The Mining Play

Global Health Effects on Markets and Mining Stock

Just FYI - Sprott Weekly News Wrap-up mentions Beta Hunt mine, ELY, and KL starting at 16’30”
Focus of 1st 15 minutes was on the possible economic effects of the Coronavirus epidemic.

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Gold should benefit. Things are going to get ugly. So far, massive effort by central banks etc to prop up markets but that will only work so long. Most major sea ports in China are not operating currently with estimates as high as 90% of economic activity halted in China. Could be many months before China is anywhere close to normal. This will slash profits world-wide saying nothing about the possibility that other countries get infected just as bad as China. There is a serious case of denial going on. Those that are in Dow/S & P stocks should get out while they can.

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“There is a serious case of denial going on”. Not only denial but a lot of misinformation from the Chinese. Infections are most likely a minimum of 3 times more than being reported. The truth will come out in dribs and drabs but most assuredly our administration won’t report the worst of it for fear of a market crash which could be a disaster for Trump.

The internet there has now been basically shutoff. 60% of Chinese normally have access to the internet. The current level of internet traffic in China is now the same as Denmark per web traffic monitoring sites. CCP is doing everything they can to silence things at the moment so indeed hard to figure out what is happening. All the numbers provided so far have been debunked; basically fiction. Based on body counting that is going on from some reporters on the ground at the 49 crematoriums in the Wuhan area that are running 24/7; at least 1200/day are being burned there for the last 17 days…i.e over 50,000 dead.

Here’s the latest on the Coronavirus:

108 people in mainland China died on Monday, the biggest single-day death toll yet. 2,478 new cases were identified in mainland China, bringing the number there to 42,708. As of Tuesday, 43,101 people were infected worldwide.

Due to lack of proper media coverage in China, I found that Twitter of all places is giving a far more accurate accounting on what is going on. (Search on #covid19 then hit latest tab), or the following specific accounts: @COVID19__News, @PneumoniaWuhan, @disclosetv, @leaksit, @COVID19Info, @chaddha_lal, @IsChinar, @ContagionTrack, , @DrEricDing) On youtube try: or this guy who is a little over the top but does put out a lot of factual articles: Note-if you spend a few hours going through all the information, be careful you don’t develop PTSD. (Example-rumor in China that dogs carry the virus-result thousands of dogs being beaten to death with horrifying videos documenting it!) Situation in China is dire. At a minimum, it will likely spread easier than HIN1 flu virus which infected 10 to 20% of the world’s population in only a year. Closer to home, not sure how much longer the markets will remain propped up.

N95 masks :wink:

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Not good enough.

If the virus is in an aerosol form(i.e from flushing of a toilet ), it will generally not be captured by N95 masks as it is too small. Also, if the mask gets wet from you breathing into it, the fibers quickly spread apart rending it completely useless if on your face for longer than 4 hours.
Finally, the mask doesn’t cover your eyes; rub your infected fingers in your eyes just once and its all over. The several thousand medical workers in China who caught the virus wearing full PPE can attest to the fact that is incredibly easy to catch.

I just had a conversation the other day with a couple fellows that work or are retired from ( Minnesota Mining and manufacturing) .Who make MANY types of dust and safety masks, and clothing. They said production lines are going 24*7 with extra lines being brought on line. Shifting people around to fill demand.
… must be a lot of woodworkers out there.

Somebody is making some money out of this. Amazon charging $25 per mask! Pretty sure they are worth less than a quarter.

Bloomberg article also…

I see it coming back strong, but wait and see.
It caught me off guard too.

Double up on your ugh…


It appears to be a massive outbreak in the Seattle area and it was apparently spreading full bore undetected for 6 weeks due to the narrow testing criteria that only tested people from China (Likely several thousands.) They can now test about 400 per day now in Washington St. so the results will all be coming out shortly. Could be a really ugly week in the markets again. Perhaps the worst will be over for Gold?

The risks to individuals having their health adversely affected in the US are actually very low. Much of the media are creating panic by sensationalizing the perception of the health risk to individuals living in the US. The global economic risks are much greater and likely to persist.

There is so much we don’t know and are learning about this virus. Incidence of flu is only estimated from those getting medical attention. What’s the baseline incidence of the flu on average? Is it 10-15% or 20% of the total population? It varies each year.

Now consider this virus is more related to the common cold than the flu. What’s the incidence of the common cold each year? Do we even track or estimate the incidence of a cold in our population? Why not? – It is because the common cold is not generally lethal or require hospitalization. It is estimated Adults have an average of 2 or 3 colds per year.

Now what if the incidence of this Covid19 virus is similar to the common cold? We have to track this new virus because it is serious to a portion of the affected population and has an associated mortality rate. Huge worldwide populations may be affected. Statistically many deaths will result. We are lacking data for an accurate estimate but do know the virus is highly transmissible. What are all the possible vectors of transmission? We know that it is primarily an airborne mode of transmission, but there are others.

Covid19 is definitely impacting a growing list of global concerns. The one immediately greatest impact was witnessed this past week. Between margin calls, the widespread positions in ETFs and Funds and the use of options it is no wonder the algorithms took over the trades. Puts on the $SPX and other Indexes put the final knife in the majority of positions being held by individual investors.

Again I would recommend reviewing the repost of “Crikey” subtitled “Things That Make You go Hmmm…” for a better understanding of what has been happening. Looking back on history puts things in a different perspective. The psychology moving the markets is much the same, even though the differences in particular forces are different. At least that’s my perspective of where things are at with PMs and what investors may be in for short and longer term.


I see this now repeatedly. News stories misrepresenting the critical R0 parameter. In your example, they actually show SARS as being more contiguous than COVID-19 which is utter nonsense.

It appears to be problem of comparing apples to oranges.

R0 varies over time and location for a number of reasons. In this case, R0 was measured in the 6 to 7 range*(per a research paper) similar to that of small pox (but not as bad as measles) during the early outbreak period in Wuhan prior to the quarantine. After the quarantine, the R0 dropped drastically and appears to be source of the more commonly quoted lower number. For purposes of comparison, the higher number seems more appropriate especially in light of the devastating rate/easy of spread seen in Iran, S. Korean, Italy and other countries not to mention the Princess cruise ship.(HIV is one possible example but how it is transmitted limits it’s target humans compared to COVID-19)

The is indeed a black swam event. Never have we had such a serious diseases that is so highly contiguous that stealthy pretends to be the flu until it is already out of control with a backkdrop of our rapid transportation system that speedily delivers the virus to all parts of the globe. Furthermore, our economy has so much further to fall compared to the economies of years gone by that were ravished by the plagues of old.

It is going to get a lot uglier before it gets better. After studying the matter, I do think things will subside for a time for this summer as transmission of the virus from contaminated surfaces will be low do to heat/UV light although direct person to person spread with still exist. So guessing, R0 drops to say 0.8 people per person infected.(Below 1 means contraction.) The contraction of the virus will be short lived however partially due to the fact that it takes so long for the virus to run its course in an individual, the virus building up in the cooler climate zones and the return to cooler weather by September.

FYI…it wasn’t a coincidence that the virus so easily spread in Wuhan. It appears cloudy, cool stagnant conditions with little UV light are perfect for transmission. I think the spread in N. Italy, S. Korea, Germany, Northern Iran, Seattle etc were all experiencing these kinds of weather conditions. Expecting locally here Michigan for the conditions to warm into the ideal range presently so wouldn’t be surprised to see some localized outbreaks. Next Fall/2021 are really going to be unplesant.

Gold is back up to 1605…nice!


Technical terms are sometimes very confusing. One should be careful not to confuse mortality rate (which is very low with COVID19) to incidence rate in a population. Mike is quite correct when he says:

The incidence rate in the next year will likely be less than the common cold but the incidence of deaths will be much higher and may be as high or higher than deaths from the flu.

Incidence extrapolations for USA for Common cold: 62,000,000 per year, 5,166,666 per month, 1,192,307 per week, 169,863 per day, 7,077 per hour, 117 per minute, 1 per second. Note: this extrapolation calculation uses the incidence statistic: 62 million cases (NIAID); 23.6 per 100 (NHIS96); estimated 1 billion colds in the USA annually; Children get 6-10 yearly, adults 2-4 yearly; over 60’s less than 1 a year.

This will be quite alarming given the level of global economic news coverage blamed on COVID-19 which is only the catalyst initiating the event. Do not underestimate how this will effect world economy.

The U.S. has had a bad flu season this year. The hospitalization rate has been about 25 people per 100,000 infected. COVID-19 has a rate closer to 25,000 per 100,000 infected…i.e as much as 1000 times more severe.

Unlike the flu, nobody is immune and nobody is vaccinated. COVID-19 spreads easier than the flu.

60% of the world’s population will come down with it in the next 2 years is the mostly widely used projection.

One fun fact. Most will get the mild form. However, even with the mild form (or walking pneumonia variety of the severe form) one’s runs the risk of getting viral myocarditis. This condition causes inflammation of the heart muscle. If you over exert yourself, you may simply fall over dead with a heart attack. If you have seen the dozens of video’s of people falling over dead in the streets of China, Iran etc.; this is what is happening to them.

So in 2020/2021, stay home if you have a cold and get some rest!

Note: Speculation that the central banks are stepping in may boost stocks for a bit but doubt it will make much difference. It is not simply a matter of the need to build confidence in the markets with plunging future profits looming.

67 countries now have confirmed cases.

Leaders telling people to wash their hands will not get us out of this mess. Speed is everything when dealing with exponential growth. Plotting along in a linear fashion won’t cut it.

Probably the best article I have seen summarizing where things stand now:

Just a quick review this morning from first hand accounts of what is going on in the various virus hot spots around world; situation is getting worse even quicker than expected.

Iran now appears to be as badly damaged as China but only doing a fraction of what is necessary to get it under control. Body bags are stacked up hospitals just like the early days of Wuhan. They don’t seem to have incinerators in Iran so massive graves sites are being dug.

S. Korea looks bad but they might actually be able to get it under control there since they are being so diligent about the testing process.

Italy must be vastly under reporting the true scope of the outbreak as they have exported a ridiculous number of cases to other countries.

N. Korea is telling all diplomats in the country to get out quickly so probably really bad there.

Thailand is simply calling it pneumonia; likely out of control there.

Can’t get a good feel on whether China is in control or not since it well documented that the true numbers are at least a factor of ten higher. In any case, business remains extremely curtailed based on check of traffic maps vs normal traffic levels.

The response in the U.S. so far has been so awful it is nauseating. The CDC now is hiding information including the number of those tested, generally testing itself still remains limited to basically only those that are nearly dead hiding the true scope of the number of infected, PPE equipment/procedures for medical workers and first responders is that of a third world nation, follow-up of those that might be infected is days behind or not happening at all, I could go on and on. Anyway, regarding the markets; Seattle is going to be SEVERELY impacted by the virus in the short term. Scenes that come out of Seattle will probably frighten a lot of people. Here is a chart that compares number of deaths vs number of cases reported at that point in time from various parts of the world. It shows that the U.S. has drastically unreported cases. Note that for the China examples, they only include cases that both tested positive plus have pneumonia. death rate


Regarding testing:

People in Washington State currently only being tested if they have #COVIDー19 symptoms and:

  1. close contact w/ lab confirmed case
  2. history of travel from affected area w/in 14 days
  3. severe symptoms (pneumonia/ARDS) and are hospitalized.

There lies the problem. It is already known that there is widespread community transmission with no travel history. Generally a person wouldn’t know if they have had contact with a confirmed cases unless a local agency conducts a trace.(When it is being done at all, it days after the fact.) And if you have severe symptoms and already almost dead, isn’t that basically too late and you have already spread it to everyone already? Not to mention that perhaps almost half have no symptoms suggestive of pneumonia at all.(but still capable of spreading it-example of Japanese cruise ship…58% of those tested positive were asymptomatic carriers.)

Testing is suppose to be done in a way to prevent the problem from spreading; not in a kind of postmortem sort of way to count the dead!

Looks like the rate cut did little for the markets but sure helped gold!

EDIT: WHO has just increased the global death rate estimate for the virus to 3.4% of those infected. As a comparison, the 1918 Spanish Flu that killed 50 million worldwide (population 1.9 billion at that time) had a death rate of ~2.5%, whereas the regular seasonal flu is ~0.1%

Analysis of genetic sequences of viruses from #Covid19 cases in the Seattle area suggest the virus has likely been transmitting there for about 6 weeks. That effectively puts Seattle where Wuhan was on Jan. 1 — three weeks from an explosion of cases.

EDIT: Due to a very loud outcry from health experts all over the U.S, the CDC has finally issued new guidance saying any American can be tested for coronavirus if deemed necessary per doctor’s orders.

EDIT: Japan - Expert: “…it has now become clear that infections are quietly spreading through people with mild symptoms and active economic and social activities.”

Saw this morning: “30 to 40% of the citizens of Tehran (8.7M population), will be infected with #COVID19 by 20 March 2020,” says Masoud Madani, an expert in infectious diseases, to the Iran Newspaper on the coronavirus outbreak in the capital."

However, to keep things in perspective; I saw some interesting numbers on China. Thus far at least, due to a predicated drastic drop in traffic accidents in China plus lives being saved by the current amazing air quality over China(which kills more than 1 million per year there) has saved many thousands of lives vs those lost to the virus. This when only accounting for acute air pollution exposure and the associated increase in strokes.

I have attached a rather fascinating map provided by the Health Ministry in Iran showing the virus spread through the country starting out in the City of Qom due to a concentration of Chinese located there.

EDIT: Did we just lose France? President Macron says the “coronavirus epidemic is unstoppable in France,” after a meeting with researchers at the Elysee.

Blows my mind how ill prepared the US is for the virus. Lack of testing kits is criminal in my mind.Here in Canada sporting events and conferences are getting cancelled left and right. Less talk and more action is needed, but truth be told, they’ve lost control of it. IMO