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May 19, 2020

7 @ 7:00

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1. Gold has traded between $1,726 and $1,743 so far today…as of 7:00 am Pacific the yellow metal is up $6 an ounce at $1,738…the $1,730’s represents key resistance…Silver, this month’s top performing major metal with a current gain of 16.1%, has shot up another 34 cents to $17.31…Copper, Nickel and Zinc are up slightly at $2.40, $5.56 and 91 cents, respectively, while the U.S. Dollar Index has slipped one-tenth of a point to 99.52…there was a sharper-than-expected drop in U.S. housing starts in April, down 30% to a seasonally adjusted rate of 891,000 units vs. a consensus estimate of 950,000 units…the price of a barrel of West Texas Intermediate has topped $30 for the first time since the middle of March on tentative signs that people are starting to drive again amid the Wuhan COVID-19 pandemic…WTI has added $1.33 a barrel this morning to $33.15 after a strong session yesterday…gasoline use in the U.S. has risen by 2 million barrels a day from its bottom in April, according to the Energy Information Administration, though that’s still 2 million barrels below where it was before the pandemic…meanwhile, Validere, a data intelligence firm that advises companies in the energy sector, says traffic volumes in many Asian cities are back to where they were before, especially during weekday commuting times…Biden remains a threat to the Canadian Oil industry: Joe Biden’s campaign promised yesterday to rip up President Trump’s approvals for the Keystone XL pipeline if the former Vice-President wins November’s election…Keystone XL is a 1,900-km heavy-Oil line that would move 830,000 barrels of Alberta bitumen each day to Texas refineries…this is critical for Alberta, the Canadian economy and North American energy security in general…as Vice-President, Biden was a key member of the Obama administration which slow-walked the project throughout Obama’s 2nd term before finally blocking construction outright shortly after Justin Trudeau’s Liberals were elected in 2015“Stopping Keystone was the right decision then and it’s still the right decision now. In fact, it’s even more important today,” Biden policy director Stef Feldman said in a statement yesterday…Quebec Premier François Legault, who has had the smartest and most aggressive re-opening strategy among Canadian provinces, has announced that Montreal-area businesses and daycares will reopen as planned on May 25 and June 1, respectively, with the daily death toll in the province now at its lowest point since April 12…Montreal has been the major hot-spot for COVID-19 in Canada, but most of the province’s confirmed cases have been confined to long-term care homes (serious problems within the long-term care home structure existed long before COVID-19)…other areas of the province were opened up earlier this month in a targeted approach that other provinces would have been wise to follow…Texas is doing well with its reopening strategy…“Let me tell you what many media outlets will not tell you,” Governor Abbot told Hannity on Fox News last night…“Today, when Texas reopened even more for business, maybe as open as any state in the country, today also was the lowest number of COVID deaths since April 3rd. Yesterday was the lowest number of COVID-related hospitalization since the middle part of April. Texas has a downward trend of those testing positive for COVID-19 as a percent of all the people testing postive. All the trends are going good and Texas is opening up for business. Know this,” the Republican governor added, “as we gather today, according to the Dallas Federal Reserve, Texas has the lowest unemployment rate of any large state in America. And we will be adding more jobs by the day”...the Navajo Nation has surpassed New York and New Jersey for the highest per-capita Wuhan COVID-19 infection rate in the United States (2,304 cases per 100,000 people), according to data from Johns Hopkins University…ironically, the nation has had one of the strictest stay-at-home orders in the country (bad strategy?), mandating that residents not leave their homes unless there is an emergency or they are essential workers…even those who leave home for work must have documentation on company letterhead with a verifiable contact number for a manager in order to go…case numbers have continued to rise, however…m

2. President Trump released a blistering letter late yesterday’s to the head of the World Health Organization (WHO), stating that his administration conducted an investigation that confirmed the health body’s multiple failures in the early stages of the coronavirus outbreak, and warned that his current funding freeze will become permanent if the organization does not make “substantive” improvements within 30 days…“It is clear the repeated missteps by you and your organization in responding to the pandemic have been extremely costly for the world,” he wrote in the letter to Dr. Tedros Adhanom Ghebreyesus…“The only way forward for the World Health Organization is if it can actually demonstrate independence from China”…ample evidence points to how China’s Communist Party leadership downplayed the virus’ threat in December and January, while the country’s death totals were also severely fudged (understated)…Trump announced in April that the U.S. would halt funding to WHO…he said at the time that his administration would undertake a 60-to-90 day investigation into why the “China-centric” WHO had caused “so much death” by “severely mismanaging and covering up” the coronavirus’ spread, including by making the “disastrous” decision to oppose travel restrictions on China…

3. Wallbridge Mining (WM, TSX) has cut 70.8 g/t Au over 5.35 m, 32.3 g/t Au over 7.05 m, and 51.4 g/t Au over 2.1 m (true widths estimated at 50% to 80%) in definition drilling outlining high-grade shoots at shallow depths adjacent to the existing mine workings within the Main Gabbro area at its its 100%-owned Fenelon Property…“In addition to delivering exceptional results, the definition drilling campaign in the Main Gabbro has further defined the near-surface zones immediately surrounding existing infrastructure,” stated Francois Demers, Vice President, Mines & Projects of Wallbridge…”This allows us to advance the mine planning required with the goal of taking the Main Gabbro into production in the future while exploration and expansion of Tabasco and Area 51 continues. Eventual production from the Main Gabbro would likely be the first step as we continue to drive this multi-phase project forward”…meanwhile, results from 5 short exploration drill holes testing the near-surface western extension of the Main Gabbro zones were also announced this morning and include 12.1 g/t Au over 1.90 m (FA-20112) and 4.4 g/t Au over 1.15 m (FA-20114) with true widths estimated at 50% to 80%…these intersections are approximately 300 m and 140 m west of the nearest mine workings…drilling has resumed at Fenelon, initially with 4 surface rigs, following the COVID-19 interruption…approximately 26,000 m have been drilled this year and the company estimates completing an additional 50,000 m this year…WM is breaking out to a new all-time high, up a nickel at $1.03 as of 7:00 am Pacific

4. Amex Exploration (AMX, TSX-V) has cut 5.4 g/t Au over 19.65 m, including 97.6 g/t over 0.70 m and 14.8 g/t over 0.70 m, in the widest intercept drilled to date (true width estimated at 45% to 75%) on the High-Grade zone in the Eastern Gold zone of the company’s Perron Project near Rouyn-Noranda…this was drilled as a wedge off hole PE-20144 which intersected 9.73 g/t Au over 9.9 m at a vertical depth of ~780 m…the high-grade intercept in the wedge hole was located 30 m vertically above PE-20144, indicating a possible change in the nature and thickness of the mineralized zone at depth and further to the east…Dr. Jacques Trottier, Executive Chairman of Amex, stated, “Our results indicate the continual expansion of the Eastern Gold zone and Grey Cat zone. We are particularly intrigued and excited by the wide intercept reported in hole PE-20144W1 due to the identification of a 3rd vein further downhole, which is typically not seen in the HGZ. Orogenic Gold deposits in greenstone belts, such as the Abitibi, often change in widths, metal zonation and structural characteristics with depth. We are excited about the prospect of an increased width at the HGZ and look forward to continuing to test this hypothesis going forward as we drill deeper on the system. In addition, our Grey Cat zone continues to deliver, with several broad near-surface intercepts reported that help to define a continuous lens of Gold mineralization”AMX is steady at $1.60 in early trading…

5. The Dow has backed off 130 points as of 7:00 am Pacific after yesterday’s nearly 1,000-point climb…Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin are testifying before the Senate Banking, Housing and Urban Affairs Committee today over steps taken to support the economy amid the pandemic…Walmart (WMT, NYSE) says its e-commerce sales grew significantly in Q1 as customers bought groceries, cleaning items and other essentials online during the early stages of the pandemic…the big-box retailers’s e-commerce sales in the U.S. shot up by 74%, and same-store sales grew by 10% in Q1…in Toronto, the TSX is up 222 points while the red-hot Venture has jumped 15 points to 524 as it attempts to conquer its 200-day SMA…Silver stocks are hot…Canada Silver Cobalt (CCW, TSX-V) is up a penny at 54 cents in early trading with a major update pending regarding Castle East, the most significant grassroots native Silver discovery in Northern Ontario in several decades with extremely high grades in vein shoots (70,380 g/t Ag or 2,053 oz/ton over 0.3 m within a broader zone of 1.4 m (core interval) @ 20,136 g/t Ag or 587 oz/ton in last winter’s 2nd wedge hole)…ounces are known to pile up in a hurry in this district in an area where multiple vein shoots are discovered…CCW confirmed a breakout above its 200-day SMA at 43.5 cents last week…3 previous such breakouts since 2017 have been followed by average percentage gains of 154% within 23 months…Aurcana (AUN, TSX-V) has jumped 14 cents to 67 cents…Dolly Varden Silver (DV, TSX-V) is 5.5 cents higher at 40 cents…Discovery Metals (DSV, TSX-V), halted late in Friday’s session, has announced a non-brokered private placement to raise up to $25-million through the issuance of up to 45.5 million units at a price of 55 cents per unit (includes half a warrant good for 2 years and exercisable at 77 cents per share)…Eric Sprott is adding to his position in DSV by taking $10 million of the private placement, boosting his position in the company to 24.4%…DSV has added 6 cents to 72 cents…among our favorite Gold plays, Probe Metals (PRB, TSX-V) has broken out above a 4-year consolidation flag and Fib. resistance at $1.20…it’s up 7 cents at $1.32Pure Gold (PGM, TSX) has surged to a new high and is up 16 cents at $1.20 through the first 30 minutes of trading…Skeena Resources (SKE, TSX-V) is up 2 pennies at $1.16

6. Corvus Gold (KOR, TSX), which last week announced a new high-grade discovery below its existing Mother Lode deposit in Nevada, announced this morning that it has initiated geophysical surveys throughout the Mother Lode trend to integrate district-scale data into its belt-wide exploration models…the greatly expanded survey as well as other ongoing regional studies and data compilations are designed to effectively and efficiently unlock the significant potential for new discoveries across the belt and throughout the greater Bullfrog Gold District…in addition, Corvus has expanded its land position east of AngloGold Ashanti’s new Silicon discovery and north of a new large claim block recently staked by Kinross Gold…activity in the belt and the Bullfrog District in general is rapidly expanding with new claim staking and new Plan of Operations permits filed for large drilling programs by Corvus, AngloGold Ashanti and Coeur Mining…over the past 2 years, Corvus has successfully defined a new, large and potentially expanding Gold deposit at its Mother Lode Property…this new discovery has recently shown a strong intrusion/structural relationship at depth which is directly related to the overlying sediment hosted Gold deposit…as a result, Corvus believes that the Mother Lode belt may host other related distal higher level epithermal, vein/stockwork mineralization…the large new Central Intrusive Zone (CIZ) discovery below the Mother Lode deposit is in a unique and under-explored geologic setting within a major, past producing Gold mining district…KOR has slipped 12 cents to $3.05 in early trading…

7. Exploration excitement is ramping up in Northern Ontario…we’re all familiar with CCW’s high-grade Silver discovery at Castle East (plus Gold potential) which is about to move into a new phase, and just recently GFG Resources (GFG, TSX-V) cut 71.3 g/t Au over an 8.5-m core length at a vertical depth of approximately 50 m below surface for a new grassroots discovery (drawing in Alamos Gold as a major investor) at its Pen Project immediately west of Timmins and approximately 100 km northwest of Castle…near GFG’s Project, Melikor Resources (MKR, TSX-V) has been drilling into high-grade Gold at its Carscellan Project (CAR-2005 intersected 25.7 g/t Au over 6 m)…MKR has quadrupled in value over the last 10 sessions, trading at 90 cents Thursday morning before it was halted with more news pending…meanwhile, near Thunder Bay, Northern Ontario’s emerging PGM district is about to garner a lot more attention as Clean Air Metals (AIR, TSX-V) gets set to commence trading “on or about” this coming Friday, May 22, according to the Venture ExchangeClean Air will have a war chest of approximately $15 million, some of which came from Eric Sprott, to tackle the highly prospective Escape Lake and Thunder Bay North Projects southeast of the Lac des Iles Palladium mine now owned by Impala Platinum (IMP, JSE)…Jim Gallagher, former CEO of North American Palladium (bought out by Impala) and executive chairman-designate of Clean Air, stated, “The recent acquisition of the Lac des Iles mine by Impala Platinum underscores the globally recognized significance of the PGE-rich Thunder Bay North region. Clean Air Metals has consolidated 2 prospective PGE properties with a significant amount of historical exploration drilling with some impressive PGE-Ni-Cu intercepts in North America and is focused on expanding these results”…with Palladium trading near $2,000 an ounce, and Sprott involved, investor interest in Clean Air is expected to be high…direct beneficiaries should be Benton Resources (BEX, TSX-V), which holds 25 million shares (19.7%) of Clean Air, and Transition Metals (XTM, TSX-V) which owns 100% of the Saturday Night Project and 25% of the more advanced Sunday Lake Project, both right on trend with Clean Air’s properties….keep in mind, all 4 drill holes into XTM’s Big Red Anomaly at Sunday Lake have hit high-grade PGM mineralization including 41.2 m @ 5.5 g/t PGM and 0.57% Cu…Benton’s market cap is only $10 million while Transition’s is only $8 million (XTM has just 47 million shares outstanding). Both are undervalued. Transition just released more solid results from Sunday Lake and also has a lot of other irons in the fire (high-grade Gold, Copper and Nickel, plus ground immediately next to CCW), in addition to its highly attractive share structure…

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  1. Hi Jon,
    Have you heard anything new on G6 Materials (GGG.v) lately? They closed their oversubscribed pp, and things seem to have gone silent.

    Comment by Frank — May 19, 2020 @ 11:27 am

  2. Jon with silver prices rising what are your thoughts on BCK (blind creek resources). You guys have mentioned it in the past and they have a lot of silver and a very low float.

    Comment by Sameer — May 19, 2020 @ 2:12 pm

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