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February 3, 2020

7 @ 7:00

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

1. Gold has traded between $1,582 and $1,569 so far today…as of 7:00 am Pacific the yellow metal is off $14 an ounce at $1,575…while mainland China accounts for more than 28% of the world’s physical Gold jewelry, bar and coin demand (848 metric tons in 2019 according to the World Gold Council), Gold prices will get continued support from the demand for safety and falling U.S. Treasury yields, with the market pricing in a higher probability of a June rate cut from the Federal Reserve…ETF buying also remains strong while multiple global central banks continue to accumulate aggressively…Silver has retreated 36 cents to $17.65…solid support around $17.50…Copper, in extreme oversold conditions, is flat at $2.53 after suffering its worst month since 2015…long-term uptrend support, which held during the depths of the bear market in 2015, is in the mid-$2.40’sNickel, also coming off a bad month, is trading at $5.77 while Zinc is off slightly at $1.00…Crude Oil has fallen another 55 cents to $51.85 while the U.S. Dollar Index has jumped nearly half a point to 97.022 Canadian Oil pipelines face yet more regulatory scrutiny this week…today, a utilities regulator in Minnesota is set to decide whether a revised environmental impact statement on Enbridge’s proposed replacement for its Line 3 Pipeline is adequate…Enbridge is proposing the replacement of a pipeline that runs 1,100 miles from Edmonton to Superior in Wisconsin, with a new conduit that will carry 760,000 barrels per day of Canadian Crude to Midwest refineries…tomorrow, it’s Ottawa-owned Trans Mountain Pipeline’s day in court…the country’s Federal Court of Appeal is expected to rule on whether the federal government consulted and accommodated Indigenous people adequately before approving, for a 2nd time, the 590,000-bpd expansion of the Alberta-to-B.C. pipeline…

2. China’s stock market reopened today to the most savage wave of selling in years with most stocks falling by the daily limit after just minutes of trading…all but 162 of the almost 4,000 stocks in Shanghai and Shenzhen recorded losses, with about 90% dropping the maximum allowed by the country’s exchanges…health-care shares comprised most of Monday’s gainers on speculation they will benefit from the virus outbreak…the nearly 8% plunge on the Shanghai was the index’s biggest daily fall in more than 4 years…the Chinese yuan blew past the 7-per-dollar mark and Shanghai-traded commodities from palm oil to Copper hit their maximum down limits…the wipeout came even as the central bank made its biggest cash injection to the financial system since 2004 and despite apparent regulatory moves to curb selling…China reported 17,205 confirmed cases of the new coronavirus and 361 deaths through yesterday…outside of China the problem is much less severe with only 180 cases reported in 25 countries and territories spanning North America, Europe, Asia and the Middle East…the coronavirus is also showing that it’s not as deadly as SARS, the outbreak in 20022003 with fewer cases (~8,000) that killed more than 800 people…

3. U.S. factory activity rebounded strongly in January after contracting for 5 straight months amid a surge in new orders, offering hope that a prolonged slump in business investment has probably bottomed out…the Institute for Supply Management (ISM) said this morning that its index of national factory activity increased to a reading of 50.9 last month, well above the consensus estimate and the highest level since July….a reading above 50 indicates expansion in the manufacturing sector, which accounts for 11% of the U.S. economy…the improvement in the ISM data likely reflects ebbing trade tensions between the United States and China following President Trump’s Phase 1 trade deal…the U.S. economy under President Trump remains resilient and initial estimates are that China’s coronavirus outbreak may impact U.S. GDP growth in Q1 only fractionally, perhaps by one-fifth of 1 percentage point…there was no reason for Friday’s big sell-off on Wall Street other than mainstream media sensationalism…

4. Marathon Gold (MOZ, TSX) has commenced its 2020 exploration drill program at the Valentine Gold Project in central Newfoundland…the company will carry out a total of 44,000 m of diamond drilling for $8.9 million…Matt Manson, President & CEO, commented: “Our 2019 drill program at the Valentine Gold Project was primarily an in-fill campaign designed to upgrade the project’s existing mineral resources in support of our ongoing Pre-Feasibility Study. The 2020 drill program will be focussed on new exploration in areas shown previously to have exhibited high potential from previous drilling, surface trenching or prospecting.  A priority will be the Sprite Corridor, where drilling in November 2019 returned very encouraging intersections of Gold mineralization in a setting similar to that seen at the nearby Leprechaun deposit.  In parallel with our mine development activities, which are based on open pits at the Leprechaun and Marathon Deposits, our intention is to maintain a high level of exploration activity going forward, with a view to new discovery and continued resource growth along the approximately 20 km of mineralized trend at the Valentine Property”MOZ is up 4 cents at $1.57 as of 7:00 am Pacific

5. The Dow has rebounded 286 points through the first 30 minutes of trading after Friday’s coronavirus overreaction sent the index tumbling 600 points…once coronavirus fears subside, resilient U.S. markets should be in a good position to hit new highs…the TSX has added 60 points while the Venture is up 1 point at 576…despite a sell-off in base metals and Oil, and renewed selling in cannabis stocks, the Venture is holding up well and features a strong support band between 570 and 560…high-grade Gold and high-grade Silver plays will remain in favor…Wallbridge Mining (WM, TSX) has added 2 pennies to 94 cents while neighbor Balmoral Resources (BAR,M TSX) is steady at key resistance of 47.5 cents…Ely Gold Royalties (ELY, TSX-V), which holds a 2% NSR on Wallbridge’s Fenelon deposit, continues to surge with a new all-time high in early trading of 80 cents…K92 Mining (KNT, TSX-V), which hit another new high of $3.98 during Friday’s session, is up 6 cents at $3.91Fiore Gold (F, TSX-V) this morning reported quarterly production of 8,750 ounces of Gold (October through December) at its Pan mine in Nevada, though the company is still maintaining fiscal 2020 production guidance of 45,000 to 48,000 ounces…“Although total ounces recovered in Q4 2019 were lower than expected, management believes these ounces are simply delayed, and will likely be recovered over the coming months,” stated CEO Tim Warman…“Our full-year guidance for FY2020 shows a significant increase in Gold production over the previous year as the benefits of the crushing circuit are fully felt. Higher guided cash costs are related to the temporarily higher stripping ratios, which are expected to decline significantly in the 2nd half of the year”GoGold (GGD, TSX) has reported net income of $535,000 (U.S.) on total revenue of $9.3 million (U.S.) for the 4th quarter ending December 31…all-in-sustaning costs were $14.59 per Silver equivalent ounce…Parral had another record production quarter and compared to a year ago revenue has more than doubled, driving the turnaround in cash flow from operations…mine optimization will positively impact Parral’s profitability in 2020GGD is steady at 85 cents…

6. Of the millions of NFL fans that watched yesterday’s 54th Super Bowl, many were looking to cash in on the Big Game thanks to the rise in sports betting in the United States…Bank of America says sports betting could reach 50% of the U.S. population by 2022…while sports betting revenue was about $950 million in 2019, estimates for the booming industry’s future range from $6 billion to $20 billion…“We think the success, adoption and technology behind online and mobile sports could be a catalyst for wider iGaming penetration, a notable shift for an industry that has thus far not been widely impacted by the Internet,” Bank of America research analyst Shaun Kelley said in a note to clients on Friday…sports betting and online gaming have been some of the hottest topics in investor conversations, Kelley said…daily fantasy sports company and bookmaker DraftKings reached a deal to merge with Diamond Eagle Acquisition Group (DEAC, NASDAQ) in December, allowing the company to become public while forgoing the typical IPO process…on Wednesday, casino company Penn National Gaming (PENN, NASDAQ) soared 12% when it announced it’s taking a 36% stake in digital sports media company Barstool Sports for about $163 million in cash…the deal, which values Barstool around $450 million, is expected to close this quarter…“We view this partnership positively and expect that it will quickly transform PENN into one of the major players in sports betting,” said Kelley…PENN also has a stake in Score Media & Gaming (SCR, TSX-V) which has been one of the top-performing Venture stocks since early 2018

7. The Canadian Marijuana Index, having fallen below 200, is trading at its lowest levels since 2016…meanwhile, 2 facts are emerging with regard to the legalization of cannabis in Canada…contrary to Justin Trudeau’s promise, the legalization of cannabis has not crushed the black market in Canada, and marijuana hasn’t proven to be the cash crop the government expected…cannabis excise tax revenues have come in at roughly only half of the Trudeau government’s original estimates…Stats Canada figures show that in the first fiscal year that marijuana was legalized (2018 – 2019) the feds took in $18 million in cannabis revenues, but had expected to take in $35 million…this year the government expected it would bring in $100 million, but now estimates it will see only $66 million…the Liberals believe that number will continue to rise to $135 million next year with a steady increase until $220 million in 2023, according to a response to a question on the House of Commons’ order paper…Stats Canada has also been tracking prices since before legalization and has found so far that illegal weed is falling in price, in order to compete with legal shops…there is also an approximately $4 per gram gap in prices with legal cannabis selling for around $10 per gram and illegal products selling for closer to $6

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  1. VSBY is looking perky today, came across this write-up – https://geckoresearch.com/vsblty-groupe-technologies-bright-start-to-the-new-decade/

    Comment by Buckshot — February 3, 2020 @ 11:32 am

  2. MOON has some solid results once again! I am surprised Mr. Market didn’t react positively but it could be because of timing/afternoon news release. My buddy says he’s having trouble buying it through TD.

    Blue Moon Drilling Strikes Wide Zones of Zinc, Gold and Silver Mineralization

    Comment by Felix — February 3, 2020 @ 12:49 pm

  3. You have to phone in to buy MOON through TD Waterhouse. It’s a pain when you are used to buying online. I complained but got nowhere. Something about thinly traded, easily manipulated, protecting the public. I didn’t agree with the rationale. I don’t know if other brokerage houses are doing the same thing or if it’s only TD.

    Comment by Danny — February 3, 2020 @ 3:40 pm

  4. Hey Danny.. You are correct.. just tried.. order was re-routed to a rep. BS!!!!!

    Comment by GregJ. — February 3, 2020 @ 9:29 pm

  5. Good pick-up for Transition (XTM, TSX-V), adding to its Palladium exposure…

    Transition Stakes the Eva Kitto PGM Property Expanding its Exposure to Palladium and Other Platinum Group Metals in Ontario

    Transition Metals Corp (TSXV: XTM) (“Transition”, “the Company”) is pleased to announce that it has staked 91 mining claims covering approximately 1,900 hectares, located east of Lake Nipigon in northwest Ontario. The property covers most of the Eva Kitto Intrusion, an early rift, mafic ultramafic body similar to those that host the Sunday Lake (Ontario), Thunder Bay North (Ontario), Tamarack (Minnesota) and Eagle (Michigan) nickel copper and platinum group (Ni-Cu-PGM) deposits.

    CEO Scott McLean commented, “Robust Palladium and Rhodium metal prices have encouraged us to further expand our PGM portfolio. Eva Kitto is a known mineralized intrusion with a number of similarities to our Sunday Lake and Saturday Night projects located closer to Thunder Bay. The Company now has excellent leverage to the rising PGM market with a bundle of projects, share holdings of PGM focused companies and royalties.”

    Transition Shareholders have significant leverage to the PGM markets through:

    – 25% free carried interest in the Sunday Lake PGM project currently being drilled by Implats Canada (see Company news release of January 20, 2020).
    – 100% interest in the Saturday Night PGM project located 16 km west of Sunday Lake (see Company news release of January 23, 2017 and May 6, 2019).
    – 100% interest in Eva Kitto PGM project (announced today).
    – 100% interest in the Maude Lake PGM-Ni-Cu project (see Company news release of October 15, 2019).
    – 100% interest in Raglan Hills PGM project located near Bancroft Ontario (see Company news release of January 25, 2016).
    – 100% interest in the Revell PGM property located in northwestern Ontario (see Company news release of September 5, 2018).
    – 15,000,000 shares of SPC Metals; a company focused on exploration of advanced PGM-Ni-Cu properties in the Sudbury Mining Camp.
    – 1,529,000 shares of Class 1 Nickel and Technologies Inc; a company focused on exploring the PGM-rich Dundonald property near Timmins Ontario (see Company news release of April 15, 2019).
    – 2.5% Net Smelter Return royalty on the PGM-rich Dundonald property.

    About the Eva Kitto Intrusion

    The Eva Kitto intrusion is one of the largest known Mesoproterozoic mafic to ultramafic intrusions associated with the Midcontinent Rift (MCR), similar in size to the footprint of other known magma conduits hosting word class Ni-Cu-PGM deposits. It is geochemically and temporally related to the earliest MCR magmatism, referred to as ‘early-rift’ type intrusions that host a number of recently discovered deposits including Sunday Lake deposit, discovered by Transition Metals in 2013 located approximately 150 km to the southwest of Eva Kitto (please refer to Figure 1).

    Transition holds a 25% carried interest in the Sunday Lake deposit which is currently being explored aggressively by one of North America’s largest producers of palladium, Impala Canada Ltd. (Implats). With production facilities at Lac Des Illes located nearby, Implats has resumed drilling to test for additional high-grade PGM mineralization as follow-up to encouraging results obtained in 2019. Drilling in 2019 returned significant mineralization including hole SL-19-026 which returned 41.20 metres @ 5.51 g/t Pt +Pd +Au (3.22 g/t Pt, 2.08 g/t Pd, 0.21 g/t Au, 0.57 % Cu) (see Company news release of April 29, 2019).

    At Eva Kitto, Ni-Cu-PGM mineralization was first discovered at the Phoenix Prospect by the OGS in 2001 where grab sampling returned up to 1.07 combined PGM’s (Pt + Pd + Au). Between 2003 and 2012, mapping and prospecting, coverage of the property by fixed and helicopter borne magnetic and electromagnetic (EM) surveys, resulted in the completion of 9 diamond drill holes totaling 2,353 metres by companies including East West Resources, Kennecott Explorations Canada (Kennecott), Mega Uranium, and Rainy Mountain Royalties. From the limited data set, the base of the intrusion is interpreted to be mineralized over a broad area. Drilling by Kennecott in 2003 in the vicinity of the Phoenix Prospect returned elevated mineralization which assayed 0.28% Ni, 0.13% Cu and 563 parts per billion (ppb) Pt+Pd over 1.22 metres in hole 03EK-02. Drilling at other locations on the property encountered additional sulphide mineralization at the base of the intrusion as well as elevated PGM concentrations in a reef style environment developed higher in the intrusive stratigraphy. Despite these prospective indications, less than 1% of the intrusion has been explored as large portions of the system underlie and intrude rocks of the Beardmore Geraldton greenstone belt and barren Nipissing Gabbro.

    Qualified Person

    The technical elements of this press release have been approved by Mr. Greg Collins, P.Geo. (PGO), a Qualified Person under National Instrument 43-101.

    Transition Metals Corp

    Transition Metals Corp (TSXV: XTM) is a Canadian-based, multi-commodity project generator that specializes in converting new exploration ideas into discoveries. The award-winning team of geoscientists has extensive exploration experience which actively develops and tests new ideas for discovering mineralization in places that others have not looked, often allowing the company to acquire properties inexpensively. Joint venture partners earn an interest in the projects by funding a portion of higher-risk drilling and exploration, allowing Transition to conserve capital and minimize shareholder’s equity dilution.

    Comment by BMR — February 4, 2020 @ 6:25 am

  6. Good morning gents, I know CCW is waiting for assays for other metals on the wedge holes, and that the silver numbers came out pretty fast. Any idea if they are planning on giving us more “quicker” silver numbers on the expansion holes, or if we are in a holding pattern waiting for the gold, copper, and cobalt numbers from these initial wedge holes? I’m pretty disappointed that Frank and Halliday have allowed the momentum to wane, after a nice start to the year. Is history repeating itself? Sure feels similar…

    Comment by Phil — February 4, 2020 @ 7:11 am

  7. Well BMR, am I jumping the gun when I say IMR s results from that first deep hole should’ve been back by now or are we expecting too much too fast, it is over 750 meters…..what is your take on it BMR? Thanks in advance ?

    Comment by Karen — February 4, 2020 @ 7:34 am

  8. Phil, sorry, but you’re acting like a nervous old lady!…in every strong primary uptrend a stock will have a healthy pullback, and this one in CCW (I love the action) isn’t even on heavy volume…it’s classic technical-driven trading toward the rising 50-day SMA and just look at the RSI(2) now as it becomes most oversold in a year (weak hands are being flushed out)…as far as Castle East, last week’s news should dispel any of your fears…this is a textbook Northern Ontario Silver-Cobalt Camp high-grade discovery, the most significant grassroots discovery in 40 years, that represents a potential cash flow machine for CCW in 2020 through a simple ramp strategy…

    Comment by Jon - BMR — February 4, 2020 @ 8:07 am

  9. CCW – the floor is at 54 , so i guess we are close to a bottom

    Comment by david — February 4, 2020 @ 8:46 am

  10. Excellent support at the 50-day, at .57, David, with strong secondary support as well as you indicated…in a primary uptrend, you have to love days like this!…

    Comment by Jon - BMR — February 4, 2020 @ 8:58 am

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