BullMarketRun.com

1. Spot Gold has traded between $1,730 and $1,711 so far today…as of 7:00 am Pacific the yellow metal is off $17 an ounce at $1,713…Silver has retreated 13 cents to $15.13…Silver investment demand continues to increase significantly, based on global ETF inflows…meanwhile, the Silver market surplus is set to shrink by more than half in 2020 due to shuttered mines…total Silver supply is expected to top consumption by 14.7 million ounces this year, well down from 31.3 million last year, according to estimates by Metals Focus for the Silver Institute…Silver coin and bar demand is set to rise 16%, the most since 2013…Nickel, up for 3 straight weeks, is flat at $5.49…the rebound in Nickel has occurred as stainless steel demand recovers in China, just as ore supply from top producer Philippines is hit by lockdown measures to stem the pandemic…Copper and Zinc are unchanged at $2.31 and 85 cents, respectively…Crude Oil for June delivery is taking a beating to start the new week, down $4.34 a barrel to $12.60…at closely watched Cushing, Oil in storage rose by about 10% in a week to 59.7 million barrels, about 25 million barrels shy of its capacity…“The market knows that the storage problem remains and we are on a calculated path to reach tank tops in weeks,” stated Bjornar Tonhaugen, head of Oil markets at Rystad Energy…“Actions are needed now as the problem stopped being theoretical and far away. The storage clock is ticking for producers and we are approaching the final countdown if no further action is taken”…the U.S. Dollar Index has slipped more than one-third of a point to 99.97…

2. Residents of Canada’s 2 largest provinces are expected to learn this week what the path to a new normal might look like when the governments of Ontario and Quebec unveil their initial plans for reopening their locked-down economies…the smartest strategy so far has come from Common Sense Saskatchewan, but keep in mind that Canada overall is trailing many other countries – including heavily affected Italy – in terms of initiating steps to get its economy up and running again…Ontario Premier Doug Ford, who referred to weekend protestors of his province-wide lockdown strategy as “yahoos”, is planning early this week to unveil a framework for kickstarting the province, while Quebec Premier Francois Legault is also expected to reveal his own timeline for reopening…British Columbia needs a major wake-up call…outside of metro Vancouver there are few cases of COVID-19 in this province of 5 million (less than 1,900 cases overall, 70% less than the Canadian provincial average), yet Public Health Officer and WHO booster Bonnie Henry doesn’t want to follow the Saskatchewan approach until the “curve” not only flattens but “bends down significantly”…of course, the more Bonnie’s curve bends downward as the lockdown in this province continues, the more the economy spirals downward, downward, downward…Smithers, the hub of the B.C. exploration sector with a population of about 6,000 (regional pop. is about 20,000), has only 1 or 2 known cases of COVID-19, yet is also in lockdown – a classic example of how more rural areas are getting screwed but people are afraid to speak up…BMR co-sponsored a major event in Smithers February 29 (Canucks’ 50th anniversary Alumni Game), the last major public event in that community prior to the lockdown, which drew over a thousand fans to a jam-packed Smithers arena…a banquet was also held the night before…again, there are only 1 or 2 known cases of COVID-19 in Smithers…the government’s “cure” for COVID-19 has been far worse than the disease in that community, and many other towns and cities in the province…a recent survey showed 4 in 10 B.C. businesses forced to shut down aren’t sure if they’ll be able to remain in business…what about the health affects of that on British Columbia citizens?…a poll released late last week by Insights West found the following: “The emotional burden on individuals in our province has been dramatic, which is why we are seeing these kinds of numbers,” stated Steve Mossop, the President of Insights West…“To see one-quarter of the population not coping well, and the majority of us feeling more stress, anxiety and worry shows that this pandemic has impacted us far beyond the physical and financial level”…

3. Congress is deploying a “whatever it takes” approach to combat the economic carnage of the Wuhan COVID-19 pandemic – what will happen when the bill comes due? (that’s why Gold is headed to ~$3,000)…“Stay-at-home” orders issued by more than 40 U.S. governors have brought economic activity to a grinding halt, putting more than 26 million Americans out of work over the past 5 weeks…to cushion the blow, Congress has enacted 3 separate coronavirus aid packages, totalling nearly $3 trillion, that provide aid to the individuals and businesses most impacted by the pandemic…spending from all levels of government is on track to reach almost 50% of U.S. GDP this year, something that has only previously happened during World War II…We’ve got to get government spending under control,” Stephen Moore, an economist at The Heritage Foundation told FOX Business…“When you’ve got the government spending almost more than the private sector is now, you know, Houston, we’ve got a problem”…

4. Eric Sprott’s interest in Silver is accelerating – he’s investing $60 million into Mag Silver (MAG, TSX) at a price of $13.25 per common share, it was announced this morning…MAG intends to use the net proceeds of the offering to fund exploration and development of the Juanicipio Project in Mexico and for working capital and general corporate purposes…“Mr. Sprott has recognized this as an investment opportunity in a world class Silver project which is heading into cash flow in the near future,” said George Paspalas, President and CEO of MAG…“We understand this is Mr. Sprott’s largest single investment in the Silver space, and would like to thank him for his strong sign of support”…MAG’s principal focus and asset is the Juanicipio Project (44%), being developed in a joint venture with Fresnillo (56%)…the Juanicipio Project is located along the Fresnillo Silver Trend, the world’s premier Silver mining camp…Fresnillo, as operator, is currently constructing and developing the surface and underground infrastructure on the property to support a 4,000 tpd operation…as well, an expanded exploration program is in place at Juanicipio with multiple highly prospective targets across the property…MAG is up $2.24 a share to $15.87 as of 7:00 am Pacific…

5. The Dow is up 141 points through the first 30 minutes of trading…in Toronto, the TSX has climbed 44 points, held back by some profit-taking in Gold stocks and renewed weakness in Oil…the Gold Index has slid 7 points to 340…the Venture, which has posted 3 straight strong weeks, is up another point at 464…Pretium Resources (PVG, TSX) has appointed industry veteran Jacques Perron as President and CEO, effective today…Perron’s career of more than 35 years in global mining has included extensive technical and operational experience…most recently he headed up Thompson Creek Metals until it was acquired by Centerra Gold in 2016…among his previous senior executive positions in mining, he was President and CEO of St. Andrew Goldfields (2007-2013), Senior Vice President of IAMGOLD (2006-2007) and Senior Vice President Canada of Cambior (2004-2006)…Probe Metals (PRB, TSX-V) has acquired SOQUEM Inc.’s 25% interest in the company’s Detour Quebec joint venture project…upon the completion of the transaction, Probe will own 100% of the project…Probe’s Detour Project represents the 3rd largest property on the Quebec side of the Detour Trend, which has seen significant exploration success and over $5 billion (CDN) of M&A activity in 2020…the project provides the potential for Probe to add significant value with over 50 km of strike length along the Lower Detour Deformation Zone, which is contiguous with Kirkland Lake’s (KL, TSX, NYSE) high-grade Zone 58N and Zone 75 discoveries…Barrick Gold (ABX, TSX; GOLD, NYSE) is considering legal action against Papua New Guinea after its government sought control of the Porgera mine and refused to renew Barrick’s mining lease, citing environmental infractions…located in the remote highlands of the South Pacific country, Porgera is a joint venture between Barrick, China’s Zijin Mining Group and the PNG government…in a statement on Friday, Barrick said that Papua New Guinea’s move to seize control of Porgera was “tantamount to nationalization” and “in violation of the government’s legal obligations”…Porgera accounts for slightly less than 5% of Barrick’s annual Gold production and has roughly 10 years of mine life remaining…PNG’s nationalist-leading Prime Minister, James Marape, told reporters on Friday that the government had “every right to refuse the lease,” and did so because of environmental, resettlement, “and many, many other legacy issues”…

6. Azimut Exploration (AZM, TSX-V) has identified a 5.6-km-long series of moderate to strong IP anomalies coincident with a 5.5-km-long Copper soil anomaly, several high-grade mineralized outcrops, and an extensive boulder field at its Pikwa Property in the James Bay region of Quebec…the IP survey was conducted over the winter over the eastern part of the 20-km Copperfield trend at Pikwa, with results released this morning…planned work in 2020 includes an initial diamond drilling program and extending the IP survey westward…most IP-chargeable anomalies correspond to resistivity highs or are located along the contacts of more resistive units (probably more silica-rich units)…the anomalies are subcropping, continuous at depth and generally dip moderately to steeply to the south…2 EM conductors about 4 km west of the IP grid suggest that the IP anomalies may extend farther…the property is part of the James Bay strategic alliance between Azimut and SOQUEM with Azimut acting as the operator…the property was acquired in 2016 following systematic Gold predictive modelling over the James Bay region (176,300 square km surface area) using the company’s proprietary AZtechMine system…

7. Seabridge Gold (SEA, TSX) this morning has released an updated Preliminary Economic Assessment for its 100%-owned KSM Project in the Eskay Camp, supporting the potential for a dramatic improvement in project economics by incorporating the recently expanded, higher-grade Iron Cap deposit into mine plans…this alternate scenario does not impact the current Preliminary Feasibility Study which remains in effect and will be included with the 2020 PEA in an updated NI-43–101 Technical Report to be filed on SEDAR within 45 days…KSM is the world’s largest undeveloped Gold/Copper project measured by Reserves…the project has both Federal and Provincial Environmental Assessment (EA) certificates and the company is maintaining a strong “social license”, having signed Impact Benefit Agreements with the Nishka and Tahltan First Nations, an environmental agreement with the Gitanyow Nation, while letters of support have come from the Gitxsan Nation…Chairman and CEO Rudi Fronk noted that the 2020 PEA was undertaken to assess an alternate approach to developing KSM by incorporating a much larger Iron Cap block cave mine into the production schedule accompanied by smaller open pits compared to prior studies and developing this opportunity much earlier in the project’s mine life…“The benefits of incorporating Iron Cap into mine plans at an early stage have exceeded the upper end of our expectations, not only for the improvements in projected economics but also for the reduction in environmental impact. The PEA is based on Iron Cap’s inferred resource estimate but we are very confident these resources will upgrade to higher categories with further drilling as they have in the past at the project’s other deposits. We therefore think the new Technical Report gives investors a compelling view of the project’s potential,” Fronk said…

2020 KSM PEA Highlights ($U.S.)

• After tax NPV at a 5% discount rate of $6 billion using Base Case 3-year average price assumptions of $1,340/oz Gold, $2.80/lb Copper and a Canadian dollar assumption of 76 cents vs. the U.S. dollar;
• 44-year mine production plan capturing 19.6 million ounces of Gold and 5.4 billion pounds of Copper from the Measured and Indicated categories plus an additional 20.8 million ounces of Gold and 13.8 billion pounds of Copper from the Inferred category;
• Life of mine recovered production of 27.6 million ounces Gold and 17 billion pounds Copper;
• 170,000 tonne per day processing rate capturing 2.4 billion tonnes of mill feed, or only 30% of the total mineral resource;
• 4-year payback on $5.2 billion initial capital;
• Average annual pre-tax free cash flow of $1.45 billion from 1.3 million oz Gold and 265 million pounds Copper produced per year during the initial 5 years of production;
• Life of mine average operating cost of negative $472 per ounce of Gold produced, net of Copper and Silver by-product revenues;
• Life of mine total cost of $4 per ounce of Gold produced, inclusive of all project capital and net of Copper and Silver by-product revenues;
• 57% reduction in mine waste rock compared to the approved EA;
• 33% reduction in greenhouse gas emissions from mine operations compared to the approved EA.

Most Popular Recent BMR Posts

Rapid Response!

How This Pandemic Will Ultimately Help Copper

Wuhan COVID-19 Virus Update

The Cost Of Doing Business With China (The CCP)

“Silver Lining”: Innovative Vancouver Company Provides Help During Crisis

COVID-19 Update

Smithers Shakes Off Turmoil For A Major 3-Day Event Connecting Hockey And The Resource Sector

Turbocharged Nickel

Commodity Check!

The Nickel Mountain Magma Highway

The Dramatic New Chase For A Nickel-Copper-Rich Massive Sulphide Deposit In The Heart Of A Famous Gold Camp