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March 10, 2020

7 @ 7:00

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

1. Gold has traded between $1,669 and $1,653 so far today following one of the worst equity routs ever yesterday…as of 7:00 am Pacific, the yellow metal is trading at its low of the day, down $26 an ounce at $1,653 after briefly topping $1,700 yesterday…Gold, however, has exceptional support and will ultimately benefit immensely from central bank and government stimulus…Silver, which will also come out of this mayhem in a powerful way, has slid 9 cents to $16.90…base metals are rebounding slightly…Copper is up 2 pennies at $2.62…Nickel has jumped 11 cents to $5.77 while Zinc has added a penny to 90 cents…Crude Oil prices have firmed up after the biggest rout in nearly 30 years yesterday as investors gauge the possibility of economic stimulus and Russia signals that talks with OPEC are still possible…Saudi Arabia, playing hardball, launched an all-out Oil war over the weekend, slashing official pricing for its Crude and making the deepest cuts in at least 20 years on its main grades…the Saudis are the world’s lowest-cost producers and also have about 2 million barrels a day of idle production capacity…Riyadh can also use its strategic Oil stocks to boost supplies at very short notice…Russia has a defensive advantage as the Kremlin can dip into its $150 billion (U.S.) wealth fund to offset the slump in Oil prices…those reserves are sufficient to cover lost revenue for 6 to 10 years at Oil prices of $25 to $30 U.S., according to Russia’s Finance Ministry…in the midst of fresh salvos from both sides, former Saudi energy minister Khalid al-Falih is in talks with Russian Energy Minister Alexander Nova in an attempt to reverse the production hikes and revive the collective OPEC-Russia output curbs, according to a Wall Street Journal report this morning…Crude prices dipped as low as $27 a barrel yesterday, roughly half of where they started the year…$20 Oil can’t be ruled out if there’s not an agreement on limiting production, especially in light of a global economic slowdown and if the Saudis are going to push for market share…as of 7:00 am Pacific, WTI has climbed $2.36 a barrel to $33.49…some Oil stocks took staggering hits yesterday including Cenovus (CVE, TSX, NYSE) which lost more than half its value…the mainstream media is burying this in their headlines, but China’s business and travel activities are steadily recovering after being disrupted by the coronavirus outbreak…that’s good news for the markets and the global economy…Nomura estimated in a research report yesterday that about 61.6% of the firms hardest hit by the health crisis in China have resumed work as of March 8, and 74.1% in the broader economy…

2. Chinese President Xi Jinping visited the quarantined city of Wuhan today for the first time since the coronavirus was identified there, reflecting confidence that the epidemic’s spread has been largely contained within China…Jinping’s visit, which came as Italian authorities locked down the entire country and governments from the U.S. to Iran scrambled to contain the spreading virus, follows weeks in which China reported a steady decline in new infections…Chinese authorities recorded just 19 new cases, 17 of which were in Wuhan, and 2 were imported from overseas – marking the 3rd straight day of no locally transmitted cases outside Hubei, the province of which Wuhan is the capital…of the country’s 80,754 patients, nearly 60,000 have already recovered and have been discharged from hospitals…in an unannounced trip today, China’s President arrived in the stricken metropolis of 11 million people to visit front-line medical workers, military personnel and community workers, state media reported…Wuhan, the center of the epidemic and capital of Hubei, has been locked down since late January as part of unprecedented measures curbing movement for hundreds of millions of people across China…

3. The huge drop in Oil prices couldn’t come at a worse time for Canada, a country that has strangely attacked its own Oil and Gas sector the last several years, killing jobs and investment in the pursuit of “saving the planet”…the result is that this critical sector has been severely weakened, and is now highly vulnerable, at the most inopportune time…quite simply, Justin Trudeau has put the Canadian Oil and gas sector in a regulatory straightjacket when, instead, we should be unleashing the full power of our energy sector…the lack of pipeline capacity – Canada’s inability to move as much product as possible as quickly as possible – and a federal government that did nothing as anarchists and fossil fuel haters blockaded Canada’s rail system last month has repelled and disgusted many investors including most recently Warren Buffett who pulled out of an LNG project in Quebec last week…at no time has it been more important for Canada to attract patient, long-term institutional investors in its Oil and gas sector, but disastrous policy choices by professional left wing politicians in Ottawa and elsewhere around the country have scared capital away…it won’t come back anytime soon, and Canadians will pay the economic price…

4. Silvercrest Metals (SIL, TSX) has nearly doubled the size of the high-grade footprint for the Babi Vista vein since mid-November last year…the latest results show higher-grade vein mineralization to depth, including hole UBV1930 with 2.1 m (estimated true width) grading 12,740 g/t Silver equivalent…the 22 infill and expansion drill holes in the high-grade footprint released yesterday are in addition to 14 drill holes in the Babi Vista vein high-grade footprint previously announced on February 25 and November 14, 2019…based on these 36 drill holes, the updated high-grade footprint is approximately 400 m along vein strike by 150 m in height, and open along strike, toward surface and at depth…within this footprint, the estimated average true width of the vein is 1.2 m while the estimated average grade is 16.2 g/t Au and 1,272.9 g/t Silver…this average grade of AgEq is 230% higher than the previous estimate of 753 g/t AgEq with a reduction in estimated average vein width of 45%…CEO Eric Fier commented, “With the further expansion of the Babi Vista vein, we continue to add value through the drill bit at Las Chispas as we systematically discover and expand high-grade Silver-Gold mineralization.  In the last 6 months of drilling, the Babicanora vein, including Area 51 zone, has gone from being the vein with the highest grade of AgEq on the project to 4th on the list, now superseded by the area 200 zone, area 118 zone and now Babi Vista. Babi Vista mineralization starts about 50 m below surface and is open in all directions.  The vein is approximately 230 m north of the Babicanora vein and was discovered while driving the Santa Rosa decline to the area 51 zone.  With the infill drilling program complete, we are now operating 12 drill rigs (reduced from 19 until further compilation work is completed), which are focusing on the extensions of high-grade veins including several new blind (not seen at surface) veins that are being intercepted as we drill along the strike of the Babicanora veins”

5GoGold Resources (GGD, TSX) has cut 9.5 m of 217 g/t Ag and 2.8 g/t Au (5.7 g/t Au equivalent) within 21 m averaging 118 g/t Ag and 1.35 g/t Au (hole LRGG-20106) in the San Juan area of its Los Ricos Project in Mexico, 1 of multiple drill holes released this morning…hole #106 intersected the Los Ricos quartz vein from 101.1 to 122 m…“We’ve increased the pace of drilling at the Los Ricos South Project and continue to hit wide intercepts of good grade,” stated President and CEO Brad Langille...”We’ve released the results of our first short holes along the el Abra outcrop which confirm grade starts at surface, including hole 102 which showed 10.7 m of 235 g/t Silver equivalent.  At the Los Ricos North Project, we are mobilizing and completing preparatory work for our upcoming drilling campaign”...GGD recently raised $25 million at 70 cents per share…it’s off a penny at 61 cents as of 7:00 am Pacific

6. The Dow has rebounded 688 points through the first 30 minutes of trading…the market suffered an historic sell-off yesterday with the Dow and the S&P 500 plunging 7.8% and 7.6%, respectively, the worst single-day performance for each index since October 2008…the Dow’s 2,013 point drop was also the biggest-ever point drop for the 30-stock average…a key support zone for the Dow ranges from about 23,000 to 25,000…President Trump is floating the idea of a fiscal stimulus package, including a payroll tax cut, but nothing concrete has yet been proposed…the triple whammy of the coronavirus, a severe plunge in Oil prices and a big sell-off on Wall Street is an opportunity for Trump to further build on his brand of economic leadership…a spirit of bipartisanship in Congress would be helpful, as difficult as that might be in an election year…in Toronto, the TSX has recovered 474 points after suffering its biggest single-day drop since 1987…the Venture has added 11 points to 474…through yesterday the Index had tumbled 120 points or 21% over 12 sessions, hitting a new all-time low of 463 (3 points below the 2008 bottom)…the 2008 low proved to be one of the greatest buying opportunities ever – we’ll see if history repeats itself…Vaxil Bio (VXL, TSX-V) is the most active in early trading today, up 2.5 cents to 14 cents cents after the company announced that it has submitted a new patent application for its anti-infective vaccines platform as a result of its recently announced COVID-19 candidate discovery… 

7. Pretium Resources (PVG, TSX) has released an updated mineral reserve, mineral resource and life-of-mine (LOM) plan for the Brucejack mine in the Eskay Camp…the updated LOM outlines average annual Gold production of 367,000 ounces for the first 9 years while mining primarily in the Valley of the Kings…at a Gold price of $1,600, Brucejack now has an estimated after-tax net present value at a 5% discount rate of $2.13 billion over the 13-year mine life…while Pretium has consistently been profitable since putting Brucejack into commercial production in July 2017, generating over $500 million of cash flow, annual production and mine grades have fallen short of original expectations…in the Valley of the Kings zone, Proven and Probable Reserves are now 12.8 million tonnes grading 8.8 g/t Au and 10 g/t Ag…the West Zone has Proven and Probable Reserves of 2.9 million tonnes @ 6.8 g/t au and 278.5 g/t Ag, for a total of 15.7 Proven and Probable Reserves grading 8.4 g/t Au and 59.6 g/t Ag (4.2 million ounces of Gold and 30.1 million ounces of Silver)…exploration upside is considerable…

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1 Comment

  1. Would it soon be a good time to dip toes into oil/energy??

    Comment by outbackjack — March 10, 2020 @ 3:47 pm

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