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December 17, 2019

7 @ 7:00

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

1. Gold has traded between $1,474 and $1,481 so far today…as of 7:00 am Pacific the yellow metal is unchanged at $1,476Gold’s nearest resistance is in the high $1,480’s followed by $1,500Silver is off a penny at $17.01…Nickel is 2 cents lower at $6.35, Copper is flat at $2.80 while Zinc is a penny higher a $1.04…U.S. investment bank Morgan Stanley is building up its base metals trading business after abandoning it 4 years ago, according to a Reuters report this morning…the move comes as rising volumes and volatility in industrial metals have boosted revenues for investment banks after years of lackluster market conditions…Crude Oil (WTI) is trying to gain traction above $60 a barrel…it’s up 44 cents to $60.65…the U.S. Dollar Index has rebounded one-fifth of a point to 97.20…on the data front this morning, U.S. manufacturing output rebounded more than expected in November…a just-released Bank of America survey among fund managers shows cash allocations have fallen to 4.2% of portfolios, the lowest level since March 2013BofA’s “Bull and Bear” reading rose to its most bullish level since April 2018…also, the global economic backdrop no longer looks so scary – a net 29% of those surveyed see growth improving over the next 12 months, a dramatic turnaround from a net minus 50% in June and a record swing for a 2-month period…a net 68% say a recession is unlikely in 2020, which is the biggest 2-month swing back to May 2009 just as the Great Recession was coming to an end…respondents reported being a net 31% overweight, the highest level of the year, though the allocation level is just above its long-term average, indicating that sentiment has not gotten overheated yet…

2. Scarce Palladium briefly breached the $2,000 an ounce level for the first time this morning, before correcting, as a Phase 1 U.S.-China trade deal drives prospects of a pick-up in demand in 2020…Palladium touched $2,006 before reversing in a much-needed pullback to unwind temporarily overbought technical conditions…it’s now off $44 an ounce at $1,916“Supply is tight in the Palladium market and when you’re adding the speculation about a potential pick-up in demand due to recovery in the global economy, you have a perfect storm of bullish news continuing to keep it supported,” Saxo Bank analyst Ole Hansen said…however, he added, “Liquidity is poor, which means that a correction can be quite brutal and could take Palladium back down towards $1,850″Palladium, used mainly in vehicle catalytic converters, has gained more than 50% this year because of a sustained supply crunch…

3. Canadians have put amateurs in charge of their hard-earned tax dollars in Ottawa: Less than 2 months after getting re-elected with a minority government, propped up the even more economically illiterate NDP and Bloc, the Trudeau Liberals admitted yesterday that Canada’s federal budget deficit will be billions of dollars deeper than it was supposed to be this year and next, according to Finance Department figures…the budget is now so stained with red ink, with little to show for it, that it’ll likely increase pressure on the Bank of Canada to lower interest rates, especially in the event of a downtown…the projected deficit of $19.8 billion for the 12-month period that ends in March is now slated to hit $26.6 billion…that’s a $7 billion miss and it comes with investment and growth statistics that lag far behind those in the United States under Trump administration policies….Canada’s federal government is smothering the private sector, harming the resource sector and driving investment dollars to the U.S. and elsewhere…perhaps the most dispiriting graph in the new fiscal update charts real business investment…it shows that investment in Canada has fallen 10% in the past 4 years, even as business spending in competitor countries like the U.S., the U.K. and Germany has risen by a similar amount…the Trudeau budget deficit – just like like his father’s – is also structural and that means it’ll get much worse in the event of a significant Canada-made economic downtown that may already have started…

4. Great Bear Resources (GBR, TSX-V) continues to deliver impressive high-grade intercepts in its fully financed 200,000-m drill program at its 100%-owned Dixie Project in the Red Lake district of Ontario…highlights of yesterday’s fresh results from along the LP fault target included 16.8 g/t over 4.15 m (55 m to 59.15 m) in the new Gap zone, located between the Bear-Rimini and Yuma zones, and 48.7 g/t Au over 8.7 m (251.6 m to 260.3 m), including 241.9 g/t over 1.2 m, in the Auro zone…President and CEO Chris Taylor stated, “With the discovery of high-grade Gold mineralization in the new Gap area, the last significant undrilled segment of the LP fault between the Bear-Rimini and Viggo zones is being successfully filled. Remarkably, all (100%) of the drill holes completed into the LP fault structure to date have intersected similar Gold mineralization and host geology.  Results continue to support continuity of Gold mineralization along more than 4 km, which remains open along strike and at depth.  Our drilling strategy for 2020 is 3-fold: 1) We plan to continue the discovery process through drill testing of new targets across the project; 2) We plan to continue significant step-out drilling over 12 km of the 18-km LP fault; and 3) We will undertake concurrent closely spaced drilling in areas where we have already successfully intersected GoldGBR has jumped another 23 cents to $8.05 as of 7:00 am Pacific

5. The Dow is up slightly through the first 30 minutes of trading…U.S. markets hit fresh record highs this morning and are aiming for their 5th straight winning session as a so-called Phase 1 trade deal between China and the U.S. clears the path higher for stocks to end a banner year…in Toronto, the TSX is up 8 points with the Gold Index steady at 247Kirkland Lake Gold (KL, TSX; NYSE) has announced that it will pay a quarterly dividend of 6 U.S. cents per common share on January 13, 2020 to shareholders of record as of the close of business on December 31…the 6-cent U.S. per common share payment is 50% higher than the previous quarterly dividend payment of 4 U.S. cents per common share paid in mid-October and represents the 11th quarterly dividend payment made to shareholders following the company’s adoption of a dividend policy in March 2017…Matt Halliday, who has come over from Kirkland Lake Gold where he was a resource geologist, has officially started as Canada Cobalt’s (CCW, TSX-V) VP-Exploration in the midst of an exciting new discovery at CCW’s Castle Property in the Gowganda Camp…“In a past producing Camp like this, there’s no reason why there can’t be a 4th, 5th or 6th deposit,” explained Halliday…“I couldn’t be more excited about this unique opportunity.  And it’s not just about high-grade Silver and Cobalt.  We’re looking at something on the Gold side as well”…rush assays from the first wedge hole completed at the Robinson Zone Discovery (massive native Silver) are imminent as drilling of new holes from surface ramps up into Christmas…crews will have a very short holiday break before drilling resumes during the 1st week of January…much more is also on Halliday’s plate including underground drilling at the Castle mine and the PolyMet acquisition deal, expected to close any day now…CCW has hit 54 cents in early trading as it approaches a new 52-week high…Balmoral Resources (BAR, TSX) is raising another $4.5 million in a Quebec flow-through PP at 51 cents per share…BAR is up 1.5 cents at 35 cents…neighbor Wallbridge Mining (WM, TSX) has added a penny to 84 cents…key resistance for WM is in the low-to-mid 80’sScore Media & Gaming (SCR, TSX-V), also looking strong going into year-end, is up 4 pennies at 73 cents in early trading…

6. Seabridge Gold (SEA, TSX) announced this morning that its search for large new porphyry targets within the KSM mining district has identified 4 prospects with signatures matching the established deposits where reserves and resources have been delineated…these new targets are under the Sulphurets Thrust Fault (STF) and are therefore ‘blind’, unlike the known deposits which were exposed at surface by erosion…notably, the company is inviting a new player(s) into the Eskay Camp to pursue these targets…Seabridge Chairman and CEO Rudi Fronk explained, “These are not targets we intend to drill any time soon.  We think this data will be valuable to a joint venture partner.  We had 3 objectives: 1) Use our extensive array of knowledge accumulated over the past decade to demonstrate that we have not exhausted the exploration potential for KSM; 2) Assess the exploration potential of areas currently proposed project infrastructure; and 3) Better define the characterization of waste materials.  We believe these new targets could contribute to the multi-generational life of the KSM Mining District while the data we generated also provides insights to help optimize site development”

7. Like Barrick (ABX, TSX; GOLD, NYSE) before it, Newmont Goldcorp (NGT, TSX; NEM, NYSE) has exited Kalgoorlie Consolidated Gold Mines (KCGM) and sold its 50% stake to Australia’s Northern Star Resources (NST, ASX)…Barrick dropped its 50% stake in Kalgoorlie in August, netting $750 million for half of the mine…Newmont has been shedding assets to streamline operations while also using its bigger piles of cash to buy back its shares…“Combined with the previously announced agreements to sell Red Lake in Canada for $375 million and Newmont’s stake in Continental Gold for $260 million, the company has meaningfully exceeded market expectations, with more than $1.4 billion in fair value cash transactions announced over the past month,” stated President and CEO Tom Palmer…“Building on Newmont’s recently announced $1 billion share repurchase program, Northern Star’s all-cash offer supports Newmont’s disciplined approach to capital allocation, which includes strategically reinvesting in the business, strengthening the company’s investment-grade balance sheet and returning capital to shareholders.  The sale of KCGM also further streamlines Newmont’s portfolio, with 12 top-tier assets located on 4 continents in the world’s most favorable Gold mining jurisdictions”

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  1. I must admit that I’m very disappointed with the lack of news from GGI.

    Comment by jasi — December 17, 2019 @ 1:19 pm

  2. Jon, just wanted to get your take on GEMC. Likely some tax loss selling today. Just trying to determine if it’s worth a gamble at .02? Going through their financial statement, $341,000 in cash as of the end of October, 96M shares outstanding. Will need cash at some point but hate to raise money at .02, perhaps a share consolidation coming before they raise money which is always the easy way out.

    Comment by Danny — December 17, 2019 @ 4:29 pm

  3. I was incorrect on the cash for GEMC, as of September 30, working capital was $120,992, they definitely need to raise money. Not sure whether to punt it as a tax loss or buy more, leaning toward selling.

    Comment by Danny — December 17, 2019 @ 4:44 pm

  4. Yes, looking forward to your answer on GEMC as well…

    Comment by AFchief — December 17, 2019 @ 7:02 pm

  5. Here’s my answer, AFchief, Danny: Mitchell Smith blew it big-time by not drilling in Nevada yet. The company and the opportunity can be fixed but not with him at the helm.

    Comment by Jon - BMR — December 17, 2019 @ 9:42 pm

  6. Marathon’s Sprite zone showing plenty of potential…


    Marathon Gold Corp. has provided new drill results from the 2019 Sprite zone exploration program at the Valentine gold project in central Newfoundland. These latest results represent fire assay data from 40 out of a total of 46 drill holes located along an approximately 3 km strike length of the Sprite Zone, located 3-5 km northeast of the project’s Leprechaun Deposit (Figure 1). Highlights include:

    VL-19-786 intersected 7.60 g/t Au over 22.0 metres;

    VL-19-776 intersected 10.43 g/t Au over 5.0 metres, and 4.80 g/t Au over 6.0 metres;

    VL-19-780 intersected 7.25 g/t Au over 10.0 metres;

    VL-19-769 returned multiple intersections of 1.63 g/t Au over 16.0 metres, 2.04 g/t Au over 9.0 metres, 4.33 g/t Au over 9.0 metres, 7.53 g/t Au over 5.0 metres, and 2.30 g/t Au over 15.0 metres;

    VL-19-779 returned multiple intersections of 3.82 g/t Au over 13.0 metres, 5.54 g/t Au over 11.0 metres, and 4.30 g/t Au over 5.0 metres;

    VL-19-778 intersected 9.74 g/t Au over 6.0 metres, and 4.73 g/t Au over 5.0 metres; and,

    VL-19-777 intersected 1.54 g/t Au over 16.0 metres.

    All quoted intersections comprise uncut gold assays in core lengths. All significant assay intervals are reported in Table 1.

    Matt Manson, President & CEO commented: “We are encouraged by these exploration results from an area of the Sprite Zone that was last explored with drilling in 2014 and 2018. The new drill holes were designed to step out from areas of previously identified mineralisation. About half hit new mineralisation, some significantly so. Of note, the drilling has confirmed a new “Main Zone” type sequence of stacked, en-echelon quartz-tourmaline-pyrite veining with significant gold grades at Section 13410E (Figure 2). This new zone is located proximal to the Valentine Lake Shear Zone, extends to a depth of at least 250 metres with an apparent thickness of up to 50 metres, and is bounded by mafic dikes. This is similar to the geological setting of the Main Zones of both the Leprechaun and Marathon Deposits. Hole VL-19-786, which returned 7.60 g/t over 22 metres, represents a 300 metre step-out to the northeast, suggesting potential extension of the mineralisation along strike. We expect that Sprite, and this new discovery area in particular, will be a priority for follow up drilling in our 2020 exploration program.”

    The “Sprite Zone” constitutes a broad area of previously identified Quartz-Tourmaline-Pyrite-Au (“QTP-Au”) veining extending northeast of the project’s Leprechaun Deposit and southwest of the Marathon Deposit. Previous drilling in the area identified a modest estimate of Measured and Indicated Mineral Resources of 0.04 Moz (0.72 Mt at 1.17 g/t) and Inferred Mineral Resources of 0.09 Moz (2.05 Mt at 1.40 g/t) in several small and shallow pit shell settings (Figure 1). Mining in these Sprite Zone pit areas was not contemplated in the October 2018 Preliminary Economic Assessment and is not expected to be included in the upcoming Pre-Feasibility Study.

    Twenty of the forty exploration drill holes reported today returned no significant intervals of mineralisation. These represent drilling in step-out areas showing no developed QTP-Au veining, drill holes extending northwestwards into the hanging-wall and away from previously identified mineralisation closer to the Valentine Lake Shear Zone, or lateral step-out holes within the hanging-wall adjacent to previously identified areas of mineralisation. Results from the remaining six 2019 Sprite drill holes remain outstanding.

    Comment by Jon - BMR — December 18, 2019 @ 5:33 am

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