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August 10, 2019

The Week In Review And A Look Ahead!

Core boxes of “pure metal” from a Nickel sulphide system only the Eskay Rift could produce…

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Daniel’s Den

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August 9, 2019

7 @ 7:00

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1. Gold has traded between $1,495 and $1,509 so far todayas of 7:00 am Pacific, bullion is off $4 an ounce at $1,497…precious metal funds recorded the 4th-largest inflows ever in the week to WednesdayBank of America Merrill Lynch said this morning, as rising trade tensions and global growth concerns prompted a dash for safe havens…Gold is poised for its best week since 2016 as the metal holds onto gains that propelled it past $1,500 an ounce while Silver trades near a 14-month high…Nickel has eased off 17 cents after a huge climb in recent days…Copper is off a penny at $2.59 while Zinc is 2 cents lower at $1.02…Crude Oil has jumped $1.72 a barrel to $54.26 while the U.S. Dollar Index is down slightly at 97.56…this week’s flight from stocks to bonds on U.S.-China trade and currency worries were weighing on the Treasury yield curve – the obscure plot of U.S. interest rates based on maturity dates – and threatening to send 10-year rates below 2-year rates…an inversion of the 2-year and 10-year yields has preceded every recession over the past 40 years…other parts of the yield curve have been inverted for months, with the rate on the 3-month Treasury bill first rising above that of the 10-year note in March…the UK economy contracted in the 2nd quarter for the first time in almost 7 years amid rising Brexit uncertainties and weakening global growth…output fell 0.2% in Q2, worse than the flat performance expected by economists and down from a 0.5% expansion recorded in Q1, according to data from the Office for National Statistics…Britain’s economy has not contracted since the final 3 months of 2012…meanwhile, in Canada, the Trudeau economy lost 69,300 private sector jobs last month while the public sector gained 17,500 jobs, another example of what’s wrong with the Canadian economy thanks to over-regulation, high taxes and a host of other problems…

2. A spectacular drill hole this morning from Garibaldi Resources (GGI, TSX-V) at Nickel Mountain, likely among the very best in Nickel sulphide exploration in many years, even better than EL-1714 that drove GGI to $5 a share in 2017…EL-1953, the 7th hole drilled this summer at the E&L deposit, has hit 18 m of textbook massive sulphide plus sections of semi-massive sulphide in addition to 56.5 m of mineralized orbicular gabbro (moderate to strongly disseminated) in a continuous 86-m intersection (more than twice the core length of the EL-17-14 interval)…EL-19-53 thickens and extends the robust Lower Discovery Zone (LDZ) along a shallow western plunge on the south flank of the E&L Intrusion…estimated true width is impressive at 80% (68.8 m)…assays are pending for EL-1953 but given the known Nickel tenor in this part of the system (7% to 8%), with unusually high Copper, PGE’s, Gold and Silver as well, the grades are almost certain to be world class…the 86-m interval is also very close to surface, having started at just 67 m, with increasing sulphide percentage downhole (Nickel-Copper-rich mineralization continued to 153 m with the hole ending at 171 m)…EL-1953 was described in this morning’s news as “the most extraordinary hole drilled so far at Nickel Mountain”the “leopard print” massive sulphides feature large loop textured pyrrhotite-pentlandite-chalcopyrite with grains of pentlandite up to 4.5 cm in diameter…it’s a geologist’s dream to hit a hole like this, and no doubt Dr. Lightfoot will be showing this one off very soon…

3. EL-19-53 has also provided important information that the main axis of the mineralized system at Nickel Mountain may be controlled by SW-NE trending domains which guides future drilling and geologic models…meanwhile, assays have been received for the first hole of this summer’s program…EL-1947 cut 7.6% Nickel and 3.2% Copper, plus Cobalt, Platinum, Palladium, Gold and Silver, over 6.1 m (and 6.1% Ni and 2.8% Cu over 9.3 m) within a broader core interval of 50.57 m grading 1.5% Ni and 0.94% Cu (true width estimated at 40.45 m)…this hole successfully extends the Lower Discovery Zone to the southeast…the massive sulphide intercept in EL-1947 is 64 m southeast of the EL-17-14 massive sulphide intercept…Jeremy Hanson, VP Exploration for Garibaldi, commented, 2019 drilling is off to a highly successful start as we test for new mineralized structures.  Lab efficiencies are speeding up delivery of assays compared to 2018 and 2017.  Beginning with these SGS results from our first hole, we expect they will be ab le to sustain better turnaround times this month for completed holes, including EL-19-53…it also appears, based on this morning’s news, that GGI has found another olivine gabbro chamber below the Lower Discovery Zone…this is classic evidence of an extensive Nickel Mountain “magma highway”, driving volume…GGI is up 11 cents at $1.71 as of 7:00 am Pacific…the GGI long-term chart, which has been remarkably accurate, is pointing to a breakout in the near future above the key $2.25 Fib. level…the fundamentals support that technical interpretation more than ever after this morning’s news…

4. The largest high-grade Nickel ore supplier in the Philippines, SR Languyan Mining, will stop mining in October, due to resource depletion, according to a report this morning from SMM (Shanghai Metals Market)…the miner, located in Tawi-Tawi, now can ship about 600,000 wmt of Nickel ore in a month, with an average Ni grade above 1.5%…another mine nearby, Altawitawi Nickel, is also verging on resource exhaustion…it has stopped output of high-grade ore, and medium-grade tailings are its major products…resource depletion or degradation have been major concerns for mines in Tawi-Tawi, given the early start of exploitation…the potential shutdown of SR Languyan, together with developments in Indonesia, is set to tighten supplies of high-grade Nickel ore and increase the possibility of a supply shortage…Nickel prices enjoyed their biggest daily advance in a decade this week on fears that Indonesia could bring forward a ban on exports of unprocessed ore…

5. Follow the money: In yet another sign of the huge turnaround in sentiment in the Gold sector, New Gold (NGD, TSX), which was really struggling just a year ago, has announced a bought deal financing of $150 million at $1.60 per share through a syndicate of underwriters led by BMO Capital Markets…the offering is expected to close on or about August 30th…New Gold, which appears to be getting its Rainy River mine on track, will use the net proceeds to enhance financial flexibility and strengthen its balance sheet (including debt repayment)…NGD is down 14 cents…

6. Oil prices rose this morning, supported by expectations of more OPEC production cuts despite the International Energy Agency (IEA) reporting weak demand growth…the IEA said global Oil demand in the 1st half of 2019 grew at its slowest pace since 2008, hurt by mounting signs of an economic slowdown and a ramping up of U.S.-China trade tensions…Oil prices have lost more than 20% from peaks reached in April, putting them in bear territory…Saudi Arabia, de facto leader of OPEC, plans to maintain its Crude Oil exports below 7 million barrels per day in August and September to bring the market back to balance and help absorb global oil inventories…market focus in Oil has clearly shifted…it is squarely on future demand, rather than on supply…the United Arab Emirates also will continue to support actions to balance the Oil market, according to the UAE’s energy minister…the OPEC and non-OPEC ministerial monitoring committee is scheduled to meet in Abu Dhabi on Sept. 12 to review the Oil market…cheap Oil means timid inflation which gives the Federal Reserve more flexibility to cut rates…

7. The Dow has rebounded 137 points through the first 30 minutes of trading…chip stocks are under pressure…President Donald Trump said this morning that the U.S. will cut ties with Chinese telecom giant Huawei, but that could change if there’s a trade deal with China…the move on Huawei came after China halted buying American agricultural products in retaliation for Trump’s surprise tariffs threat last week…China also allowed its currency to drop against the dollar to a key level unseen since 2008in Toronto, the TSX is down 75 points while the the Venture is flat at 596Eskay Camp stocks are firming up after news from GaribaldiGGI neighbor Metallis Resources (MTS, TSX-V), which reported new surface discoveries at Thunder North earlier this week, is up 6 cents at 88 cents…Crystal Lake Mining (CLM, TSX-V) is up half a penny at 35.5 cents while Tudor Gold (TUD, TSX-V) has added 4 cents to 90 cents…CLM and TUD are in the midst of drill programs and could have fresh news anytime now…further north, GT Gold (GTT, TSX-V) is up a penny at $1.21 while Brixton Metals (BBB, TSX-V) has eased off half a penny to 35.5 cents but looks strong…

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Garibaldi Hits Big At Nickel Mountain

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August 8, 2019

BMR Evening Alert: Turbocharged Nickel!

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7 @ 7:00

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1. Gold has traded between $1,490 and $1,504 so far todayas of 7:00 am Pacific, bullion is off $6 an ounce at $1,495…not surprisingly, investors are moving into Gold exchange-traded products at an unprecedented pace with holdings rising to a 6-year high in July, according to the latest report from the World Gold Council (WGC)…the WGC said today that global Gold-backed ETFs and similar products saw $2.6 billion in net inflows last month as holdings increased by 52 tonnes to 2,600 – a level not seen since March 2013“Last month’s flows continued the positive trend that had started in mid-May as uncertainty rose – whether from economic concerns, trade tensions or geopolitical risks – and global monetary policy started to shift to a more accommodative stance,” the WGC stated in a news release…what’s also impressive is that investors jumped into Gold in a strong dollar environment as the U.S. Dollar Index rallied to a new 52-week high last month…the Philippine central bank cut its benchmark lending rates today, following similar moves this week by New Zealand, India and Thailand, among others…interest rate futures now suggest that traders are betting the Fed will cut rates 3 more times by year-end…in another tailwind for Gold, U.S. 10-year Treasury yields dropped further below 3-month rates…Nickel surged to a new multi-year high of $7.60 overnight (see below)…it’s currently up 51 cents at $7.24…Copper has added 4 pennies to $2.61 while Zinc is flat at $1.04…Crude Oil has rebounded $1.04 a barrel to $52.13 while the U.S. Dollar Index is up one-tenth of a point at 97.62

2. China’s central bank stocked up on Gold for the 8th month in a row in July amid escalating trade tensions, according to just-released data from the People’s Bank of China…the country’s Gold reserves rose to 62.26 million ounces from June’s 61.94 million ounces, which means about 10 tons were bought in July…the bank has been purchasing Gold on a monthly basis since December, increasing the value of total Gold reserves as of the end of July to $88.9 billion…the central bank’s appetite for Gold demonstrates a desire to diversify away from the U.S. dollar…China’s Gold percentage of total reserves, however, is still very small considering that the Asian country is the #1 Gold producer and consumer in the world…

3. Chinese exports rebounded in July thanks to increased shipments to Europe and Southeast Asia, but economists expect the turnaround to be short-lived as Beijing and Washington escalate their trade battle…China’s exports rose 3.3% from a year earlier last month, reversing a 1.3% decline in June…a Wall Street Journal poll of 13 economists had forecast a drop of 2%…shipments to Europe and Southeast Asia – China’s top 2 trading partners – also bounced back, while the decline in exports to the U.S. eased after President Trump and Chinese President Xi Jinping struck a conciliatory tone on trade at the Group of 20 summit in Japan in June…many Chinese exporters have made an effort to diversify their overseas markets in recent months as trade uncertainties loomed…exports to the Association of Southeast Asian Nations bloc and EU rose 15.6% and 6.5%, respectively, from a year earlier in July, according to official data…the rising trend in China’s exports to non-U.S. markets may act as a cushion against new U.S. tariffs on Chinese goods…

4. Nickel’s biggest daily jump in a decade astonished investors as the metal spiked as much as 13%, or almost $2,000 U.S. a ton, in thin Asian morning trading, extending a rally over the past month triggered in part by rumours that top producer Indonesia might bring forward a ban on Nickel ore exports…prices eased overnight after the nation’s mining ministry denied that any policy changes are imminent, but speculation remains high…Nickel is by far the best-performing base metal this year, with most other contracts declining…it has benefited from dwindling global stockpiles, long-term prospects for a demand boost from its use in electric-vehicle batteries, as well as concerns that Indonesia could curb supplies…Indonesia is the world’s top source of mined Nickel, most of which goes to China, and its policies to restrict raw materials are closely watched by investors…the government said it will revoke export permits of companies failing to meet smelter construction targets set out by the ministry…

5Marathon Gold (MOZ, TSX) has cut 16 m @ 5.7 g/t Au very close to surface (39 m – 55 m), including 6 m grading 12.9 g/t Au, through infill drilling at its Leprechaun deposit in the Valentine Gold Camp…other results released this morning were highlighted by 26 m @ 4 g/t (7 m to 33 m), including 2 m @ 27 g/t, and 13 m grading 4.1 g/t in another drill hole…the infill/definition drilling program has extended the Main Zone high-grade mineralization for 700 m along strike and to a depth of approximately 250 m…high-grade mineralization was intersected both near-surface and at depth where the PEA resource model has either low grade or gaps…the 69-hole, 20,468-m program is expected to add significantly to the Gold grade and ounces in the next resource update for this part of the deposit which is anticipated to be completed next month…

6. The Dow has rebounded 137 points through the first 30 minutes of trading…in Toronto, the TSX is up 75 points while the Venture has eased off 1 point to 596Brixton Metals (BBB, TSX-V) has closed an over-subscribed private placement, raising gross proceeds of $7.7 million…Eric Sprott took $4 million of that PP, increasing his ownership in Brixton to 18.25%…BBB touched a new 52-week high of 30 cents in early trading…Discovery Metals (DSV, TSX-V) is up slightly after releasing encouraging assay results of 112 underground samples from its drill-permitted Minerva Ag-Zn-Pb Project in Coahuila state, Mexico…3 key underground areas were sampled: Mina Minerva, Concordia and Tercia…at Mina Minerva, underground workings consist of approximately 460 m of lateral development and 2 vertical shafts, 30 m and 59 m deep, respectively…78 samples were taken, dominantly representing manto and vein mineralization encountered during mapping…53 of these samples returned grades higher than 500 g/t AgEq with an average grade of 1,804 g/t AgEq….Gernot Wober, VP Exploration, stated…“The first-ever documented underground results from the historic mines at Minerva were impressive.  Mapping and sampling of the underground workings, in addition to surface work completed previously, continues to indicate that the mineralizing system is very high grade.  The current results are extremely positive and support the drilling program that we plan to initiate later this year, the first drilling the project has ever seen”

7. White Gold (WGO, TSX-V) has released initial assays from its ongoing $13 million 2019 drill program at its recent high-grade Vertigo discovery and on its flagship Golden Saddle deposit, located in the prolific White Gold district in the Yukon…all Vertigo diamond drill holes to date have intersected Gold mineralization and have identified a minimum of 6 high-grade mineralized structures…each structure displays strong continuity from surface to over 250 m down dip and remains open in all directions…at Golden Saddle, WGO drilled 3.6 g/t over 68 m from 73 depth, including 8.1 g/t Au over 13.6 m from 77 m depth…diamond drilling at Golden Saddle has locally extended the GS Main zone 205 m down dip from historic drilling, approximately doubling the down-dip extension in the area which previously only extended to 165 m; added additional mineralization above the previously modelled orebody; and infilled several strategic gaps in the resource model…diamond drilling at GS West successfully proved continuity of the deposit both along strike and down dip, expanding the modelled mineralization beyond the envelope included in the company’s 2019 mineral resource estimate…WGO is off a nickel at $1.19 as of 7:00 am Pacific

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August 7, 2019

BMR Evening Alert!

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7 @ 7:00

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1. Gold has scaled a new 6-year peak today, trading between $1,481 and $1,511as of 7:00 am Pacific, bullion is up $36 an ounce at $1,510 after an important breakout earlier this week through $1,450…U.S.-China trade tensions, global growth concerns and central bank easing around the world are all helping to drive this powerful move in bullion…Gold is also underpinned by inflows into ETFs and unprecedented central bank purchases…Gold’s chart momentum is also attracting a lot of new participants…Silver has soared 63 cents to $17.05…significantly, Silver has broken out above a long-term downtrend line on its monthly chart – this is a major development that we’ve been forecasting for months now…Nickel, which enjoyed a sharp run Monday, has retreated 15 cents to $6.64…Copper is steady at $2.56 while Zinc is off 2 pennies at $1.02…Crude Oil has fallen more than $2 a barrel to $51.55 while U.S. Dollar Index has shed one-quarter of a point to 97.37…euro zone government bond yields have slumped to record lows this week while Dutch 30-year and Irish 10-year yields turned negative for the first time…data from Germany this morning showed the steepest year-on-year decline in industrial production from Europe’s biggest economy since 2009, a contributing factor in Oil’s slide today…President Trump pressed his demand again this morning for the Federal Reserve to accelerate interest rate cuts, saying the U.S. central bank needs to keep pace with its global counterparts…“They must Cut Rates bigger and faster, and stop their ridiculous quantitative tightening NOW,” Trump said in a series of early morning tweets…

2. Gold’s rally has room to run with Bank of America Merrill Lynch (BofAML) projecting that the yellow metal has the potential to reach $2,000 an ounce next year…a big supporter of Gold prices going forward will be the effects of “quantitative failure,” the bank pointed out…“Successive rounds of monetary easing have had a series of side effects.  Beyond falling rates, around $14 trillion of debt now has negative yields (including Germany’s 30Y Bund as of today).  This has been a key driver behind the recent Gold rally and with more easing to come, the dynamic will likely sustain a bid for the yellow metal,” BofAML stated.  “Successive rounds of easing have delivered less bang for the buck and markets are much less enthusiastic about further stimulus. Quantitative failure, under which markets refocus on elevated debt levels or the lack of global growth would likely lead to a material increase in volatility,” the bank said. “Such a sell-off may prompt central banks to ease more aggressively, making Gold an even more attractive asset to hold”

3. Following a decision earlier this week by the U.S. Treasury Department to label China a currency manipulator – the first such distinction since 1994 – officials in Beijing pegged the yuan at $6.9996 against the dollar today, the lowest mid-point setting in more than 11 years, and allowed the currency to drift below the $7 mark for the 3rd consecutive session…the move both indicates China’s need to weaken its currency in order to mitigate the affects of tariffs put in place by the Trump administration as well as Beijing’s insistence that it must be treated as an equal in trade talks with the world’s biggest economy…meanwhile, according to the latest Treasury data, the U.S. is now on a pace to generate $72 billion in tariffs annually, and could well hit the $100 billion mark Trump has touted if new 10% tariffs on $300 billion in untaxed imports from China take effect on September 1 as threatened…

4. Higher Silver prices will definitely help First Majestic (FR, TSX) going forward…the company released 2nd quarter financials this morning, showing a loss of $12 million (U.S.) in Q2 at a realized average Silver price of $14.80 per ounce…other notable numbers in the Q2 results: Pure Silver production was up 16% to 3.2 million ounces; Silver equivalent production was up 25% to 6.4 million ounces; Revenue was up 5% to $83.7 million, primarily due to a 13% increase in Silver equivalent ounces which was partially offset by a 12% decrease in Silver prices; Mine operating earnings were up 283% to $4.2 million; Cash costs were reduced by 10% to $6.84 per payable Silver ounce; AISC were reduced by 10% to $14.76 per payable Silver ounce; Strong balance sheet with $94.5 million in cash and cash equivalents…“In the 2nd quarter, our strong production results were mostly offset by lower Silver prices which impacted revenues, earnings and cash flows compared to the same quarter of the prior year,” stated Keith Neumeyer, President and CEO of First Majestic“Continued strong production from our San Dimas and Santa Elena mines, which together produced approximately 80% of the company’s total production, generated mine operating earnings of $4.2 million.  At Santa Elena, we are already seeing improvements in metallurgical recoveries following the installation of its new high-intensity grinding mill in the 2nd quarter.  This project has been a success and a great example of how new technologies are changing the mining industry”FR is up sharply in early trading, gaining $1.33 a share to $14.45

5. Skeena Resources (SKE, TSX-V) has started surface drilling at Eskay Creek…the 2019 Phase I drill program will initially focus on converting pit constrained Inferred resources to Indicated resources via infill in the 22, 21A, 21E and HW Zones…these zones have been prioritized for helicopter supported drilling such that the remaining drilling in the 21B Zone can be performed with ground transported drill rigs later this year…this initial phase of drilling at Eskay Creek will total approximately 15,000 m over 200 drill holes with average drilling depths of 75 m…hole spacings required for indicated resources varies by zone but will average 15 to 20 m between drill holes…a second drill rig will be mobilized to Eskay Creek in the coming weeks to accelerate the drilling schedule and may focus on exploration step-out holes to test for additional tonnage potential…the company also plans to mobilize a drill rig to the Snip Project on the western side of the Eskay Camp later this fall for a 5,000-m drill program targeting mineralization in the down plunge of the Twin Zone and in the 200 Foot Wall Zone…meanwhile, the Preliminary Economic Assessment Eskay Creek is currently being undertaken by Ausenco Engineering Canada in Vancouver and is scheduled for completion by the end of this quarter…it will include an assessment of an open-pit mining scenario followed by flotation and pressure oxidation of the concentrate for precious metal recovery with tailings deposition similar to historical operations…elsewhere around the Eskay Camp, Garibaldi Resources (GGI, TSX-V) is rebounding, up 11 cents at $1.41 as it bounces off its rising 50-day moving average (SMA), while Tudor Gold (TUD, TSX-V) has pushed above the $1 mark to its best levels since 2016

6. The Dow has tumbled 508 points through the first 30 minutes of trading…the 10-year Treasury yield has slid to its lowest level since 2016…the benchmark 10-year Treasury yield dipped below 1.6% after starting August above 2%…the move further narrowed the yield curve, a widely watched recession indicator…the spread between the 10-year rate and the 2-year is at its lowest level since 2007 at less than 8 basis points…in Toronto, the TSX is off 29 points despite another big jump in the Gold Index which is now at 260, its highest level in nearly 3 years…the Venture has jumped 4 points to 599Eskay Camp stocks are in the green this morning…further north, GT Gold (GTT, TSX-V) has hit a new 9-month high of of $1.21 in early trading while Brixton Metals (BBB, TSX-V) is up a penny a 28 cents…Klondike Gold (KG, TSX-V) is following up on yesterday’s advance with a gain of 3.5 cents to 44.5 cents…KG announced yesterday that drill hole EC-19267 cut 1,009 g/t Au with 1,035 g/t Ag over 1 m (104 to 105 m) in a wider interval that graded 404 g/t Au and 415 g/t Ag over 2.5 m…this is a new discovery 25 m below the known Nugget zone mineralization and remains open…more assay results are pending…

7. Pure Gold Mining (PGM, TSX-V) has closed a $90 million (U.S.) project financing package with Sprott Resource Lending Corp…the financing will fully fund the costs to develop an underground mine at Pure Gold’s Madsen Gold Project in the Red Lake Camp…the financing comprises a credit facility for $65 million and a $25 million callable Gold stream…with the project now fully funded, the company has also announced that its Board of Directors has approved a “decision to construct” for the Madsen Red Lake mine…with approximately $90 million (CDN) in the treasury on closing of the first tranche of this financing, and a recent project agreement signed with Wabauskang First Nation and Lac Seul First Nation, the company will immediately commence development activities with a goal of first Gold pour by the end of 2020…additionally, the financial flexibility provided by this financing and the recent equity raise of $47.5 million (CDN) will allow Pure Gold to continue to pursue a growth strategy, with exploration drilling expected to continue through the balance of the year…

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