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March 4, 2020

7 @ 7:00

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1. Gold has traded between $1,631 and $1,650 so far today following yesterday’s surge when the Fed suddenly cut interest rates by half a point…as of 7:00 am Pacific, bullion is up $2 an ounce at $1,642…Silver is off slightly at $17.11…base metals are steady with Copper, Nickel and Zinc at $2.56, $5.67 and 89 cents, respectively…Crude Oil has jumped 82 cents barrel to $48 while the U.S. Dollar Index is up one-third of a point at 97.48…the Trump economy remains resilient…U.S. companies kept adding jobs in February despite the coronavirus scare, as private payrolls expanded well above the pace that Wall Street had anticipated…employment excluding government jobs rose by 183,000 for the month, according to this morning’s report from Moody’s Analytics, topping the 155,000 that economists had expected…“COVID-19 will need to break through the job market firewall if it is to do significant damage to the economy,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement…“The firewall has some cracks, but judging by the February employment gain it should be strong enough to weather most scenarios”…Joe Biden’s campaign for the Democratic Presidential nomination got a major boost as he swept to victory in multiple states on Super Tuesday, surprising almost all pundits, although Bernie Sanders claimed the big prize of California where a majority of exit polls showed Democrats in that state have a favorable view of socialism…Michael Bloomberg has dropped out of the race after spending more than half a billion dollars with little to show for it…passenger car retail sales in China, the world’s biggest auto market, fell 80% in February because of the coronavirus outbreak, according to the China Passenger Car Association…the coronavirus epidemic has sparked a bond bonanza in China, with financial institutions and companies rushing to sell debt at low interest rates…since early February, more than 150 Chinese companies, including manufacturers, airlines and property developers, have collectively raised more than 237 billion yuan ($34 billion) by selling so-called coronavirus bonds, which devote a portion of their proceeds to “epidemic prevention and control” efforts within the country…the pace of issuance has picked up as more companies have found they can borrow money cheaply this way…average coupon rates on the new securities, which mostly range from 1.6% to 6%, have in many cases been lower than yields on comparable outstanding debt from the same issuers, according to Wind Info, a data provider…state-owned banks have been the main buyers of the virus bonds…

2. Italy’s government has announced that it will temporarily close the nation’s schools and universities to help contain the COVID-19 outbreak there…the death toll in that country jumped to 79 yesterday, higher than anywhere outside Asia and Iran, up from an official total of 52 on Monday…as of this morning, there are more than 2,500 cases of the virus in Italy…officially, Iran (#2 behind China in terms of reported deaths) has 2,336 cases of the virus and has recorded 92 deaths, although there is speculation that the actual number of cases in Iran is far higher…there are widespread expectations that Italy’s economy will enter a recession because of the outbreak…the euro zone’s 3rd largest economy, Italy was a problematic member of the single currency bloc even before it became the country worst hit by the coronavirus…previously, Italy was expected to grow a meagre 0.5% in 2020

3. Sona Nanotech (SONA, CSE) has partnered with GE Healthcare Life Sciences to complete the COVID-19 Rapid Screening Test (RST)…Sona’s COVID-19 lateral flow test will incorporate GE’s Fast Flow High Performance Membrane (FFHP), specifically designed to allow for multiple optimization techniques…the aim is to get the RST into markets as quickly as possible and the 2 companies will be working in tandem to accelerate that process…Sona maintains all commercial rights to the RST…currently, the majority of testing completed for the COVID-19 virus utilizes molecular based technology (PCR), a costly testing platform that frequently takes 2 to 4 hours to produce results and requires specialized laboratory equipment and skilled technicians to operate…in comparison, lateral flow assays provide results between 5 to 15 minutes and can be administered by a layperson…Darren Rowles, CEO of Sona, stated, “It’s exciting to work with a best-in-class partner like GE Healthcare Life Sciences, drawing on their expertise and to use the new FFHP Membrane”Sona expects to provide near-term updates on the development of its rapid-response COVID-19 test…SONA has been on fire in recent weeks and jumped 29 cents to a closing price of 94 cents yesterday in 30 minutes of trading following a halt for news…profit taking this morning has taken the stock down 26 cents to 68 cents as of 7:00 am Pacific…the mid-60’s represents the top of a strong support band…

4. Yet another example of why Canada is broken…less than 2 weeks after Teck Resources (TECK.B, TSX; TECK, NYSE) pulled its application for the $20.6 billion Frontier oil sands project, Suncor Energy says it expects to spend the next 6 years before regulators on an application it has just filed to extend the life of its main oil sands mine (the Base Mine Extension Project which it doesn’t expect to begin operating until 2030)…that’s a timeline that analysts say is exceptionally long for a replacement project and creates new uncertainty for major projects in Canada…Suncor’s current mine operations are 15 years away from the end of their operating life and the company is looking for approvals to replace existing production by mining the ore in a nearby lease…The Impact Assessment Agency of Canada released Suncor’s project description late Monday, which shows that Suncor expects to spend between 2019 and 2026 in the regulatory process…in its application, the company said it expects to use new technologies in the mine extension that “have the potential to significantly reduce the overall footprint, reclamation timeline and GHG emissions” of the project…in addition, the company pledged to continue “aggressively pursuing paths to reduce emissions in other areas of its business and in ways that sequester carbon and produce net benefits”

5. The Dow is up 502 points after the first 30 minutes of trading…in Toronto, the TSX has added 171 points with the Bank of Canada just announcing a half point interest rate cut…like the U.S. central bank, Canada’s policy-makers cited the spread of COVID-19 for pulling the trigger on their first interest rate cut since 2015…they also made sure it was clear to everyone that more stimulus is possible…“Before the outbreak, the global economy was showing signs of stabilizing,” the Bank of Canada said in a statement…“While Canada’s economy has been operating close to potential with inflation on target, the COVID-19 virus is a material negative shock to the Canadian and global outlooks, and monetary and fiscal authorities are responding”…how the Bank of Canada could state that the Canadian economy has been operating “close to potential”, when that simply isn’t the case, is staggering…the Venture has gained 7 points to 524Canada Cobalt (CCW, TSX-V) is up 2 cents at 56 cents in early trading…CCW has been one of the top performers during PDAC, climbing 40% on the increasing likelihood of a major high-grade Silver discovery at Castle East alongside a newly-reported Gold find approximately 500 m to the southwest…”going deep” in the Abitibi has proven to be successful recently for the likes of CCW, Wallbridge Mining (WM, TSX) and Amex Exploration (AMX, TSX-V)…

6. Wallbridge Mining (WM, TSX), 2 days after announcing a proposed friendly buyout of neighbor Balmoral Resources (BAR, TSX), released a broad set of new drill results from Fenelon this morning in 2 separate news releases…the latest numbers have expanded the high-grade portion of the Tabasco zone to 500 m of strike length and 500 m of downdip extent with assays such as 4.3 g/t Au over 32.5 m in hole FA-19096, and 3.4 g/t Au over 43.7 m, including 5.7 g/t over 19.45 m, in hole FA-20110…holes FA-20118, 119 and 126 (assays pending) all intersected strong mineralization in the West, while holes FA-20116 and 123 (assays pending) are pushing mineralization to the East onto section 10350 E where the Tabasco Zone had not yet been identified…the Cayenne Zone is also showing areas of strong Gold mineralization at depth, as shown by the intersection of 4.6 g/t Au over 15.6 m, including 19.1 g/t  over 2.7 m, in FA-19094, located 75 m down-dip of 17.6 g/t over 11.04 m in FA-19059 announced last summer…additionally, definition drilling in the Main Gabbro zone has expanded known high-grade shoots with intersections such as 40.7 g/t over 5.96 m in hole 190985013…meanwhile, Wallbridge also reported this morning that it continues to drill into wide intersections of 1 to 2 g/t Gold with narrower zones of high-grade material within the Area 51 vein network in the immediate hangingwall to the Tabasco/Cayenne shear system…

7. Growth in the euro zone is likely to be very sluggish over the next decade, experts have warned, and the forecasts were bleak even before the new coronavirus hit the region…“Even before the coronavirus outbreak, dark clouds had been gathering over the euro zone economy, with Italy in the eye of the storm,” economists at ING warned yesterday…“Over the next 10 years, the region’s potential growth rate will likely slow to a crawl while Italy faces a stagnation far worse than anything Japan has seen.  In the next 10 years, demographic and structural headwinds, and a limited appetite for reform, could push the bloc’s potential growth rate to less than 1%, down from the annual average pace of 1.4% of the previous decade”…in the 4th quarter of 2019, euro zone growth was just 0.1% quarter-on-quarter, marking the slowest growth rate since 2013, with its largest economy Germany seeing flat growth, and Italy and France seeing a 0.3% and 0.1% contraction, respectively…

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  1. Are you surprised that SONA has not recovered and is currently sitting at the pre halt price?

    Comment by Reg — March 4, 2020 @ 10:24 am

  2. Not really, needs to breathe a bit after a hard run…landed within a strong support zone today with orderly trading most of the session…

    Comment by Jon - BMR — March 4, 2020 @ 1:07 pm

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