, TSX-V) in a move that makes sense considering that Sun Metals was obligated to give 31.5 million shares to Lorraine by early April in order to complete its 100% earn-in of the Stardust Project in north-central British Columbia…under the friendly takeover, shareholders of Lorraine will receive 0.54 of a common share of Sun Metals for every Lorraine share held (50 million LLC shares are currently outstanding)…the consideration values Lorraine at approximately 24 cents per share, representing a premium of approximately 38% based on the trailing 20-day volume-weighted average of each company as of the close of trading last Friday…Sun Metals came to life in late October last year when the company drilled into a Copper-rich intersection outside of the known resource at Stardust – the best drill result ever at the property, actually, as DDH18-SD-421 returned 5% CuEq over 100 m – 2.5% Cu, 3 g/t Au and 52.5 g/t Ag…geologists are confident that they are successfully tracking a major mineralizing fluid pathway toward the heart of this high-grade system which has been reinterpreted as a large, coherent integrated porphyry-skarn-CRD-epithermal system after a detailed review of an enormous amount of historical data…no holes have been drilled yet to follow up on the results of #421 which will be the primary focus of a minimum 15,000-m 2019 program starting this spring…

4. Pure Gold Mining (PGM, TSX) has significantly increased Indicated and Inferred mineral resources at its Madsen Gold Project in the Red Lake District…Indicated resources have jumped by 319,000 ounces to a total of 2,063,000 ounces (7,196,000 tonnes at an average grade of 8.9 g/t at a 4.0 g/t Au cut-off) while Inferred resources have increased by 171,000 ounces to a total of 467,000 ounces (1,880,000 tonnes at an average grade of 7.7 g/t Au, same cut-off)…the soon to be completed Feasibility Study is based upon Indicated resources at the Madsen deposit which have increased by 13% to 1,857,000 ounces (6,429,000 tonnes at an average grade of 9.0 g/t)…the new estimates include updated and expanded mineral resources for all previously reported deposits, including Madsen, Russet South and Fork, and includes first-time disclosure of mineral resources at the Wedge deposit…resources from the Madsen deposit have been incorporated into an FS currently being finalized and will be followed by a PEA for the Russet South, Fork and Wedge deposits…both studies are expected to be released later this month…Darin Labrez, Pure Gold President and CEO, stated: “Today’s updated mineral resource estimate is the first of several near term key milestones on the path to establishing a modern, scalable mining operation at Madsen.  Over the past 4 years, our team’s disciplined, focused efforts and geological expertise, has established unequivocally that the Madsen deposit, in the very heart of Canada’s Red Lake mining district, is truly an exceptional asset.  The team’s efforts have resulted in an indicated mineral resource that has doubled over that period.  With this new high confidence resource, based on 1.2 million metres of drilling, we are in great shape to put a mine plan together for the next chapter in the evolution and growth of the Red Lake camp”

5. The Dow is up 138 points through the first 30 minutes of trading on strength in consumer discretionary and technology stocks following upbeat earnings, while investors wait for President Trump’s State of the Union address tonight…in Toronto, the TSX has gained 45 points while the Venture, aiming for its 9th straight winning session, has lost 4 points to 621 on profit taking in the cannabis sector…Flowr (FLWR, TSX-V) is bucking the trend this morning, trading higher on news that it has submitted an application to list its shares on NASDAQ…subject to approval for listing, FLWR will continue to trade on the VentureFlowr has made tremendous progress executing on its business plan since becoming a public company last year and we believe the cvompany is well positioned to pursue additional growth opportunities,” said Vinay Tolia, Flowr’s Co-CEO. “A NASDAQ listing is an important step forward for Flowr because we believe it will broaden our access to international investors as we become a truly global company”iMetal Resources (IMR, TSX-V) has commenced Phase 1 of its maiden drill program at Gowganda West in Northern Ontario where initial holes at Zone 1 South are following up on channel sampling that returned values as high as 39.3 g/t Au…9 of 14 samples exceeded 2 g/t and also included 16.5 g/t and 11.5 g/t…Gary Grabowski, IMR advisory board member who served as district geologist for Ontario’s Ministry of Northern Development and Mines for more than 35 years, stated: “Zone 1 South is hosted by lithologies such as jasper-bearing conglomerate and green carbonate-altered mafic volcanic rocks similar to the rocks observed in the Kirkland Lake camp”

6. Probe Metals (PRB, TSX-V) has commenced a winter drill program at its Val-d’Or East Project…approximately 24,000 m of planned drilling with 4 rigs will focus on expanding current Gold resources, testing new targets and extending the coverage of regional exploration…new drill targets will include 1.5 km of unexplored ground between the Beliveau and Courvan Gold zones as well as the Monique and Cadillac Break East areas..winter programs will also include geophysical surveys that will broaden the scope of the company’s regional exploration…David Palmer, President and CEO of Probe, states: “With a strong treasury going into 2019, Probe’s primary goal is to continue advancing Val-d’Or East in order to establish it as one of the leading projects that works in any foreseeable Gold price environment.  From the work completed to date, our confidence is growing in the project and we see a clear path forward to development”...an updated mineral resource estimate for Val-d’Or East project is expected late this quarter…

7. Should this come as any surprise?…the Trudeau government says it has no plans to lower taxes on cannabis, even as other regions in North America embrace research that says lower levies may help eradicate the illegal pot trade…jurisdictions in the U.S. with legal cannabis markets are considering temporarily lowering pot taxes in hopes of encouraging consumers to migrate from the illicit market (if you recall, Trudeau’s thesis for legalizing marijuana revolved around the idea of eliminating the black market – that’s not going to happen, much like his promise to eliminate the budget deficit)…recent research from the Institute on Taxation and Economic Policy argues that lower taxes in the early days of legalization gives the industry a chance to get on its feet…it also recommends phasing in cannabis taxes over time and allowing medicinal users to pay less than recreational users…the Trudeau government, however, is not interested in following that advice…Finance Department spokesman Anna Arneson told The Globe and Mail, “The taxation framework for cannabis products entails keeping duties low and working with the provinces and territories to maintain a co-ordinated approach to taxation.  There are no planned changes to the existing duties at this time”…Ottawa also charges an extra $1-per-gram excise tax on all cannabis, recreational and medicinal…

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