May 11, 2020
7 @ 7:00
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1. Gold has traded between $1,711 and $1,691 so far today…as of 7:00 am Pacific the yellow metal is off slightly at $1,702…Silver, last week’s best performing metal, continues to push higher…it’s up another 8 cents to $15.56…Nickel has added 2 pennies to $5.53…Copper is off a penny at $2.36 while Zinc is up 1 cent at 90 cents…Crude Oil has gained 20 cents a barrel to $24.94 while the U.S. Dollar Index has added one-fifth of a point to 99.94…the number of operating Oil and gas rigs in the world’s largest Oil producer fell to 374 in the week to May 8, a record low according to data going back to 1940 from energy services company Baker Hughes…some significant steps will be taken today in the too-slow process of lifting draconian government measures across Canada aimed at limiting the spread of the Wuhan COVID-19 virus…Quebec is reopening elementary schools and daycares outside the Montreal area which has accounted for most of the province’s cases…students will be subject to physical distancing and frequent handwashing while school officials follow public health guidelines for cleaning and disinfection…Quebec is also allowing most retail stores outside Montreal to open today, but pushed back the opening date for schools and other businesses in the hard-hit metropolis to May 25 as case numbers there remained high…restrictions are also easing, but less dramatically, elsewhere across the country including Ontario where non-essential retail stores can open for curbside pickup today…White House advisor Peter Navarro has threatened retaliation against China for its role in the spread of the pandemic as tensions between the world’s 2 largest economies continue to rise…“A bill has to come due for China,” Navarro said during an interview this morning on CNBC’s “Squawk Box”…“It’s not a question of punishing them, it’s a question of holding China accountable, the Chinese Communist Party accountable”…Navarro is one of the chief China hawks in President Trump’s administration and serves as the director of the Office of Trade and Manufacturing Policy…he declined to say whether he was advising the President to impose new tariffs or scrap the “Phase 1” trade deal reached between the 2 countries earlier this year…“They inflicted tremendous damage on the world which is still ongoing,” Navarro correctly noted…“We’re up to close to $10 trillion we’ve had to appropriate to fight this battle”…attorneys general for 18 U.S. states have signed a letter asking bipartisan leaders in both the House and Senate to open hearings into China’s role in the spread of the coronavirus, accusing the communist government of “layers of deceit” in a coverup of the severity of the virus while it “wreaked havoc” in the United States…
2. Sales of Tesla’s (TSLA, NASDAQ) Model 3 sedan in China fell over 64% in April compared with the previous month, despite a recovery in the electric car market there, according to data from an industry body released today…Tesla sold 3,635 Model 3 cars in April – down from 10,160 in March, the China Passenger Car Association (CPCA) said…that fall comes despite a 9.8% month-on-month rise in electric car sales in China in April…the CPCA reported that it is also seeing a bounce back in demand following the outbreak of the Wuhan COVID-19 virus in the world’s 2nd-largest economy…meanwhile, Elon Musk says he will move Tesla’s headquarters out of California after he was ordered by authorities there to keep the company’s only U.S. vehicle plant closed…“Tesla will now move its HQ and future programs to Texas/Nevada immediately,” the CEO tweeted…the company was filing a lawsuit against Alameda County, he added…since March 23, all but “basic operations” have been suspended at Tesla’s Fremont plant, near San Francisco, because of “shelter in place” orders enacted in Alameda County…the factory employs more than 10,000 workers, and makes about 415,000 vehicles every year…California’s government has eased some restrictions around the state this week, allowing businesses to resume operations…however, several Bay Area counties have issued their own criteria for which businesses may reopen, which take precedence…in Alameda, all but essential businesses must remain shut until the end of May…it appears radical California state Democrat Lorna S. Gonzalez from San Diego doesn’t care about job losses from a Tesla departure…her response on Twitter was “F*ck Elon Musk”…she describes herself as a “Mama, Labor Leader turned CA Assemblywoman and Progressive Latina Democrat”…there is nothing “progressive” about cheering the departure of a major company out of a state or province…
3. Shanghai Disneyland welcomed visitors today for the first time since January, becoming one of the highesrt profile tourist spots to reopen as China reboots parts of its economy that were shut down by the pandemic…if today’s reopening was anything to go by, Walt Disney’s (DIS, NYSE) theme park kingdom is likely to regain its magic slowly…visitor numbers were capped, some attractions remained closed and the day featured none of the hallmarks for which the Disney parks are known: parades, fireworks and meet-and-greets with familiar characters…though authorities gave permission for Shanghai Disneyland to reopen at 30% capacity, or roughly 24,000 people a day, the theme park would initially operate at “far below that” level, Disney CEO Bob Chapek said on an earnings call earlier this month…instead, Disney has its “training wheels” on as the company implements new physical distancing procedures…the Shanghai playbook is likely to be replicated as Disney reopens its other resorts in the coming weeks…its U.S. parks have been shut since March…the company’s operating income fell 37% during the 3 months ending March 28 and Disney has said the pandemic cost it $1.4 billion, with the parks division accounting for $1 billion of that…
4. Some significant M&A activity in the Gold sector today…SSR Mining (SSRM, TSX) and Alacer Gold (ALC, TSX) are joining forces…the combined entity will continue as SSR Mining and will be led by Alacer’s Rod Antal as President and CEO and SSRM’s Michael Anglin as Chairman…the new board of directors will comprise 5 directors from each of the current SSR Mining and Alacer boards for a total of 10 directors, including the CEO…how well that will work remains to be seen…Paul Benson, President and CEO of SSR Mining said, “The zero-premium merger of SSR Mining and Alacer creates an exciting leading intermediate Gold producer with exceptional financial strength, robust margins, strong cash flow generation, and long mine lives that will be run by highly experienced management with a track record of value creation. Consistent with our long-standing strategy of growth through a combination of organic development and M&A, the new SSR Mining will be well positioned to build on the strong foundation of both companies to continue growing and delivering value for all shareholders”…meanwhile, in an interesting 3-way play, Gran Colombia Gold (GCM, TSX) has signed a definitive agreement to complete a business combination with Gold X Mining (GLDX, TSX-V) but that deal is contingent on Guyana Goldfields (GUY, TSX) turning down an offer from Silvercorp Metals (SVM, TSX) and accepting a proposal from Gran Colombia and Gold X…Gran Colombia and Gold X believe the immediate value creation afforded to Guyana shareholders via the upfront offer premium and the ability to realize further value through the continued operations in the new larger, stronger entity represents an opportunity far superior, both strategically and financially, to the proposed transaction between Silvercorp and Guyana announced on April 27…shareholders of Gran Colombia would own ~60% of the combined company, with Guyana and Gold X shareholders owning ~25% and ~15%, respectively, on a basic shares outstanding basis…the love that Guyana is suddenly attracting is getting reflected in its stock price as GUY has shot above its 200-day moving average (SMA) for the first time since last year…it’s up 10 cents at 80 cents in early trading…
5. The summer drilling season in the Eskay Camp has commenced earlier than usual…Tudor Gold (TUD, TSX-V) has started a 20,000-m drill program at its Treaty Creek Project, a month earlier than last year, with 2 rigs at the Goldstorm zone, on trend from Seabridge’s (SEA, TSX) KSM Project just 5 km to the southwest…Ken Konkin, Tudor Vice President of Project Development, stated: “We are very proud of the hard work and dedication that our crews exhibited during the weeks prior to the start of drilling. Due to their diligence in preparing the camp we have been able to start our drill program a month earlier than last year’s program. The priority is to continue to expand the Goldstorm System to the southeast and to the northeast. The current known length of the northeast axis of the Goldstorm System is over 850 m, and the southeast axis is at least 600 m; the system remains open in both dimensions, as well as to depth. The strongest mineralization encountered to date is from 2 consecutive 150-m step-out holes at the northeast end of the drill grid: GS-19–42 yielded 0.85 g/t AuEq over 780 m with the 300 Horizon averaging 1.28 g/t AuEq over 370.5 m and GS-19–47 yielded 0.70 g/t AuEq over 1,081.5 m with the 300 Horizon averaging 0.87 g/t AuEq over 301.5 m. Our program will be focused on expanding the mineralized area from these 2 very encouraging step-out holes. Furthermore, we plan to continue advancing along the NE axis with yet another 150-m step out hole. The best results from the southeast dimension came from GS-19-52 which yielded 0.78 g/t AuEq over 601.5 m with 1.06 g/t AuEq over 336 m within the 300 Horizon”…
6. The Dow is down 228 points through the first 30 minutes of trading…the S&P 500 has rallied more than 33% since hitting an intra-day low on March 23…that surge has been led largely by mega-cap tech stocks such as Facebook, Amazon, Apple, Netflix, Google-parent Alphabet and Microsoft…stocks that would benefit from the economy reopening are also up sharply since then…MGM Resorts has soared more than 70% while Disney is up nearly 30% in that time…in Toronto, the TSX has lost 84 points while the Venture has gained another 2 points to 494…Canada Cobalt Works (CCW, TSX-V) is pushing higher in early trading, up 4 cents at 47.5 cents, following Friday’s post-market news that shareholders voted 99.92% in favor of a name change to Canada Silver Cobalt Works, better reflecting the significance of the company’s high-grade grassroots Silver discovery immediately adjacent to 3 past producers including CCW’s Castle mine…the name change is expected to become official this week followed by property news…CCW’s EMA-50 has reversed to the upside, a technical event that has immediately preceded other major moves in the stock…northwest of the Castle mine at Gowganda, in the increasingly hot West Timmins area, Melikor Resources (MKR, TSX-V) is up 11 cents at 51 cents after recently reporting strong results there…Freegold Ventures (FVL, TSX), last week’s big winner, is challenging Fib. resistance on the daily chart in the low 40’s, up 8 cents at 42 cents as of 7:00 am Pacific…Galway Metals (GWM, TSX-V) has cut 4.6 g/t Au over 13 m at its Clarence Stream Project in New Brunswick, 92 m down-plunge and west of (and on the same vein) as the Richard zone discovery hole intersection in BL18–12…meanwhile, the gap between the Richard and Jubilee zones has also narrowed to 350 m from 1-km originally after hole 59 cut 5.9 g/t Au over 12 m…Probe Metals (PRB, TSX-V) has resumed drilling at Val d’Or East…the 2020 exploration program consists of 90,000 m of drilling, 290 km of IP, updated 3D geological models and new technical work to advance the project…drilling is focused on expanding and delineating current Gold resources as well as defining potential new deposits within the regional landholdings…of the 90,000 m, the company intends to drill approximately 55,000 m on resource expansion and exploration, 20,000 m on infill drilling and 15,000 m on regional exploration…all of the current known Gold zones are still open along strike and at depth…Cannabix Technologies (BLO, CSE) has developed a new version of its THC Breath Analyzer (THCBA) and is preparing for additional testing with the device…company engineers have updated several components in the THCBA and have changed the form factor for improved handling…testing to date has shown from the time of sample intake, the device can provide results in under 5 minutes…the THCBA uses a disposable spit trap and provides easy to understand screen prompts for the positive and negative detection of THC in breath…
7. PureGold Mining’s (PGM, TSX) construction activities at its PureGold Red Lake mine in Ontario are on schedule…the first Gold pour planned for Q4 2020 aligns with a robust and rising Gold market that significantly exceeds the base-case parameters and strong project economics of the mine’s 2019 feasibility study…PGM also continues to build size and scale..this month it begins drilling with the intent to convert resources to reserves and increasing resources from new high-grade discoveries at surface and at depth…“We are not just building an integrated mining operation,” stated Darin Labrenz, President and CEO…“We are building a fully-funded, long-life growth company uniquely positioned in the Red Lake camp, one of the world’s largest Gold-producing districts. Our opportunity is tremendous: the real potential to become Red Lake’s next senior Gold producer. Our 47 sq. km property possesses a proven, large high-grade Gold system, with the same rocks, structure, timing, geology, grade and endowment potential as Evolution’s Red Lake mine just 15 km away. Work to date has proven we have a clear and precise understanding of the geology and district, and we have demonstrated our ability to execute on our goals. Our future cash flow will fund our aggressive Gold growth plans, and there is no more important time to be building a Gold mine”…
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May 9, 2020
The Week In Review And A Look Ahead!
The “Corona Crash” appears to have marked the bottom of a 2+ year Venture bear market that began in early 2018…
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