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May 12, 2020

7 @ 7:00

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

1. Gold has traded between $1,711 and $1,696 so far today…as of 7:00 am Pacific the yellow metal is $13 an ounce higher at $1,710…Silver, up 9 cents at $15.57, has confirmed a breakout above Fib. resistance at $15.18 on the daily chart and now appears ready to challenge next Fib. resistance in the $17.30’s…base metals are relatively flat with Copper, Nickel and Zinc at $2.36, $5.54 and 91 cents, respectively…Crude Oil has gained $1.18 a barrel to $25.32 (see below) while the U.S. Dollar Index has slipped half a point to 99.76…U.S. consumer prices in April took their biggest drop in history going back to at least 1957 as the economy reeled from restrictions imposed to control the Wuhan COVID-19 virus…the Bureau of Labor Statistics reported this morning that the CPI excluding food and energy prices slumped 0.4%, the steepest monthly drop since records have been kept…while the decline in prices was broad-based, the biggest swoons in the “core” part of the index came in apparel and transportation services, which dropped 4.7% each…commodities not including food and energy fell 0.7% and medical care services prices were off 0.5%…Tim Hortons executives are meeting with franchisees this week to map out a return to normal, starting with reopening dining rooms as soon as provincial governments say it’s OK for customers to sit down in restaurants again…the new plan revolves around tables (thankfully, the pandemic will force Tim Hortons to keep things a little tidier)…Tim Hortons will widen the space between tables…it will also sanitize tables, as well as chairs, after each use…and it will limit the number of customers allowed at any given table to no more than 4…these are incremental and expected moves but also monumental ones, the first of many little bricks needed to rebuild a blissfully unremarkable fast food dining experience…President Trump is moving to cut investment ties between U.S. federal retirement funds and Chinese equities in a move that it tied to the handling of COVID-19, according to documents obtained by Fox Business News…the White House does not want the “Thrift Savings Plan”, which is a federal employee retirement fund, to have money invested in Chinese equities amounting to about $4 billion in assets…

2. Stanford Internet Observatory says the Chinese communist party’s pandemic propaganda campaign has reached tens of millions of Facebook users since mid-February, and it’s beginning to rival the Russian disinformation campaign during the last U.S. election…much of this propaganda is being broadcast by Chinese state media with verified accounts and millions of followers…for example, CGTN, a Chinese state news agency running some of these ads, has 100 million likes on Facebook – more than triple that of CNN (perhaps a bad comparison given CNN’s horrible ratings)…

3. The biggest U.S. mall owner, Simon Property Group, says it plans to have roughly 50% of its properties reopened again within the next week, as states begin to loosen their lockdown restrictions during the coronavirus pandemic…it made the announcement as it reported quarterly earnings, where Simon’s quarterly profits fell 20.2% during the 1st quarter ended March 31“We are now leading the effort for these local economies to get back to business,” CEO David Simon said during an earnings conference call with analysts…“We want to help these local communities because frankly they depend on our sales taxes”Simon owns roughly 200 malls and outlet centers in the U.S., including Copley Place in Boston and Northgate Mall in Seattle…

4. Voluntary production cuts by OPEC members show that Oil producing countries are doing what they can to stabilize the market during the ongoing pandemic…Saudi Arabia yesterday said it will reduce output by an additional 1 million barrels per day from June 1, in a bid to support Oil prices…following the kingdom’s announcement, the UAE and Kuwait also announced supply cuts…that’s on top of an agreement between OPEC and non-OPEC allies, sometimes referred to as OPEC+, to lower production by 9.7 million bpd from May 1…however, while there are “green shoots,” the outlook is unclear as the pandemic continues…“If we were to get a second wave in the crisis, if we were to get lockdown restrictions re-implemented, that could really change the trajectory of an oil price recovery,” respected RBC analyst Helima Croft (global head of commodity strategy) told CNBC…“We really have to wait and see what is going to happen with this virus before we can basically say we’re in the clear in terms of being on a sustainable path to recovery. The OPEC heavyweights are sort of lining up to try to do what they can to stabilize this market. We’re already starting to see a pick up in demand as global lockdown conditions ease, people start driving again. So, essentially what they’re doing is acting as an accelerator in terms of getting the market rebalanced”

5. Great Bear Resources (GBR, TSX-V) has announced a $20 million bought deal flow-through financing at $17 per share, led by Cannacord Genuity…this comes after GBR revealed more stellar results yesterday from its 100%-owned Dixie Project in the Red Lake District…the company has suddenly doubled the confirmed vertical depth of the Dixie Limb zone, intersecting the zone’s deepest, widest and highest-grade interval to date after drill hole BR-085 was extended from 524 m to a downhole depth of 1,509 m…notably, the drill hole also intersected Gold-bearing quartz veins that may represent the lateral and vertical extension of the Hinge zone at depth, suggesting the Dixie Limb and Hinge zones may coalesce at depth…BR-085 returned 10.2 g/t Au over 19 m, which included 68.6 g/t over 2.65 m, which in turn included 133.5 g/t over 1 m (1,008.55 m – 1,027.55)…check out our most recent Sunday Sizzler for more on GBR, one of our top 10 advanced Gold exploration/development plays, including John’s latest chart…President and CEO Chris Taylor stated, “With our first deep drill hole, we have doubled the known vertical extent of the Dixie Limb and intersected new Hinge-zone-style veins that may represent extensions to the Hinge zone. Results also suggest the Dixie Limb and Hinge-zone veins may merge at depth, an idea we are keen to test with further drilling. BR-085 intersected identical geology to the upper Dixie Limb zone; however, for the first time, we observed Dixie-Limb-style and Hinge-zone-style Gold mineralization in close proximity to each other. The increased grades and widths of Gold mineralization are also consistent with the trend of increasing strength of Gold mineralization at depth seen frequently at Dixie. These results define a new, high-priority exploration target that has the potential to combine the predictable geometry of the Dixie Limb zone with the higher Gold grades of the Hinge zone. Several of the existing LP fault drill holes are ideally located to be similarly extended to deeply target the Dixie Limb and Hinge zones at significantly lower costs than if we had to collar new holes from surface”GBR has added 4 cents to $12.01 through the first 30 minutes of trading…

6. The Dow is up 72 points as of 7:00 am Pacific…the tech-heavy NASDAQ is gunning for its 7th straight winning session…yesterday’s gain put the index firmly in the green on the year, up 2.4% and sitting just 6.5% from its record high reached on February 19…investors continue to pile into tech firms whose businesses are proving to have the most resilience during this pandemic…shares of Amazon and Netflix have both soared more than 30% this year, while Microsoft has gained 18%…chipmaker Nvidia hit a fresh all-time high this morning, bringing its 2020 gains to nearly 40%…in Toronto, the TSX has added 48 points while the Venture has pushed above 500 for the first time in more than 2 months…Sona Nanotech (SONA, CSE) announced this morning that it has received confirmation from an independent laboratory that its COVID-19 lateral flow test achieved a positive response to a recombinant whole spike protein control reagent specific to SARS-CoV2 and matched the limit of detection (LOD) achieved in its own labs…in-house analytical testing has indicated a very high level of specificity to COVID-19, with no false positives being generated…verification and validation work continue, explaining the weakness in the stock this morning as investors were hoping that this final phase would be completed by now…live virus testing will now occur with a U.S. lab…technically, RSI(2) is at extreme oversold levels approaching 1%…SONA is off 20 cents at $1.39 as of 7:00 am PacificCloudMD (DOC, CSE) was halted pre-market, pending news…Fiore Gold (F, TSX) has hit a new high of 89 cents after the company released results from a continuing drill program at its Pan mine in Nevada…the program is part of a long-term program aimed at expanding the resource and reserve base and extending the mine life…the 64 holes reported this morning showed encouraging intercepts including 74.7 m grading 0.74 g/t Au (PR20-040)…the most recent Proven and Probable reserve estimate from 2018 shows 318,000 Gold ounces at an average grade of 0.51 g/t Au with reserve cutoff grades of 0.21 g/t for the North and Central pits and 0.14 g/t for the South Pit…Canada Cobalt Works (CCW, TSX-V) is pushing higher again in early trading, up a penny at 51 cents, following Friday’s post-market news that shareholders voted 99.92% in favor of a name change to Canada Silver Cobalt Works, better reflecting the significance of the company’s high-grade grassroots Silver discovery immediately adjacent to 3 past producers including CCW’s Castle mine…the name change is expected to become official this week followed by property news…CCW’s EMA-50 has reversed to the upside, a technical event that has immediately preceded other major moves in the stock…

7. SilverCrest Metals (SIL, TSX) has drilled 1.8 m (estimated true width) grading 11,148 g/t Silver equivalent, further expanding the extent of the Babi Vista Bein at the company’s Las Chispas Project in Sonora, Mexico…based on 42 holes drilled to date, the updated high-grade footprint is approximately 400 m along vein strike by 200 m in height grading (uncut, undiluted) 20.3 g/t Au and 1,590 g/t Ag, or 3,110 g/t AgEq, over an average true width of 1 m, and open in most directions…CEO Eric Fier, remarked, “We are looking forward to safely resuming operations at Las Chispas later this month in a staged approach with safety and caution in mind. The Babi Vista Vein continues to add value to Las Chispas as we in-fill drill for resource conversion and expansion of additional high-grade Silver-Gold mineralization. Babi Vista was discovered in 2019 while constructing the Santa Rosa decline to intercept the Babicanora Vein in the Area 51 zone. With the schedule delays caused by COVID-19 global impact, resource estimation for the ongoing feasibility study has been pushed for completion to Q4 2020 which allows for additional drill results, including Babi Vista, to be added to the study. More specifically, this additional time should better define the Babi Vista Vein and help in mine design and schedule by accelerating this conveniently located (access via the decline) high-grade vein early in the mine life”

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  1. ObamaGate!!!!!

    Comment by MacT — May 12, 2020 @ 10:28 am

  2. Hi Jon, any recent thoughts on VSBY? They seem to be forming some pretty good partnerships. Thanks

    Comment by Danny — May 12, 2020 @ 10:48 am

  3. Nice results out from Doubleview this morning!

    Comment by Sameer — May 12, 2020 @ 11:01 am

  4. Jon what is your take on the stock price fall after the SONA news

    Comment by Don — May 12, 2020 @ 1:51 pm

  5. Good evening Jon, What are your thoughts on the NR Sona dropped today and the trading action. The SP was brutalized today. Any hope for a recovery soon or will it be sometime next month or longer?

    Comment by Schimy — May 12, 2020 @ 3:11 pm

  6. SONA
    January 14, 2020 – The notes payable will be settled in full by the issuance to these note holders of an aggregate of 2,520,270 common shares at a deemed price of $0.20 per share. All of these shares will be subject to resale restrictions prohibiting their resale until May 14, 2020.

    Comment by Jeremy — May 12, 2020 @ 4:33 pm

  7. Loved it, Don, and hope we see some follow-thru selling in the am.

    Comment by Jon - BMR — May 12, 2020 @ 7:21 pm

  8. Jon why would you say you loved the huge drop in Sona today? Why would you want further selling tomorrow morning? Where do you see a technical bottom support? Thanks Jon. I thought you were a holder in Sona.

    Comment by Sooch — May 12, 2020 @ 7:54 pm

  9. Re sona, I don’t understand your positive comments on today’s trading action. Could you give a little further explanation? Thanks in advance.

    Comment by Mike — May 12, 2020 @ 8:35 pm

  10. Just check the Morning Alert, that will tell you, Sooch…

    Comment by Jon - BMR — May 13, 2020 @ 5:49 am

  11. Jeremy, almost all of that paper (85%) is in the hands of insiders, and the other 15% in the hands of an associate of a director – it’s no threat to the market…

    The fact also that a major U.S. lab is handling the validation is huge plus IMHO…

    Comment by Jon - BMR — May 13, 2020 @ 7:42 am

  12. Hi Jon, not sure to understand the issue of the heat deactivated virus. Is it that they tested/optimised the test with deactivated virus, so they don’t contaminate the lab of course, but then it doesn’t have the same response as the live virus, hence the need to re-validate the test with live virus in a qualified lab and in hospital with real patients?

    Comment by rgiroux — May 13, 2020 @ 12:40 pm

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