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September 8, 2020

7 @ 7:00

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1. Spot Gold has traded between $1,937 and $1,906 so far todayas of 7:00 am Pacific, Gold is off $13 an ounce at $1,915 as the greenback continues to rally…Silver has slipped 74 cents to $26.05 but has strong support in the mid-$20’s…base metals have pulled back modestly…Copper is off 5 pennies at $3.05…Nickel has fallen 13 cents to $6.73 while Zinc is 3 cents lower at $1.09…Crude Oil has dipped another $3.10 a barrel to $36.37…the U.S. Dollar Index has broken out above a short-term downtrend line, up three-quarters of a point to 93.47…however, all the index is doing is rallying back up to where it broke down severely on its long-term chart…the primary trend continues to be bearish…Copper remains Goldman’s “favorite” commodity on the basis of cyclical and structural support and ongoing supply issues…“Recent data points have been supportive, with a tight demand picture increasingly emerging as persistent on-shore demand in China has seen LME inventories fall to the lowest level since 2005 and falling treatment fees signaling a tight concentrate market. Our view remains that Copper can remain stronger from here as Chinese property demand remains at elevated levels, and the supply-side continues to deal with the effects of COVID-19the euro zone economy declined by slightly less than initially estimated in the 2nd quarter, but the drop was still the sharpest ever as consumer spending caved in due to COVID-19 restrictions…GDP fell by 11.8% from the previous quarter and by 14.7% year-on-year, data from the European statistics agency Eurostat showed this morning…U.S. economic data due for release today includes the NFIB small business index, the employment trends index, the IDB/TIPP economic optimism index and consumer credit…President Trump talked up American manufacturing and attacked Joe Biden for his very weak record on China at a news conference yesterday…“We’ll manufacture our critical manufacturing supplies in the United States, we’ll create ‘made in America’ tax credits and bring our jobs back to the United States and we’ll impose tariffs on companies that desert America to create jobs in China and other countries,” the President stated…Trump is fighting not just Biden and the now far-left Democrats but much of the mainstream media which has become a PR arm of the Democrat Party – an enviable position for Trump, actually, entering the November 3 elections…SoftBank is the “NASDAQ whale” that has bought billions of dollars’ worth of U.S. equity derivatives in a move that stoked the fevered rally in big tech stocks before a sharp pullback last Thursday that has stretched into this morning…the Japanese conglomerate has been snapping up options in tech stocks during the past month in huge amounts, fuelling the largest trading volumes ever in contracts linked to individual companies…

2. Tesla (TSLA, NASDAQ) tumbled this morning, opening at $336, after Elon Musk’s electric vehicle maker was left out of the S&P 500 by the committee that decides on new additions to the index…the stock has been on a tear this year, having risen around 400%, and the company is now worth more than some of the world’s largest automakers, including Toyota and Volkswgen…on Friday, the S&P 500 Index Committee decided to add e-commerce site Etsy (ETSY, NASDAQ)automatic test equipment maker Teradyne (TER, NASDAQ), and pharmaceutical firm Catalent (CTLT, NYSE) to the S&P 500, but stopped short of including Tesla…some investors had expected Tesla to be included this quarter after it reported its 4th consecutive quarter of profitability in July…TSLA has fallen as much as 33% in 6 sessions…shares surged 56% from July 22 through August 31, boosted by a surprise profit for the 3 months through June that sealed a 4th straight quarter of profitability and paved the way for the stock to be included in the S&P 500…to be eligible for S&P 500 inclusion, a company must also have a market cap of at least $8.2 billion, be listed on an eligible U.S. exchange, and be among the most actively traded…while Tesla didn’t make the S&P 500 this time around, investors may not have to wait long…TSLA’s addition to the S&P 500 could come as soon as 3 weeks from now following an S&P Index Committee meeting on September 21, which could prompt a new wave of buying…

3. North American equity markets remain under pressure to begin the new trading week...the Dow is down 488 points while the NASDAQ has lost 433 points or about 4%…technology shares suffered their worst sell-off in more than 5 months last week…there was a clear rotation out of hot tech stocks and into stocks that would benefit from a further reopening of the economy…steep losses in Amazon, Apple, Microsoft and Facebook2020’s market leaders – drove the tech-heavy NASDAQ down 3.3% to suffer its worst week since March 20…the Dow and the S&P 500 fell 1.8% and 2.3%, respectively, posting their biggest weekly losses since June…even with last week’s pullback, the NASDAQ is up more than 70% from its March bottom…investors are looking at Apple the wrong way and the company will shed a third of its market cap over the next 12 months, Goldman Sachs says in a note to clients…the bank has been one of the most bearish Wall Street firms on the tech giant, and it reiterated its sell rating on the stock this morning…Goldman says it doesn’t believe the non-iPhone segments of the business will be able to make Apple a true growth company again…in Toronto, the TSX is down 168 points…the Gold Index has fallen 8 points but is trading in an area of exceptional support in the low-to-mid-360’s…the Venture has retreated 15 points to 719Kodiak Copper (KDK, TSX-V) is up a penny at $1.68 after a more than 200% gain last week on confirmation of a broadening Copper-Gold porphyry discovery at its MPD Project in southern B.C. in the heart of the Quesnel Trough, north of the Copper Mountain mine and south of Huckleberry…Sassy Resources (SASY, CSE), a newly-listed Eskay Camp-focused play, hit a new high of 75 cents in early trading after news Friday that the company has found visible Gold over a broad area at surface at the previously undrilled Westmore target, part of its 146 sq. km Foremore Project…first-ever drilling commences in about a week…this has quickly become the best immediate possibility for a new high-grade grassroots drilling discovery in this prolific district…density of veining, vein orientation, magnetic signatures, an abundance of galena, and a multi-phased intrusive all provide concrete evidence that Sassy, with only 29 million shares outstanding, has a legitimate discovery in the works at Westmore which up until just recently was mostly covered by ice and snow (hindering historic exploration efforts)…elsewhere in the Eskay Camp, Metallis Resources (MTS, TSX-V) has commenced a minimum 5,000-m 2020 drill program at its Kirkham Property…initial drilling is focused on the southern section of the Hawilson Monzonite (HM), an approximate 7.5-km-long porphyritic intrusion on the property, targeting high-grade Gold on the eastern margin…significant Gold mineralization has previously been observed within calcareous siltstone units forming an approximate 1 km by km envelope proximal to the eastern intrusive contact of the HM…

4. Dolly Varden Silver (DV, TSX-V) announced this morning that it has added a 2nd drill rig to its Dolly Varden Property to prioritize discovery-focused exploration drilling along a previously untested trend of alteration and mineralization that strikes north from the high-grade Torbrit Silver deposit…additional drilling is also being planned to expand and upgrade the current resources and for future engineering studies…initial assays from this summer’s drilling are pending…the company is continuing with surface exploration work, including mapping and soil sampling, which has already generated additional potential drill targets…Dolly’s geological team is very excited about the prospects along the Torbrit mine trend. Torbrit hosts our highest-grade area of the current mineral resource with overlapping styles of high-grade Silver mineralization,” stated President and CEO Shawn Khunkhun…“We look forward to updating our shareholders with the assays for our drilling completed to date and we are prepared to continue exploring through the fall season with the purpose of maximizing the results of our drill plan and budget”

5. Initial drilling on the new ground acquired through Wallbridge Mining’s (WM, TSX) recent acquisition of Balmoral Resources has expanded the ultimate size potential of the Fenelon Gold system…Wallbridge drilling has extended Gold mineralization 500 m to the west and 850 m to the south of Area 51…this greatly expands the ultimate potential size of the Area 51 vein network Gold mineralization on Wallbridge’s 100%-owned Fenelon Gold Property…the Area 51 vein network, along with the Tabasco, Cayenne and Gabbro Zones, form parts of a large Gold system located within and adjacent to the Jeremie Diorite, which has now been traced for over 1.8 km…“The new, greatly expanded, footprint of the Fenelon Gold System, together with our ongoing infill and step-out drilling program on the original Area 51, Tabasco and Cayenne areas, dictate that we need to consider a significant increase and acceleration of our drilling program to define the full potential of what is rapidly becoming a very large system with multi-million ounce resource potential,” stated Marz Kord, President and CEO of Wallbridge“In the coming weeks we will continue to outline the potential of this Gold system by also exploring the virtually untested extensions of the Tabasco-Cayenne Zones toward the southeast”…drill hole FA-20160 returned 106 g/t Au over 0.60 m, while drill hole FA-20165 cut 6.8 g/t Au over 5.65 m, including 18.9 g/t over 1.95 m…initial drilling to the south of Area 51 has intersected strong Area 51-style Gold mineralization in Jeremie Diorite, including visible Gold in 4 of 6 holes drilled to date (assay results are pending for these 6 drill holes)…

6. Marathon Gold (MOZ, TSX) released encouraging assays this morning from 13 drill holes completed within the 6-km-long Sprite Corridor, including the new Berry Zone…highlights (core lengths) included:

VL-20838 intersected 1.5 g/t Au over 111 m, including 35 g/t Au over 1 m…

VL-20839 intersected 14.4 g/t Au over 9 m, including 60.1 g/t over 2 m, and 4.3 g/t Au over 15 m…

VL-20837 intersected 8.2 g/t Au over 5 m, including 36.2 g/t Au over 1 m…

VL-20844 intersected 4.4 g/t Au over 8 m…

Matt Manson, President & CEO commented: “These most recent assay results from the Valentine Gold Project represent exploration drill holes located both within the new Berry Zone, and step-out holes extending northeastwards towards the Frozen Ear Pond Road area. Well developed Quartz-Tourmaline-Pyrite-Gold vein mineralization is now being consistently intersected over the 650-m strike extent of the Berry Zone between sections 13350E and 14000E. We currently have 4 exploration rigs active at Valentine: the first is conducting exploration step-outs toward the FEP Road, moving north-eastwards from Berry; the second is moving south-westwards toward the FEP Road from the margin of the Marathon deposit; the third is conducting the recently announced 8,000 m in-fill program at Berry; and a fourth rig has been mobilized to the Narrows prospect, located northeast of the Marathon deposit, to conduct scout drilling in an area of recent promising trenching results. The 2020 exploration program at Valentine is discovery-oriented and focused on areas with little previous drilling. The success achieved to date at Berry has allowed us to add an in-fill program aimed at delineating potential mineral resources. We expect to be releasing the results of both the in-fill and greenfield drilling steadily through the fall as it comes available”

7. Ivanhoe Mines (IVN, TSX) and its partners released an independent Definitive Feasibility Study (DFS) this morning for the development of the Kakula Copper mine in the DRC, together with an updated Pre-Feasibility Study (PFS) that includes ore mined from the nearby Kansoko Copper mine in addition to ore mined from Kakula; and an updated, expanded Preliminary Economic Assessment (PEA) for the overall development plan of all the Copper discoveries made to date at the Kamoa-Kakula Project…the DFS evaluates the Stage 1, 6-million-tonnes-per-annum Kakula mine currently being constructed… this first stage yields an after-tax NPV(8%) of $5.5 billion (U.S.), IRR of 77% over a 21-year mine life, and payback of 2.3 years…“The Definitive Feasibility Study is an independent verification by 9 of the world’s top engineering firms of the robust economics generated by our initial, 6-Mtpa starter mine at Kakula,” stated Founder and Executive Co-Chairman Robert Friedland, “while the updated Preliminary Economic Assessment is further validation of Kamoa-Kakula’s potential to rapidly expand to become the world’s 2nd largest Copper mine, with annual Copper output of more than 800,000 tonnes. The Definitive Feasibility Study also confirms what we’ve been telling investors for the past year and a half, and showcasing monthly in our progress galleries – the Kakula mine is being rapidly built, it is ahead of schedule, and is on budget. The estimated remaining initial capital costs for the phased development at Kamoa-Kakula is $0.7 billion (U.S.), of which an estimated $0.65 billion is to complete the 6-Mtpa mine at Kakula. Our proportionate share of the remaining initial capital costs is approximately 50%, with subsequent expansions funded by cash flows. The economic models assume financing will be on the basis of 100% equity, providing the opportunity to increase returns by leveraging commercial or other debt facilities. Most importantly, the Kakula mine has been designed to produce the world’s most environmentally-responsible Copper, which is crucial for today’s new generation of environmentally and socially focused investors”

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1 Comment

  1. Anybody following Encore Energy? They have been halted all day now.

    Comment by Alan — September 8, 2020 @ 10:48 am

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