7:00 am Pacific

(Exclusive to BMR Subscribers – Not for Distribution or Posting on any Board!)

• After touching an overnight low of $1,587, Gold reversed sharply higher and is currently up $14 an ounce at $1,627.  Silver dipped as low as $14.13 overnight but is now up 16 cents at $14.69;
• The Venture’s rally off historic lows continues with the Index up another 9 points at 405;
• The Dow, which posted its first back-to-back gains yesterday since early February (a combined 2,609 points), has climbed another 652 points as of 7:00 am Pacific;
• Streets in India normally bustling with people and traffic stayed empty today as the country of 1.3 billion people endured the first day of a national lockdown brought on by the Wuhan COVID-19 virus.  Indian Prime Minister Narendra Modi announced the measure yesterday, saying that people would have to remain in their homes for the next 21 days, with only essential services remaining open
• Nevada’s Democratic governor has signed an emergency order barring the use of anti-malaria drugs (chloroquine and hydroxychloroquine) for someone who has the virus.  The move comes a day after a Phoenix-area man and his wife were in critical condition from taking an additive used to clean fish tanks known as chloroquine phosphate, similar to the drug used to treat malaria.

U.S. Jobless Claims Top 3 Million, Twice The Estimate 

A record 3.28 million U.S. workers applied for unemployment benefits last week as the Wuhan COVID-19 virus hit the economy, immediately ending a 10-year  job expansion.

“We’re Not Going To Run Out Of Ammunition”

Federal Reserve Chairman Jerome Powell pledged this morning that the central bank will keep using the tools it has to fight the economic collapse brought on by the pandemic.  In an interview with NBC’s “TODAY“, the central bank chief said the recent initiatives the Fed has taken will help provide capital to businesses that need it and will be especially helpful once the virus is brought under control.  “When it comes to this lending, we’re not going to run out of ammunition, that doesn’t happen,” he said.  “We still have policy room in other dimensions to support the economy.”

Over the past 2 weeks, the Fed has taken its benchmark rate to near-zero and initiated a slew of measures aimed at keeping credit flowing.  The Fed also has joined the Treasury Department in programs that will provide funding to businesses of all sizes, and has started buying corporate bonds and other assets where it has not been involved previously in order to free up frozen credit markets.

Powell said the Fed is aiming at “places where credit is not being offered where it should be offered.  We can step in and make that happen. That’s a very positive thing and appropriate thing in this highly unusual situation we’re in,” he said.

In addition to the other steps, the Fed has relaunched its asset-purchasing program, vowing to buy as many bonds as needed to keep markets and the economy functioning properly.

Silver Sizzles Again

Retail interest in Silver has picked up dramatically across the globe since last week.  In one measure of that, the U.S. Mint has reported Silver coin sales of 4.83 million ounces so far in March, which is nearly 4 x more than last year’s monthly average of 1.24 million ounces.

Technically, Silver formed what clearly appears to be an important bottom during last week’s panic when the metal plunged as low as $11.72.  The total move off the 2008 low around $8 was 6-fold, further supporting John’s long-term Silver chart from as far back as a year ago that showed how Silver was poised to reach measured Fib. resistance in the $70’s during the early 2020’s.

The “WHY” is now very apparent.

Below is John’s latest short-term chart which shows how extreme oversold conditions gripped the market last week with a breakout above the sharp RSI(14) downtrend line in recent days.  This is a dramatic reversal.

Canada Cobalt (CCW, TSX-V)

If Silver has indeed started a move that’s going to take it to new record highs, Canada Cobalt (CCW, TSX-V) – soon to be renamed Canada Silver Cobalt – is also going to hit record highs just based on the new discovery at Castle East which has the potential to match or exceed the ~70 million ounces historically mined within 2 km to the west along the shallow western margin of the Nipissing diabase.

This is the best Silver play in Canada.  Don’t be surprised if CCW comes out of the “Corona Crash” with a MASSIVE move to the upside.  In fact, it’s starting now as the stock confirmed a technical reversal yesterday and climbed as high as 39 cents.  News is expected soon.

Key support has held at the rising 1,000 day SMA in addition to the mid-20’s (as we saw last year).  Unlike most stocks, CCW’s 200-day SMA (currently 41.5 cents) has not gone into decline.

A move back above the 200-day is imminent, especially as the Venture continues to gain traction.

Grade Is King

The best Silver discovery in Canada at the moment belongs to CCW.  The 2008 financial crisis marked the beginning of a spectacular 6-fold move in Silver from just above $8 to nearly $50 by early 2011.  “March Madness”, featuring an initial head fake lower in Silver just like in 2008, has laid the foundation for a similar run in the metal to new all-time highs over the next couple of years.  Silver stocks will go insane.

The strategy of “going deep” in the Abitibi has paid off big-time for CCW and the likes of Wallbridge (WM, TSX) and Amex (AMX, TSX).  All 3 have out-performed their peers in recent months and will continue to do so.

We’re just days away from a “major update” from CCW, and “High-Grade Halliday” isn’t going to disappoint in our view.

What’s particularly attractive about CCW at the moment is that while investors are seeing a lot of promise at Castle East, including some world class Silver grades, the extent of this new deposit (or series of deposits) is likely to be a big upside surprise.  Historically, 95% of the Silver produced in the Gowganda Camp (60 to 70 million ounces) has come from the robust Miller Lake Intrusion – and almost all of that from the shallow western margin of the diabase where outcrop gave the “oldtimers” an obvious clue where high-grade Silver could be found.

They virtually ignored the area to the east where the diabase dips, forming a “basin”, and virtually no surface clues are present.

Modern geophysics has changed everything – that’s how the CCW discovery was originally made.

What if the “oldtimers” and Agnico Eagle were mining just along the edge of something much, much bigger – and perhaps even better in grade?  Wouldn’t be the first time we’ve seen that in this business!

CCW VP Exploration and former Kirkland Lake (KL, TSX; KL, NYSE) resource geologist Matt Halliday, in tandem with Doug Robinson, has “cracked the code” at Castle East – that’s our conclusion based on a growing amount of evidence including news March 2 of a Gold opportunity at Castle East as well.

Matt Halliday, CCW VP Exploration

Castle East, also now confirmed to host Gold-rich quartz veins in an Archean package above the diabase, is impregnated with much more productive differentiated diabase (gabbro) than previously recognized immediately adjacent to ~70 million ounces of historical production.

Furthermore, the extremely rich ore shoot (>1,000 oz/ton) that CCW has already identified can be relatively quickly accessed through an exploration ramp that also opens up the broader Castle East area to highly efficient drilling strategies once the vein structures can be seen in 3D.  It doesn’t take many tons at extraordinary grades to drive game-changing revenue for a junior like Canada Cobalt.  Grade, as always, is King.

The PolyMet processing facility acquired by CCW just a 75-minute drive from the Castle Property is “icing on the cake” as it makes this new discovery more valuable than ever.

Note:  John, Jon and Daniel hold share positions in CCW.  Jon also holds share positions in AMX and WM.

11:30 pm Pacific

BullMarketRun.com

Are We Doing The Right Thing?  

An increasing number of countries around the world are closing borders and locking down cities to stem the spread of the Wuhan COVID-19 coronavirus, but this approach simply isn’t sustainable and could send dozens of countries over the economic cliff.  The stakes are huge and power politics, nationally and globally, are at play like never before.

In Canada just last month, we had an excellent example of a situation that was allowed to get crazily out of control due to inept governments (federal and provincial), the power of social media and the cheerleading of an agenda-driven mainstream media.  A handful of anarchist “hereditary chiefs” – a bunch of bad actors who are also climate change extremists – and a relatively small contingent of anti-capitalist professional protestors (some of them foreign-funded) stirred up a frenzy and shut down large parts of our national rail system and other critical infrastructure over an already-approved $6 billion jobs-rich LNG Project.  These individuals were highly skilled at social media, and many members of the mainstream media eagerly helped pour gas on their fire.

The same federal government that tripped over its own feet and allowed significant economic damage to be inflicted upon Canada during those few weeks in February is now telling us what we need to do to win the war against an invisible enemy known (except among the politically correct left) as the Wuhan virus.  Our Prime Minister is so astute about these matters of standing up for Canada, and protecting Canadians’ health and the Canadian economy, he refused to impose a travel ban on China, the source of the virus, in late January/early February.  “There is no place in our country for discrimination driven by fear or misinformation,” Trudeau actually said, though his decision not to act in the best interests of Canadians was driven by fear of retaliation by communist China.

A growing chorus of people are coming to the conclusion that the current “remedy” for the Wuhan COVID-19 virus is actually worse than the “disease”, which for the vast majority of individuals resembles the common cold or flu. Ordinary people, medical experts, business and political leaders are starting to question the idea of a self-imposed shutdown of economies and unprecedented government spending (record deficits and debt) and intrusion into our daily lives.

Vancouver grocery store, March 23.

How much economic cost can we bear, how much government debt can we rack up, and how many people’s livelihoods are we prepared to destroy, all in a bid to save an unknowable number of lives infected by the Wuhan virus? The virus must be taken seriously but a more targeted approach – one that efficiently tests far more people, isolates those with the virus, and protects society’s most vulnerable – is the only sustainable path forward.

Latest developments:

• Total number of confirmed Wuhan virus cases across Canada now stands at 2,792 while the death total has climbed to 26;
• After hours of tense negotiations, the government and opposition parties in the House of Commons are nearing a deal on a massive $82 billion aid package for the tumbling Canadian economy.  Trudeau has faced stiff backlash over his incredible original proposal to grant cabinet extraordinary powers to borrow and spend without Parliamentary approval;
• Non-essential businesses in Ontario have been ordered to close.  Ontario’s inept testing for the Wuhan virus is coming under increasing attack – people are waiting up to a week to receive results, and only 3,000 tests are being conducted each day;
• The Wuhan virus is driving the natural instinct of British Columbia’s NDP socialist government to spend money it doesn’t have.  The NDP has announced $5 billion worth of initiatives ($2.8 billion on people and services, and $2.2 billion on businesses and “economic recovery in the future”) to combat the virus.  B.C. officially has more than 600 confirmed cases.  However, the limited number of people in ICU for the virus roughly approximates the number of people in ICU for the regular seasonal flu.  Health Minister Adrian Dix has said provincial health orders in response to the pandemic would remain in place until at least the end of April. Those orders include the closure of bars, restaurants and personal service businesses, as well as a ban on gatherings of more than 50 people.  People are required to keep 2 meters apart when out in public;
• Around the globe, Singapore has announced more lockdown measures tonight – its most stringent so far. Bars, clubs, cinemas and other entertainment outlets will be shut from Thursday until April 30.  The government also ordered malls and restaurants to reduce crowds if they were to stay open.  All religious services have also been suspended.  Despite being one of the earliest countries to report the outbreak, Singapore has not imposed a full shutdown, with schools, offices and shops staying open.  The number of cases in the city-state started climbing last week.  There are now 558 cases in Singapore;
• New Zealand has declared a state of emergency and prepared to go into complete lockdown starting at midnight for a month.  People are encouraged to self-isolate as all non-essential services close.  In neighboring Australia, officials have warned that the surging number of cases could start overwhelming the country’s intensive care units.  Australia has just announced new restrictions this evening which limit the number of people at weddings to 5 and capped funeral attendance at 10.  More non-essential businesses will also be shut;
• The White House and Senate leaders reached a deal late tonight on a massive $2 trillion coronavirus stimulus bill to combat the economic impact of the outbreak;
• In a Fox News virtual town hall this morning, President Trump expressed concern that the country could see an uptick in suicides should the coordinated economic slowdown aimed at preventing the spread of the virus continues much longer, citing Americans’ desire to get back to work.  “You’re going to lose a number of people to the flu, but you’re going to lose more people by putting a country into a massive recession or depression,” Trump said.  “You’re gonna lose people.  You’re gonna have suicides by the thousands.”  In the latest Gallup poll just released, Trump’s approval rating has hit 49%, matching his best performance ever in that poll;
• Brazilian President Jair Bolsonaro is a breath of fresh air with a dissenting opinion on draconian government measures to combat the Wuhan virus.  In a televised address this evening, he took aim at the “hysteria” over the coronavirus and urged that life must continue and jobs be preserved.  “We must return to normality,” he said. “The few states and city halls should abandon their scorched-earth policies.” Coronavirus deaths in Brazil have climbed to 46 from 34 with the number of total cases at 2,201, up from 1,891.

Sona Nanotech (SONA, CSE) 

In the midst of a national and global pandemic, also creating economic upheaval, Sona Nanotech (SONA, CSE) and its partners including GE Healthcare Life Sciences (a subsidiary of GE Electric – GE, NYSE) are urgently taking a working prototype of the world’s most advanced lateral flow Rapid Response Test for the Wuhan COVID-19 virus to the manufacturing stage, with the first pre-orders expected any day now.

We are in a war against the Wuhan virus.  How we fight this war is critical.  SONA, GE and their partners have the weaponry to help us win this war in the smartest and most efficient ways possible.

The SONA-led consortium is a classic example of how entrepreneurship and the private sector are integral to pulling us out of a nightmare scenario that has become reality for North Americans and billions of people elsewhere in the world.

GE, of course, is the only company that has been part of the Dow since the 19th century.  The players involved in this mission – SONA, GE, Bond Digital Health, The Native Antigen Co., and individuals such as SONA CEO Darren Rowles and scientific advisers Fiona Marshall and Sandy Morrison – are the best at what they do, and their project is already being labelled a “major milestone” by health agencies across the world.  These agencies are scrambling to find creative ways to test for a highly infectious virus while reducing the severe stress on frontline healthcare systems.

SONA has been one of the best performing stocks in the world over the past 6 weeks, initially uncovered by BMR when it was trading at just 30 cents.  We’ll have a subscriber update pre-market tomorrow.

Note:  John and Jon hold share positions in SONA.