4/9/2020 – Trading Lab Morning Email
We received a promising news release from Great Bear Resources (TSX-V:GBR) this morning with a highlight intercept of 4.24 grams/tonne gold over 52.15 meters. Not too shabby if you ask me.
The first thing that stood out to me in this NR is that Great Bear has now extended the LP Fault Zone to 5km in strike length and roughly 400 meters depth:
While we can’t say that this mineralized zone is 4 g/t gold throughout, even at .5 g/t Au this is a significant gold deposit. It’s also important to remember that the LP Fault Zone is only one of multiple gold mineralized zones at Dixie.
Some other key points from this morning’s NR:
- Gold mineralization intersected in 100% of drill holes for which assays have been returned to date. While some of the holes are fairly low grade, the key point is that there is some gold in all of them.
- Results show continuity of gold mineralization over approximately 400 vertical meters from surface in the LP Fault area, which remains open to extension in all directions.
- Great Bear has reduced its rig count to 3 drill rigs in order to ensure worker safety and probably also to conserve cash during an uncertain time. GBR has 3 core shacks at Dixie so 3 drill rigs also makes some sense for the time being. The company emphasized that it is on track to complete its 300 drill hole program by December 2020.
Great Bear continues to be at the top of my list of junior mining companies that are likely to be acquired in 2020 and I don’t see this takeout happening at less than a double-digit share price. Dips continue to be opportunities to add to ones position.
This morning we also “found out” that 6.6 million Americans filed for unemployment last week (I think we can expect another six million next week as well), which makes the total for the last three weeks nearly 17,000,000 jobless claims. We also learned that the Federal Reserve is using $2.3 trillion to backstop state and local governments, in addition to small businesses.
This is nothing short of helicopter money at this point, and the Fed announcement has triggered a reversal in S&P futures from being down about 1% to being up about 1%. At this point it’s clear the Fed will stop at nothing to bolster the economy and stock prices.
What will be the end result?
We don’t know exactly, however, the Fed is so far past the point of no return that this “independent” central bank is now nothing more than an extension of Congress and the Treasury Department. Expect massive deficits and money printing for an unlimited period of time.
This is all extremely positive for precious metals and mining shares. There is no point in overthinking things and getting too cute.
Disclosure: Author owns GBR.V shares at the time of publishing and may choose to buy or sell at any time without notice.
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