Global Insanity Prevails

Source: Michael Ballanger for Streetwise Reports   09/14/2019

Sector expert Michael Ballanger uses storytelling and personal experience to unpack the myths and machinations behind the precious metals and financial markets.

"Destroyers seize gold and leave to its owners a counterfeit pile of paper." —Ayn Rand

Why don't we start things off a tad differently this evening? Let me relate to you all a parable from the Book of Quantitative Easing where all is good and noble in the world of government oversight, the most widely used oxymoron in the history of mankind.

Granny Smith, now in her late nineties, wakes up one morning and finds that her dear husband for nigh-on seventy years has gone on to meet his Maker. But alas, as distraught as one would expect her to be, she is covertly delighted because, well, old Egbert Smith was not exactly the man she married and being forced to change his diaper and his bedsheets each night had grown both tiresome and difficult.

When the lawyer had finished probating the will after eight meetings that could have been just as effective with one, it was learned that Granny was in possession of a sizeable pool of capital, on the order of US$5,000,000. She immediately ordered a meeting with that nice young man from the bank that "smiles at me and always smells good" in an effort to determine what she should do with her money.

You see, for the past fifty years, husband Egbert handled the family finances because, well, women were not expected to understand money. But prior to marriage, Granny had a job in a bank and was quite proficient in helping "customers" (as opposed to "clients") understand how the bank was trying to screw them. She understood fully the "Power of Compounding" long before some wannabe-evangelist-cum-motivational-speaker windbag decided to sell a million copies of his latest (plagiarized) book. However, I digress. . .

She enters the mahogany-walled offices of the bank CEO with her handbag full of post-it-note reminders of just how he is going to try to make her $5,000,000 work for him instead of her and sits down in the largest, plushest, most expensive, high-backed chair in banker history.

"Five mil is a lot of money" is the opening salvo of this former drug-dealer-car-salesman-turned-bank-CEO as he shows her a chart of the five top banks' CD (certificate of deposit) rates. "The range for a 5-year CD is minus 0.23 to minus 0.29 with the our bank, highlighted in yellow. Remember, we value your money," he says and then asks his "administrative assistant" to fetch them some tea and cookies. "And I want you to know that safety is paramount."

Granny Smith looks at Mr. Bank CEO and says, "Forgive me, Mr. Morgan, but I am an old lady trying to understand your business so please describe to me what is meant by the minus sign before those figures."

"Well, Mrs. Smith, it's pretty simple. We protect your money from thieves and corporate raiders and the government so that you can live the rest of your life stress-free."

Granny looks up at him quizzically from a half-knitted tea cozy and two very intimidating needles as she says, "Well thank you, but what I meant to ask was what return I will have on my money if I deposit it at your bank in your government-insured Certificate of Deposit?"

At this point the banker starts fiddling with his tie and perspiring heavily as he goes on for another fifteen minutes about "global uncertainty" and "government guarantees" and "bank safety," and at the exact moment he decides to launch into his "final close," to get $5,000,000 cash into his bank, which desperately needs to shore up the $6 billion in bad car loans, little Granny Smith interrupts him with this, the most innocent of all questions: "Mr. CEO, if I give you and your wonderful bank all of my five million dollars, how much will I get back after five years?"

Now choking on the ramifications of a truthfully answered question, Mr. Bank CEO pivots into the "You-don't seem-to-understand" defensive formation, followed by yet another twenty minutes of diatribe.

At this point of the early evening, Granny has been transformed from an "innocent and quite defenseless elderly lady" to "totally pissed off and ready-to-rumble granny-goon," and decides to ask the banker the ultimate question. Holding a Hewlett Packard financial calculator in her left hand while pointing one of her knitting needles at his throat with her right, she snarls "How much freakin' money do I get back on September 12, 2024, if I give you my $5 million today?"

The banker stands up; he straightens his tie; he wipes his brow; and he says to the now openly hostile granny, "$4,290,435, my dear, but with the full safety and security of our bank."

Granny: "So, let me get this straight. I give you five million dollars today and five years from now, when I’m 103, you give me back less than i started with???"

The banker CEO smiles bravely and says, "Welcome to the New World Order, Mrs. Smith."

She grabs her bag, rising quickly from the high-backed chair, and says with the utmost of decorum, "Welcome to the World of f-you, Mr. Banker." And leaves the building.

And so ends the first parable.

Why, pray tell, would anyone in their right mind, let alone a fiduciary entrusted with the prudent stewardship of client capital, ever buy a financial instrument from a high-risk institution (remember subprime?) that guarantees a negative yield to maturity? Now, I don't pretend to be a balance sheet genius, nor do I profess to understand all the financial engineering that is practiced these days but it seems to me there is a checklist of possible reasons. Here are but a few:

  • You have borrowed money from the financial institution and they demand you put up collateral in the form of a bond yielding negative returns. In other words, they layer a second level of "fees" on you, jacking up your effective cost of borrowing to inflated levels;
  • Your financial institution uses government securities as a reserve requirement in order to soften the interest expense to the government. Since the government regulates your financial institution, they are forced to play ball and the added inconvenience is passed along to the customer,
  • You are a professional money manager that sees rates going from –1% to –2%, thus opening up a potential capital gain in the price of the bond. As there is an inverse relationship between yield and price, declining yields are accompanied with rising price, hence the rationale for playing the "Greater Fool" game. The early idiot sells the useless bond to a bigger idiot and banks the gain;

And finally,

  • You were walking to work this morning and were hit on the head by a falling quote machine thrown by an incensed gold trader and were senseless when you made the decision to buy a bond that ensures that you will lose money.

I am sure there are many, many more reasons someone buys a negative-yielding financial instrument, and reasons that are quite possibly more sophisticated than the ones listed above. The point I make is that when you really think about the symptoms of a collapsing global banking system, one needs look no further than the 65% of all global bonds that are delivering a negative yield.

Strong economies are found in regions and countries that are sporting strong balance sheets, just as strong companies are able to cover interest costs from existing cash flow with ease. After several decades of mercantilist behavior fully supported by governments across the globe, with the exception of those countries (Russia, China, Cuba, Zimbabwe, and now Venezuela) that attempted to function under socialist/communist systems of government, we have now arrived at the ultimate tipping point, where government spending now not just exceeds, but dwarfs, tax receipts.

In the case of China, where the shadow banking system cloaks much of their toxic debt, they do not have the additional burden of entitlements, which are the Achilles heel of the American government, military, and banking system. Whenever I look around and try to find a country living within its means, I am hard-pressed to find one. Maybe the Sultan of Brunei could offer lessons as his country sports the lowest debt-to-GDP (gross domestic product) ratio on the list, and while Japan is the worst offender, their total debt at $9 trillion pales in comparison to United States' $19 trillion debt load. What the U.S. dollar bulls fail to take into consideration is that the entitlements of Medicare, Medicaid and Social Security have to be added to that figure, and the reason they don't is that they can't figure out the numbers.

Falling into the realization category of The Emperor's New Clothes, I contend that we are today at the precipice of a massive drop in global living standards brought on by the final reconciliation of debt. Individual citizens who take advantage of generous lending practices and pile on layer after layer of debt always encounter that point in time where bankruptcy arrives first slowly, then suddenly (thanks to Ernest Hemingway), because cash flow from earnings or dividends and interest falls disastrously short of cash outflow.

At that point, assets must be sold to reduce debt, and while individual citizens can sell things like homes or automobiles or cottages, governments can only sell land. And as any politician knows (think the Greek Islands), the mere mention of carving off a piece of Hawaii or Vancouver Island to pay down someone else's obligation is certain career suicide. Hence, and with good reason, governments are moving—no racing—to get the trillions upon trillions in toxic bonds to a negative yielding setup, because just as interest expense is a charge upon the government income statement, interest earned (by negative yielding bonds) is a credit. In this manner, there suddenly exists an accounting function whereby debt becomes an asset, and in this manner, the deadbeat global central banks and criminally compromised treasury departments are able to prolong the largest Ponzi scheme in history.

I further contend that the public is coming to the realization that the smartest people in the room are rarely politicians and never central bankers. However, the best communicators in the room from a political perspective are those who can speak to the masses in a language and style foreign to most educated people (think Donald Trump). After fifty or so years of movie star orators like Ronald Reagan, Bill Clinton and Barack Obama, public perception within the lunch-bucket crowd has now swayed away from "slick" and is gravitating to "blunt" with factual accuracy in the message a mere bonus.

I refer to this growing malaise of disenchantment and unrest as being rooted in one word—mistrust. That mistrust is going to manifest itself within large pools of investible capital fleeing the 10-year safety-net investment strategy, where every 10% drop is met with Fed intervention and jawboning, winding up in alternative investments such as gold and silver. We have already witnessed the impact of the Millennials and GenY-ers on cryptocurrency deals in 2013–2017 and then cannabis deals from 2013–2019. The moves in those two sectors were mind-blowing because, as a generation, with thanks to the wonderment of social media, their access to timely information allows them to move in swarms, not unlike bee colonies, chasing deals in mob-like fashion while exiting with the same virulence.

This impulsiveness is the reason we are getting such wild swings in everything, and no better example of that than in the recent June–September advance in silver from $14.50 in late May to $19.75 on Sept. 4. It took three months for silver to get through $17/ounce, but only three more weeks to peak at $19.75, as the last $2.75 was a wholly new breed of investor arriving into the precious metals markets. Having never been laid out by the bullion bank traders before, they were like sheep being sent to the corral, and just as quickly as they inhaled every share of GDX and GDXJ above $30 and $42 respectively, bludgeoning their way in, today they are all bludgeoning their way out. Same drill over at the Crimex; late longs in silver and gold are being beaten like rented mules.

I sounded the alarm back in June, when gold first attempted to surmount the five-year resistance at $1,350–1,375 and while I stand behind the reasoning, I was overly cautious and exited the GLD call options, NUGT, and JNUG way early. I kept 100% positions in the GGMA portfolio in physical gold and silver and held on (for dear life) as the GDX and GDXJ positions screamed ahead until late August, when I sold 50% positions in the $30 and $43 range (GDX and GDXJ respectively), with the balance jettisoned on Sept. 4.

Also sold at or near the top was Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTC) (at $9.02) for a 292% profit from Jan. 2. So, between the leveraged and non-leveraged trades, the GGMA portfolio is ahead 163% for the year and is sitting on a 53% cash position, looking for a reentry point to the unleveraged miner ETFs as a starter, followed by the leveraged ones (including GLD and SLV calls) if and when we get to a deeply oversold position.

Now, I’ve had a number of people message me with congratulatory salutations on some of the trades but make no mistake about it: I am terrified to be without positions in the GDX and GDXJ, or, as they say, "flat and nervous." In fact, I feel more anxiety being underinvested and cashed up than I did when I was fully invested and down 15%.

On that note, let me clarify. We are finally in the throes of angst that accompany all bull markets in their early stages. My favorite is silver for all of the reasons you have been reading for the past forty-six months, since I opined in December 2015 that we had just ended the 2011–2015 bear market and were about to embark on a brand new bull, one that would (and will) change fortunes and lifestyles for all on board.

That opinion has not changed. In fact, for reasons well documented in this publication and others, conditions are ripe for a hyperinflationary conflagration that will, based upon the sheer magnitude of scurrilous counterfeiting of sovereign currencies around the world, make 1921 Weimar Germany look like a tea party. There is only one sanctuary for savings in a world of monetary madness, and that sanctuary absolutely must reside outside of the banking system, because the tattered tentacles of Deutsche Bank are intertwined with the shadow banks in Shanghai, which are, in turn, part of a global labyrinth of debt and collusion and intervention and fraud.

I will repeat analogy from years past. When you visit a pig farm, you see brown pigs and white pigs and pink pigs and even mottled pigs, but at day's end and the bell is sounded, every pig in the sty sullies up to the feeding trough regardless of color. Similarly, banks can be from the United States or the UK or China or Brussels; they all depend on "fiat" (decree or mandate) and when this growing mistrust of the system finally embodies itself in the daily decisions of investors around the world, all banks will topple, regardless of their locale. At that point, and fear explodes, there will be simply not enough gold and silver to satiate demand. Where infinite and urgent demand meets limited and tightly held supply, pricing chaos ensues. That is what I expect, and that is why I am "flat and nervous."

I close out the week by reminding you all that despite what you are being fed about a "new paradigm" and that "it's different this time," take one look at the COT Report and realize that the 33,130 contracts covered during the last COT reporting period probably involved a $30–40 per ounce clip that represents 100 ounces per contract or $100-125 million in profits taken by bullion banks from the pockets of investors and speculators. At the top in very early September, I counted no fewer than fifty articles in the blogosphere that finger-wagged their conviction that the forces of good had finally and convincingly defeated the "cartel" and it was now "safe" to ignore the bullion banks and go "all in."

It is late in the Friday trading session, and with the weakness in today's session in silver, it has now corrected back to a level where, while not egregiously oversold yet, it represents a decent reentry with a small amount of capital into the SLV December $18 calls at $0.42 for a trade to $2.50 by expiry. I will probably be bidding for 25% positions in the GDX at $26.50 and GDXJ at $36 on Monday morning, after which I will overmedicate myself and take a bold swipe at the diabolical duo of NUGT and JNUG. Edging one's toe into the waters has always served me well because averaging up is a far wiser strategy than averaging down. (Just ask my bank manager, accountant, psychiatrist and pharmacist).

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger's adherence to the concept of "Hard Assets" allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

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Disclosure:
1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: None. My company has a financial relationship with the following companies referred to in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector. Additional disclosures are below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Great Bear Resources. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Charts provided by the author.

Michael Ballanger Disclaimer:
This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

( Companies Mentioned: GBR:TSX.V; GTBDF:OTC, )

Gold Weather Veins in Big Red

Source: Streetwise Reports   09/12/2019

The explorer recently released early-stage sampling results for its Golden Triangle property that identifies a "significant gold discovery."

Streetwise Reports caught up with Ian Slater, the CEO of Libero Copper and Gold Corp. (LBC:TSX.V:, LBCMF:OTCQB). Slater is ramping up his international firm's exploration program at its Big Red property in the Golden Triangle of British Columbia, Canada.

The Golden Triangle is difficult to mine, terrain- and weather-wise, but payoffs for tenacity have been consistent during the past 150 years. The region sports several of Canada's most lucrative copper-gold mines, including Premier, Red Chris, Snip, Brucejack and Eskay Creek.

There is road access into Big Red, so the harsh winter is the main obstacle to working the area—the weather window is July through October. Big Red is a big patchwork: It covers 20 contiguous claims totaling 26,000 hectares.

Slater is fresh off of raising $3.7 million in a private placement for Libero. The placement found institutional support and was oversubscribed by $1 million. Slater said the expected proceeds are more than enough to finance Big Red exploration and general capital needs for the next two mining seasons in the Golden Triangle.

Slater's team includes legendary geologist Leo Hathaway of Lumina Gold Corp. At Lumina, Hathaway's historic discoveries resulted in a $1.6 billion buyout. Slater and Hathaway are pushing to commence the Big Red exploratory drilling program in a few days. They aim to finish the first round of drilling before the heavy snows of October.

"We spent the summer taking continuous rock samples, confirming the results from historical assays, which were gold-laden soil samples that date back to 1963. We took the new samples from the bedrock. Our plan is to start drilling in September; we are waiting for the final permit," Slater said.

Slater pointed out that his workforce can drive through the wilderness to Big Red on a dirt road, which is a big plus in these rough-hewn mountains. The drive is worthwhile: Past and present surveys show that Libero's exploration zone is heavy with porphyry copper and gold, epithermal gold and silver and volcanogenic sulfide mineralization.

The centroid of the Big Red targets is a large magnetic-high feature that coincides with a radiometric potassium anomaly, copper, gold and molybdenum anomalies and a mapped Jurassic aged porphyry intrusion. Epithermal gold targets lie to the south and west including the Poker target to the west of the porphyry targets.

On September 5, Libero released results from its early-stage sampling program, announcing a significant new gold discovery at the Copper Bowl target "where five contiguous 50 meter continuous rock chip samples returned intervals of 2.91 grams per tonne gold over 250 meters including 6.14 grams per tonne gold over 100 meters in two contiguous samples."

The company also noted the sampling "confirmed the anomaly previously compiled from historical sampling campaigns conducted at the Ridge gold target. Continuous rock chip sampling results at the Ridge gold target included 5.14 grams per tonne gold from a single continuous chip sample taken over 50 meters."

The company plans to target both Ridge and Copper Bowl in its upcoming drill program.

Slater said the newly raised capital will be used to work through the end of the next year's drilling season. "We will be permitted for 15 drilling pads of multiple years. The lab results should turn around on three-week schedules." He expects the samples to show mostly gold-copper porphyry. "We are focused on the gold," he remarked.

"This is the first time that the Big Red project has been consolidated under one operator," Slater noted. The company has invested in a series of affordable, structured options. "If the exploration does not work out to our liking, we can walk away with minimal losses," he explained. Libero's eggs are not all in one carton.

Libero's business strategy is acquiring "high-quality copper and gold deposits with significant resources but without any fatal flaws or significant holding costs." It looks for projects with known mineralization, but significant exploration potential. The plan is to sell at a premium when strong markets inspire the hunt for acquisitions, Slater said.

Buy cheap, sell dear fits the Libero's plan for exploring its Big Red asset, as well as its 49 unpatented claims in the Tomichi deposit in southwestern Colorado.

Tomichi contains an inferred mineral resource of 711 million tons at a grade of 0.33% copper equivalent. Slater says that exploring Tomichi is currently on the backburner. That project awaits a change in market conditions. because the Tomichi metal, while abundant, is relatively low grade compared to the prospects at Big Red and Mocoa.

"There is a lot of metal in the ground, but it is not costing much to hold on to Tomichi until global supplies are reduced and the pricing changes," Slater noted.

Libero's "flagship" venture is a higher-grade deposit near the town of Mocoa, Colombia. It contains an inferred resource of 636 million tons at a grade of 0.45% copper equivalent. The deposit is accessible by road and it has an unusual history.

The Mocoa deposit was discovered in 1973 when the United Nations conducted a regional stream geochemical survey. Through 1983, explorers mapped the geology, did surface sampling and ground geophysics (IP, magnetics). It sank 31 diamond drill holes totaling 18,321 meters, resulting in promising, if preliminary metallurgical test work.

Four drill core composites, representing different rock and ore types, and a bulk composite of all these samples were processed at Dawson Metallurgical Laboratories in Murray, Utah. Standard grinding and flotation tests were completed. A bulk copper-molybdenum flotation concentrate was processed to produce copper and molybdenum concentrates.

According to contemporaneous reports, the copper concentrate has a grade of 24.2% Cu with a recovery of 85.9% and the molybdenum concentrate has a grade of 55.14% Mo with a recovery of 82.7%. Both concentrates are clean with no deleterious elements.

Majors have been circling Mocoa from afar, waiting for the juniors to strike. In 2008 and 2012, B2Gold executed diamond drill programs at Mocoa. Slater acquired the deposit from B2Gold Corp. (BTG:NYSE; BTO:TSX; B2G:NSX) in return for a 19% stake in Libero.

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Disclosure:
1) Peter Byrne compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Libero Copper and Gold Corp. Please click here for more information. Within the last six months, an affiliate of Streetwise Reports has disseminated information about the private placement of the following companies mentioned in this article: Libero Copper and Gold Corp.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Libero Copper and Gold Corp., a company mentioned in this article.

( Companies Mentioned: LBC:TSX.V:, LBCMF:OTCQB, )

When Will it be Safe to Jump Back into the Gold and Silver Pool?

Source: Streetwise Reports   09/12/2019

Bob Moriarty of 321 Gold discusses what the Daily Sentiment Indicator is saying about the precious metals markets.

Once again the DSI (Daily Sentiment Indicator) made an accurate call on a major top in gold and silver. The DSI reached nosebleed territory for gold about four weeks ago suggesting the metals were nearing shoal waters. Silver and platinum got stupid a week ago and I suggested a correction would be timely.

Investors should remember that when someone writes a recommendation or makes a comment no matter whom it is, they are expressing an opinion. I don't give a damn how many facts or figures someone uses, it's an opinion. But in my experience the use of the Daily Sentiment Indicator has proven very accurate calling the top in the stock market in 2018 and the bottom in late December. Now, once again it has identified a tradable top.

People got way too bullish on the metals. All I saw and heard was a ton of people talking about how high gold and silver were going to go. The number of outstanding contracts hit a record high. It always does at tops, that's what makes it a top no matter how long it lasts. The weak hands buy at tops and sell at bottoms. They also are the biggest users of margin so once a decline gets serious they panic and start a cascading decline.

I am on record calling for a top in the overall market in September leading to a major crash starting in October. It's just an opinion but I am getting my gas mask on and fixing to head to the nearest bunker.

Now many writers are talking about some minor correction before gold and silver once again bolt for the running rabbit. I don't think so. With the record bullishness, you need both time and price to scare hell out of the weak hands and for sure that hasn't happened.

When the DSI for gold and silver and platinum break under 10 you can put your life jacket back on and jump in. If the markets follow the traditional calendar, that will be about mid December.

In a different vein, I want to thank the hundreds of people who wrote to me expressing their sorrow at the news of the death of my wife. We knew she was ill, she was tired and wanted out but still when it happened it was the biggest shock of my life. I miss her so.

I've learned a lot and while it may seem callous of me to run the website with tears on my face, I need something to make it worth breathing. Now I realize that life is a teeter-totter. The opposite side of deep love is incredible pain. I loved Barbara deeply and I mourn her greatly. Thank you if you were one of those kind enough to share your thoughts.

Bob and Barb Moriarty brought 321gold.com to the Internet almost 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.

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Disclosure:
1) Statements and opinions expressed are the opinions of Bob Moriarty and not of Streetwise Reports or its officers. The auther is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation. The author was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Analyst Raises Target Price of Canadian Miner Given ‘Continued Momentum’

Source: Streetwise Reports   09/11/2019

Key points management made on a recent investor tour are presented in a BMO Capital Markets report.

In a Sept. 5 research note, analyst Andrew Kaip reported that BMO Capital Markets raised its target price on Pretium Resources Inc. (PVG:TSX; PVG:NYSE) to CA$24 per share from CA$20 given that "we continue to see upside for shares of Pretium."

After BMO took Joe Ovsenek, CEO, and John Hayes, senior vice president of corporate development, through Toronto to meet with investors, Kaip wrote, "we sense investors are beginning to become more comfortable with the company's execution and are now more focused on future priorities such as upcoming catalysts."

In his report, Kaip summarized the highlights from management's comments.

1. As for H1/19 performance, Pretium is expected to increase production quarter over quarter and achieve its H1/19 guidance of 170,000 ounces (170 Koz) gold along with its 2019 guidance of 390–420 Koz.

2. By the end of September, Pretium must decide whether or not to buy back 75% of the gold sales offtake. Kaip indicated that "at current metal prices, it makes sense to spend the $60 million."

3. Pretium will continue to pay down debt throughout the rest of this year and next. Ovsenek said he'd like the company debt free.

4. Expansion plans to 3,800 tons per day (3.8 Ktpd) by year-end 2019 are on track. Only minor mill upgrades still need to be done. Kaip added that "permitting has opened the door to further expansion to 5 Ktpd."

5. By September's end, Pretium will finish a 70 kilometer infill drill program aimed at converting half of the Indicated resource to Measured. "We expect infill drilling to improve the quality of the resource and lead to a more robust reserve estimate," commented Kaip. Pretium will need to decide whether or not to revise the mine plan to encompass longitudinal hole stoping.

6. Starting in 2020, Pretium can start allocating $40 million toward a dividend or an NCIB, under the terms of the debt facility, and the leaning seems be toward a dividend.

BMO removed the Speculative component of its Outperform rating on Pretium, "given improved execution year to date," noted Kaip.

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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Pretium Resources, a company mentioned in this article.

Disclosures from BMO Capital Markets, Pretium Resources, September 5, 2019

IMPORTANT DISCLOSURES

Analyst's Certification
I, Andrew Kaip, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of our compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.

Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Company Specific Disclosures
Disclosure 5: BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the past 12 months from Pretium Resources.
Disclosure 6C: Pretium Resources is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: C) Non-Securities Related Services.
Disclosure 8A: BMO Capital Markets or an affiliate has a financial interest in 1% or more of any class of the equity securities of Pretium Resources.
Disclosure 16: A research analyst has extensively viewed the material operations of Pretium Resources.
Disclosure 17: Pretium Resources has paid or reimbursed some or all of the research analyst's travel expenses.

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( Companies Mentioned: PVG:TSX; PVG:NYSE, )

Red Lake Explorer Keeps Making Discoveries

Source: Maurice Jackson for Streetwise Reports   09/10/2019

Chris Taylor, CEO of Great Bear Resources, talks with Maurice Jackson of Proven and Probable about his company's exploration efforts in Canada's prolific Red Lake District.

Maurice Jackson: Joining us for our conversation is Chris Taylor, the president, director and CEO of Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTC). Pleasure to be speaking with you today to share the value proposition before us in Great Bear Resources. Before we delve into project specifics, Mr. Taylor, please introduce us to Great Bear Resources and what is the opportunity you present to the market?

Chris Taylor: Great Bear is a Canada focused high-grade gold explorer. Our project, the Dixie property, is located in the Red Lake District of Ontario, which is quite famous for being probably the premier high-grade gold district in the country.

Maurice Jackson: Speaking of opportunity, I think you're being quite modest here. Great Bear has rewarded shareholders in the last 52 weeks with a 400% return. Congratulations. The company's been able to answer a series of questions with very impressive results and they are all responding with yes. Let's find out why the stock price is soaring. Great Bear Resources is focused on a new high-grade gold discovery in Red Lake, Ontario. Take us there and provide us with some historical context on the region.

Chris Taylor: Red Lake is known for producing a large number of high-grade gold ounces. It's quite road accessible. You can connect in through the remainder of Ontario and down into the U.S. just below that. There's about 30 million ounces of gold produced in the district to date. The majority of that is from Newmont Goldcorp's main Red Lake gold mine. What we have in our project is effectively a large high-grade gold discovery, with multiple gold zones, and it's located about a mile or two off the side of the highway, with a power line that runs over the project and therefore we have low exploration costs. This is an area where investors and the dollars that they provide to the company turn into meters of drill core drilled with very cost effective structures due to excellent infrastructure.

Maurice Jackson: There's some strategic advantages that Great Bear Resources has over its peers that are exploring for gold with regards to brownfields exploration. Please share some of those virtues on exploration and from a capital standpoint.

Chris Taylor: In this area, one of the main advantages is low-cost exploration. And this is because effectively, rather than looking for minerals on the top of a mountain or up in the Arctic Circle or in the heart of Africa, you're in a civilized jurisdiction that's politically stable. This means that you end up with lower drill costs, lower operational costs. There are assay labs within a 20-minute drive from our project in downtown Red Lake, which has a full service community, skilled population of workers and obviously a very extensive history of mining. Effectively this is cost effective exploration where investment dollars turn into meters and that turns into performance in the share price as long as you continue to be successful, and Great Bear certainly has been up to this point.

Maurice Jackson: We've covered the region. Mr. Taylor, please introduce us to your flagship, Dixie gold project, and share some of the project highlights.

Chris Taylor: The Dixie gold property is located about a 20-minute drive from downtown Red Lake, so that means it's also about a 20-minute drive from one of the largest gold mines in the area. And the property is located in greenstone type rocks. These are Archean age greenstones that are mesothermal gold faults.

Effectively from tip to tip on this large LP fault structure, which is where we've made three of our most recent gold discoveries, is about 22 kilometers long end to end. Within the fault itself, the main area of it, we think is the most prospective is about 18 to 20 kilometers long. We've only drilled at this point about 15% of that structure, but every drill hole that we've put into the fault itself and the immediately adjacent area has gold mineralization. This is truly what could be characterized as a brand new district scale gold discovery.

Great Bear is working on a big greenstone-hosted, high-grade gold system. And quite exciting with the discoveries that we've been making is that a lot of the gold that we're drilling goes right to the surface. And that's quite exceptional in Red Lake because Red Lake, other than being famous for high-grade gold, it's famous for mines that go down a mile, a mile and a half deep vertically from surface. And on our project, excellent gold results have been generated really right to the surface bedrock interface. It's quite exciting.

Maurice Jackson: It certainly is. And to really appreciate the opportunity before us, please share some of the similarities between Newmont Goldcorp's Red Lake gold mine and the Dixie gold project.

Chris Taylor: Newmont Goldcorp is working on high-grade quartz veins. Gold is hosted in high-grade quartz veins that extend down to, I'll use Canadian terminology here, down to about two and a half kilometers or more in depth. And that's very, very similar to the first gold zones that we found on our Dixie property, the Dixie Limb and the Hinge zones. These were exciting discoveries that we had over a year ago now, and that's very similar geometrically in terms of the types of mineralization and the gold grade distributions. The size, when you look at it from a surface map perspective, very much like what we found early on. And that's similar to two of our zones and very dissimilar from a bunch of the other major zones that we found recently on our property.

Maurice Jackson: The Dixie gold project hosts five zones. What has Great Bear Resources most excited here?

Chris Taylor: We were very excited up to the last six-month period with the types of consistent and repeatable high-grade gold numbers that we were generating from the Hinge zone discovery and the Dixie Limb discovery. And this was very, very similar in terms of the gold grades and other patterns of mineralization and rock type to what you see at the main mines in the district. However, just over the last number of months, which has been the fuel for a very strong response in our share performance as well, is this very large fault structure. The LP fault structure down the project hosts an entirely different type of disseminated high-grade gold mineralization, and those are two words, disseminated and high-grade, that you don't often hear in the same sentence. And to make that more exciting from our point of view is that gold mineralization extends, again, right to the near surface. This is a new type of gold mineralization in the Red Lake District, and that's what makes this so compelling as an exploration story is that we're really just beginning the discovery process along this big new target.

Maurice Jackson: The company has been issuing a series of very impressive drill results. Please share some of the results and what this means going forward for the company.

Chris Taylor: Recently, one of the new zones that we've discovered called the Auro Zone on the LP fault generated a near-surface intercept of about 42 meters of about 5.28 grams per ton gold. Now, that's exceptional in a sense that that's a high-grade gold intercept in and of itself, but the fact that that's sitting right in the near surface is very interesting. And within that zone, there was about a meter and a half of about 100 grams per ton gold. That's over 3 ounces per ton gold, and what we're seeing as we drill along that fault are additional very high gold grades, including at the Bear-Rimini discovery. Near surface, we had a zone that was about 2 meters of just about 200 grams per ton gold, and then below that there was about a 14 meters zone of about 12 grams per ton there below that.

And then just beside that, there was another zone which was about 50 meters of about three quarters of a gram per ton, showing us that we have these large intervals of bulk tonnage-type gold mineralization adjacent and flanking and surrounding the high-grade zones that we've been finding. Before that, within the Dixie Limb and the Hinge zones, these are the high-grade Red Lake-style gold veins, which they're located about a kilometer to the west of the zones that I was just describing. Noteworthy of mention, at some intervals, we had a couple of meters with an ounce per ton range, so somewhere in the 20 to 40 gram per ton range. That's very typical for some of the intercepts that we've seen, but once in a while you get true bonanza grade gold intercepts.

I remember releasing a result, it was about a meter of about 900 grams per ton gold at the beginning of 2019, and I think that included, it was approximately 0.6 meters of about 1,600 grams per ton gold. These are phenomenally high-grade gold results, which is what the district is associated with, and those results were also a driver for value appreciation in Great Bear.

Maurice Jackson: Take us to the Hinge zone, which has been quite active the last year, and walk us through a cross section comparison between the Dixie and the Red Lake gold mine.

Chris Taylor: These are effectively very similar types of deposits, the Hinge zone and the Red Lake gold mine. They have similar types of alteration around the gold veins, the red brown hydrothermal biotite alteration. What you're looking for in this district typically to make grade at most of the deposits is about 2 meters of about 10 grams per ton gold. And the reason being the 10 gram per ton gold number tends to be economic in this area that you can extract it and pay and make money at those levels, and then the 2 meter width is about what the mining equipment width is.

The 2 meter's is about the minimum width that would flank the vein and that's what you'd be aiming for. When considering the district, one would be looking these veins that range from 30 centimeters wide to a couple meters wide, and they'll mine these things in the district all the way down to many kilometers depth, and that's what Goldcorp and now Newmont Goldcorp have been doing for many years. That's very similar to what we're seeing within the Hinge zone, except the Hinge zone has been surprising us repeatedly with multiple gold veins in many of the drill holes.

Great Bear Resources has been locating intervals that are wide zones of gold bearing quartz veins, sometimes up to over a hundred meters in drill quartz where you see repeated gold veins of anywhere from 30 centimeters to several meters in width. And I believe the widest that identified is about 7 meters of about an ounce per ton gold. And those are incredibly robust developed gold bearing vein systems, definitely on par with some of the best in the district.

Maurice Jackson: Moving on to the Bear-Rimini Zone, what would you like to share with us? Because there's some impressive stuff going on there as well.

Chris Taylor: The Bear-Rimini zone hosts some of the numbers I was quoting recently. A couple of meters of a couple hundred grams, 14 meters of 12 grams. This is a zone of a wide disseminated gold mineralization that's within a felsic volcanic unit that we see over many kilometers where we've drilled it so far, and that's entirely new for the Red Lake District. Most of the gold in the area is hosted by these gold bearing veins, but they tend to be within what we call mafic and ultramafic volcanic rocks, and those are effectively, if you look at them with your naked eye, those are dark colored rocks, dark green rocks, typical greenstone belt rocks.

The rocks that we're drilling in the Bear-Rimini zone are quite light in color. They're very different chemically, they have a very different origin, and they occur in big thick units of these felsic volcanic packages with other units intruded into them, and that's where we're seeing these new gold discoveries. The Bear-Rimini zone is something that has not been seen before in the Red Lake District to the best of my knowledge, and it has the potential for many kilometers of strike length certainly. We've already drilled it over about 3.2 kilometers and so far it's wide open to extension.

Maurice Jackson: Finally, and equally important, take us to the Yuma zone. Why are shareholders enthusiastic about this zone?

Chris Taylor: The Yuma zone is effectively a 1.5 kilometers stepout along the same structure from the Bear-Rimini zone, and it contains multiple zones of high-grade gold mineralization and those are flanked by wide intervals of this low-grade gold mineralization that you see globally in many open pit deposits. And the Yuma zone is very similar to the new zone that we've recently announced, which is another kilometer stepout along that fault, which is the Auro zone.

Collectively the Bear-Rimini, Yuma and Auro zones all have the same geology that's been intersected in drilling and they all contain a combination of high-grade gold and that's flanked by these wide zones of low-grade mineralization that projects right to surface. The market and our geologists, and everybody involved in the Great Bear story, is very excited by these because it's very rare to see this combination of high grades surrounded by the bulk tonnage mineralization, and especially to see it along drill centers that are spaced kilometers apart, and to see that consistency of geology and gold mineralization. That's what's exciting here is the scale of these discoveries is really something that you don't see very often.

Maurice Jackson: Let's discuss some important topics germane to the project, beginning with reversionary interests. Are there any on your projects?

Chris Taylor: No, actually another fairly unique characteristic of Great Bear and its properties is that the properties are 100% owned by the company and on top of that, there are no royalties of any kind owed to other parties on these projects. All of the benefit of these discoveries flows to our shareholders.

Maurice Jackson: That is quite impressive and something you don't run into quite often. We're going to get into some numbers later in this discussion, but from a capital expenditure standpoint, what is your largest expense, and at what cost?

Chris Taylor: We're spending right now about a million dollars a month on drilling and exploration work. And if you look at the money that Great Bear has raised, about 80 cents on every dollar goes to drilling and exploration work. The remaining costs, probably about 10 cents of that, would be salaries and other things and we obviously have to keep the company moving. And, of course, like every other company in our type of space, we do marketing and promotion and these sort of outreach. That's probably another 10 cents on the dollar. But the vast majority of the money that we raise turns right into meters of gold bearing core, drilled out of the ground. It's been very cost effective that way because of the infrastructure access on the property.

Maurice Jackson: What is your relationship with the indigenous people?

Chris Taylor: We have an excellent relationship with the local indigenous groups. And we've been fortunate that we recently sponsored a student work program for this summer, and we also have ongoing business relationships with some of the community members who are providing, for instance, drill core boxes for the program. That's a very tall order because we drill a lot of core and we look forward to more of this cooperation while we go forward. These are communities in this area that are very familiar with mining and many of the community members are active in the mining industry and also in forestry and other natural resource work.

Maurice Jackson: Are you fully permitted?

Chris Taylor: Yes. The work that we're doing now is fully permitted. There have been no issues regarding permitting or execution of the work that we need to carry out.

Maurice Jackson: Is the ultimate goal for Great Bear Resources to develop the Dixie gold project and sell it or build a mine?

Chris Taylor: This is a question I get asked a lot because a company needs to be prepared to put the project forward through all the exploration stages and through into production. What you need to always think about in the back of your mind though is that very few junior companies in our shoes that make this scale of discovery make it through that production process on their own, typically at some point there are a number of major producing gold companies in the world and they are looking for these types of assets. Their reserves are always being depleted and the combinations of high-grade gold, near-surface gold and access to infrastructure that we have certainly put the Dixie property at the front of the pack when it comes to comparable gold projects that these guys are looking at.

Maurice Jackson: We've discussed the good. Let's address the bad. What can go wrong and what is your action plan to mitigate that role?

Chris Taylor: One of the biggest errors that a company can make is effectively, in our situation, when you're onto a district-scale type discovery, is that the company will prematurely focus on resource development and definition on one particular zone to the detriment of wider exploration, and making the discoveries that will ultimately add the most value for a company. Great Bear is very cognizant of that. We try not to get led by the market into drilling hundreds and hundreds of holes onto any particular zone and trying to define it too early.

That's one of the concerns that companies are often forced into just because they have difficulty accessing capital. We've been very successful raising funds and employing those funds on our own terms, and that's led to the sequence of discoveries that we continue to make. Other risks that we would have would be very much like other companies in our space. Besides something geologically that constrains the amount of gold mineralization, that's typical risk. There are no special risks for our project. It's in a fully permitted operating mining district, and it's one of these areas where you don't get the political risks or other risks that you see in other jurisdictions. We are in a safe and a stable area to work in.

Maurice Jackson: Switching gears, let's discuss the people responsible for increasing shareholder value. Mr. Taylor, please introduce us to your board of directors.

Chris Taylor: One of the key members of the board of directors is my partner in business within Great Bear, Mr. Bob Singh. He's a professional geologist and he was responsible with originating contacts of his in the Red Lake district for the Dixie property as a business opportunity for the company. Bob is a member of the board and he's been instrumental in this success to date. We have two relatively famous industry advisors, and they are Mr. John Robins and Mr. Jim Paterson. They were responsible and involved with the Kaminak gold discovery in the Yukon a few years back, and its subsequent sale to Goldcorp for about half a billion dollars.

Other board members include Dr. David Terry and we have Mr. Doug Ramshaw and Mr. Tony Ricci. These are all independent directors of the company, all experienced industry veterans, and they've been down the road on many discoveries over the years, and Mr. Rob Scott is our CFO. We have an experienced independent group of directors, and recently we've added somebody who's quite experienced in the marketing space as a VP of corporate communications, Rita Bennett. Collectively we put a very effective team of people together within Great Bear and I think we're getting the message out, and definitely delivering on our promises to shareholders.

Maurice Jackson: Who is Chris Taylor and what makes him qualified for the task at hand?

Chris Taylor: These questions are always probably the worst to answer for somebody like myself. I don't like talking about myself that much. I'm an exploration geologist by background, but I have an academic background. I have a Master’s degree in Structural Geology, at various times in my life I've crawled all over various mountain ranges here, there and everywhere including the Himalayas, the Andes, the various stuff up in Alaska, all over the United States and Canada. My background, I used to be the vice-president in exploration with Great Bear Resources almost 10 years ago now, and during the decline in the mining cycle, I ended up taking control of the company being offered that by the board at the time.

I restructured the board of directors, found financing for the company. Often, when financing was difficult to acquire, I would keep it going using my own bank account. And what we did was find that compelling mix of traits in a project, in this case the Dixie property, that had the opportunity to really build value for shareholders. I've been focused on that for years now. It's been about nine years with Great Bear and I've gone through every effort to make sure that our shareholders have the best shot at success with a project like this, and Dixie has certainly not failed to deliver it.

Maurice Jackson: It certainly hasn't. Who is on your management team and what skill sets do they bring to Great Bear Resources?

Chris Taylor: Well, Great Bear runs a very tight ship in this sense. We have a small number of executives. There's myself as the president and CEO, Bob Singh as VP exploration. We're both on the board of the company. Rob Scott, I mentioned before, our CFO, and we also have Rita, who I mentioned as VP corporate communications, and we deal with a very qualified group of consulting geologists they're based in Red Lake and they've lived there for many years, and I used to work for Goldcorp and other companies in the area that's called Rimini Exploration. The Rimini people were ex Goldcorp people and are helping us run the project on a day to day level.

We have been very efficient using very minimal staffing and extra costs, and we're trying to put as much of the money as we raise as we can into the ground. It's a lean, mean, hopefully very qualified team, and I think the proof was in the pudding with these things. If we keep generating value for shareholders, we don't want to end up with a bloated corporate structure that eats up dollars that could otherwise you put into the ground.

Maurice Jackson: Let's get into some numbers. Please share the capital structure for Great Bear Resources.

Chris Taylor: Great Bear is a very tightly structured company despite the fact that we've been actively exploring for a few years now. We have about 42 million shares issued and outstanding on a fully diluted basis including remaining warrants, there aren't very many left, and options. We're just over 50 million shares issued and outstanding. The capital structure is very tight in this company compared to most of our peer groups in the industry.

Maurice Jackson: How much cash and cash equivalents do you have?

Chris Taylor: In Canadian dollars, we have about $18.5 million cash in the till right now, and there are several millions, $7 to $8 million, of additional funding available through in the money warrants and options. All told, we're looking at over $25 million in cash and cash equivalents at the moment, which is sufficient for us to drill nonstop at this rate without the requirement to finance again all the way through past the end of 2020.

Maurice Jackson: That's correct because I think you referenced your burn rate was about a million per month, is that correct?

Chris Taylor: That's correct. That's three rigs drilling all the time on the project, 12 months a year.

Maurice Jackson: How much debt do you have?

Chris Taylor: We don't have any debt at all.

Maurice Jackson: This is quite impressive, sir. Who are the major shareholders and what is their level of commitment?

Chris Taylor: The largest individual shareholder in the company is Mr. Rob McEwen. He was in charge of Goldcorp at the time of its high-grade zone discovery, about a decade and a half ago, in Red Lake, and I remember when we put out one of the zones that we discovered, the Hinge zone, we put out news and within an hour of that news hitting the news wires, I was on the phone with Mr. McEwen and he became our largest shareholder at that time. I remember exactly what he said. He said, "Chris, I've seen this story play out before. I know how it ends and I want to be your premier shareholder in Great Bear." Mr. McEwen is the largest individual that we have involved.

We have another shareholder who we've not named, Mr. Rob Cudney. He owns a few percent of the company individually. He was involved with a company called Gold Eagle Mines, which also had a major discovery in Red Lake. They sold that deposit to Goldcorp before they drilled off a resource, for about a billion and a half dollars. And he likewise was very interested in becoming a shareholder of the company. Those of us in management collectively with us and our families, we have about 15% of the outstanding shareholdings of the company. I think Mr. McEwen has about 14%, Mr. Cudney has a few percent, management has 15%. We have institutional ownership, which is increasing on a regular basis.

That would likely be up to the 25 to 30% range at this point, and the remainder of the float is owned by retail. At this point, we have not committed ourselves to any particular large mining company or other large investment institution that would have a say in how we're operating. We operate completely independently and that gives us the ability to make these discoveries without having external mandates supplied to us. It's been a very successful formula for us.

Maurice Jackson: Are there any redundant assets on the books that we should know about?

Chris Taylor: No.

Maurice Jackson: Are there any change of control fees? And if yes, what is the compensation?

Chris Taylor: Change of control fees within Great Bear I believe three of us that would have a change of control provision, and these would be to the tune of probably collectively between the number of people that are involved on the order of a couple million dollars in the event that that occurs. These are very insignificant costs relative to the scale of the project and the value of the company.

Maurice Jackson: Is management charging a consultant fee for any services?

Chris Taylor: No. Management in this case are all salaried, so effectively it's a standard salary commensurate with our level of experience in the industry, and it would be according to standard in industry parameters.

Maurice Jackson: In closing, multilayered question here. What is the next unanswered question for Great Bear Resources? When can we expect a response and what determines success?

Chris Taylor: One of the principal questions that I get asked is how much gold is there on your property? And, of course, we'd like to figure that out as well, and that also goes very nicely into the second part of your question is when will this be revealed? Well, this is an ongoing 90,000 meter currently exploration program and we're funded for way beyond that in terms of number of meters that we can drill, so I would expect that the market and shareholders will understand over time just how big this system is and I believe as the limits of the gold mineralization are sought and they're hopefully eventually found, we will then see commensurate value come in with the story much as it has been doing. The value proposition for investors here is to be part of the discovery process on a project that looks like it has the potential to be much bigger than the majority of prospects like this that have been seen in the last number of years.

Maurice Jackson: Chris, what keeps you up at night that we don't know about?

Chris Taylor: Well, a number of years ago, I was in the same boat as everybody else that had a dream and a vision for growing a company like this through the discovery process that was always about finding enough money to keep that drill rig turning. We've been very successful on that front in the sense that we recently completed a bought-deal placement that was doubly oversubscribed, so we ended up raising twice as much money at a higher price than we had originally sought, and we're currently so well funded that we don't need to go back to the market for a long time.

Right now, what keeps me up is no longer those mundane concerns that are typical of the industry. Right now, my main concern is that we don't make it through enough exploration until we get an offer that's too good to be refused from a large mining company and we end up having to hand over the project at too early of a stage. Fortunately for us, because we're independent in terms of our shareholder base and very well funded, I can't see that that will happen before we have significant room to grow from this point. And that's what I really look forward to.

Maurice Jackson: Great Bear Resources can stand on the merits of his own work, but the coincide with it, you have the catalyst of also having a resurgent gold price, a six-year high. Does that change anything for you though?

Chris Taylor: I would suggest that the increased gold prices probably liven up the space in terms of potential M&A activity. There's always interest on the M&A side, but the ability to consummate deals, if you listen to large mining companies, they'll often tell you that they want to buy assets at the bottom of the market, but if you look at when they actually do buy assets, it's when you have a bit of a bull market scenario going on. For us, the high gold prices, in Canadian dollar terms, gold is now at record levels that have never been seen before.

And that means that projects, projects in Canada, have a potential profitability far beyond what they would have had even just a few years ago, and that means that Canada and Red Lake jurisdictions like ours that are easy to access and have existing mining infrastructure, these are premier destinations for large companies to go and seek major discoveries, and we think that we're on top of one of those.

There are no downsides for us with the rising gold price, but the kind of mineralization that we're seeing, whether gold prices are higher or even quite a bit lower, I would anticipate that these would have robust economics going forward. If you look at comparable deposits in the area, they're quite profitable even well below $1,200 dollars an ounce gold, $1,100 an ounce gold. With the kind of environment that you're looking at now, it's nothing but good news for companies that are in our situation.

Maurice Jackson: Mr. Taylor, last question. What did I forget to ask?

Chris Taylor: I guess, maybe you forgot to ask what gets me out of bed in the morning? And I think that's an easy one to answer. To be on top of a discovery process like this in Great Bear, every morning is a little bit like Christmas. I get updates and the drill rig has gone into a new area and it's found gold here and it's found gold there, but one of the things that I really enjoy that really drives me is just benefiting our shareholder base. These are people, and if you think about it, when we were a tiny little company just two years ago with a sub $5 million market cap, people were taking money and giving it to us to go drill based on our vision of what this project could be.

I love to be able to reward shareholders for their trust. And whether you came in at 50 cents, or $5, or $10 ultimately, whatever it's going to be, I'll do my very best because I'm a big shareholder and I understand that the faith you put in us, you want to see returns on that investment. That's why I'm very focused on limiting dilution in the company, keeping the share structure tight and making sure that the money that we raise turns into money that that's supplied in the ground so that we can find more gold. So that's what drives me. I love talking about it. I love talking to shareholders. I work for shareholders and I'm always happy to talk to them. I guess that's maybe the one thing that you forgot to ask me.

Maurice Jackson: One of the questions I will receive is, Maurice, do you think that the stock is going to melt up referring to Great Bear Resources? I'm like, "You're witnessing the beginning of it."

Chris Taylor: Yes.

Maurice Jackson: And I stress, the beginning. I think this is just the beginning stages for you. The stars are aligning and if you are considering becoming a shareholder, what's the website address to so much to go to, sir?

Chris Taylor: Have a look at www.greatbearresources.ca. That's our website. Have a look at that. You can look at all the technical information. We're very transparent in terms of disclosure. You should be able to find all the maps and drill sections and 3D models and descriptions of where every hole has been and keep in mind we don't hide drill holes. Often when you read releases from companies, they give you highlighted drill holes in the release and everything else is undisclosed. With Great Bear, we disclose everything all the time.

Maurice Jackson: I found that hard to believe that companies would hide the bad results?

Chris Taylor: Well, they say for remaining results, go to the website. Well, you can do that with us, but the results have already been disclosed in a news release. We're very transparent that way and I think that sets us apart from other people as well. So please go, check out our website, www.greatbearresources.ca, and have a look at the technical information there. Hopefully that will give you something to be interested in.

Maurice Jackson: For direct inquiries, call 604.646.8354 or you may email info@greatbearresources.ca. Great Bear Resources trades on the TSX.V: GBR | OTCQB: GTBDF.

Before you make your next bullion purchase, make sure you call me. I'm a licensed representative for Miles Franklin Precious Metals Investments, where we provide a number of options to expand your precious metals portfolio from physical delivery, offshore depositories, precious metal IRAs, and private blockchain distribute ledger technology. Call me directly at 855.505.1900 or you may email maurice@milesfranklin.com. Finally, please subscribe to provenandprobable.com for Mining Insights and Bullion Sales.

Chris Taylor of Great Bear Resources, thank you for joining us today on Proven and Probable.

Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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Disclosure:
1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Great Bear Resources is a sponsor of Proven and Probable. Proven and Probable disclosures are listed below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Great Bear Resources. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own shares of Newmont Goldcorp, a company mentioned in this article.

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( Companies Mentioned: GBR:TSX.V; GTBDF:OTC, )

Wounded Animals, Indeed

Source: Michael Ballanger for Streetwise Reports   09/09/2019

Sector expert Michael Ballanger offers his observations of recent activity in the gold and silver markets.

"The permabulls will tell you that the bullion banks and their treasury department conspirators have lost all power in this 'new paradigm' and we should relax and refrain from worry. I tend to disagree because wounded animals are the singular most dangerous of all creatures on this debt-ravaged planet, and with gold at $1,552, these cartel cretins are now wounded, angry and very desperate animals."
—Michael Ballanger, Sept. 2, 2019; silver at $19.00 one day before the top

OK, so now that there is zero doubt surrounding the recent demise of the bullion banks, I was reminded yesterday (amidst the gnarling and gnashing of many a silver bulls' incisors) of a famous Mark Twain quote surrounding rumors of his passing: "The reports of my death are greatly exaggerated."

That is exactly the reply of the criminal cartel last week as bullion bank shenanigans took a page out of the Carpe Diem playbook and absolutely pounded the precious metals with such feral ferocity that they quite predictably set off a retail panic of the highest order. One very prominent gold and silver bull tweeted out, "It should be noted that Crimex silver is still up on the week!", to which I quickly and cynically replied, "Tell that to my margin clerk."

Tweets defending the tape action were furious all day Friday after noticeable calm on Thursday, and the fact that every single tweet was of the "BTFD!" or "buying opportunity" vintage, I would have felt a great deal better had there been a few "Get me the $#$% out!" tweets implying the arrival of panic, and not of the "buying" kind we saw on Wednesday. It would seem that the Millennials and GenX-ers suddenly discovered the precious metals over the Labor Day weekend and were abruptly punished for their tardiness. Empty vodka bottles and used vaping dispensers were everywhere. . .

The daily charts for gold and silver have recorded but a mere blip on the long-term radar screen and remain in beautifully choreographed uptrends. But there is one chart that has me a tad rattled and it is the weekly silver chart, where the arrival of the dreaded and most-foul "gravestone doji" marks a powerful reversal signal to a market that has been trending higher in orderly fashion since my July 2 bullish call at $15.00 silver at $14.20 SLV. The gravestone doji is one of the most reliable reversal indicators and is always found at the tail end of a bull move. When accompanied by the big volume spike we had last week in silver, it suggests that my re-entry into the silver market is going to be farther away and possibly a bit lower than I initially expected.

Going into Thursday, the number of tweets from newly minted gold "experts" (most of whom you know) that were the literary equivalent of a NASCAR victory lap, complete with buxomy girls and flowing champagne, were voluminous to the point where I actually tweeted this during the final orgasmic spike in silver on Wednesday: "Not ONE—repeat—NOT ONE bearish tweet on the PM sector in the past two sessions—everyone now long and strong with bows taken and egos fully erect."

Whenever highly emotional extremes of either greed or fear enter the market—any market—I have learned over the years to be prepared to take the opposite side of the trade. Certainly there was an extreme last July when people were revolted by the prospect of owning silver, with more than a few of the "enlightened ones" calling for a 100 GSR (gold-silver ratio), which was the equivalent of capitulation.

I took the other side of that trade and remain short the GSR from 92.40 (currently 82.68). Similarly, I counted somewhere in the order of 75 bullish articles on silver and over 200 on gold by Wednesday of last week, and answered over 50 e-mail queries asking whether they should add to Aftermath Silver Ltd. (AAG:TSX.V) at $0.30 per share (up from $0.10 60 days prior).

The abject terror of early July was replaced with unwavering avarice last week, so naturally, seeing, feeling and smelling the odious presence of greed slithering its way into the gold and silver trading pits compelled me to take the other side of that trade as well. And I offer this not as a self-laudatory handwave but more as an educational lesson in human behavior.

What has annoyed me to no end in the past few weeks has been the presence of hubris in the collective psyches of many precious metals bulls, and it is not surprising that an attitude of "There! Take that, ya bastards!" was prevalent with regard to the bullion banks after year-after-year of intervention, interference and criminal collusion. I, too, was delighted in July when the $1,375 cap for gold was blown to smithereens by the combination of physical demand and rising mistrust. Notwithstanding the many thousands of dollars I left on the table by exercising the same prudence that saved my sexagenarian ass in past campaigns, the move into the $1,500s has been at once both vindication and celebration for a gold "opinionator" known to launch quote monitors from ninth-floor windows in search of banker craniums with alarming regularity.

However, the camaraderie among we gold bulls turned ugly when I started to read about a "new paradigm," to the point where I wanted to take the term and install it in my lavatory. Just as pride cometh before a fall, tweaking the bulbous, red-veined noses of the bullion bank sloths is analogous to shuffling deck chairs on the Titanic; it invites a negative outcome.

That is why I started this week's missive with a quote not from Ayn Rand or John Maynard Keynes but from last week's missive. By last Wednesday, the bullion bank traders weren't just irritated canines; they were bruised and bloodied wolverines, backed into a corner of the underground garage with nary a path for escape save launching a final desperate attack—and attack they did, sending the gold and silver bulls reeling into urgent and intensified retreat after weeks of complacency and control.

If there is one thing I have learned over the years, you do not tempt fate. In the minds of those who control governments and their military-industrial complexes, gold is the enemy. Rising gold prices are the financial equivalent of nuclear missiles being shipped to and installed in Cuba. Neither will be tolerated (for very long) by those wielding the baton of power and if we, for one millisecond, forget that, we are doomed to margin call miasma and deflated dreams.

Wall Street symbolizes the American Way of Life and all that is good that separates them from the heathens in Afghanistan or Venezuela. When rising gold prices hijack the financial news headlines, you had better prepare yourselves (and your margin clerk) for a change of venue. The most dangerous phrase in all of trading is "It's different this time." It is never, ever, "different". . .

Cot Report

The September 2 COT had only one notable item: The bullion banks were afraid of adding more than 4,000 new shorts to their positions despite a massive price surge on Tuesday. That is informative. (See below.)

To summarize what I deem as a "watershed week," I go into Monday morning with a 53.7% cash position my unleveraged trading account and 85% cash in the leveraged account. The GGMA portfolio is essentially my unleveraged account and is now up 163% year to date. But what is important for me is being able to resist the temptation of buying back all positions that I put on in the first half of the year too early.

In an election year, the incumbent president (and particularly DJT) will be acutely aware of the S&P 500 and of gold prices. I do not trust these insidious serial manipulators because the most mind-numbing and alluring narcotic of all is power, and with the addictive personalities sported by all politicians, there is little if anything they will not do to lose their grasp of it.

Therein lies the danger in assuming that physical demand alone will give way to unimpeded advances in gold and silver; the central banking global cabal has many tools at its disposal, and to underestimate its willingness to use them to advance its own agenda would be abject folly. What we witnessed late last week was most certainly a healthy and well-deserved spate of gold ol' all-American profit-taking in the metals but the manner in which it closed out the week, and particularly the post-Crimex Access market, reeked of the all-too-familiar odor of interference.

While natural forces may have initiated the pullback, a malevolent and purposeful force exacerbated it and that was clearly evident in the final hours on Friday. While the bullion bank behemoths were blatantly timid earlier in the week, someone or something gave them great confidence in pressing their bearish bets late Friday, and I think readers of this publication have a pretty good idea who or what that presence might be.

Wounded animals, indeed.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger's adherence to the concept of "Hard Assets" allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

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Disclosure:
1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: Aftermath Silver. My company has a financial relationship with the following companies referred to in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector. Additional disclosures are below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Aftermath. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Aftermath Silver, a company mentioned in this article.

Charts provided by the author.

Michael Ballanger Disclaimer:
This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

( Companies Mentioned: AAG:TSX.V, )

Silver’s Sharp Reaction Back

Source: Clive Maund for Streetwise Reports   09/09/2019

Technical analyst Clive Maund charts silver and explains why he believes it hasn't hit a final top.

Silver reacted back sharply on Thursday and Friday after a parabolic blowoff top. This was not a final top, but it does indicate that silver needs to take a rest and consolidate/react back, probably for at least several weeks.


The latest silver COT is also showing a 1-year record extreme for positions, giving grounds for caution…

Click on chart to pop-up a larger, clearer version.

Although the longer-term Hedgers chart for silver is not at the extremes that it reached in 2016 and 2017, readings are also at levels that give grounds for caution, especially considering that silver just did a parabolic slingshot move.

Click on chart to pop-up a larger, clearer version.
Chart courtesy of sentimentrader.com

The conclusion is that silver has started a corrective phase, and, given the nature of the beast, it could be quite scary for the unprepared once it breaches the parabolic uptrend, but with gold especially having signaled the start of a major bull market any such corrective action will be viewed as presenting a rare opportunity to buy silver investments at very good prices ahead of the major uptrend that is expected to follow.

Originally published on CliveMaund.com on September 9, 2019

Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

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Disclosure:
1) Statements and opinions expressed are the opinions of Clive Maund and not of Streetwise Reports or its officers. Clive Maund is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Clive Maund was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Charts and graphics provided by the author.

CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

Technical Analyst: Significant Correction for Gold Has Started

Source: Clive Maund for Streetwise Reports   09/09/2019

Technical analyst Clive Maund discusses the factors he sees pulling gold down.

Although a major precious metals sector bull market has certainly started, various fundamental and technical factors came together last week to suggest that a significant correction to the recent strong run-up has now started.

The main fundamental development was the announcement that there will be a Trade War summit between China and the U.S. early next month, with hopes being expressed that this may lead to compromise or some kind of truce. Whilst the chances of improvement may be slim, the market has got what it wants for now which is hope, and this hope should continue at least until this meeting, which provides the excuse for the markets to go "risk on" until then, which is why the stock market broke higher last week, delaying but not eliminating our crash scenario.

A return to "risk on" is clearly not good for the precious metals, which, until last week, had been benefiting from a flight to safety as had the dollar, creating the unusual situation where the dollar and gold were rising at the same time. Now, in a risk on environment they are suddenly out of favor again.

In addition to this fundamental argument we have a range of technical indicators pointing to a correction in the precious metals sector that we will now look at. They include its overbought status, overly bullish sentiment readings and COTs showing extreme readings.

Starting with gold's 6-month chart, we can see that it doesn’t look too bad—yet, but if we look more closely we can see that it is on the point of breaking down from the rather steep uptrend in force from late May, with it having dropped back on quite high volume the past two trading days, and it is noteworthy that Thursday's drop was the biggest 1-day drop for a long time, making it more likely that it signals a reversal. In addition, the MACD indicator shows that momentum is starting to flag.

So, how far could gold react back? It happens more often than not that after a price breaks clear out of a giant base pattern, as gold did from its giant complex Head-and-Shoulders bottom or Saucer base shown on our 10-year chart, that it then returns to test support at the upper boundary of the base pattern before turning higher again. That could happen again and it would throw a lot of investors in the sector who are now of the view that we are "off to the races." So, if it does react back that far don't be dismayed—on the contrary it would throw up one last great buying opportunity.

We have had a rather unusual situation in the recent past where the dollar and the precious metals have been strengthening together. This is because, in a risk-off environment both have been considered safe havens. In a risk-on environment this logic works in the other direction so that the dollar and the precious metals may both react back together. On the 3-year chart for the dollar index we can see that it is at a good point to turn lower, despite its still bullishly aligned moving averages, as its persistent gentle uptrend has brought it up to the significant resistance level shown.

While precious metal stocks continued to push higher in recent weeks, the decline was losing momentum, as revealed by the downtrending MACD indicator on the 6-month GDX chart below, which led to its breaking down on high volume on Thursday and Friday, and it won't have to drop much lower to break below its 50-day moving average, that has opened up a rather large gap with the 200-day, a development that is likely to happen soon.

So how about COTs and sentiment? We will now proceed to look at them. We had been wary of calling a top too soon based on the increasingly lopsided COTs, having called a top too soon during the run-up early in 2016, but now, given the other factors that we have considered, in particular the negative developments last week, the latest gold COT, which shows high Large Spec long positions and heavy Commercial short positions, certainly makes a reaction back by gold now or soon a lot more likely…


Click on chart to pop-up a larger, clearer version.

The COT is backed up by the latest Hedger's chart, that goes back to 2010, which shows that positions match the extreme reached in the summer of 2016, and as we know this was followed by a brutal correction for the rest of the year. While a correction certainly looks likely it shouldn't be so deep, because there is a big difference this time round, which is that gold has broken out into a major new bull market—it was still in a basing phase in 2016.


Click on chart to popup a larger, clearer version.
Chart courtesy of sentimentrader.com

Lastly, the Gold Miners Bullish % Index is still at 87%, and while we were waiting to see if it would hit 100% as it did in 2016, it doesn't have to, of course, before a reversal occurs, and 87% certainly shows that enough people are bullish to warrant a trip to the fleecing shed.

Investors in the precious metals sector should therefore take measures to protect themselves, which include stepping aside for a while, or if staying long, hedging with inverse ETFs such as DUST, or options (options are much more cost effective), GLD Puts being very suitable as they are highly liquid with narrow spreads, and then we watch for the expected correction to unfold, aware that when it has run its course, we will be presented with a MAJOR BUYING OPPORTUNITY.

Originally published on CliveMaund.com on September 9, 2019

Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

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Disclosure:
1) Statements and opinions expressed are the opinions of Clive Maund and not of Streetwise Reports or its officers. Clive Maund is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Clive Maund was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Charts and graphics provided by the author.

CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

Exploring for Copper in Major Belt in the Yukon

Source: Maurice Jackson for Streetwise Reports   09/09/2019

Tim Johnson, CEO of Granite Creek Copper, speaks with Maurice Jackson of Proven and Probable about his company's exploration activities in the Yukon.

Maurice Jackson: Joining us for conversation is Tim Johnson, the president and CEO of Granite Creek Copper Ltd. (GCX:TSX.V). Pleasure to be speaking with you today regarding the value proposition before us in Granite Creek Copper. Before we delve into project specifics, Mr. Johnson, please introduce us to Granite Creek Copper and what is the opportunity you present to the market?

Tim Johnson: Granite Creek Copper is a member of the Metallic Group of Companies; that's a group that identifies what we see as undervalued opportunities. In Granite Creek Copper's case we've acquired a large brownfields land position in the Minto Copper Belt in Yukon, Canada. It's a type of thing that you can acquire at the low part of the market, which we think we are for copper, and we only see upside from here. We have assembled a team of professionals who can advance a project and we've acquired a significant land position.

Maurice Jackson: Take us to the Minto Copper Belt and provide us with some historical context on the region.

Tim Johnson: Well, it's an interesting region. At one time it was held by a single junior mining company, United Keno Hill Mines. It did quite a bit of exploration in the belt. It was part of the discovery of the two major deposits in the belt, which one of them is now in operation, the Minto Mine, that was recently purchased by Pembridge. And the other one is the Carmacks Copper Project that is held by Copper North.

Granite Creek Copper sits right between them. Our ground, even though was held by this group, hasn't seen any significant exploration since the early 1980s. So we were able to acquire a really unique property that wouldn't normally have been available.

Maurice Jackson: To really appreciate the opportunity before us in the Stu Copper Project, which is your flagship project, share with us some of the resources and reserves from the Minto mines and the Carmacks deposit.

Tim Johnson: The most important number, in our context regarding the Minto Mine, is 3.9 million tonnes Proven and Probable. And the significance of that is that provides them roughly a four-year mine life with their current reserves. They do have some resources that they could probably convert, but we see them potentially running out of ore fairly shortly.

And then to the south of us, right adjacent to us, is the Carmacks Project and, again, they have a small deposit. They've got about a seven-year mine life as contemplated by a 2016 PEA. We don't see that as being big enough. So we are strategically positioned very well to potentially provide mill feed for two mines, one to the north of us and one to the south. The one north of us is within about 25 kilometers, and the one to the south of us is right adjacent to our claim boundary. So any success that we have, we have potential partners to look at things. So we view both scenarios favorably.

Maurice Jackson: The Yukon is attracting a lot of investment. Who is investing there and why?

Tim Johnson: The majors in the past few years have taken another look at the Yukon. Newmont Goldcorp is in there in some of the gold spaces, Coeur Mining is in there and I think what you're going to see over the coming years is more interest in the Yukon. I mean one of the reasons for that, it's a great jurisdiction to work, they’re very forward thinking, they're inviting investment. The Yukon government is one of the promoters of the mining industry itself, and they spend a lot of time and resources to try attract investment in into the region.

Maurice Jackson: There are some strategic advantages that Granite Creek Copper has over its peers that are exploring for copper with regards to brownfields exploration. They're very important to know for our audience here, please share them with us.

Tim Johnson: We feel, and this is the philosophy of the Metallic Group itself, that we've acquired a land position that if a major was where we are in the copper space, they would have acquired it. So, if a major held the Minto Mine, for instance, we have the ground that they would be looking to acquire to expand their resource. That's not the case here. In fact, there are three different juniors, one that's got an operating mine, and one in near-term production and ourselves within a space that you would really see a major consolidate at some point.

And we think that one of our major advantages is that as we develop resources and our neighbors to the north and south, we think at some point there's going to be a critical pound in the ground number that's going to attract the big companies, the big copper companies, that are going to have to take a look at the belt.

Maurice Jackson: Mr. Johnson, introduces to your flagship, Stu Copper Project, and share some of the project highlights with us.

Tim Johnson: After we acquired the Stu Copper Project, we also acquired a historical database that was developed by the previous company, United Keno Hill Mines that I mentioned before. We've done some compilation work on that database and we've also signed datasharing agreements with our neighbor to the south. And by consolidating that data we're starting to get some new, interesting ideas about our project. We recently completed a soil compilation that identified four significant multi-kilometer targets, and that was without putting any boots on the ground.

That was just taking the old data, getting it into modern GIS software and reviewing what we had. We've acquired over 5,000 soil samples, historical, most of them copper. So a lot of the work that we're doing now is having to look at that, going back in, doing multi-element sampling just to see if the gold and the silver that we know is in the system can be advanced along with copper. Historically, there are some significant high-grade drill intercepts in the order of 2% to 2.5% copper, as high as 3% copper over 13, 14 meter intercepts. So not long, but significant grade.

Maurice Jackson: Granite Creek Copper has a database of historical data including drilling, trenching, geophysics and geochemical sampling. From those results, what makes Granite Creek Copper confident that they have the next major copper discovery in the Yukon?

Tim Johnson: Our compilation work has shown some significant multi-element targets. We are currently doing geophysics work to focus those targets and identify high priority drill targets. We know, based on the work of other operators in the belt, that a certain type of geophysics, induced polarity, that we're using works quite well. We're using known technology and we're compiling known data and developing new targets. So, we think we've got a really good chance of developing significant resources, either for our neighbors to the south, or our neighbors to the north, or even a standalone operation should we develop enough.

Maurice Jackson: What can you share with us regarding soil anomalies?

Tim Johnson: Our recent compilation effort showed four large regional targets. One of them was new to us; it was in the data, but not obvious because different operators had held it in different broken up land ownerships over the years. Once we started to compile the data and realize where the data was in reference to the claim boundaries, we were able to actually develop a significant new target, our northeast target, as well as ones that are close to our southern claim boundary with Copper North.

Maurice Jackson: Now you somewhat addressed my next question, which was a two-fold question, which is have you identified drill targets and are you actively drilling there now?

Tim Johnson: We're not actually drilling now, and when we acquired the property there were actually some pretty good drill targets from previous operators. However, we felt that a compilation effort, a review of the data and really wrapping our heads around what we had, before we rushed to drill, was the best approach. I think a lot of juniors, they rushed to drill to try and show what they've got, and I think that can be very dangerous. We're comfortable with the compilation that we're doing and the ground work that we're doing this year to develop drill targets to be drilled as soon as we can next season.

Maurice Jackson: Let's discuss some important topics germane to the project, beginning with reversionary interest. Are there any on the project?

Tim Johnson: There is a net smelter return on the project, other than the NSR we hold a 100% interest. It was acquired for stock. When we did the acquisition, Granite Creek had been a shell and we cleaned it up, put new management in place, and acquired this project. So other than the NSR, we have no obligations other than maintaining the claims in good standing by doing sufficient work on them on an annual basis.

Maurice Jackson: We're going to get into some numbers later in this discussion, but from a capital expenditure standpoint, what is your largest expense, and at what cost?

Tim Johnson: Well, our largest expense will be drilling. You know, we envision a $1.5 to $2 million drill program next season. Our current exploration is in the $200k to $300k range and we expect that to develop significant targets for us for next season's drilling program.

Maurice Jackson: Are you fully permitted?

Tim Johnson: We are fully permitted on about half the claim block, the southern half of the claim block. The northern half permits are underway. They're with the Yukon government now. We don't see a lot of problems getting the permit to the stage that we need for exploration. And then, as we move towards development, there's another permitting process to go through.

Maurice Jackson: We've discussed the good, let's address the bad. What can go wrong and what is your action plan to mitigate that wrong?

Tim Johnson: I think the biggest risk for us and our shareholders this time is the near-term price of copper. We see a little bit of weakness right now, but we don't think that's long term. We think in a 6 to 12 month timeframe that's going to turn around. We see significant shortfalls in the copper market moving forward. So, we think that's the biggest risk.

A possible mitigation would be look to another project, but we're quite happy with the one we have; this is going to continue to be our flagship project. If the copper prices continue to stay soft, we will look at reducing our expenditures to preserve capital, but, long term this is where we want to be.

Maurice Jackson: Switching gears, let's discuss the people responsible for increasing shareholder value. Mr. Johnson, please introduce us to your board of directors.

Tim Johnson: As president and CEO and director of the company, my background is logistics and project management. I've been in the public company space for almost 10 years now. Prior to that I ran a service company that had large projects in northern British Columbia, so I'm good at keeping things on track and on budget. Mike Rowley is also a director. He is president, CEO of Group Ten Metals and part of the Metallic Group. He's been in a public space for about the same time, 10 to 12 years. He's focused on his company, but also provides critical advice.

Another director of ours is John Cumming. John is a securities lawyer who's been practicing in Vancouver for a very long time. And the last director is Francois Lalonde. Francois is an investor and businessman, an engineer. He lives in Montreal and provides us access to some of our potential investors there. So we've got a pretty well-rounded board.

In addition to that, because we are part of the Metallic Group of Companies, we access personnel such as Greg Johnson, who has a track record of taking resources and expanding and developing them. He is ex Novagold, and the CEO of Metallic Minerals, and we have access to some of his compatriots who were involved in that operation and many others. And, because of our association with the Metallic Group, we share geologists and geophysicists and professionals that we don't have to pay their full salary because they're spread amongst the group. So, the group is an opportunity for us to cost save and to access some of the personnel that we normally wouldn't be able to, with a company our size.

Maurice Jackson: Well, good stewards of capital. Always good to hear. Who is on your management team and what skill sets do they bring to Granite Creek Copper?

Tim Johnson: Our management team includes individuals who were formally part of Metallic Minerals and when we formed the Metallic Group, we accessed them. So our geologist, Debbie James, does a lot of work for us. Scott Petsel does a lot of work for us. Again, these are individuals who have experience developing resources, taking small, underdeveloped resources and expanding them. We also have personnel with Debbie, including Lauren Blackburn, who have extensive experience in the Yukon, understand the Yukon geology and the ways of working with the Yukon government and local First Nations as, well.

Maurice Jackson: Let's get into some numbers. Please share the capital structure for Granite Creek Copper.

Tim Johnson: We've got 35.7 million shares issued and outstanding, fully diluted 68 million. Roughly 37% to 38% of that is held by insiders and other people close to the company. So, we're fairly tightly held, and with a significant holding of the insiders.

Maurice Jackson: How much debt do you have?

Tim Johnson: We have no debt. We're currently about $700,000 cash positive.

Maurice Jackson: What is your burn rate?

Tim Johnson: Our burn rate is about $20,000 a month.

Maurice Jackson: Are there any redundant assets on the books that we should know about?

Tim Johnson: No, there are not.

Maurice Jackson: Are there any change of control fees and if yes, what is the compensation?

Tim Johnson: The change of control fees to the CEO is six months' salary.

Maurice Jackson: Is management charging a consulting fee for any services?

Tim Johnson: Other than the CEO, I draw a salary, there's no other management charges to the company.

Maurice Jackson: In closing, multi-layer question, what is the next unanswered question for Granite Creek Copper? When can we expect the response? And what determines success?

Tim Johnson: Big question is when do we drill? That is going to depend on the current ground programs going on, geophysics and soils, and of course the weather. We will likely have to do another raise in order to fund that drill program. But that's the next question that we're looking at.

Maurice Jackson: What keeps you up at night that we don't know about?

Tim Johnson: I think the markets, really. Where copper is going, how long we're going to see these slightly depressed prices and when we're going to see a turnaround. We rely heavily on where copper price is going and the perception of the market.

Maurice Jackson: Mr. Johnson, last question. What did I forget to ask?

Tim Johnson: Well, I don't know that you've got to ask it more like I forgot to mention it. What I forgot to mention is the nature of the two projects to the south and to the north of us. To the south of us, the Carmacks Project is an oxide copper project. To the north of us, the Minto Mine is a sulphide mine. The significance of this is that one mill can't process the other's material. We know that there's some limited oxide at Minto and we know that there is some limited sulfide at Carmax, and we have both.

So, we could potentially see a scenario where trucks were shipping both ways. It would be picking up sulphide material from us delivering it to the mine to the north. Picking up oxide material from them, maybe some more from us, and delivering it to the mind to the south. So, the belt is really a significant consolidation potential with an oxide mill in the south, potentially, and a sulfide mill to the north and us in the middle. We think that's a great scenario.

Maurice Jackson: And how does grade fit into the narrative?

Tim Johnson: This is some of the highest-grade copper in Western Canada, at Minto and potentially on our ground, and even the oxide resource to the south. So even though the tonnages are quite a bit smaller here than you would see, say, for a big porphyry system, the grade makes up the difference.

Maurice Jackson: Mr. Johnson, for someone listening that wants to get more information about Granite Creek Copper, please share the website address.

Tim Johnson: www.gcxcopper.com.

Maurice Jackson: For direct inquiries, call (604) 235-1982 or you may email info@gcxcopper.com. Granite Creek Copper trades on the (TSX.V: GCX).

Before you make your next bouillon purchase, make sure you call me. I'm a licensed representative for Miles Franklin, precious metals investments, where we provided a number of options to expand your precious metals portfolio, from physical delivery, offshore depositories, precious metal IRAs, and private blockchain distributed ledger technology. Call me directly at (855) 505-1900 or you may email maurice@milesfranklin.com.

Finally, please subscribe to provenandprobable.com for Mining Insights and Bullion Sales.

Tim Johnson of Granite Creek Copper, thank you for joining us today on Proven and Probable.

Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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Disclosure:
1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Granite Creek Copper. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Granite Creek Copper is a sponsor of Proven and Probable. Proven and Probable disclosures are listed below.
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( Companies Mentioned: GCX:TSX.V, )

With Its Val d’Or Assets, Exploration Company ‘On Track to Get Serious Attention’

Source: Streetwise Reports   09/06/2019

The recently released resource estimate and other reasons why this Canadian firm makes a premium takeout target are provided in an iA Securities report.

In a Sept. 3 research note, iA Securities analyst George Topping reported that the size, potential and location of Probe Metals Inc.'s (PRB:TSX.V) Val d'Or projects in Quebec put the company on "producers' mergers and acquisitions screen."

"Probe has the largest Val d'Or land package and now the largest resource in the camp, which elevates it to a premium takeover candidate," the analyst added.

That just released resource estimate totals 2.6 million ounces at an average grade of 1.9 grams per ton (1.9 g/t) gold. About 70%, as opposed of the previous 56%, of the resource is open pit at a grade of 1.5 g/t.

The grade for the open pit Measured and Indicated resource is 1.7 grams per ton and for the inferred resource, 1.4 g/t. Yet, iA Securities expects the Inferred grade will increase with further infill drilling, noted Topping. Whereas the grades of the Inferred open-pit resources were "slightly lower than expected," they were offset by the total ounces.

Further, adding the 565,000 ounces located on Probe's optioned properties, Monique and Sleep, takes Val d'Or's total resource estimate to 3.1 Moz, Topping pointed out. Plus, "recent parallel trends to the New Beliveau deposit should continue to grow."

iA Securities expects that Probe will be acquired in one to two years, perhaps by Agnico Eagle or any of a number of midtier or senior producers, particularly those in the area. The management team has done it before, selling its Borden mine to Goldcorp. "The longer it runs, the higher the eventual takeout price," Topping commented. Probe, with $23 million in cash, does not need financing any time soon.

IA Securities has a Buy rating and a CA$2.40 per share target price on Probe Metals, whose stock is currently trading at around CA$1.50 per share.

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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from iA Securities, Probe Metals Inc., Research Update, September 3, 2019

Conflicts of Interest: The research analyst and or associates who prepared this report are compensated based upon (among other factors) the overall profitability of iA Securities, which may include the profitability of investment banking and related services. In the normal course of its business, iA Securities may provide financial advisory services for the issuers mentioned in this report. iA Securities may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis.

Analyst's Certification: Each iA Securities research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst's personal views about the issuer and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Analyst Trading: iA Securities permits analysts to own and trade in the securities and or the derivatives of the issuer under their research coverage, subject to the following restrictions. No trades can be executed in anticipation of coverage for a period of 30 days prior to the issuance of the report and 5 days after the dissemination of the report to our clients. For a change in recommendation, no trading is allowed for a period of 24 hours after the dissemination of such information to our clients. A transaction against an analyst's recommendation can only be executed for a reason unrelated to the outlook of the stock for the issuer and with the prior approval of the Director of Research and the Chief Compliance Officer.

Company Related Disclosures:
Probe Metals Inc.: In the past 12 months, Industrial Alliance Securities Inc. has managed or co-managed a public offering of securities for the issuer.
The analyst has visited the issuer’s operations. No payment or reimbursement was received from the issuer for the associated travel costs.

( Companies Mentioned: PRB:TSX.V, )