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October 23, 2019

7 @ 7:00

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

1. Gold has traded between $1,488 and $1,497 so far todayas of 7:00 am Pacific, bullion is up $8 an ounce at $1,496…Silver is 8 cents higher at $17.57…key resistance remains $17.70 to $17.80…a close above $18 would confirm a fresh breakout…the Indian Diwali festival begins Friday…Gold demand from Indian consumers usually rises during the festival…however, reports say Indian consumer Gold demand could decrease up to 50% this year due to higher prices and an increase the country’s Gold import duty…it’s notable that the UAE is the latest country to announce that it’s establishing a federal platform for Gold trading and the tracking of Gold sources…the move, approved by the UAE cabinet earlier this month, is part of a larger policy to enhance the UAE’s position as a global hub for Gold and jewellery trading…the policy has 3 main pillars – governance, sustainability and innovation – with 10 separate strategic programs and initiatives, also including the establishment of a federal platform for Gold trading and tracking, international marketing of the Gold sector, and the use of technology in the production of Gold…the move is another signal that some countries are moving away from the dollar for Gold denomination…Antofagasta said today that protests in Chile could cut its Copper production by about 5,000 tonnes, equivalent to less than 3% of 3rd quarter output, due to delays in supplies and travel disruptions for workers…the London-listed miner, which has 4 mines in Chile and employs about 19,000 people, kept its annual forecast unchanged at 750,000790,000 tonnes of Copper this year but said 2020 output would be lower at 725,000755,000 tonnes…Copper is up a penny at $2.63 as of 7:00 am Pacific…Nickel has climbed 3 pennies to $7.57 while Zinc is flat at $1.14…Cobalt is steady at $16.10…Crude Oil has lost 14 cents to $54.34 while the U.S. Dollar Index is unchanged at 97.54

2. As noted yesterday, the Canadian economy is already in trouble as Trudeau begins his 2nd term with a minority government devoid of any representation from the heart of the country’s Oil and gas sector…Stats Canada reported that August retail sales were negative 0.1%…real gross domestic product (GDP) has expanded only 1.4% in the past year, but population growth is 1.5%, so the Canadian economy, despite all the bravado from the Liberals and their left-leaning friends in the mainstream media, is actually contracting fractionally on a year-over-year per capita basis…the fastest-growing segments of the economy are government, as we saw in the latest employment report, cannabis and multi-unit construction…those segments, amounting to 40% of GDP, have a combined year-over-year growth rate of over 3%…and of course we know the pain that has been brought upon the Oil and Gas sector in this country, largely due to government policies and the inability to get pipelines built…what sensible country would intentionally harm such an important sector of its economy, and care more about getting pot to market than Oil?…that’s “progressive”?…meanwhile, productivity growth in Canada is stagnant, whereas in the United States it is up 1.7% in the past year…Canadian household debt, while marginally off its all-time high‎, is still higher today as a share of GDP (101.3%) than it was in the United States at the 2006-07 bubble high (98.2%)…total principal and interest payments now absorb 15% of personal disposable income, a record high back to 1990 when borrowing costs were double-digits…this represents a serious drag on Canadian cyclical consumer spending, as we have seen with flat year-on-year retail sales growth…

3. A few earnings disappointments this morning including Boeing, Texas Instruments and Caterpillarshares of Caterpillar (CAT, NYSE), considered a bellwether for the global economy, dipped in early trading after the company slashed its full-year outlook and posted 3rd-quarter earnings that were well short of expectations…the company blamed the dismal results on a reduction in inventories from dealers…management said in a news release this weakness could persist due to “global economic uncertainty”…the heavy machinery manufacturer earned $2.66 per share in Q3 vs. the consensus estimate of $2.88 per share, according to Refinitiv…revenue came in at $12.76 billion, more than half a billion dollars below expectations…despite the weak results from Caterpillar and a few others, the 3rd-quarter earnings season has largely topped analysts’ expectations…of the 118 S&P 500 companies that have reported, 81% have posted better-than-expected results, according to FactSet…to be sure, companies are beating watered-down estimates…S&P 500 earnings were expected to have fallen by more than 4% in the previous quarter entering the season, according to FactSet

4. Wallbridge Mining (WM, TSX) is up a penny in early trading at 44.5 cents, where it can be expected to meet some technical resistance…the company released a whopper of a drill hole at depth following Monday’s late morning halt – 27 g/t Au over 38.9 m, and the stock certainly would have responded better if there weren’t already half a billion shares outstanding…Wallbridge’s impressive 70,000– to 80,000-m 2019 drill program continues to follow up on the Area 51 and Tabasco discoveries, outlining a large Gold system at its 100%-owned Fenelon Gold Property…drill hole FA-19-086, which was visually described in the company’s October 9 news release, assayed 27 g/t tonne Gold over 38.39 m in the Tabasco zone at a vertical depth of 500 m, further demonstrating the significant Gold endowment of the system at depth…further assay results from this hole are pending…“This interval released from hole FA-19-086 is a truly spectacular intersection with strong Gold mineralization throughout the over 38-m core length that has been assayed so far,” stated Attila Pentek, VP-Exploration for Wallbridge“We are keenly awaiting further assay results of surrounding batches from this hole, which, based on the mineral assemblages described, should carry some additional Gold mineralization.  Holes FA-19090 and FA-19092, 100 to 150 m away, also returned mineralized intersections of significant width along with some visible Gold mineralization in the Tabasco zone.  These new intersections, for which assays are not yet available, along with 20.89 g/t Au over 8.54 m, intersected in FA-19-052 (Tabasco), 17.58 g/t Au over 11.04 m in FA-19-059 (Cayenne) and 5.50 g/t Au over 10.96 metres in FA-19-065 (Tabasco), make us very excited about the potential of the Fenelon Gold system at depth”

5. The Dow is up 46 points as of 7:00 am Pacific…most Canadian voters didn’t take this into account Monday but inflows into Canadian stocks from international investors have declined by about 75% over the past year, another affect of anti-resource government policies in this country…net inflows into Canadian equities could be quickly headed to zero for the first time since 2008, which would not bode well for domestic stock performance…as of 7:00 am Pacific, the TSX is off 11 points while the Venture has rebounded 2 points at 542Score Media & Gaming (SCR, TSX-V) is up slightly…the company’s reports year-end financial results after the close…Gatekeeper Systems (GSI, TSX-V) is finding technical support in the low 20’s after the stock’s surge on Monday to a 2+ year high of 27.5 cents on record volume…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…Skeena Resources (SKE, TSX-V) is unchanged at 52 cents after another bounce to the upside yesterday following more drill results from Eskay Creek…very high grades of Gold mineralization hosted within the largely under-explored and undeveloped Lower Mudstone horizon clearly demonstrate that another high tenor mineralization event occurred in the Eskay Creek stratigraphy…geologically, something very special occurred in the area from Nickel Mountain to Eskay Creek which both formed at approximately the same time…

6. Fiore Gold (F, TSX) has cut thick intervals of oxide Gold mineralization both within and outside of the current resource pit shells at its Gold Rock Project in Nevada, just 8 miles from its Pan Gold mine…highlights include 22.9 m @ 0.72 g/t Au in GR-19023; 25.9 m @ 0.92 g/t in GR-1924; 15.2 m @ 1.48 g/t in GR-19026; 16.8 m @ 1.6 g/t in GR-19029; and 10.7 m @ 1.36 g/t in GR-19032…these results will expand the resource envelope in advance of a PEA targeted for year-end…holes GR-19026 and 032 are particularly interesting in that they show strong intercepts with grades well above the average resource grade at the very northern end of the current pit-constrained resource…in the case of GR-19032, the intercept is north of the current resource pit, indicating the deposit remains open along strike to the north…holes 24 and 25 provide good infill intercepts in the central portion of the northern resource pit, while hole 19 (12.2 m @ 1.04 g/t) demonstrates continuity of grade through the lightly drilled gap in the current resource south of the northern resource pit…strong intercepts were also encountered in the southern resource pit, particularly in holes 23 and 29…President and CEO Tim Warman stated, “These holes represent the last of the RC holes from the 2019 drilling program at Gold Rock, with the results showing strong, consistent mineralization over approximately 2.4 km of strike length.  With the final RC assays in place we can now begin updating the geological and resource model at Gold Rock in support of the upcoming PEA scheduled for the end of the year.  Work on the PEA is progressing well and we are looking forward to the first detailed view of what we hope will be our second operating mine in Nevada.  With this first phase of drilling complete at Gold Rock, we’ve begun drilling at the Pan mine with the goal of growing the resource and reserve base and extending the mine life as we did successfully in 2018

7. Now the World Gold Council is on the climate change bandwagon…the WGC today published: Gold and Climate Change: Current And Future Impacts…the report highlights the Gold sector’s carbon footprint and the steps the industry can take to become net-neutral and meet the objectives of the Paris Agreement…“There is a path for Gold companies to meeting the Paris Accord.  We are already seeing a lot of good progress from a lot of mining companies, there is still more work that can be done,” stated Terry Heymann, CFO for the WGC, in an interview with Kitco News“Everyone needs to play their role when it comes to combating climate change and the Gold industry is no exception”…the report noted that the entire Gold sector produces 36,793 tonnes of carbon dioxide per tonne of Gold…total Gold market carbon emissions come in at 126.4 million tonnes…Gold production has by far the largest footprint in the entire sector…the WGC said that last year about 32,689 tonnes of greenhouse gasses were released last year for every tonne of Gold produced…Heymann noted that the biggest carbon emitter at a mine site is used in power generation: diesel fuel used to power generators that run the camps and mills…he added that this portion of Gold production has the biggest carbon footprint but it also represents the biggest opportunity to decarbonization…“It’s not an easy path right now but it’s feasible for mining companies to play their role and operate with net-zero emissions,” he said…“It’s only going to get easier as technology advances”

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  1. Nice to see insider (Setter, Robert) in CCW exercise his warrants for 0.35. Any word on them closing their PP this week?

    Comment by Don — October 23, 2019 @ 2:53 pm

  2. Very close, Don, is what I’m hearing. I added some more on the pullback to .33 today…the chart shows a beautiful uptrend of 2 steps forward, 1 step back…

    Comment by Jon - BMR — October 23, 2019 @ 3:41 pm

  3. For me the big question with CCW is when do they get their permit for the tailings? I don’t don’t see any type of big move forward in the share price until that happens. Whether they close the PP this week or next week is not a big deal. It’s the permit for the tailings that will generate some excitement. Assuming they get it.

    Comment by Danny — October 23, 2019 @ 4:58 pm

  4. Not only will they get it, Danny, for the Castle, and soon, but I suspect there’s a surprise coming with respect to the Beaver near the town of Cobalt, just a 10-minute drive from the PolyMet facility. Importantly, that is patented ground, which means you don’t need permits for drilling or “environmental rehab”. The tailings there are significant, even slightly higher in grade compared to the Castle. Should have a little more on this in the am. With regard to the whole tailings issue, CCW is looking at this from a district perspective, and the potential economic opportunity is massive when you consider the fact there are probably 100 million tonnes of tailings or more. The PolyMet acquisition plays directly into this district Big Picture approach…and with the Trudeau government continuing in power, the environmental push in this area is only going to intensify with the opportunities expanding. No company is better positioned for that than CCW with Re-2OX and other advantages.

    Comment by Jon - BMR — October 23, 2019 @ 6:15 pm

  5. That would be a nice surprise. So processing tailings would be considered “environmental rehab” at the Beaver?

    Comment by AFchief — October 23, 2019 @ 8:38 pm

  6. Jon

    What could possibly be the hold up with GGI, we only have 2 holes reported and we are approaching November, Regoci says more news by end of September and does not even come close to making that happen. This year was supposed to be much much better on getting assays out and now it is actually worse. Investors are losing confidence as you can see by the daily decline in the SP. Regoci talks about shareholder value being the only thing he is focused on, but yet here we are all in the dark without a clue on what is going on and why the delays in reporting assays…. Really what the heck in your honest opinion can be the reason for the delays this time? Thanks

    Comment by Gregh — October 23, 2019 @ 9:54 pm

  7. Jon..I would assume that Castle being a past producer would also be patented ground, no?

    Comment by bob — October 24, 2019 @ 6:59 am

  8. Hi BMR, is gold still part of the CCW story? What happened to the assays the market was supposed to see back in February?

    Comment by jean — October 24, 2019 @ 7:11 am

  9. Yes it is, jean, and not just as Castle East but of course with the e-waste opportunity with the PolyMet facility is very interesting as well…we’ll see how that develops…at Castle East you have a broad area that historically has not been explored or analyzed in nearly enough detail, but I believe a picture is now starting to emerge…a regional update from CCW is expected soon…one thing appears quite certain – incredibly rich Silver extends to depth with nearly 200 ounces over 3 m…that’s likely an ore body as intercepts like that do not occur in isolation in a Camp such as this…that vein has a lot of friends in the neighborhood…no different than Wallbridge’s Fenelon Property with that big high-grade Gold intercept reported Monday at a vertical depth of 500 m…

    Comment by Jon - BMR — October 24, 2019 @ 8:47 am

  10. Important breakouts unfolding in Silver and Gold this morning…as we’ve been stressing all along, gains in certain Silver stocks are going to be extraordinary over the coming months – tremendous leverage in some of them…

    Comment by Jon - BMR — October 25, 2019 @ 5:35 am

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