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1. Spot Gold has traded between $1,718 and $1,691 so far today…as of 7:00 am Pacific the yellow metal is off $15 an ounce at $1,698…Silver has retreated 19 cents to $15.01…Nickel, aiming for its 4th straight weekly advance, is up another 6 cents at $5.57…Copper has gained 2 cents to $2.24 while Zinc is up a penny at 87 cents…Crude Oil has alternated between gains and losses in a volatile session that at one point saw the June WTI contract drop by more than 20%…as of 7:00 am Pacific, WTI is off 7 cents at $12.71…traders continue to eye dwindling storage capacity worldwide, although some of Crude’s losses were offset by optimism around reopening of economies…the economic impact of the Wuhan COVID-19 virus has ripped through the Oil industry in dramatic phases…first it destroyed demand as lockdowns shut factories and kept drivers at home…then storage started filling up and traders resorted to ocean-going tankers to store Crude in the hope of better prices ahead…now shipping prices are surging to stratospheric levels as the industry runs out of tankers, a sign of just how distorted the market has become…the U.S. Dollar Index has slipped more than a quarter of a point to 99.75…online sales in the U.S. jumped 49% from March 12 to April 11, compared with a baseline from March 1 to March 11, according to Adobe Analytics…the United States “could be in for a bad fall” if researchers don’t find an effective treatment to fight the the virus by then, White House health advisor Dr. Anthony Fauci stated during an interview this morning with The Economic Club of Washington, DC…the virus will certainly make a comeback in the U.S. even as cases begin to stabilize, he warned…COVID-19 is “not going to disappear from the planet,” he said, adding infectious disease experts are learning about how the virus behaves by watching emerging outbreaks in other countries such as Southern Africa that are starting to enter their colder seasons…President Trump said yesterday that China could have stopped the coronavirus before it swept the globe and said his administration was conducting “serious investigations” into what happened…“We are not happy with China,” Trump stated at a White House news conference…“There are a lot of ways you can hold them accountable. We believe it could have been stopped at the source. It could have been stopped quickly and it wouldn’t have spread all over the world”…
2. Probe Metals (PRB, TSX-V) has made a series of new discoveries at its 100%-owned Val d’Or East Monique Property, an open-pit past producer with a significant current resource and just 5 km southeast of the company’s New Beliveau deposit along the Pascalis Gold trend…drill hole MO-39 cut 18.4 g/t Au over 2.3 m starting just 26.5 m downhole, confirming a new zone parallel to the I zone…the same hole also intersected 14 m grading 1.6 g/t starting 133 m downhole…high grades at Monique are now known to extend from near-surface to at least 550 m vertical depth…MO-33 was designed to test the A and B zones to depth…this hole intersected the zones where predicted and represents some of the best assay results from the A zone to date, with a wide interval of 5.2 g/t over 14 m including 15 g/t over 3.1 m…this zone, which was intersected at a vertical depth of approximately 550 m, continues to show strong mineralization and is open along strike and at depth…meanwhile, hole MO-41 was designed to test the western extension of the I zone and cut 4.5 g/t over 14 m at 80 m vertical depth, including 18.2 g/t over 2 m…this hole is located 150 m west of an historical hole that returned 14.1 g/t over 9.1 m…Dr. David Palmer, President and CEO of Probe, stated: “The first results from the Monique drilling have exceeded our expectations and represent some of the best intersections to date from this property. Results show higher Gold grades over significant widths, and include a new high-grade discovery south of the former open-pit. In its first resource estimate the Monique deposits grew to 660,000 ounces of Gold and we believe that the current results indicate excellent potential to continue expanding these resources within the current permitted and active mining lease. These types of results are becoming the hallmark of this property, and the Val-d’Or East project in general, and confirm our belief in the strong potential for new discoveries and large-scale growth along the eastern half of this prolific mining camp”…yesterday, Probe announced it now owns 100% of the 3rd largest property on the Quebec side of the Detour Trend, 50 km of strike length along the Lower Detour Deformation Zone contiguous with Kirkland Lake Gold’s (KL, TSX, NYSE) high-grade Zone 58N and Zone 75 discoveries…PRB has strong momentum and is up 3 pennies at $1.03 through the first 30 minutes of trading…undervalued Probe is well financed with over $30 million in its treasury and no debt, on top of 3.4 million ounces in Gold resources and growing…technically, PRB’s 50-day EMA in the upper 80’s is reversing to the upside…
3. Crisis in the Oil and gas sector intensifies: Calfrac Well Services (CFW, TSX), one of Canada’s largest Oilfield services companies, announced this morning that it’s cutting 70% of its North American workforce, cutting salaries of executives, board members and remaining staff…the company is also delaying filing its financial statement for the quarter and reducing its capital program by roughly half to $55 million…Calfrac operates in Western Canada, the United States, Russia and Argentina and is considered one of the largest hydraulic fracturing companies in the world, but is now facing a slowdown in each of the markets to varying degrees…“Since December 31, 2019, there has been a rapid and unforeseen deterioration in business conditions resulting from the COVID-19 global pandemic and the Oil price war among OPEC+ members,” the company said in a statement this morning…“These historic events caused an unprecedented decline in Oil prices globally, resulting in reductions in the planned spending of essentially all of Calfrac’s clients”…
4. As the COVID-19 approach across much of Canada risks turning many of the country’s workers into welfare slackers, America starts rebounding: Texas, Ohio and multiple other states have taken steps to ease lockdown orders and reopen their battered economies…leaders in states hit harder by the pandemic, however, were moving more slowly and urging people to stay home as officials sought to expand testing capacity and create contact-tracing teams…after weeks of closures and physical distancing orders in the U.S., states from Mississippi to Tennessee to Colorado began to permit some businesses to reopen yesterday, welcoming customers back and letting some employees return to work…over the weekend, some businesses had resumed in Georgia, Oklahoma, Alaska, Texas and South Carolina, with physical distancing measures in place…retail stores, restaurants, malls, movie theatres, museums and libraries in Texas will be allowed to open Friday at 25% capacity, Republican Gov. Greg Abbott said yesterday…he will allow a stay-home order now in place to expire Thursday…“The executive order has done its job,” he said. “Now it is time to start a new course”…many are watching Texas’s phased reopening as a test…the country’s second most populous state has relatively low rates of COVID-19, but among the lowest testing rates, leading critics to say there is no way to know how prevalent the virus really is…
5. Canada’s 2 most populous provinces have chosen widely divergent paths as they unveiled lockdown-lifting plans yesterday that contrast Ontario’s caution with Quebec’s more ambitious approach (ironic, for sure, considering that All Hat, No Cattle Ford has tried to brand Ontario as being “Open For Business”)…Ontario set out benchmarks including a consistent decrease in the number of Wuhan COVID-19 cases before some workplaces and public spaces open…Quebec, meanwhile, is facing hundreds of new cases and dozen of deaths each day (90% in long-term care homes) but still set May 11 as the start for opening elementary schools and daycare centres (a plan for businesses will be announced today)…Ontario’s plan doesn’t even mention schools, which are closed until at least the end of May…“The framework is about how we’re reopening – now when we’re reopening,” Ford said yesterday as he unveiled the province’s 12-page plan…“This is a road map, it’s not a calendar”…
6. The Dow is up another 204 points through the first 30 minutes of trading…in Toronto, the TSX has climbed 121 points…the Gold Index has slipped 8 points to 336, but pullbacks should be embraced with the Index projected to soon challenge key resistance in the 360’s…Horizons ETFs management is warning investors not to buy units of 2 of its Oil-focused exchange-traded funds because the ETFs face possible implosion amid collapsing energy prices…Crude Oil 2x Daily Bull (HOU) and Crude Oil 2x Daily Bear (HOD) may be forced to liquidate their assets if prices go much lower, Horizons said in a statement yesterday…the market value of the Oil contracts underlying the funds are likely worth less than the value of the funds themselves…the Venture, which has posted 3 straight strong weeks, is flat at 471…VSBLTY Groupe Technologies (VSBY, CSE) is up 3 pennies at 26 cents…the stock is on the verge of a breakout above a downtrend line in place since last summer…GoldON (GLD, TSX-V) announced this morning that it has received its drill permit for the West Madsen Gold Property…the company has the right to earn a 100% interest in the property through an option agreement with Great Bear Resources (GBR, TSX-V)…GLD is fully funded to complete the drill program which will commence as soon as logistically possible…at 62 cents, GLD has tripled off its 20-cent March low at the height of the “Corona Crash” and should have strong new support at its now-rising 50-day EMA in the mid-40’s…
7. Seabridge Gold (SEA, TSX) continues to track higher after releasing an updated PEA yesterday 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.
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