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October 7, 2019

7 @ 7:00

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

1. Gold has traded between $1,496 and $1,508 so far today to begin a new week in which Chinese traders will return to action after a week long National Holiday…as of 7:00 am PacificGold is off $3 an ounce at $1,501…for the 10th consecutive month the People’s Bank of China (PBoC) has increased its Gold reserves, once again establishing itself as a dominant force in the market…the latest data from the Chinese central bank, released over the weekend, shows that it bought 5.9 tonnes of Gold in September, pushing its total Gold holdings above 100 tonnes…in total, the PBoC now owns 1,770 tonnes of GoldCommerzbank noted, “Given that China’s Gold holdings, as a proportion of its currency reserves, are still very low by Western standards, the PBoC is likely to continue to buy Gold in the future”…China is increasing its Gold holdings in part to create a “soft peg” to the precious metal as it promotes the currency’s internationalization…Silver is up 2 cents at $17.53…Copper has rebounded 2 pennies to $2.56 while Nickel and Zinc are both flat at $8.14 and $1.06, respectively…Crude Oil, which has been hit hard the past couple of weeks, has rebounded 55 cents to $53.36…gains in Oil prices that followed crippling attacks on Saudi Arabian production facilities last month proved short-lived, yet the expense of shipping Crude across the ocean has continued to soar…the cost of chartering a very large Crude carrier, or VLCC, to ferry oil from the U.S. Gulf Coast to Asia has surged to $10 million, or $5 a barrel – about twice the price before the attacks in Saudi Arabia, according to analysts…the increase has raised the price of U.S. Oil sold overseas at a time when countries in Asia, particularly Japan, South Korea and India, are racing to replace lost deliveries from Saudi Arabia and bolster their stockpiles to further buffer against Middle East supply disruptions…the U.S. Dollar Index is flat at 98.80…spending on retail goods and dining during China’s National Day holidays returned to growth this year, offering unexpected respite to an economy that has been expanding at its weakest pace in almost 3 decades…overall revenue from retail and dining during the period rose 8.5% from a year earlier to 1.52 trillion yuan ($212.6 billion)…that compares with a drop of 6.7% during the National Day holiday last year, the only decline since at least 2009 when the data became publicly available…

2. Equity markets are under mild pressure in early trading after a media report suggested Chinese officials are increasingly reluctant to agree to a broad trade deal pursued by the Trump administration…Vice Premier Liu He, who will lead negotiations for China, told dignitaries that his offer to the U.S. will not include commitments on reforming Chinese industrial policy or government subsidies, according to Bloomberg…trade talks between the U.S. and China are set to resume in Washington, D.C., on Thursday…deputy-level talks kicked off this morning…Wall Street came into this morning’s session after the Dow and S&P 500 posted their 3rd straight weekly decline after a flurry of disappointing U.S. economic data suggested the ongoing U.S-China trade battle has started to take its toll…China has much more to lose, however…

3. A slew of relatively weak U.S. economic data last week fuelled fears of a recession, but Goldman Sachs said the U.S. is still not close to a downturn…the double whammy of an accelerated slowdown in manufacturing and services sparked a 900-point drop in the Dow over 3 sessions last week…however, Goldman said the weakness in manufacturing may have bottomed…“This downturn in manufacturing has been one of the longest on record and may start to stabilize, if not improve, somewhat soon,” Peter Oppenheimer, chief global equity strategist, said in a note today…“Our economists remain of the view that growth has slowed but is not close to recession.  Assuming no recession, it is too early to expect this equity bull market to end in our view”…investors have also been grappling with an ongoing earnings decline this year as the escalated U.S.-China trade battle continues to weigh on parts of corporate America…the S&P 500′s earnings are expected to slip another 4.1% in the 3rd quarter, which could be the first time the benchmark has reported 3 straight quarters of slowdown since 2016, according to FactSet“While avoiding a recession should support risky assets, the upside is somewhat limited by the prospects for continued relatively modest profits growth,” Oppenheimer said…of course the high U.S. dollar is hot helping the manufacturing sector or companies with heavy overseas exposure, and that’s where the Fed can step in by continuing to lower interest rates…the Fed’s next policy meeting is at the end of the month…

4. Canadians are prepared to accept this as the “new norm”?…Vancouver commuters are being warned to expect disruptions today as a group of radical environmentalists plans to shut down the Burrard Bridge…Extinction Rebellion says it will engage in an act of “peaceful civil disobedience” beginning at 8:30 a.m., blocking the bridge for the rest of the day…Vancouver is not the only city in Canada today affected by this whacko group – Extinction Rebellion is being allowed to shut down bridges elsewhere in the country… “We do not want to cause disruption to people going about their everyday lives, but we have no other choice,” the group said in an open letter…“Worldwide, hundreds of thousands of people are already being affected by famine, droughts, rising sea levels, flash floods, and increasingly frequent extreme weather events”…protesters say they want elected leaders to “tell the truth” about climate change, act immediately, and defer to decisions of a “citizens’ assembly” on climate issues…of course at the root of Extinction Rebellion’s climate change hysteria, what’s really driving it, is a core belief in socialism…“Capitalism is incapable of taking the necessary action to prevent global warming because of this need for short-term profits and international competition.  Demands that obscure this run the risk of miseducating activists on what steps need to be taken to stop catastrophic climate change,” the group has stated…Extinction Rebellion is yet another example of how “climate change” is being effectively used by the far left to advance a stridently socialist agenda in Canada, the United States and elsewhere around the world…Extinction Rebellion was established in the United Kingdom in May of last year with about 100 academics signing a call to action…the movement uses a circled hourglass, known as the extinction symbol, to serve as a warning that time is rapidly running out for many species…

5. Benchmark Metals (BNCH, TSX-V) has cut 132.5 g/t Au and 8,560 g/t Ag over 0.9 m within a broader core interval of 2.87 m grading 46.9 g/t Au and 3,056 g/t Ag starting 130 m downhole in the first 2019 drill hole result from the Phoenix zone at its Lawyers Project in north-central British Columbia…results have extended the Phoenix zone from surface down to approximately 150 m depth…the Phoenix zone is 1 of 4 mineralized areas located within a 3 km radius of each other in the central portion of the (+)20 km Lawyers trend…CEO John Williamson commented, “The Phoenix massive sulphide vein that we discovered in 2018 represents another style of mineralization to be explored along the Lawyers trend.  The new drill hole has extended the high-grade Phoenix zone to nearly 150 m in depth from surface, while anomalous geochemistry and geophysics indicate that this zone could be extended to over 1 km in total length with additional drilling, which we will pursue in the weeks to come”…although it is part of the Lawyers trend, the Phoenix mineralization appears unique to the styles typically noted at Dukes Ridge and Cliff Creek…Phoenix mineralization is hosted within a discrete quartz vein measuring approximately 14 m in true-width…the vein contains semi-massive sulphides, including acanthite, sulfosalts, chalcopyrite, pyrite and native Silver…some smaller stockwork-style veinlets do exist within the Phoenix zone, especially to the northwest with closer proximity to the Dukes trend, suggesting that there may be at least 2 overprinting and intersecting mineralization events…BNCH is up 3.5 cents at 40 cents as of 7:00 am Pacific

6. The Dow, on a 3-week losing skid, is off 103 points as of 7:00 am Pacific…for many on Wall Street, the Silver lining to last week’s disappointing economic data is that a) it materially increased the probabilities for further FOMC interest rate cuts, and b) it also increased pressure on the U.S. and China to work toward a timely trade resolution…the TSX is 26 points lower while the Venture has lost 1 point to 558Liberty Gold (LGD, TSX), one of the big movers last week on more encouraging drill results from Nevada, has eased off 2 pennies to 96 cents in early trading…North American Palladium (PDL, TSX) was halted pre-market, pending news…MacDonald Mines (BMK, TSX-V) is steady in early trading after drilling into more high-grade Gold at its Scadding deposit near Sudbury (see below)…more dilution at cheap prices for SunMetals (SUNM, TSX-V)…the company has arranged a $4 million flow-through financing, mostly at 25 cents…at least there are no warrants involved…

7. MacDonald Mines (BMK, TSX-V) has released results from the 2nd hole of a continuing drill program at its SPJ Property, 40 km east of Sudbury…the 2nd hole was collared 35 m from the previously reported SM-19001 within the footprint of the historic deposit…2 distinct zones of high-grade mineralization were intersected – 8.6 g/t Au over 7.6 m, including 14 g/t over 4.21 m, and 3.2 g/t Au over 15.29 m, including 23.1 g/t Au over 0.87 m (core lengths, estimated to represent between 75% and 85% true width)…visible Gold has been observed in holes 3, 4 and 5 with flecks of visible Gold at 49 m, 50 m, 73 m and 106 m depth in hole #5BMK is off half a penny at 15.5 cents through the first 30 minutes of trading…the stock certainly has technical momentum and would respond much more favorably to high-grade results if they’re generated from outside the known historic resource…President and CEO Quentin Yarie stated, “These results support our model of multiple, thick zones of high-grade Gold mineralization at Scadding.  As we target these stacked zones of mineralization in our ongoing drilling program, we’ve observed visible Gold in 4 discrete locations down the hole in SM-19005, located 60 m downdip of hole SM-19002.  This indicates that the Gold-rich zones form a mineralized envelope that appears to be wider than suggested by historic drilling and that the mineralized system likely extends to depth.  Also, our recent sampling program within and beyond the Scadding mine area was indicative of a Gold-rich iron-oxide-Copper-Gold system. This can potentially expand, beyond what was previously thought, the size and footprint of mineralization on the property.  We have expanded our exploration program to include further prospecting, stripping, and trenching of these new areas, along with the ongoing drill program to expand the Scadding deposit”

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  1. BMR, seems like Sprott is very encouraged with GGI compared to MTS given the recent warrant updates on both companies. Do you have any opinion when GGI will release hole #54 and more holes? Seems like 1-2 weeks late is the “going-rate.” Cheerio.

    Comment by Clarence — October 7, 2019 @ 9:28 am

  2. BMR, have you noticed what’s happening with the nickel inventories?

    Have you looked much into Great Bear Resources? If so, just curious, do you own shares?

    Comment by Mick — October 7, 2019 @ 10:59 am

  3. Jon,
    What are your thoughts on the snail mail from CCW. I know we are waiting for the third PP to close. Do you anticipate news coming soon after the PP closes or will be waiting a lot longer?

    Comment by Shaker — October 7, 2019 @ 11:04 am

  4. In July 2017 CLM was languishing at the .16 level (like it is today), before going on run, hitting .92 before Christmas that year. All that happened before they owned Burgundy Ridge, which has such massive potential compared to the company holdings in 2017. Seems to me, there is great value here at these levels, given that we are approaching a 2 year low, with a company that has seen big moves off such lows in the past.

    Comment by Bryan — October 7, 2019 @ 2:10 pm

  5. Greetings, do you think the Chinese holiday could explain the weakness in gold/silver? Been pretty dull…

    Comment by Diane — October 7, 2019 @ 2:24 pm

  6. CLM has had rush assays in Burgundy since Aug 12th. Nothing that will move CLM is coming out of Burgundy this year. Wasn’t CLM’s year, maybe next year. Just my humble opinion, maybe they still surprise

    Comment by Weatheritout80 — October 8, 2019 @ 7:46 am

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