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June 1, 2020

7 @ 7:00

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

1. Spot Gold has traded between $1,726 and $1,748 so far todayas of 7:00 am Pacific the yellow metal is up $4 an ounce to $1,733…Spot Silver, which enjoyed its biggest monthly gain in 8 years in May, has added 27 cents to $18.11Mitsubishi on Silver: “As the world emerges from the first wave of COVID-19, it is important to remember that Silver remains not just a portfolio diversifier alongside Gold but an important industrial commodity in its own right – one that has a largely underappreciated role as a catalyst in the production of ethylene oxide for use in, among other things, plastics for personal protective equipment, and as an anti-bacterial and anti-viral agent in a variety of coating applications”Silver was last week’s and last month’s top performing metal (up 3.8% for the week and 19.6% for the month)…Commerzbank: “It is also evident from the ETF inflows that Silver is currently in greater demand than Gold. The Silver ETFs tracked by Bloomberg have registered inflows of 2,479 metric tons since the beginning of April, i.e. since the start of the quarter. This has seen holdings rise by 12.3%, allowing Silver to overtake Gold in this respect. The increase in Gold ETFs during the same period has been 10.4%. Inflows into Silver ETFs since the start of the year now total 3,786 tons (+20%), which equates to almost two months of global Silver mining production”…Copper is steady at $2.43…Nickel is up 3 pennies at $5.60 while Zinc is unchanged at 90 cents…Crude Oil, coming off its best month ever in May, has retreated 72 cents to $34.77…the U.S. Dollar Index, now under some technical pressure which is positive for both commodities and the Venture, is down one-third of a point at 98.06…many protests across America in recent days are inciting crime, not justice…some major retailers across the country are temporarily closing their stores in areas hit hard with protests against police that have turned into mob violence…Target, Apple and Amazon-owned Whole Foods are among the retailers that announced they would shutter locations temporarily or adjust store hours around citywide curfews…some Apple, Target and Whole Foods stores were damaged by looting, as demonstrations turned violent in multiple cities…Attorney General William Barr stated, “It is time to stop watching the violence and to confront and stop it. The violence instigated and carried out by Antifa and other similar groups in connection with the rioting is domestic terrorism and will be treated accordingly”…the demonstrations spread north…left-wing and anarchist groups in Montreal never turn down an opportunity to stir up trouble in that city…along popular St. Catherine Street yesterday afternoon, people smashed windows and looted stores, while trying to evade police…in some cases, projectiles were thrown at officers…

2. While China’s official PMI, released by the National Bureau of Statistics yesterday, showed continued expansion, the magnitude of the gains fell for a 2nd straight month, and a subindex to measure production slipped to 53.2 from 53.7 in April – pointing to sluggish demand…the new-export-orders subindex, a gauge of external demand, continued to remain deep in contractionary territory, though it improved to 35.3 in May from 33.5 in April…meanwhile, the Caixin PMI survey, which is tilted toward smaller private manufacturers, showed new export orders contracting at an historically sharp rate, Caixin and research firm IHS Market reported this morning…while work resumptions and stabilized supply chains have enabled manufacturers to ramp up their output again, production remains much more robust than demand, Caixin’s senior economist said in a statement accompanying this morning’s release…taken together, China’s manufacturing surveys suggest that the pace of the economic recovery from the coronavirus disruption is slowing, due in large part to lackluster overseas buying…

3. The Dow off slightly as of 7:00 am Pacific…the retail revival is real, but selective…the SPDR S&P Retail ETF (XRT) has rallied 37% since April 1, pacing for its best quarter on record, despite a slowdown in consumer spending and the U.S. savings rate spiking to an all-time high of 33%…the XRT is still down 11% year-to-date, underperforming the broader S&P 500’s nearly 6% loss…stocks that have led the XRT higher this quarter include Wayfair (up 221%), Children’s Place (up 113%), Etsy (up 111%),  Stitch Fix (up 82%), Boot Barn (up 66%), and Tractor Supply (up 44%)…the S&P 500 now trades at 21.6 times expected earnings, putting its forward P/E into territory last seen during the dot-com bubble…however, that P/E ratio is deceptive since it reflects expectations during an unusual period of turmoil…in Toronto, the TSX is up 19 points in early trading while the Venture continues to push higher, up 6 points at 560…the Index enjoyed its best May ever with a gain of 17.4%, putting it 67% above its Corona Crash low…Sona Nanotech (SONA, CSE) was strong out of the gate this morning, up another 61 cents at $3.41 through the first 30 minutes of trading as the company nears potential validation of its Rapid Response COVID-19 lateral flow test…PyroGenesis Canada (PYR, TSX-V) has jumped another 25 cents to $1.68 following a major breakout at the end of last week…Galway Metals (GWM, TSX-V) has intersected 38.5 m (37.9 m true width) of 6.2 g/t Au, including 373 g/t Au over 0.50 m, in hole 100 on the westernmost section of the Richard zone at the company’s Clarence Stream Project in southeastern New Brunswick…in addition, hole 101 (45 m from hole 100) cut the widest intersection yet at Clarence Stream, 85 m (76.9 m true width) grading 1.4 g/t Au…the Richard, George Murphy and Jubilee zones are all part of the same 2.5-km-long mineralized system…GWM is up 3.5 cents on the news at 43.5 cents…Osisko Mining (OSK, TSX) has arranged a $150 million bought deal financing with Canaccord Genuity and Eight Capital acting as co-lead underwriters…they are purchasing 41.1 million units of Osisko at a price of $3.65 per unit (includes a half warrant good for 18 months at $5.25)…Lundin Gold (LUG, TSX) has announced that its first phases for restart of operations at Fruta del Norte are well underway…the company has shipped all of the concentrate and more that had been stored at site since the suspension of operations March 22…on May 15, Ecuador’s national government issued COVID-19 protocols that set out health and safety guidelines for the mining industry in order to enable operations to restart…in addition, the government established logistics corridors that facilitate transportation for the mining industry…“The reestablishment of transportation corridors was an important first step in our plan to restart operations at the mine,” said Ron Hochstein, President and CEO of Lundin Gold“We are in the last stages of finalizing the restart of our operations, which is expected to occur early in the 3rd quarter of this year”...Fruta del Norte is one of the world’s highest-grade Gold mines…LUG’s $50 million bought deal private placement at $12.05 is expected to close on or about June 11

4. The NHL, the first major North American professional sports league to announce a format for its potential return to competition, also has a comprehensive COVID-19 testing strategy…there are screening protocols in place for voluntary workouts and training camp in the hands of individual teams…Deputy Commissioner Bill Daly also said the NHL plans to test all players every day when games start happening…“We will have a rigorous daily testing protocol where players are tested every evening and those results are obtained before they would leave their hotel rooms the next morning, so we’ll know if we have a positive test and whether the player has to self-quarantine himself as a result of that positive test,” Daly said…“It’s expensive, but we think it’s really a foundational element of what we’re trying to accomplish”…each test costs approximately $125, the league says, and Commissioner Gary Bettman estimated 25,00035,000 will be needed to get through the playoffs – a price tag, he concedes, of “millions of dollars”…but athletes have plenty of concerns about risking their health to get back to work, and regular testing is something players insisted on…

5. Four First Nations in Northern British Columbia are devising what they view as a low-carbon path to a postpandemic economic recovery on their traditional territories, highlighting a starring role for liquefied natural gas as a transition fuel to help combat “climate change”…the elected leaders of the Haisla, Lax Kw’alaams, Metlakatla and Nisga’a have formed the First Nations Climate Initiative as a think tank, saying their goal is to attract privatesector investment, bolster economic self-determination and address poverty in their communities…of the 4 indigenous groups, the Haisla Nation is the only one so far to see an LNG project, after LNG Canada began construction in the fall of 2018 in Kitimat at an industrial site on the Haisla’s traditional territory…their end game is to attract investment in at least 2 more LNG projects in Northwest B.C., possibly in the Prince Rupert region, the Nass Valley or Kitimat…in an 8-page position paper, dated May 27, the 4 First Nations describe their aspiration to “create a vibrant low-carbon economy out of the economic devastation COVID-19 has precipitated”

6. Russia has approved an anti-influenza drug, Aviifavir, to treat COVID-19 and will start delivering it to hospitals this month, according to the country’s sovereign wealth fund…the fund, RDIF, has provided money for Russia’s development and production of the drug which is based on favipiravir, an anti-influenza drug developed in Japan under the name Avigan, in a 5050 joint venture with Russian pharmaceutical firm ChemRar…preliminary trials appeared to show that it could shorten recovery times for patients with COVID-19…the final stage of Avifavir clinical trials involving 330 patients are ongoing, RDIF and ChemRar said today, but Russia’s Ministry of Health over the weekend already temporarily approved the use of the drug as a coronavirus treatment…“It’s a major, major step forward,” RDIF CEO Kirill Dmitriev told CNBC this morning…“We believe there are now only two antiviral drugs against the virus that are really effective, those are remdesivir, done by the U.S., and this favipiravir, which also has significant promise”RDIF and the ChemRar Group said today they will deliver 60,000 courses of Avifavir to Russian hospitals in June, promoting it as among the world’s first coronavirus treatments to be approved…“Avifavir is Russia’s first Covid-19 drug and has shown high efficacy in treating patients with coronavirus during clinical trials. Avifavir has received a registration certificate from the Ministry of Health of the Russian Federation. Thus, Avifavir has become the first Favipiravir-based drug in the world approved for the treatment of COVID-19,” they said in the statement…

7. Canadian governments and health authorities who have ignored the negative health affects of lockdown measures are now getting some hard data to chew on…according to a recent survey, one-quarter of Canadians are experiencing moderate to severe levels of anxiety…a similar proportion felt lonely occasionally, or most of the time, in the past week; 20% reported feeling depressed…women, parents with children at home and younger adults, the 18 to 39-year-olds, are faring worse than others…nearly one-quarter of the 1,005 people surveyed between May 8 and 12 reported binge-drinking in the past week…significant numbers reported feeling nervous and edgy, or having trouble relaxing…the findings come from the first wave in what will be a series of surveys by the Centre for Addiction and Mental Health, in collaboration with Delvinia, a research tech and data collection company…Delvina is offering free access to the survey data as a giveback “to help mental health professionals get ahead of what’s coming”, the company says…

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9 Comments

  1. Great volume on MOON today, it looks like the deal Platina made will provide them the funds to advance their project.

    Comment by Danny — June 1, 2020 @ 8:15 am

  2. BEX / AIR / XTM group cooled off around 10%. I’m fairly heavyily weighted to BEX and XTM. Given that AIR debuted already, and that we all feel we’re in the middle of a silver run, would it make sense to temporarily reduce that weighing and move it over to a silver miner? Basically, move to where the momentum is and then move back?

    Comment by schiffwasright — June 1, 2020 @ 10:38 am

  3. In general, schiffwasright, in my experience, the more i dance around the worse off i do. But that’s just been my experience. I’m not great at jumping in and out of stocks in days or weeks, months and yearly movements have been easier and more reliable to predict.

    Sometimes it’s hard enough to make 1 “right” decision. Then when i start dancing around i have to make 3-4-5 and 6 right decisions, as opposed to just one.

    I’m holding BEX at least until we start seeing some drill results from AIR (they’re drilling now) and what they’ve got with Far Lake could also move the needle for BEX.

    Comment by daniel — June 1, 2020 @ 12:06 pm

  4. Jon thinking of selling half or maybe more of Moon and moving funds into a silver play. Any reasons not to sell??

    Comment by Patrick — June 1, 2020 @ 12:19 pm

  5. Hi BMR. Sona responded to inquiry from IIROC after a halt this morning. Sona said testing continues by MRIGlobal and their test is still an “unvalidated prototype”. Are you thinking this means we have a much longer wait for validation of Sona’s covid rapid test? Or, maybe this is just a standard response and validation can still come at any time. Thanks, John

    Comment by John — June 1, 2020 @ 1:17 pm

  6. Jon how long will this environmental baseline study take? CCW hired a firm to do it.

    Vision For Castle East

    Canada Silver Cobalt has launched the permitting process, under Ontario’s “Advanced Exploration Permit” structure, to construct a ramp to the rich Robinson Zone which will also provide underground exploration platforms to greatly enhance new discovery opportunities targeting both high-grade silver and the new gold zone (refer to March 2, 2020, news release) located within Archean rocks overlying the diabase several hundred meters southwest of the Robinson Zone. This streamlined process, which doesn’t require any federal approvals, includes environmental baseline studies for air and water permits in addition to a closure plan for Castle East. CCW has already met with Ministry officials and has engaged a leading engineering firm to help spearhead the process.

    Comment by Don — June 1, 2020 @ 1:18 pm

  7. Just standard language to comply with regulators/disclosure, John…news re: MRIGlobal is imminent, IMHO – that’s certainly what the market is saying, and is consistent with industry timelines…

    Comment by Jon - BMR — June 1, 2020 @ 1:58 pm

  8. Patrick, I have held MOON a long time (probably like you) and totally get the frustration and why you would want to sell. However there is no way I am selling at 1.5 – 2 cents. If Platina decides to make the project in California a focus then I think anyone selling now could have big time seller’s remorse. A lot of silver stocks have moved nicely and you could be selling low and buying high. Just my 2 cents (same price as MOON) for what it’s worth, I am not a registered advisor. Interested to hear BMR’s opinion. Cheers

    Comment by Danny — June 1, 2020 @ 2:39 pm

  9. Thanks Danny sold half. Will use the loss against plenty of profits elsewhere. Will give the other half a few weeks and if nothing happens sell them. Sold IMR as well. No point hanging on to sleepy stocks in a bull market

    Comment by Patrick — June 2, 2020 @ 8:04 am

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