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January 27, 2020

7 @ 7:00

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

1. Gold has traded between $1,576 and $1,587 so far today…as of 7:00 am Pacific, the yellow metal is off its highs but still up $8 an ounce at $1,580…safe-haven demand for Gold and Silver has kicked in as China’s coronavirus outbreak has spread significantly…Silver has gained 9 cents to $18.20…Copper, trading at $2.71, is on track for its 9th consecutive losing session, its longest skid in 6 years as the spreading Chinese coronavirus hits demand in the world’s biggest metals consumer…Nickel has retreated 10 cents to $6.05 while Zinc is 2 pennies lower at $1.08…Crude Oil has fallen 94 cents to $53.25 while the U.S. Dollar Index is up slightly at 97.92…preliminary data released over the weekend show the scale at which the coronavirus outbreak is affecting the Chinese economy…overall travel on Saturday, the first day of the Lunar New Year, dropped 28.8% from a year ago, which included a 41.6% drop in civil air travel, a 41.5% decline in rail travel, and a 25% drop for road transport…the coronavirus has now taken the lives of at least 81 people in China and sickened more than 2,800 worldwide, but many more cases are likely to be reported in the coming days…the majority of the reported cases are in mainland China where local authorities have quarantined several major cities, affecting more than 50 million people, and canceled Lunar New Year’s events in Beijing and elsewhere…Mongolia has closed its vast border with China, and Hong Kong and Malaysia announced they would bar entry to visitors from the Chinese province at the centre of the outbreak following a warning by medical officials that the virus’s ability to spread was growing…travel agencies were ordered to cancel group tours nationwide, adding to the rising economic losses…stock and futures trading in China, closed for the Lunar New Year holiday, is tentatively scheduled to resume next week…Scotiabank thinks Canada’s economy in the 4th quarter fared worse than the Bank of Canada’s projection of 0.3% and may even have slipped into negative territory if the spate of recent economic data coming out of the manufacturing sector was any indicator…“Q4 GDP growth overall is likely tracking considerably below the BoC’s 0.3% growth rate and perhaps in very mild contraction territory,” stated Derek Holt, Vice-President & Head of Capital Markets Economics…

2. The continued spread of the coronavirus appears to be hitting global markets like a similar outbreak in 2003, but the history of recent health scares and market internals may mean the pullback won’t last long and investors are currently overreacting…markets also slumped in early 2003 amid an outbreak of severe acute respiratory syndrome, or SARS, but that was just a temporary setback and many major indexes (and the Venture) enjoyed a strong year…the Wuhan coronavirus is still much smaller than the SARS outbreak of 2003, according to official numbers from governments around the world, but that could change as the outbreak continues…the coronavirus is expected to have more cases in China than SARS eventually, but the overall mortality rate appears to be lower for the new virus, according to various experts…

3. The price of Rhodium, a precious metal that strips pollutants out of exhaust fumes, has been surging to begin 2020 as car manufacturers in Asia and Europe scramble to abide by stricter emission regimes…supplies of Rhodium are limited because the metal is mined as a byproduct of mostly Platinum and Palladium, while demand is rising as regulators restrict emissions and subject autos to more rigorous tests…Rhodium prices, which are vulnerable to wild swings because the metal has no futures market, surged as much as 65% this month to $9,985 a troy ounce, though the metal’s price has backed off modestly in recent days to $8,800…this builds on last year’s rally, extending Rhodium’s advance over the past 12 months to as much as 300%….for auto manufacturers contending with a downturn in sales and the cost of designing electric vehicles, rising Rhodium and Palladium prices represent an added burden…the metal’s rally has cost the auto industry around $8 billion over the past month, according to analysts at Citigroup, who estimate that PGM’s now represent 15% of global auto makers’ cash flows…

4. Ongoing drilling at Canada Cobalt’s (CCW, TSX-V) Castle East discovery in the Gowganda Camp has quickly defined a minimum potential 200-m vertical extent vein zone in the most significant grassroots discovery in the Northern Ontario Silver-Cobalt Camp in several decades…significantly, the Robinson zone is now interpreted to fall within a “much broader and productive horizon” associated with a 300-m thick Silver-rich sill with native Silver occurring near both the upper and lower contacts of the Nipissing diabase with the Archean volcanics…this greatly elevates the potential scale of this system which is situated in a basin area that dips east of 3 robust past producers (~70 million ounces) within 2 km…a 2nd vein shoot has been intersected 100 m below the original discovery to the northeast while native Silver hits have occurred as much as 100 m above and northwest of the 1st vein shoot…grades have been spectacular, including 70 kilograms (2,053 oz/ton) over 0.30 m within a 4-m core interval assaying 212 oz/ton in the 2nd wedge hole…textbook deposit signatures include extensive veining and alteration, rich vein shoots, native Silver-filled fractures, and multiple structures (i.e., low angle faults) believed to be spatially related to high-grade mineralization…more assays are pending…Matt Halliday, VP-Exploration for Canada Cobalt, commented: “The Robinson zone is on strike from the old Capitol mine workings 650 m to the west, so there is plenty of room to grow this discovery both laterally and vertically which we are in the process of doing,” Halliday continued…“It’s important to note that mostly only the shallow western margin of the diabase was mined historically in the rich Gowganda Camp from networks of veins that extended for hundreds of meters.  At modestly deeper levels Canada Cobalt’s Castle Property features kilometers of unexplored or under-explored diabase from the upper contact to the lower contact as we are discovering at Castle East”CCW, now vertically integrated, is an ideal position to quickly reap the benefits of this discovery given its recent acquisition of the only facility in the district (just a 1-hour drive down the highway from the Castle mine) that combines bullion pouring, bulk sampling, commercial assaying and e-waste processing…a ramp to the discovery to access such high-grade material and potential new discoveries from underground in an environment of rising Silver prices could easily make Canada Cobalt the Silver play of the year…CCW is steady at 70 cents as of 7:00 am Pacific

5. The Dow has tumbled 405 points through the first 30 minutes of trading…the S&P 500 slid the most in almost 4 months, with technology shares leading the drop…Wall Street analysts are also issuing warnings about retailers, restaurants and hotels that have high revenue exposure to China…in Toronto, the TSX has slid 159 points…the TSX Gold Index ran up as high as 271 in early trading before backing off…it’s now flat at 264…the Venture has lost 5 points to 577K92 Mining (KNT, TSX-V), an exciting high-grade Gold play with scale, has hit another new all-time high this morning…it’s up 13 cents at $3.65 as of 7:00 am PacificTransition Metals (XTM, TSX-V), with interests across a range of metals and properties, has been one of the Venture’s top performers this month with a gain of more than 75% through Friday’s trading…the long-term chart shows a very significant breakout in the works for this $9 million market cap deal…it’s off a penny-and-a-half at 21.5 cents through the first 30 minutes of trading…

6. Financings, drilling and positive project milestones were all positive in December, according to S&P Global Market Intelligence which tracks a variety of junior metrics to make a composite index…“All 4 exploration metrics – significant financings, drilling activity, initial resources and positive project milestones – increased in December 2019 as S&P Global Market Intelligence’s Pipeline Activity Index, or PAI, jumped to 96, from 79 in November 2019, the index’s best showing in over a year,” wrote analysts at S&P Global Market IntelligenceS&P noted that Gold PAI increased to 149 from 123, while the base metals PAI rose to 55 from 43 over the same period…the number of financings by junior and intermediate companies jumped to 274 in December 2019 from 159 in November…positive project milestones rose to 5 from 4

7. A majority of people around the world believe capitalism in its current form is doing more harm than good, a recent survey has found (published just ahead of this week’s Davos meeting of business and political leaders)…not surprising, really, given what most students have been taught in schools, colleges and universities…this year was the first time the “Edelman Trust Barometer“, which for 2 decades has polled tens of thousands of people on their trust in core institutions, sought to understand how capitalism itself was viewed…the study’s authors said that earlier surveys showing a rising sense of inequality prompted them to ask whether citizens were now starting to have more fundamental doubts about the capitalist-based democracies of the West…“The answer is yes,” David Bersoff, lead researcher on the study produced by U.S. communications company Edelman...”People are questioning at that level whether what we have today, and the world we live in today, is optimized for their having a good future”…the poll contacted over 34,000 people in 28 countries, from Western liberal democracies like the United States and France to those based on a different model such as China and Russia, with 56% agreeing that “capitalism as it exists today does more harm than good in the world”…only in Canada, the United States, Australia, South Korea, Hong Kong and Japan did majorities disagree with the assertion that capitalism currently did more harm than good…

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  1. Jon,

    We’ve seen the nickel inventory totally depleted a couple of weeks ago, we knew that a lot of it was simply re-wired into warheouses elsewhere, now we assist to a massive surge back into the inventories, back at around 192K so far. What can explain that “wild refill” and what does the outlook for the overall demand looks like for 2020? Also, doo you think we’ll see the “proverbial split” of Nickel sultide and nickel latterite this year? What can we expect for nickel prices this year?

    Comment by Ragnarok — January 27, 2020 @ 11:09 am

  2. Jon what do you think of the trading of CCW today?

    Comment by Don — January 27, 2020 @ 12:14 pm

  3. Love it, Don, in the sense that smart money has been accumulating on the dip during what has been a red day across the markets thanks to the China flu…what excites me more is knowing that there is such a productive horizon from near the top of the contact to near the bottom of the contact, associated with this 300-m thick sill…it’s already a mine if you really know this district…Grade is King and there’s enough grade and ounces in just that wedge zone to make shareholders a lot of money and grow this company well beyond where it is today…can’t think of a Silver junior in a better position than this one right now, and that could attract some key individuals…

    Comment by Jon - BMR — January 27, 2020 @ 12:38 pm

  4. I’m not a member of ftmig, but I really find this curious that on their site (navigate to) Garibaldi Resources, and there they state outstanding shares shows 285,479,008. Is that accurate Jon? Doesn’t seem correct unless I’ve been asleep for the last 3 years.

    Comment by Laddy — January 27, 2020 @ 3:39 pm

  5. That sounds great! ?

    Comment by Jacquez — January 27, 2020 @ 6:12 pm

  6. Obviously not an accurate figure, Laddy…another reason Regoci needs to wake up – web site and other materials need a major refreshing…

    Comment by Jon - BMR — January 27, 2020 @ 7:11 pm

  7. Yeah had a chuckle, still, you’re interviewing a company and so forth, and they can’t get the numbers correct. NEXT!!!

    Comment by Laddy — January 27, 2020 @ 7:25 pm

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