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October 22, 2019

7 @ 7:00

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

1. Gold has traded in a tight range between $1,483 and $1,489 so far todayas of 7:00 am Pacific, bullion is up $3 an ounce at $1,487…Silver is 2 cents higher at $17.54 after a brief spurt past some short-term moving averages intra-day yesterday…key resistance remains $17.70 to $17.80…a close above $18 would confirm a fresh breakout…Nickel is down slightly at $7.34…Copper and Zinc are each up a penny at $2.63 and $1.14, respectively, Cobalt is steady at $16.10…the London Metal Exchange (LME) is reviewing recent trading in the Nickel market following the biggest-ever decline in inventories…the exchange sent an email to members asking for more details of “significant client activity” in Nickel warrants since September 1…the LME also asked members to identify the client and business reason for the transactions, as well as steps taken to “ensure that the client’s activity is not conducive to an abusive squeeze or other pattern of market abuse/disorderly market conduct”…British Prime Minister Boris Johnson faces 2 pivotal votes in Parliament today that will decide if he can deliver on his pledge to lead the United Kingdom out of the EU in 9 days’ time…the Canadian economy is already in trouble as Trudeau begins his 2nd term…retail sales in Canada took a dive in August, falling 0.1%, as reported by Stats Canada this morning…the August figure was well below the consensus estimate of a 0.4% gain…China and the United States have achieved some progress in their trade talks, Chinese Vice Foreign Minister Le Yucheng said today…Yucheng’s comments came a day after President Trump spoke of optimism about a deal, while White House adviser Larry Kudlow said tariffs on Chinese goods scheduled for December could be withdrawn if talks go well…

2. Eric Sprott on Silver, and bank liquidity issues: “There is going to be a shortage of Silver.  We get information from dealers looking for supply and paying premiums, which is almost unheard of.  And when I look at the amount Silver going into ETFs and going into India, there is no way that there is not going to be a shortage”…on top of that, there is “a huge problem” happening under the surface – ongoing bank liquidity issues and how the Federal Reserve is responding to it…“There’s something happening underneath the surface where bank illiquidity is encountering a huge problem, and we are not being told.  Who knows what’s going on behind the scenes?  The most likely thing is somebody has blown up their derivatives book, and all the banks are calling in loans to other banks for fear…of the domino effect.  The repo market has come under tremendous stress”…the problem became visible to investors in mid-September when the repo rates surged close to 10%, he added…“The fact that they let it happen.  The fact that they weren’t aware that it was happening.  So there’s this huge illiquidity situation in the banking business which they thought they solved”

3. Eastern Canada, particularly Quebec, wants Western Canada’s Oil money but not the Oil, so perhaps it’s time for the West to get creative in terms of protecting its vital interests…in a sign of the times in a climate change-crazed hysteria “progressives” have strategically created to scam enough votes for federal power, the heartland of Canada’s critical Oil and gas sector, Alberta and Saskatchewan, is no longer represented in the federal government after yesterday’s election that reduced the Trudeau Liberals to a minority, albeit a strong enough minority to prevent a formal Liberal-NDP coalition…despite the fact his party was completely wiped out in Alberta and Saskatchewan, lost the national popular vote to the Conservatives and bled seats in every region of the country (it was the 2nd lowest popular vote for any national government in Canadian history), there was not even a shred of humility in Justin Trudeau’s victory speech last night…in fact he was just as defiant and smug as ever, coming across as if he had won a smashing majority…in a breach of tradition and decorum, he even walked out to the podium and delivered his speech in Montreal less than 2 minutes after Conservative leader Andrew Scheer began to deliver his opening remarks to supporters in Regina…the TV networks switched to Trudeau, preventing Scheer from speaking live to a national audience…if that’s Trudeau’s way of “reaching out to the West”, we’re in for some difficult times until the plug can be pulled on his minority government in 17 months or so (the average lifespan of a minority at the federal level)…meanwhile, Stephen Guilbeault, radical environmentalist and new Liberal star in Quebec, boldly stated that the Liberals will move “further and faster” on “climate change”…Guilbeault is expected to hold a key position in the new Trudeau cabinet and will be a lightening rod for the West and the resource sector in general…he could be appointed Trudeau’s “Climate Change Czar” with far-reaching influence into the resource space, bolstered by the Liberals’ hideous Bill C-69 which recently became law…Canada has become more divided than ever under Trudeau with Western alienation resurfacing while the Bloc has regained strong new support in Quebec…unfortunately, times are about to get even tougher for Canada’s Oil and Gas sector which has already been crushed by Trudeau…notably, the last time the Venture Exchange traded above 1,000 was when it was being led by the Oil and Gas sector in 2014

4. Vivian Krause reported in the Financial Post this morning that Barack Obama’s tweet in support of Justin Trudeau wasn’t the only outside influence in the 2019 election…“In 8 battleground ridings, Leadnow, a Vancouver non-profit with roots in the United States, was busy helping to try to defeat Andrew Scheer and the Conservatives.  According to emails sent to anyone who subscribes, Leadnow made 150,000 phone calls, and in Greater Toronto, it ran radio ads against the Conservatives.  Leadnow is one of the lead organizations in a Rockefeller-funded international effort called The Tar Sands Campaign that aims to land-lock Oil and Natural Gas from Western provinces, keeping Canada out of the global Oil market.  Leadnow has organized protests against all of the pipeline projects that have been scrapped or stalled: Northern Gateway, Keystone XL, Energy East and Trans Mountain as well as Woodfibre LNG and the Coastal Gaslink project in northern B.C.  In 8 ridings, Leadnow did door-knocking and helped to get out the vote for specific candidates.  During the 2015 federal election, Leadnow was also active with a strategic voting campaign to defeat Conservatives in 29 swing ridings. All but 5 were defeated”

5. The Dow is up 12 points as of 7:00 am Pacific…U.S. stocks will try this week to break the all-time highs set earlier in the year as a slew of S&P 500 companies report earnings…about 120 S&P 500 companies, or around 24%, are scheduled to release their quarterly results this week…those companies include Caterpillar and Boeing, both of which are expected to report tomorrow morning…the TSX is up 47 points and the Canadian dollar is steady as investors mostly shake off last night’s election results, likely relieved that it was a strong minority and the NDP doesn’t have “veto” power (the NDP will have sway, however, as Trudeau will nonetheless attempt to remain in power as long as he can by forming an unofficial “progressive” alliance)…the Venture is unchanged at 543Gatekeeper Systems (GSI, TSX-V), yesterday’s volume leader with a 36% gain, has eased off 1.5 cents to 25 cents in early trading… the stock is trading at its best levels since early 2017 and charts show it could move robustly into the 30’s on a breakout above key resistance in the upper 20’s…the company’s recurring revenue model got a boost last week, thanks to an $11.8 million 5-year deal with the 6th largest transportation system in the United States…MacDonald Mines (BMK, TSX-V) is under pressure after releasing additional results from drilling at its SPJ Property near Sudbury…assays for SM-19005 weren’t quite as exciting as the visuals…3 distinct zones of mineralization were intersected – 7.8 g/t Au over 1.4 m, 21.7 g/t over 1.6 m and 8.1 g/t over 1.9 m…drilling has yet to step out aggressively from the known historic deposit…Phase 3 diamond drilling has commenced at Radius Gold’s (RDU, TSX-V) high-grade Gold-Silver Amalia Project in Chihuahua, Mexico…Pan American Silver (PAAS, TSX, NASDAQ) is now operating the project and plans a minimum 2,500-m program as part of its option agreement with Radius to earn an interest in Amalia…

6. Skeena Resources (SKE, TSX-V) continues to deliver strong results from drilling at the past producing Eskay Creek mine…2 surface drill rigs are being used for the 2019 Phase I program in the 21A, 21E and 22 zones to infill and upgrade areas of Inferred resources to the Indicated category…this morning, Skenna released results from the 21A zone and the Lower Mudstone horizon, below the current Essay Creek resource…highlights include 313 g/t Au and 95 g/t Ag over 2.2 m in SK-19063, including 1,380 g/t Au and 322 g/t Ag over 0.50 m; 3.3 g/t Au and 56 g/t Ag over 37.5 m in SK-19065; and 4 g/t Au and 79 g/t Ag over 30.5 m in SK-19056 (true widths estimated at 80% to 100%)Paul Gaddes, Skeena VP-Exploration, noted, “Very high grades of Gold mineralization hosted within the largely under-explored and undeveloped Lower Mudstone clearly demonstrate that another high tenor mineralization event occurred in the Eskay Creek stratigraphy.   Both the regional and near mine mineralized intersections within this largely underexplored horizon represents a significant exploration target for the Eskay Creek Project.  The company’s detailed understanding of this mineralized system will allow future exploratory drill targeting to focus on instances where this auriferous horizon links to the known mineralized synvolcanic feeder zones and paleo-depressions in the mudstones”…the Lower Mudstone is situated approximately 100 m stratigraphically below the more familiar Contact Mudstone, host to the previously developed Eskay Creek deposits…Skeena is up 2.5 cents at 52 cents as of 7:00 am Pacific…the stock has performed well since late July, climbing more than to 50% thanks to solid progress at Eskay Creek where a lot of Gold was left behind when the mine shut down more than a decade ago…

7. Of all the market-moving tweets these days, one in particular from Democratic Presidential hopeful Senator Elizabeth Warren is sending shivers through the Oil industry…“On my first day as President, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands,” she tweeted on September 6“And I will ban fracking – everywhere”…outlawing a technique that energy producers use to blast Oil and gas from shale formations would require legislation and spur a torrent of opposition from companies, investors and probably even state governments…substantial as those hurdles may be, they haven’t stopped analysts from running the numbers for investors and energy executives to see what might happen, if hydraulic fracturing were banned…they are particularly focused on Warren’s threat to choke off drilling on federal lands…Tudor Pickering estimates that if fracking were banned, Natural Gas prices in the U.S. would jump to somewhere between $9 and $15, up from $2.32 per million British thermal units on Friday…the firm figures that Oil, trading around $53 a barrel, would rise to the $80 to $85 range and could risk shooting to $150 during market shocks…entire Oil-field service companies would become obsolete…pipeline owners would suffer without replenishment, as existing wells peter out…the winners would potentially be Canadian shale drillers and big global operators like Exxon and Chevron, for which higher energy prices would offset losses on U.S. assets…

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  1. Any update on the trading action with ETR? Seems to have broken its base support at .25

    Comment by goose90 — October 22, 2019 @ 11:30 am

  2. Hi Jon, RSI at 31 on the daily chart for GGI. This selling seems quite overdone beyond what the charts says. Is there any suggestion you have in reaching out to Steve R.?

    Comment by Jean — October 22, 2019 @ 2:14 pm

  3. Closed up half a penny at 26 cents, goose90, despite briefly dipping below .25 intra-day; ETR share structure (just 20 million outstanding) and a substantial land package in the Eskay Camp make it a valuable stock to own for when it does make its first big run. Massive sulphides hit on a 400-m step-out from Rock ‘N Roll deposit – certainly some potential there. Quite a bit of gabbro has been found on under-explored northern part of property…more news to come including first assay results…

    Comment by Jon - BMR — October 22, 2019 @ 7:50 pm

  4. Another good news for CRE.V


    Critical Elements and Primero Announce a Guaranteed Maximum Price for Engineering, Procurement and Construction of the Rose Phase I Spodumene Project


    October 23, 2019 – Montréal, Québec – Critical Elements Lithium Corporation (the “Corporation” or “Critical Elements”) (TSX-V: CRE) (US OTCQX: CRECF) (FSE: F12) is pleased to announce Primero Group (“Primero”) has successfully completed the first phase of its Early Contractor Involvement (“ECI”) agreement with the Corporation, and that Primero has provided a Guaranteed Maximum Price (“GMP”) for the engineering, procurement and construction (“EPC”) of the Rose Lithium-Tantalum project (“Rose” or the “Project”) on a lump sum turnkey basis that is in line with the Project’s feasibility study published November 29, 2017.
    Critical Elements and Primero are in discussions to commence the second phase of the ECI agreement (ECI Phase II – Front End Engineering Design) which will include initial detailed engineering as well as determining fixed prices based on the GMP for Primero to perform all of the work involved in completing the EPC lump sum turnkey proposal. Primero is also offering the Corporation its EPC services as a fully integrated package if the final lump sum is within the GMP, and if technical and commercial parameters are met during the second phase.
    A summary of the ECI approach is included below:
    • ECI Phase I – Guaranteed Maximum Price (completed):
    o Review and assimilate all of the existing design and data
    o Stress test and optimize the design through reviews, specific value engineering and trade-off studies
    o Reconfirm quantities and pricing
    o Initiate selected engineering deliverables to achieve nominally 25% engineering definition
    o Formulate a GMP for the process plant and associated process supporting infrastructure
    o Submit a proposal and schedule to progress to the next phase
    • ECI Phase II – Front End Engineering Design (“FEED”):
    o Progress and finalize a selected set of engineering deliverables to achieve nominally 40% engineering definition
    o Advance long lead and critical equipment packages to “Ready for Award” status
    o Complete the contracting strategy and partnership for construction
    o Optimize and reduce contingency applied to the GMP in order to formulate a Lump Sum (the “LS”) cost estimate for the EPC of the process plant and associated process infrastructure

    o Submit a complete and firm proposal with schedule to Critical Elements for the EPC-LS contract (the Corporation expects the lump sum cost estimated to be in line with the feasibility study (Rose Lithium-Tantalum project feasibility study, WSP, November 29, 2017))
    o Execution of the EPC-LS
    • Operation and maintenance support throughout scope of services
    “Primero is thrilled to have worked alongside the Critical Elements team. The GMP conclusion underscores the skills and talent the Americas team in Montréal has in cold weather and hard rock lithium projects, coupled with the in-house expertise in Perth, giving us another great rollout. Rose is the latest addition to Primero’s Québec lithium portfolio. We couldn’t be more pleased”, stated Jacques Parent, General Manager of Primero Group Americas.
    Jean-Sébastien Lavallée, Chairman & Chief Executive Officer of Critical Elements stated, “We are very pleased with Primero’s work and the team. We said it before and continue to believe they are the industry-leader in engineering and construction of spodumene plants.”
    Jean-Sebastien Lavallée (OGQ #773), geologist, shareholder, Chairman & CEO of the Corporation and a Qualified Person under NI 43-101, has reviewed and approved the technical content of this release.
    About Critical Elements Lithium Corporation
    The Corporation recently released a financial analysis for Critical Elements’ wholly-owned Rose Lithium Tantalum project (Rose Lithium-Tantalum project feasibility study, WSP, November 29, 2017), which is based on price forecasts of US $750/tonne for chemical-grade lithium concentrate (5% Li2O), US $1,500/tonne for technical-grade lithium concentrate (6% Li2O) and US $130/kg for Ta2O5 in tantalite concentrate, and an exchange rate of US $0.75/CA $. The internal rate of return (“IRR”) for the Rose Lithium-Tantalum project is estimated at 34.9% after tax, and net present value (“NPV”) is estimated at CA $726 million at an 8% discount rate. The estimated payback period is 2.8 years. The pre-tax IRR for the Rose Lithium-Tantalum Project is estimated at 48.2% and the pre-tax NPV at CA $1,257 million at an 8% discount rate (see press release dated September 6, 2017). The financial analysis is based on the Indicated mineral resource. An Indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The life-of-mine (LOM) plan provides for the extraction of 26.8 million tonnes of ore, 182.4 million tonnes of waste, and 11.0 million tonnes of overburden for a total of 220.2 million tonnes of material. The average stripping ratio is 7.2 tonnes per tonne of ore. The nominal production rate is estimated at 4,600 tonnes per day, with 350 operating days per year. The open pit mining schedule allows for a 17-year mine life. The mine will produce a total of 26.8 million tonnes of ore grading an average of 0.85% Li2O and 133 ppm Ta2O5, including dilution. The mill will process 1.61 million tonnes of ore per year to produce an annual average of 236,532 tonnes of technical and chemical grade spodumene concentrate and 429 tonnes of tantalite concentrate.
    About Primero Group
    Primero provides engineering design, construction and operational services to the minerals, energy and infrastructure sectors. Primero has specialist expertise in project implementation and delivery with a complementary service offering comprising civil, structural, mechanical and electrical solutions. Primero provides these services to a diverse client base, ranging from mid-sized companies through to international mining and energy houses.

    Jean-Sébastien Lavallée, P.Geo.
    Chairman and Chief Executive Officer
    Investor Relations:
    Paradox Public Relations
    Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

    Comment by Sylvain — October 23, 2019 @ 6:24 am

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