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February 4, 2020

7 @ 7:00

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

1. Gold has traded between $1,577 and $1,556 so far today…as of 7:00 am Pacific the yellow metal has retreated $20 an ounce to $1,556…no reason for Gold to dip below its solid floor of support between $1,550 and $1,520…Silver, with chart support beginning at $17.50, has fallen just 4 cents to $17.61…base metals are picking up…Copper has rebounded 5 cents to $2.57 while Nickel and Zinc are both up slightly at $5.83 and $1.01, respectively…Crude Oil has added 64 cents to $50.75 amid hopes for new output curbs from OPEC and its allies to offset any potential drop in demand triggered by China’s coronavirus outbreak…the U.S. Dollar Index has gained more than one-tenth of a point to 97.94Caucus Chaos, and Wall Street loves it…the political party that wants to bring the “Green New Deal”, “Medicare For All” and “Free Tuition” to America, exponentially expanding the role of government (never a wise choice), can’t even properly manage a caucus event it had 4 years to prepare for…in what is unquestionably a huge embarrassment for the Democratic Party, no results have been released yet from last night’s Iowa Caucus, the much-anticipated kick-off every 4 years to the Presidential elections…Republicans had no problem counting their votes – President Trump took 97%, and it’s hard to imagine he won’t knock out the discombobulated Democrats with a landslide victory in November…

2. China’s central bank could cut its key lending rate as well as banks’ reserve requirement ratios (RRRs) in the coming weeks to support economic growth, according to a report this morning from Reuters…this comes a day after the People’s Bank of China unveiled massive liquidity injection measures to the tune of more than 1 trillion yuan…with China’s Q1 GDP likely to fall sharply, due to the coronavirus outbreak, Beijing can be expected to respond aggressively with fiscal and monetary stimulus to get growth on track in Q2..this will generate a V-shaped recovery, led by the industrial sector, and that in turn is going to push oversold base metals back up sharply…

3. Enbridge’s (ENB, NYSE) Line 3 Pipeline replacement cleared important hurdles yesterday when a Minnesota regulator endorsed a revised environmental impact statement for the project…the Minnesota Public Utilities Commission’s decision, followed by its approval of a certificate of need and route permit, is a victory for Canadian Oil producers who have been forced to curtail production in Alberta because of a shortage of pipeline capacity…Enbridge shares have hit a nearly 3-year high…Line 3, built in the 1960’s, carries Oil from Alberta to Superior, Wisconsin…it carries less Oil than it was designed for because of age and corrosion…replacing Line 3 will allow Enbridge to double capacity to 760,000 barrels per day, driving the fossil fuel haters crazy…meanwhile, Canada’s Federal Court of Appeal is set to release its decision later this morning (10:00 am Pacific) on the latest challenge of the Trans Mountain Pipeline expansion…First Nations from British Columbia filed court challenges after the federal government approved the project a 2nd time last June…a court hearing in December focused on the government’s consultation with the First Nations between August 2018 and June 2019

4. Shorts have been burned on this one – Tesla (TSLA, NASDAQ) jumped again today, hitting a new record high above $900 in early trading as major shareholder Ron Baron forecast the company will top $1 trillion in revenue in a decade…“I just can’t believe this freaking stock.  It’s insane,” Roth Capital analyst Craig Irwin said on CNBC’s “Squawk Box”“This is a big separation from those of us who like to pull out the calculators and look at reality”…this latest surge comes after Tesla climbed 19.9% yesterday, its biggest 1-day gain in 6 years…Argus Research raised its price target to a new Wall Street high of $808 a share (but even that price target is below where the stock opened this morning)…Tesla shares are up more than 80% this year through yesterday’s close, fuelled by analysts raising price targets to catch up to the stock and short-covering by investors betting against the shares…analysts still can’t keep up with the run…their average 12-month price target is $493, up from $334 in December, according to FactSet

5. The Dow has climbed 445 points through the first 30 minutes of trading as overblown coronavirus fears subside…in Toronto, the TSX has added 145 points while the Venture has backed off 3 points to 572, just above a strong band of support from 570 to 560Ely Gold Royalties (ELY, TSX-V), which holds a 2% NSR on Wallbridge’s (WM, TSX) Fenelon deposit, remains halted, pending news…Eric Sprott added 1 million shares of Balmoral Resources (BAR, TSX) yesterday at 47 cents, increasing his stake in the company to 9.1% (16.1 million shares) on a non-diluted basis…the market is not too excited about GoGold Resources’ (GGD, TSX) dilutive PP announced this morning…the company announced it’s raising $15 million through Sprott Capital Partners LP and PI Financial in a bought deal at 70 cents per share…each unit consists of 1 common share and a half warrant exercisable at a price of 85 cents a share, just 2 cents below yesterday’s close, for 2 years…GGD has plunged 14 cents to 69 cents…Calibre Mining (CXB, TSX) has drilled more high-grade intercepts at El Limon in Nicaragua including 11.85 g/t over 5.1 m, 18.65 g/t over 5.1 m, and 4.1 g/t over 20.3 (estimated true widths)…the drilling was successful in expanding Gold mineralization along the El Limon vein system, with high-grade intercepts returned from extensions below the current Limon Norte deposit…CEO Russell Ball stated, “A nice start to our exploration program at El Limon.  We ramped-up the program significantly in January and I am confident that our 2020 drilling campaign will deliver positive results in this world-class, low sulfidation epithermal district”Nighthawk Gold (NHK, TSX) has drilled 12.7 m grading 8.5 g/t Au, including 2.85 m @ 33.7 g/t, at its Treasure Island Gold Project 11 km north of its flagship Colomac Gold Project, within the north-central portion of its 100%-owned Indin Lake Property in the Northwest Territories…drilling continues to define a wide band of consistent mineralization that spans a 750-m long section of the regional contact between metavolcanic and metasedimentary rock units within the eastern part of the 7-km-long Treasure Island…mineralization remains open along strike to the east and west and represents priority ground for future exploration…Ero Copper (ERO, TSX) is swinging back after losing nearly one-quarter of its value in January, thanks to the hype around the coronavirus and plummeting Copper prices…this is not only a very profitable production story but one of the best exploration plays in the marketEro is super-aggressive at pursuing new discoveries on its large-scale holdings in Brazil while it also features strong operational execution and peer-leading organic production growth via its 99.6% interest in Mineração Caraíba S.A. (“MCSA”), a long-established Brazilian Copper mining company with over 40 years of operating history in the Curaçá Valley…ERO is up 49 cents at $19.15 as of 7:00 am Pacific

6.  Palladium is pushing higher again, up $50 an ounce today at $2,265, and 1 of the undiscovered opportunities in the Palladium space is Transition Metals (XTM, TSX-V) with a market cap of only $9 million…this morning the company announced that it has staked 91 claims covering approximately 19 sq. km 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 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, shareholdings of PGM focused companies and royalties”...the Sunday Lake Project is currently being drilled by Implats Canada which is following up on 2018 results that included 41.2 m @ 5.5 g/t PGM; 35.8 m @ 3.9 g/t PGM; and 42.9 m @ 3.4 g/t PGM; 61 m @ 2.2 g/t…XTM holds a 25% free-carried interest to feasibility…Transition holds more than 3 dozen projects covering all the major metals…

7. Of the millions of NFL fans that watched Sunday’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…last 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

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  1. Jon –

    Care to speculate on what GGI’s Regoci could do to stimulate GGI? It’s been a long, cold winter for GGI fans. Time for shock and awe!

    Comment by MARSHALL — February 4, 2020 @ 8:44 am

  2. Marshall, one thing he needs to do is bring new people into the fold…this will also help re-energize things…I’ve been harping on that for a while…people make the difference, and he must build out the team – especially given the scale of this project…second, and this includes the first point, they need to do a much better job of communicating the story and producing updated and better material…also needs to start bringing in the broader Eskay Camp holdings because there is tremendous ground there, not only along the 12 km Nickel Mountain trend but elsewhere…in short, Regoci has to aggressively counter investor fatigue and get the ball rolling again – not hard to do, really…just do it!…

    Comment by Jon - BMR — February 4, 2020 @ 9:05 am

  3. Jon..Do you have any idea why the drop in CCW..has dropped over 10 cents since last news?

    Comment by Colleen — February 4, 2020 @ 10:20 am

  4. Jon

    can you be more specific on who Regoci should hire to get the story out there and who he should hire to build out the team that would make a difference to the market?

    Comment by gregh — February 4, 2020 @ 10:28 am

  5. First off, gregh, it would start with someone who could aggressively and effectively communicate the story in a way that Regoci can’t (that’s simply not his strength)…but there’s room for several more individuals here, covering everything from geology side (properties) to biz/marketing operations…this is really a large-scale operation when u look at how Nickel Mtn is developing, and of course the broader Eskay Camp holdings and everything else…it requires more people, as simple as that, and a re-energized strategy…

    Comment by Jon - BMR — February 4, 2020 @ 11:16 am

  6. Jon

    The scope of what you envision for GGI sounds expensive. Do you see a deep pockets Nickel Producer getting involved? Otherwise, how does it get funded? Tesla?

    Comment by MARSHALL — February 4, 2020 @ 12:15 pm

  7. Colleen, nothing fundamental – this was totally technically driven and the kind of pullback you normally see in any strong primary uptrend…the exact timing of these things is difficult to predict but it’s a necessary part of the process that helps cleanse, moves paper from weak hands to strong hands, and allows stocks to re-energize and ultimately go to new highs…came on relatively low volume and on a day when the overall Venture was a little weak as Gold and Silver pushed lower…astute traders embrace these mini-corrections at and near strong support…CCW bounced nicely off its rising 50-day, and RSI(2) is at its lowest level (very oversold) in nearly a year…no reason this won’t finish the week on a strong note…

    Comment by Jon - BMR — February 4, 2020 @ 9:32 pm


    Ely Gold Royalties Inc. has entered into an agreement with Eric Sprott of Toronto, Ont., dated Feb. 3, 2020, pursuant to which Ely Gold has agreed to acquire from Sprott a 0.5-per-cent net smelter returns royalty (target royalty) on the gold-producing Jerritt Canyon mine facility, located in Elko, Nev., and currently operated by Jerritt Canyon Gold LLC (JCG LLC) a private Nevada limited liability company (the “Transaction”). Sprott originally acquired the Target Royalty from Veris Gold USA Inc. (“Veris”) in 2014, pursuant to an April 9, 2014 agreement concerning the Jerritt Canyon Mine wherein Veris was obligated to convey and grant the Target Royalty to Sprott. Ely Gold already holds a per ton royalty interest on the Jerritt Canyon processing facilities that it acquired in a private transaction in 2019 (refer to press release dated May 23, 2019).

    In consideration for the Target Royalty, Ely Gold has agreed to pay CAD$8,000,000 to Sprott, payable by issuance of 12,698,413 Ely Gold common shares at a deemed issue price of $0.63 per share (the “Ely Gold Shares”). In connection with its assistance with the Transaction, Ely Gold has agreed to pay a finder’s fee to Medalist Capital Ltd. comprising a cash fee of 1.0% of the Transaction price, plus 300,000 Ely Gold Share purchase warrants each exercisable over a three-year term to purchase one Ely Gold Share at an exercise price of $0.63 per share. All of the Ely Gold securities issued in the Transaction will be subject to a four-month hold period pursuant to applicable TSX Venture Exchange (“TSXV”) policies and applicable securities laws.

    The Transaction remains subject to certain customary commercial conditions, including Ely Gold’s completion of its due diligence on the Target Royalty, settling definitive Transaction documentation, and receipt of all approvals required under TSXV policies and applicable securities laws. As part of its Transaction due diligence, Ely Gold plans to commission and file an independent updated National Instrument 43-101 technical report on the Jerritt Canyon Mine within 45 days of this news release. The last publicly available technical report on the property was filed by Veris in on July 11, 2013 (“NI-43-101 Technical Report Veris Gold Corp. Jerritt Canyon Property, Elko County, Nevada; Effective Date: December 31, 2012”, See http://www.sedar.com).

    Before giving effect to the Transaction, Sprott holds, directly and indirectly, 5,615,454 outstanding Ely Gold Shares, and warrants to purchase up to an additional 19,023,943 Ely Gold Shares at an average exercise price of $0.36 per share. On this basis and given the current approximate issued and outstanding total of 100.3 million Ely Gold Shares, Sprott’s direct and indirect holdings represent approximately 5.6% of the outstanding Ely Gold Shares on a non-diluted basis, and approximately 20.7% on a partially diluted basis. After giving effect to the Transaction, Sprott will hold approximately 16.2% of the outstanding Ely Gold Shares on a non-diluted basis, and approximately 28.3% on a partially diluted basis. However, pursuant to a pre-existing agreement (refer to press release dated November 29, 2019), unless the TSXV accepts Sprott becoming a “Control Person” (as defined under TSXV policies) of the Company, Sprott has agreed not to exercise any portion of his warrants if, as a result of such exercise, his direct and indirect holdings would exceed 19.9% of the outstanding Ely Gold voting shares. The Company plans to seek such an approval at its next annual general meeting expected to be held on or before May 2020.

    About Jerritt Canyon Mine

    Gold was first discovered at the Jerritt Canyon Mine in 1972, with the first gold poured in 1981. Between 1981 and 1999, mining was conducted via open pit. Underground operations began in 1993 with the opening of the SSX-Steer Complex and Smith mine. Presently, the Jerritt Canyon Mine is operated by JCG LLC, a private mid-tier North American gold producer. Its primary assets are the permitted and operating Jerritt Canyon processing plant and associated four gold mines located 50 miles north of Elko, Nevada. According to JCG LLC, since mining began at Jerritt Canyon, more than eight million ounces of gold have been produced. The mineral processing operation at Jerritt Canyon is designed to process highly refractory gold ores up to 4,000 tpd and the mill reported processing in excess of 1.1 million tons in 2017 and 1.2 million tons in 2018.

    Gold mineralization at Jerritt Canyon occurs in both upper plate and lower plate stratigraphy. While approximately 30% of the 119 square mile land package has experienced first-pass exploration, most of the property outside the mined areas, has not been explored to date. Lower plate rocks are known to occur at Jerritt Canyon at surface, near-surface and under valley fill.

    Comment by Jon - BMR — February 5, 2020 @ 5:50 am


    Walker River Resources Corp. has provided additional drill results from the late 2019 reverse circulation drill programs on the Lapon gold project, located approximately 60 kilometres southeast of Yerington, Nev.

    RC drill hole LC19-42 returned 96.03 g/t Au (uncut) over 13.7 meters, including 547.05 g/t Au over 1.5 meters, 115.38 g/t Au over 1.5 meters, and 199.06 g/t Au over 1.5 meters, at a depth of approximately 76 meters.

    RC drill hole LC19-43 returned 94.81 g/t Au (uncut) over 6.1 meters including 305.25 g/t Au over 1.5 meters, and 73.86 g/t Au over 1.5 meters, at a depth of approximately 84 meters.

    RC drill hole LC 19-45 returned 346.4 g/t Au (uncut) over 1.5 meters at a depth of 3 meters.

    Key Highlights:Holes 42 and 43 were only the second and third holes carried out in this new zone discovered in hole 19-35 which returned 1.37 g/t Au over 22.9 meters. (see news release 09-04-19)Significantly, in Hole 42, the assay interval of 199.06 g/t Au over 1.5 meters, was in granite at the contact with the altered zone.To date, mineralization has been discovered in broad, altered, fractured and brecciated NE trending structural zones. Anomalous gold values are denoted in many areas within this zone, and significant higher-grade mineralization over significant widths is located within sub vertical en echelon zones of intense alteration and gold enrichment.To date all the drill holes carried out in the Lapon Rose and the newly discovered zone have returned gold mineralization.The 2019 exploration program was focused on the expansion and delineation of the gold mineralized zones discovered by the Company, as well as exploring other areas of the project in the search for new mineralization and potential discoveriesWalker’s initial geological mapping and prospecting on the Lapon Gold Project, followed by its drill programs, has demonstrated the potential for the emplacement of significant gold mineralization.

    Comment by Jon - BMR — February 5, 2020 @ 5:53 am

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