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BMR Morning Alert! - BullMarketRun.com

March 29, 2018

BMR Morning Alert!

4:30 am Pacific

(Exclusive to BMR Subscribers – Not for Distribution or Posting on any Board!)

Venture Slips On An Oil Slick!

Whoa, what’s with the Venture dropping 32 points or 4% in just 2 days, leading to an unusual March on top of a freaky February?

Spring has sprung in most of Canada, but it certainly hasn’t been a pretty couple of days for the Venture which closed below 800 yesterday for the first time since early December.

Before we get into one reason WHY this is happening, let’s take a look at the Venture short-term chart for a look at the current behavior of the Index from a technical perspective.

There’s reason to believe that some immediate/near-term relief is on the way as RSI(2) and RSI(14) on the daily chart have hit low extremes not seen since the 2017 bottom in July when the Index landed at 748.84.

Nearest support is 780 which the Venture came within just 2 points of yesterday before finishing at 784.

For weeks we’ve been pointing out key resistance in the low 830’s.  A market will take the path of least resistance, so after not being able to push through the 830’s the Index decided to test important support instead.

The EMA(8) and EMA(20) are the critical short-term moving averages – they are at 811 and 822, respectively, and in decline.  Both EMAs need to be conquered and both must reverse to the upside for confirmation of the start of a fresh uptrend.

Canadian Resource Sector Hindered By A Negative Political Backdrop

One significant factor that’s impacting Canadian markets, especially resource stocks, is political in nature:   It’s not a partisan comment to say that incompetent left-leaning governments at the provincial and federal levels (Trudeau, Wynne, Notley, Horgan-Weaver) have implemented policies and taken positions that are hurting the resource sector, in particular the Oil and gas industry, and the general economy as a whole.  Canada is now trailing the United States, for example, in almost every economic category and the gap is widening (but we’ll “save the planet”, right?).

One recent bank report indicated the Canadian economy is losing $50 million a day ($16 billion a year) due to a lack of pipeline capacity.  Politicians possessed by gender and “climate change” ideologies (imagine, putting a resource project to a “gender” test!) are destroying investment and jobs right across the country while also putting Canada at a competitive disadvantage vs. our largest trading partner.

Justin Trudeau has brought in a National Energy Program that’s just as bad as the one his father introduced more than 3 decades ago, while an ill-conceived federal revamping of the resource project approval process has added new regulatory hurdles for companies.  In B.C., the Green Monster is doing everything it can to block the critical Kinder Morgan pipeline expansion while one half of the two-headed Green Monster (Andrew “Wacky” Weaver) has actually come out against the largest proposed investment ($40 billion) for an industrial project in the province’s history – an LNG facility in the northwest part of the province that would generate 10,000 jobs.  What sane politician would oppose such a project?  Wacky Weaver’s reason is that it would produce 8 to 10 megatonnes of greenhouse gas emissions and the NDP has no “climate plan” to address that.  He’s prepared to defeat the NDP on the issue later this year if it doesn’t produce a satisfactory “climate plan” (hopefully he will and B.C. can rid itself of this cancerous Green-NDP coalition).

For the first time ever, extremist David Suzuki put his support behind a political party – the Greens in B.C. led by Andrew “Wacky” Weaver.

Now the Good News – change is in the air as an election in Ontario in just over 2 months (June 7) is expected to finally put the horrendous Kathleen Wynne government out of its misery and usher in a new period of fiscal sanity and pro-business, pro-resource sector policies.  That change, led by populist conservative Doug Ford, should dramatically alter the national discourse and encourage investors in the process.

Individual Stock Updates

Garibaldi Resources Corp. (GGI, TSX-V)

If there’s one company exploring in Canada with an opportunity to breathe new life into the entire junior resource market with the discovery of a generation, it’s Garibaldi Resources (GGI, TSX-V) which will soon be taking aim at a bull’s eye massive sulphide target within the HC-1 conductor on a significant step-out from EL-1714 – a world class 40.4-m intersection.

It’s not just the impressive geophysical signatures that are pointing to massive sulphides in ALL directions from the Discovery zone that was confirmed through drilling late last year, but Dr. Peter Lightfoot has collected an overwhelming amount of geological evidence that supports the case for a robust Nickel-Copper-rich system and a new mine in the heart of a prolific high-grade Gold and Copper-Gold porphyry Camp.

One of our favorite clips from Jon’s recent interview with Dr. Lightfoot is the one below when Jon quizzed him about the immediate area to the NORTH and why it wasn’t drilled last year (if this isn’t the definition of “blue sky”, what is?):

The HC-2 conductor, meanwhile, is a pleasant surprise and could lead to exciting new possibilities southwest of last year’s drilling.  Based on news late last year, we already know that at least 2 km of prospective ground exists to the east-southeast of the Discovery zone while a northeast trend of geophysical anomalies and surface mineralization continues for a minimum of 6 km.

Hang on to every GGI you’ve got because we expect crews will be mobilizing in April for a dramatic restart to drilling that could quickly carry the stock back to last year’s highs.

Pascal Biosciences Inc. (PAS, TSX-V)

A non-resource stock that’s ideally positioned to zoom to the upside is Pascal Biosciences (PAS, TSX-V) which we’ve been recommending as an astute buy anywhere in the 40’s.

With Pascal at current levels (it closed unchanged yesterday at 42 cents), investors have tremendous leverage and limited downside based on the following:

  1. The story is highly compelling – Pascal is the first company to identify a mechanism in which cannabinoids may provide a direct benefit in immunotherapy
  2. The $5.2 million financing at 40 cents is a game-changer for the company in terms of advancing its business plan and driving news flow
  3. The full warrant at 60 cents is good for just 12 months and could easily pad the company’s coffers by an additional $8 million
  4. The 40-cent financing provides additional price support within an already exceptional band of technical support between 44 cents and 35 cents
  5. Technical set-up is very bullish (primary uptrend) including reversals to the upside in the 200, 300, 500 and 1,000-day EMA’s
  6. Given the above, potential downside from current levels (closed at 47 cents Friday) is extremely limited
  7. Blue sky upside
  8. Liquidity and interest in the stock is outstanding
  9. Current market cap is only $21 million (only 50 million shares outstanding following the $5.2 million raise)
  10. Very capable management team

PAS 6-Year Monthly Chart

You’ll see few charts on the Venture that are as encouraging as this one.

PAS broke out forcefully above a downsloping channel last month on record volume with 35 cents being the critical breakout point, coinciding with new Fib. support and the current EMA(50).

Our analysis is that this stock is going to enjoy an explosive 2018 with next measured Fib. resistance in the $1.20’s – accumulate and hold!

Canada Cobalt Works Inc. (CCW, TSX-V)

No company – we repeat, no company – in the northern Ontario Cobalt Camp is better positioned to produce a Cobalt resource and get product to market than Canada Cobalt (CCW, TSX-V) given its underground access at the Castle mine.  President and CEO Frank Basa just needs to hurry up the process to commence underground drilling – Jon just had a meeting with him and we’re confident he’ll execute on that plan.

Last year, CCW ran from pennies to a high of 30 cents before losing half its value and briefly trading in the mid-teens where it was an incredible buy.  It then more than tripled in just over 2 months to a January high of 55 cents before starting another correction, similar in percentage terms to the one last year.

Note the following in John’s fresh CCW chart:

  • RSI(2) is at a low extreme, barely above zero
  • Price is at the bottom of a downlsoping channel
  • Strong support zone in the high 20’s

From a fundamental standpoint, CCW remains well below where it should be in relation to its peers.  Basa does have to move his feet a little faster – that’s what the market is saying and we believe he understands that message.

iMetal Resources Inc. (IMR, TSX-V) 

There will come a point when Gold will suddenly explode to $1,400+ and discovery plays like iMetal Resources (IMR, TSX-V) will rise by orders of magnitude.

The election of Doug Ford, a strong proponent of northern Ontario’s resource sector, is also expected to positively impact companies in that region.

And here’s something else – iMetal Resources has the full support of both First Nations groups in its area (the Gowganda West Project).

The above, combined with an exciting grassroots discovery of high-grade Gold over a broad area of outcrop on a property contiguous to a 4-million ounce Gold deposit, gives us great encouragement that IMR can turn into a multi-bagger win for investors in 2018.

Technically, IMR has dropped on low volume toward tremendous new support at the top of the bullish ascending triangle that formed over a 2-year period.

GT Gold Corp. (GTT, TSX-V)

GT Gold (GTT, TSX-V) bucked the trend and was up sharply yesterday, closing with a 7-point gain at 64 cents.  Subscribers should be accumulating on any weakness with an eye toward holding for the next 4 to 6 months for a minimum move to measured Fib. resistance in the $1.20’s.

Just over a week ago the company announced the closing of a $6.5 million private placement above the market at 72 cents per share (no warrants).  That’s certainly a vote of confidence in the company’s Tatogga Property in northwest B.C. where an exciting high-grade Gold discovery was made early last summer, propelling the stock to a high of $2.76 where we advised locking in profits.

The company’s cash position is now $9.5 million, meaning this summer’s planned program is now fully funded.

Technically, it’s safe to assume the stock bottomed out in the mid-40’s last month.  Accumulate on any weakness.  Next major resistance is 89 cents followed by $1.20’s.

It’s worth reviewing our piece on GT Gold during PDAC

Why Are These People Smiling – Their Stock Has Tanked 80%! 

Below is a picture of the GT Gold (GTT, TSX-V) crew at the PDAC “Core Shack” this afternoon.

Charlie Greig, one of our favorite geologists, is the second from the right in this picture, holding some highly mineralized drill core in each hand from the company’s Tatogga Property (Saddle South Discovery) in northwest B.C. near Iskut.

After surging as high as $2.76 last summer (BMR gave a sell recommendation at Fib. resistance at $2.65 after our original buy alert below 40 cents during the first half of the year), GT Gold has fallen 80% to just 55 cents (today’s close).

Ouch…but these folks are all smiles!

Charlie’s no market wizard (virtually no geologists are) but he does understand how to find Gold, and he has found lots of it at Saddle South – a high-grade epithermal Gold-Silver vein system that was never drilled until last year.  GT Gold completed 28 RC holes last summer and 58 diamond drill holes for 16,000 m.  Abundant juicy intercepts along 1,000 m of east-west strike to >500 m down-dip from surface were highlighted by 51.5 g/t Au over 6.95 m in hole #7.

Meanwhile, a potential Red Chris-style porphyry system has been drilled into at Saddle North.

GT Gold is fully financed for this year’s work (about 85 million shares outstanding after the 84-cent flow-through PP closes) and Charlie told Jon this afternoon that the company expects to drill as much as 30,000 m in 2018, starting in June.

So this is why Charlie & Co. are smiling – they know they’re onto something big and they’re confident about where things are headed once the drills start turning again.

We bring GT Gold to your attention tonight, not because you should buy it tomorrow morning but you should put it on your “watch list” as a strong candidate for at least a double or even a triple from the spring lows to this summer’s high.

Note:  John, Jon and Dan hold share positions in GGI and CCW.  John and Jon hold share positions in IMR.  Jon also holds share positions in GTT and PAS. 

27 Comments

  1. Thanks guys for putting hope in these bloody days 🙂
    I’m a bit worried about MOON… Seems like it’s loosing strenght and flirting below support. We’ve been expecting good news since a little while. Any thoughts?
    Thanks again!!

    Comment by jeanmichel — March 29, 2018 @ 5:34 am

  2. Great update guys, especially GGI!

    Comment by MURF — March 29, 2018 @ 5:49 am

  3. MOON is in perfectly good shape, jeanmichel, and has only been restrained by weak overall markets…they are progressing toward drilling during Q2 and there’s a deposit they’re learning a lot more about that already hosts 800 million pounds of Zinc, 70 million pounds of Copper, 10 million ounces of Silver and 300,000 ounces of Gold…with a market cap of just $10 million, tremendous underlying value in this play and the stock will run when the drill starts turning…

    Comment by Jon - BMR — March 29, 2018 @ 5:55 am

  4. BMR:
    What discovery has IMR made?
    Are you referring to the samples?
    Have they defined targets?
    Have they drilled a hole yet?
    Trying to understand your analysis at this early stage of exploration.
    Thx

    Comment by GoldenFalcons — March 29, 2018 @ 6:12 am

  5. Thanks for MOON’s update Jon, really appreciate!

    Comment by jeanmichel — March 29, 2018 @ 6:18 am

  6. GoldenFalcons, no one ever previously looked at the ground IMR has been exploring at Gowganda West…completely virgin ground that was overlooked due to extensive cover…so to make a surface discovery with the grades that they’ve reported over a 300 m distance (and expanding) is significant, especially when one considers there’s a multi-million ounce Gold deposit on the property contiguous to the north…drill targets are being finalized…

    Comment by Jon - BMR — March 29, 2018 @ 6:46 am

  7. Jon:
    OK I think I see what your saying here.
    Early Stage but very encouraging with what work has been done thus far.
    Thank you.

    Comment by GoldenFalcons — March 29, 2018 @ 6:50 am

  8. Those grades at surface in Zones 3A and 3B are also higher than any grades reported from surface sampling at Tahoe’s deposit to the north, GoldenFalcons…the area was poorly mapped by the Ontario Geological Survey which helps explain why it was overlooked…

    Comment by Jon - BMR — March 29, 2018 @ 6:55 am

  9. Hi Jon, my understanding was that CCW is finalizing a contractor for rehab work. Is he moving slowly on this? My concern is that CCW has very little strength on the marketing side of things – but in all fairness, it’s been a TOUGH market and would probably be best to just confirm the resource first. What do I know though….

    Comment by BigBid — March 29, 2018 @ 6:59 am

  10. MTS had news yesterday. Any comments on the NR? Their VTEM is done now as well. they are working up info on 3 separate and different targets on a 1000M long corridor a km or so below Thunder South,, in addition to the other 5 spots on the Kirkham that are prospective

    Comment by David — March 29, 2018 @ 7:02 am

  11. March is almost over and the past 3 months have been nowhere near anticipations !!! Only good thing was getting rid of Trainwrecks and loading back up on GGI and getting a good foothold on PAS and PGC !!! I can sleep owning a Truckload of GGI but those others ???? Luckily Spring has arrived and I’ll only have 3 or 4 Stocks to look at, and all those others are no longer on my Screen !!! Go GGI and PAS …… and a couple of others ” not mentioned ” …… Farmer T

    Comment by farmer — March 29, 2018 @ 12:06 pm

  12. Jon, Dan, John, Any update on MLG? Permits in hand yet? Any major interest after assay results? Perhaps an update for the sizzler this weekend?

    Comment by Large — March 29, 2018 @ 4:14 pm

  13. Hi BMR Dan, just curious why you don’t own AIS. They got the pilot plant and chemistry testing complete. I like to hear opposing sides if that’s the case.

    Comment by flyinthruu — March 29, 2018 @ 6:45 pm

  14. http://www.dailymail.co.uk/news/article-5561655/Canadas-love-affair-Justin-Trudeau-polls-suddenly-drop-time.html

    Polls for Justin drop. Cheering for resources here.

    Comment by BigBid — March 30, 2018 @ 5:15 am

  15. Flyinthru, there are quite a few stocks Dan writes about that I like but don’t currently own – and I’m sure the reverse is true for him…we can’t own everything…

    Comment by Jon - BMR — March 30, 2018 @ 7:28 am

  16. Thanks Jon. Makes sense. Hope that didn’t come across wrong. Like to hear opposing sides from solid individuals if that were the case here.

    Comment by BigBid — March 30, 2018 @ 7:37 am

  17. Curious
    Is big bird and flyingthru the same person?

    Comment by Gregh — March 30, 2018 @ 8:54 am

  18. Yes. Sometimes I comment from my phone and the name gets changed.

    Comment by BigBid — March 30, 2018 @ 9:03 am

  19. Table’s set for GGI / MTS / GTT / PAS / MAI/CGE / ……. Ready for April having cleaned shop by ” zeroing ” holdings during the month of March, which turned out to be a devastating one for AIS and WLF and the 3 Blockchains FTC/DM/CYX and then IMR / CCW / GGM actually stayed in the green after all the hoopla !! So now it’s nice to sit back and watch the Triangle slowly come to light and getting back to where we left off last Fall !! Farmer T

    Comment by farmer — March 30, 2018 @ 11:26 am

  20. ML Gold Corp (MLG.V) Interview Peter Bell and Adrian Smith : https://www.youtube.com/watch?v=5IFhOv13bRY

    Comment by large — March 30, 2018 @ 1:26 pm

  21. I am concerned by some of the price action in our favourite stocks. CLM in particular has a horrible monthly bar for March and unlike GGI it has already made a significant move before any drilling has taken place (presumably based on Dr Lightfoot’s reputation). Was there any other reason for the massive gain other than anticipation?.
    GGI last year made its big move only after the drilling started which suggests that there will be limited upside once drilling gets started…perhaps not even exceeding it’s all time high? RSI on the monthly is at 60 which is relatively high but it is falling whereas with GGI it was slightly lower and rising when the drilling started.There is also a slight divergence between price and RSI on the monthly chart and volume also expanded on the down month.
    Do the charts concern you or am I missing something? Thanks.

    Comment by keen1991 — March 31, 2018 @ 5:01 am

  22. Keen1991, CLM had a disappointing finish to March but keep in mind the pullback was on relatively low volume and came at a time when there was weakness across all markets…CLM’s correction started simultaneously with the Venture’s pullback beginning March 20…it’s also important to note that with CLM since late last year, there has been plenty of volatility and each correction has been a great buying opportunity – it ran to 80 cents and corrected to 40 cents; it then ran to $1.05 and corrected to 60 cents; then it surged to $1.12 and pulled back to 63 cents last week before closing the week at 69 cents…all of CLM’s longer-term moving averages continue to advance – can’t say that for a lot of Venture stocks…

    Now, as far as the fundamentals are concerned, we all know how Dr. Lightfoot’s expertise led to a big new Nickel discovery at Nickel Mountain thanks to his reinterpretation of the Eskay Rift and its potential for multiple Nickel sulphide deposits…when he says the Rainy River region is also very fertile ground for a Nickel sulphide discovery, investors would be wise to assume that that is indeed the case…Nicobat is a highly compelling project with a pipeline of exciting targets and I’m confident that with VTEM, initial drilling and borehole surveys, we’ll see that potential more clearly than ever…keep in mind that GGI only started moving last summer AFTER VTEM results and some additional surface sampling (Anomaly A) were reported…CLM hasn’t even seen its VTEM or borehole EM results yet and drilling has just started, so give it a chance…furthermore, another major reason we’re so excited about CLM (besides Dr. Lightfoot and Nicobat) is Richard Savage (CEO)…he was a very successful broker and has been involved in some incredibly profitable deals…I know Richard well and his vision for CLM, which is certainly within his ability to achieve, is to build a top-tier exploration company that creates tremendous wealth for investors…he understands the markets and he’s thinking BIG – very BIG…so on that note, let not your heart be troubled about CLM this Easter weekend…with this company we’re just at the beginning of what’s going to be an incredibly exciting journey in 2018 and beyond – so much more to come IMHO…

    Comment by Jon - BMR — March 31, 2018 @ 6:23 am

  23. Thanks Jon for the rapid response. I think my concern is largely based on the move that has already taken place without a VTEM or drilling…but I’ll wait and hope for the best. I probably have too large a positiion in this stock so will reduce on the next leg up and redistribute amongst some of the other picks.Enjoy your Easter.

    Comment by keen1991 — March 31, 2018 @ 7:22 am

  24. Hi Jon, I’ve been doing more DD on AIS. They are going to address the issue of production constraint within the industry, they have very strong connections with the govenrment, historical data on Guayatayoc, imminent drilling with a maiden estimate, world-class team…I feel quite comfortavke with them a long-term hold. Any other opinions or concerns?

    Comment by BigBid — March 31, 2018 @ 8:32 am

  25. I agree BigBid. AIS is only a matter of time before it gets going. Drilling is imminent, lithium is still fetching top dollar, Argentina is lithium capital with big companies sniffing around for assets. I believe we will see a dollar again this year. So a triple from this point is not bad in my opinion. You can tell it is starting to wake up. The quick run to 55 cents is just a taste of what’s to come. But remember to take a little profit when it reaches a dollar. 😀👍🏼

    Comment by Tycoon777 — March 31, 2018 @ 12:31 pm

  26. With a lot of these plays you just have to be patient and let them play out. If they haven’t changed fundamentally then hang tight or buy more. I remember BMR pounding the table with GGI at .14 and I bought a lot. Then it dipped to .075 losing half of my investment on paper. BMR said nothing had changed fundamentally so I bought a whole bunch more. You have to give these plays time…. sometimes a couple years for really big gains. I think a lot of us… myself included, watch them a little too closely.

    Comment by Weatheritout80 — March 31, 2018 @ 1:28 pm

  27. Haha, I should have taken some this past run to 50. When reading that supply for lithium carbonate has more risk than demand, and very few juniors in this space with a proven team can actually PROODUCE this stuff, hard not to get excited about them for the next couple years.

    Comment by BigBid — April 1, 2018 @ 4:36 am

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