Gold has reversed and is up $5 as of 7:10 am Pacific time to $1,246 an ounce…we’re keeping a close eye on support levels for the CDNX which plunged 42 points yesterday in sympathy with the declines in Toronto and New York…after the first 40 minutes of trading this morning the CDNX is up 5 points to 1415…there is tremendous technical support for the CDNX at 1400 but if the May low of 1393 is breached, BMR’s technical analyst sees another strong area of support around 1370…it’s interesting to note that over the last two months, the CDNX is off 16% while the TSX Gold Index is actually up 6%….this is a reversal of the pattern we saw throughout 2009 and into the first few months of this year when the CDNX was outperforming both Gold and the TSX Gold Index…what this tells us is that for now some significant speculative fervor has certainly come out of the market but there’s still money to be made in selective issues – some of the current gold producers and the best of the speculative juniors (Gold Bullion Development being an example) who are enjoying exploration success and defining significant deposits…Gold Bullion (GBB, TSX-V) is down a penny this morning at 64 cents as investors wait for news from Granada…GBB is consolidating nicely in the 60′s and is underpinned by strong technical support at 60 cents…Seafield Resources (SFF, TSX-V) is under some pressure in early trading, down 1.5 cents to 19.5 cents where it has closed a gap from Monday morning…Seafield has a strong treasury and an outstanding project portfolio…the slight pullback from Monday’s high is healthy from a technical standpoint as the stock tests support at former resistance levels…there is a huge bid at 19 cents…another opportunity we like is Fire River Gold (FAU, TSX-V) which is developing its Nixon gold mine project in Alaska…the company is in the process of completing a $5.5 million financing at 50 cents, and also reported this morning it has generated just over $1 million in revenue from a mill cleanup program at Nixon (900 ounces of gold recovered)…Fire River is off a penny on light volume to 58 cents…investors looking for value outside the gold market should do their due diligence on North Arrow Minerals (NAR, TSX-V) which is about 4-6 weeks away from the start of a drill program at its very promising Lac de Gras diamond property in the Northwest Territories…North Arrow has an excellent chance of exploration success at Lac de Gras where it has identified many untested high priority kimberlite targets using proprietary technology…two legends in the diamond exploration business, Gren Thomas and Dr. Chris Jennings, have teamed up again (they co-discovered the nearby Diavik deposit nearly 20 years ago) to develop North Arrow’s Lac de Gras holdings…NAR closed yesterday at just 16 cents…
June 30, 2010
The CDNX broke through important support at 1440 yesterday, shedding a whopping 42 points to close at 1410. BMR’s technical analyst takes a detailed look at the CDNX below and sees the potential of some further downside. But we caution investors not to panic even if the market takes out the May low of 1393. For various technical reasons John sees initial strong support at 1370 if the May low is breached. The 1370 target also happens to be in the immediate vicinity of the CDNX’s rising 300-day moving average. In the 2003-2007 bull market, the CDNX fell very marginally below its 300-day SMA each year before rebounding sharply each time. We could see a repeat of that here in the summer of 2010. It’s important, in our view, to understand the “big picture” despite all the fear-mongering that is so prevalent right now – what we’ve been witnessing the past couple of months is a normal CDNX correction within an ongoing bull market. This has been a frustrating market lately, punctuated by some deceiving moves to the upside, but we’re not on the edge of a 2008-style meltdown – the dynamics back then were much different and the technicals were far worse. Rising long-term moving averages (200-day and 300-day) are underpinning this market and will provide strong support and prevent the kind of meltdown we saw two years ago when the current favorable technical conditions did not exist. Below this chart is John’s near-term analysis:
John: The CDNX joined all the other indices on a joyless ride to the downside yesterday. The market deteriorated throughout the day and closed at 1410 for a loss of 42 points (2.86%) on slightly higher volume than Monday.
Looking at the chart, I have drawn a 21-day Symmetrical Triangle, two sloping blue lines and a vertical green line. The Symmetrical Triangle is a consolidation pattern which can be classed as a reversal pattern when it occurs after a downtrend or a continuation pattern if it occurs during an uptrend or downtrend. Theoretically, it can break in either direction but it usually breaks with the prevailing trend. In this case it was a continuation triangle because the CDNX has been in a downtrend since May 3 as shown by the ADX trend indicator and the -DI above the +DI during that period.
We can estimate the Symmetrical Triangle support level target by adding the length of the vertical green line to the level of the breakout. The length of the green line is equal to 1515 – 1435 = 80 points. The breakout level is approximately 1450. Therefore, the Symmetrical Triangle support target is 1450 – 80 = 1370. This is shown on the chart. Two other possible support levels are also shown as horizontal green lines.
Looking at the indicators:
The RSI(2) indicator shown is a short period indicator which I use to identify the strength of the move. In this case the RSI value is 3.78. I expect another drop today because the RSI value is not down to zero – bearish.
I have shown instances on the chart (vertical blue lines) when the RSI reached zero and the corresponding Index level.
The ADX trend indicator, as mentioned above, has shown the CDNX to be in a downtrend and with the -DI climbing I expect the weakness to continue. The ADX (black line) trend strength indicator is at 29 and turning up with room to move higher without expecting a reversal – bearish.
The Slow Stochastics indicator has the %K (black line) very low in the oversold region and the %D (red line) above it but turning down – bearish.
Outlook: The CDNX is in a bearish state for the short term until it reaches a viable support level. The most probable one is around 1370.
June 29, 2010
It was a case of deju vu yesterday as Gold did exactly what it did a week earlier, moving above $1,260 and then promptly selling off intra-day…Gold is down again this morning but off its lows of the day…as of 7:40 am it’s at $1,233, a $6 drop from yesterday…the U.S. dollar is sharply higher this morning and crude oil is off nearly $3 a barrel to $75.46…Asian markets were down significantly overnight including a 4.27% drop in China…North American markets are also under heavy selling pressure at the open with the Dow and the TSX each down over 200 points…the CDNX has fallen through important support at 1440, raising the likelihood of a test of the May low of 1393 if there is not a sudden and dramatic intra-day turnaround…the CDNX is down 30 points to 1422…we’ve been quiet with regard to Gold Bullion Development (GBB, TSX-V) recently as the market is waiting for drill results or an exploration update for its next signal…GBB also moved into technically overbought territory last week, suggesting the possibility of a minor pullback which is what we’re seeing with the weakness in the overall markets…we remain as bullish as ever on the Granada Gold Property which has the potential to be one of the top discoveries in Canada in 2010…Gold Bullion is down three pennies to 66 cents…Seafield Resources (SFF, TSX-V) made a significant move yesterday on big volume as the company announced the start of drilling at its Miraflores Property in Colombia…Seafield also provided for the first time, through its new web site, a detailed overview of its Quinchia Project which clearly shows the multi-million ounce potential of this 67 square kilometre land package just south of Medoro Resources’ (MRS, TSX-V) 9.7 million ounce Marmato Deposit…with $4 million in the bank and a strong portfolio of properties that also includes Elora in northwestern Ontario and Picachos in Mexico, Seafield is very attractive at current levels…the stock has pulled back slightly this morning in sympathy with the overall markets and is currently down 1.5 cents to 20.5 cents…bargain hunters should also keep an eye on North Arrow Minerals (NAR, TSX-V) which closed yesterday at 16 cents…Fire River Gold (FAU, TSX-V) is off a nickel to 59 cents…Fire River is in the process of completing a major financing at 50 cents for its promising Nixon gold mine project in Alaska…
Independent Research and Analysis of Emerging Junior Resource Companies: Speculative, Undervalued, Home Run Opportunities in Today’s Markets
Welcome to our site, or at least a sneak preview of it! The final version may look much different than this as we continue to develop a very unique investment and money-management resource site. An important component of this site is original research on small and undiscovered junior resource companies that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity. Management is the first thing we look at – it’s our #1 criterion – because without superb or solid management, a company with the best properties in the world is either going to underperform or flat-out fail. So we look for superior management guided by strong business ethics and integrity, followed by an outstanding portfolio of projects. At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop.
BullMarketRun.com is completely independent from any companies it covers. BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site. We accept no advertising either. Our stock coverage is for informational purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinin or other advice is being rendered on any stock or company. We strongly recommend 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 before making any investment decisions. The stocks we cover, by definition, are highly speculative and potentially very volatile. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks. We are not Registered Securities Advisors. Our opinions 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. It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time. Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.
June 28, 2010
Gold has broken through resistance in the $1,250′s and is currently up $6 an ounce to $1,262 (as of 7:30 am Pacific time), very close to another all-time high…the CDNX is ahead 2 points to 1461…Seafield Resources (SFF, TSX-V) has taken off this morning on news the company has commenced a 3,500 metre drill program at its Miraflores Property in the Quinchia district of Colombia…Miraflores already has an inferred 43-101 resource of nearly 800,000 ounces…Seafield is up 3 cents to 22 cents on over 2 million shares, making it one of the most active stocks on the Venture Exchange so far today…this is likely only the beginning of this move for Seafield as our outlook for this stock over the summer is very bullish…the company launched a new web site Friday which for the first time has given investors a full understanding of the magnitude of its Quinchia Project…another 800,000 ounces (non-compliant) are estimated at the Dos Quebradas Property which has undergone only limited exploration…Seafield’s third property, Chuscal, also has blue sky potential…some small scale mining is currently taking place at Chuscal, similar to Miraflores, and “significant geochemical anomalies have been outlined at Chuscal over a large magnetic anomaly” – to the best of our knowledge these are new details on Chuscal provided Friday afternoon on Seafield’s web site (the company is currently finalizing the Chuscal option)…in total, Seafield has assembled a 67 square kilometre land package at Quinchia just south of Medoro Resources’ (MRS, TSX-V) 9.7 million ounce Marmato Deposit…what we see happening is Seafield defining a series of deposits that add up to a multi-million ounce package that ultimately gets taken out by Medoro…the individuals who assembled Medoro’s land package (Ian Park and Stewart Redwood) are working for Seafield and put together its landholdings at Quinchia…they are trying to nail down more property for Seafield as well…Gold Bullion Development (GBB, TSX) is off two pennies to 68 cents as investors continue to wait for news from the LONG Bars Zone…
June 27, 2010
BullMarketRun first uncovered Seafield Resources (SFF, TSX-V) nearly a year ago when it was trading by “appointment only” between a nickel and 7 cents. The company has gone through a fundamental transformation since then, an event we correctly anticipated, with a very significant exploration move into Colombia. The stock exploded to a high of 35.5 cents in late February when it probably got a little too far ahead of itself (we advised traders to take profits). For the past two months Seafield has consolidated between a yearly low of 16 cents, just above its rising 300-day moving average, and 22.5 cents. For both fundamental and technical reasons, Seafield in our view is now ready for another powerful move to the upside. It closed Friday at 19 cents and has never looked better as a speculative opportunity than it does right now. We finally have a clear understanding of what Seafield has assembled in Colombia – its 67 square kilometer Quinchia Project was presented very thoroughly and powerfully Friday afternoon (June 25) when Seafield unveiled a new web site. A major drill program at Quinchia is also ready to start.
Seafield, whose largest single shareholder is Yamana Gold (YRI, TSX), is developing three projects (Colombia, Ontario and Mexico) but Quinchia in Colombia is its flagship project where most of the company’s expenditures will be directed toward through the balance of the year.
Keep in mind as you read the facts below that Seafield’s current market capitalization is only $18 million.
Already, Seafield is sitting on 1.6 million ounces of gold (800,000 43-101 inferred compliant at Miraflores and 800,000 ounces historical non-compliant at Dos Quebradas) at Quinchia which features three major projects (Miraflores, Dos Quebradas and Chuscal) in addition to a large and relatively unexplored area that holds major blue sky potential. In total, Seafield’s land package covers 67 square kilometers and is located less than 10 kilometres south of Medoro Resources’ (MRS, TSX-V) Marmato Deposit which contains a current measured, indicated and inferred resource of 9.7 million ounces (Medoro’s market cap is $300 million).
What we see unfolding at Quinchia is this: At least three or four separate deposits that together give Seafield a multi-million ounce resource that acquisition-hungry Medoro Resources then goes after in a takeover of Seafield. That’s speculative on our part but a very possible scenario. It’s important to point out that the two key players in Seafield’s Colombian venture and acquistions are the same individuals who assembled Medoro’s Marmato land package – Ian Park and Stewart Redwood. Both know this area of Colombia like the back of their hand. They’re also going after more property for Seafield.
There is excellent potential to expand the current resources at Miraflores and Dos Quebradas, and a third Seafield project at Colombia that looks very interesting is Chuscal.
Miraflores (open to the west and at depth) is three kilometers southeast of Dos Quebradas which has excited geologists with its potential going northeast (for several kilometers). About three kilometers south of Miraflores is Chuscal where underground sampling indicates the existence of a large porphyry system as explained in a report posted Friday on Seafield’s new web site. Some small scale mining is currently taking place at Chuscal, similar to Miraflores, and “significant geochemical anomalies have been outlined at Chuscal over a large magnetic anomaly” – to the best of our knowledge these are new details on Chuscal provided Friday afternoon on Seafield’s web site (the company is currently finalizing the Chuscal option).
The Quinchia district features excellent infrastructure with Pan American highway access, three international airports, electricity, and new access to the Pacific Coast on a railway line currently under construction. All Seafield projects are below 2100 metres in elevation. While it’s not Quebec, Colombia is still regarded as a good jurisdiction for mining and exploration.
Timeline of Revealing Recent Events With Seafield:
The signs of a possible imminent major move in this stock are very evident:
May 13, 2010
Seafield firms up and trades an all-time record 10 million shares in a single day – significant new “players” have obviously entered the market, loading up on free-trading cheap stock;
May 28, 2010
Seafield announces a proposed private placement of up to 14,285,714 shares at 17.5 cents with a two-year full warrant at 25 cents to raise gross proceeds of up to $2.5 million. “The offering is expected to close on June 4, 2010.” Sounds pretty much like a bought deal – some of the same players who picked up free trading stock May 13 are likely involved in the PP;
June 11, 2010
Seafield announces the closing of an oversubscribed PP – 16,863,171 units at 17.5 cents for gross proceeds of $2,951,055. Brokers’ warrants are also issued. Approval of the financing is granted a few days later by the Exchange;
June 22, 2010
Seafield announces the granting of 2.6 million stock options at 17.5 cents and the hiring of investor relations (Dean Stuart of the Boardmarker Group out of Calgary), an unusual move for President and CEO Tony Roodenburg;
June 25, 2010
Seafield unveils a brand new web site and for the first time provides pictures from Quinchia in addition to a very informative 24-page power point presentation. Again, an unusual move for Roodenburg who in the past has resisted expenditures in this area. The Seafield “promo machine” is ramping up.
We certainly can’t disagree with the following statement in the Seafield Power Point Presentation:
“Considerable upside in share price compared to other Colombian plays.”
Then There’s The Elora Factor
Seafield’s highly prospective Colombian assets are enough to potentially send this stock much higher. But a big boost could also come very quickly from Seafield’s promising Elora Gold Property which is strategically positioned in the Gold Rock Mining camp of northwestern Ontario near Dryden.
Elora is a classic Archean shear hosted deposit that has delivered some very encouraging results for Seafield including 7.54 g/t Au over 12.19 metres. Seafield will be doing some more work on Elora later this year but in the meantime there’s a company called Manitou Gold (MTU, TSX-V) that’s drilling like crazy right beside Elora (immediately adjacent) at the former Big Master Mine.
Manitou was just listed on the TSX Venture Exchange in March and has raised $5 million for drilling and exploration in the Gold Rock mining camp – it acquired a large land package from Goldcorp Inc. (G, TSX) which holds slightly more than 10% of Manitou.
Initial drill results from Big Master are imminent – the first five holes were completed at the end of May and sent in for assaying. Samples from the Big Master No. 1 trend returned assay results of 80.1 grams per tonne gold proximal to the shaft area, 52.4 grams per tonne gold from the Helena Shaft area and 93.2 grams per tonne gold midway between the two shafts. This structure has been prospected along a distance of 1,020 metres and has returned numerous high-grade gold assay results. In addition the historic operator followed the structure with a 407-metre-long drift on the 183-metre level. Along the Shaft No. 2 gold trend, assay results of 26.7 grams per tonne gold were returned. A third parallel system was identified in the prospecting program and returned assay results of 11.4 grams per tonne gold.
With a major drill program underway, Manitou has an excellent chance of a high-grade “hit” which could have significant implications for Seafield.
Technically Speaking – Seafield Is Ready To Rock
BMR’s technical analyst examined Seafield’s bullish-looking chart in a separate piece posted earlier today. Below are some key “big picture” technical reasons this stock appears poised for a major move:
- On Friday Seafield broke above its 50-day SMA for the first time since April;
- Seafield’s 20-day SMA has swung positive for the first time since March;
- The stock has spent the last 2 months consolidating just above its rising 300-day moving average (16 cents) where it has incredible support;
- The 200-day SMA is still rising with no threat of reversing, confirming the stock remains in a long-term uptrend.
John goes into more specifics on Seafield’s chart so please check out his excellent analysis.
There has never been a better time, in our view, to be a Seafield shareholder. The Seafield story may have gotten a little bit ahead of itself earlier this year. But now, the reverse seems to have occurred – the stock price is actually now trailing the current fundamentals in our view. The company has locked up an impressive land package, immediately adjacent to Medoro, which could easily host three or more one million-plus ounce deposits. A major drill program should be commencing anytime now and the company appears to be ready to start telling its story to the world. There is much more upside potential than downside risk at 19 cents.
Note: The writer holds shares in Seafield Resources. Please read the BMR disclosure/disclaimer under “Independent Research And Analysis”. No fee or compensation of any kind has been paid to BMR for this report.
The technicals and fundamentals for Seafield Resources (SFF, TSX-V) are both now perfectly aligned, strongly suggesting that a potential significant upside move is imminent with this stock. We’ll be laying out the new and very intriguing fundamental case for Seafield later today. First, BMR’s technical analyst examines an updated bullish-looking SFF chart:
John: After 3 weeks of consolidation between 16.5 cents and 18 cents, Seafield Resources (SFF, TSX-V) is threatening to break to the upside. On Friday it opened at 18 cents, traded as low as 16.5 cents, but then closed strongly at 19 cents.
Looking at the chart we can see on Thursday and Friday 2 white shaved candles indicating buying pressure with both days closing at their highs. Friday marked the highest closing price for Seafield since May 19.
The Bollinger Bands show that with Friday’s strong showing, the bands are starting to splay or diverge. This suggests the indicated strength to the upside will continue. Also note that the SMA(13), the red dotted line, has turned up – another bullish sign.
Friday’s close was also above the SMA(50) for the first time since April 14.
Seafield has excellent support at 16.5 cents and the next major resistance level is at 22 cents. I have not shown these on the chart so as to avoid overcrowding, keeping it simple. We will be following this very closely in the near future with more charts.
Looking at the indicators:
The RSI has broken above the 50% line to 69% – very bullish but not overbought.
The ADX trend indicator shows the +DI (green line) has made a definitive break above the -DI (red line) and the ADX (black line) trend strength indicator is low, suggesting the present trend strength is weak but bullish. The ADX (black line) is turning up, showing the weak bullish trend is getting stronger.
The Chaikin Money Flow (CMF) indicator shows that there is still some selling pressure but it’s declining with the increased buying pressure as shown by the rise in volume.
Outlook: There should be very bullish sentiment toward this stock in the coming week, resulting in a good move to the upside on increased volume.
June 25, 2010
The BMR Portfolio
Gold Bullion Development (GBB, TSX-V) enjoyed another banner week, jumping 23% to close at 70 cents…incredibly, this stock has increased 10-fold from when we introduced it to our BMR readers just 6 months ago…a 100,000 share investment at 7 cents for $7,000 last December in GBB would now be worth a whopping $70,000…our outlook for Gold Bullion and its Granada Gold Property remains very bullish…initial drill results from the 20,000 metre Phase 2 program are due out soon though it remains a guessing game in terms of exactly when…technically, GBB has shot up into overbought territory based on Stochastics and the RSI (into areas where it has modestly retreated from before), so a near-term “cleansing” of this condition is possible before the stock makes an attempt at higher levels…that’s not what some investors may wish to hear but at BMR we tell it like it is…it’s important to note, though, that any near-term pullback in GBB – if it happens – is not likely to be severe and will be met with plenty of support…the stock has stayed at or above its 10-day SMA (currently at 61 cents) the entire month of June…
Seafield Resources (SFF, TSX-V)
Seafield has languished for the past few months but finally appears ready to make a move…with approximately $5 million in the bank and a strong portfolio of properties – some of which are about to be aggressively explored – Seafield offers a lot of blue sky potential at its current price of 19 cents…we’re in the process of completing a special update on Seafield which we’ll be posting over the weekend at BMR…this is a company we understand well as we have been following it closely ever since last summer when we introduced it at just 6 cents…technically, a couple of important developments occurred Friday as Seafield closed at 19 cents on strong volume for a 1.5 cent weekly gain…the stock broke above its 50-day SMA for the first time since April and its 20-day SMA has swung positive, ending a decline that started in March…a reversal, therefore, is underway with Seafield which has formed a nice base in the mid-to-upper teens for the past 2 months – just above its rising 300-day SMA…there are other bullish technical factors with SFF that we’ll be detailing here shortly…fundamentally, the company holds some highly prospective gold properties in the Quinchia District of Colombia with one of those properties hosting a NI-43-101 compliant inferred resource of nearly 800,000 ounces…what’s also interesting about Seafield is its Elora Gold Property near Dryden in northwestern Ontario…Elora is a classic Archean shear hosted deposit that sits in the under-explored Gold Rock mining camp…Seafield won’t be doing any work at Elora until later this year BUT what’s happening right now in that mining camp is that newly-listed Manitou Gold (MTU, TSX-V) is drilling like crazy…Manitou is armed with $5 million in its treasury and it’s currently drilling the former Big Master Mine immediately adjacent to Elora…the chance of a high-grade “hit” at Big Master is very real and that would have positive implications for Seafield…expect SFF to very soon regain the momentum it had late last year and into the early part of this year…
Sidon International (SD, TSX-V)
Sidon is very similar at this point to what Gold Bullion and Seafield were like last year…Sidon is waiting for approval from the CDNX on its letter of intent with a private company for an option to purchase the Morogoro East Gold Property in Tanzania, an African country that has really opened itself up for gold exploration and mining…Tanzania has gone from just a million ounces of gold reserves a decade ago to over 50 million now…Morogoro East is in the under-explored eastern region of Tanzania along a potentially prolific gold belt about 100 kilometres south of Canaco’s (CAN, TSX-V) very promising Handeni Gold Project…Sidon has filed a 43-101 report on Morogoro with the CDNX and is also waiting for Exchange approval on its recently completed private placement at a nickel…it has been a waiting game with Sidon over the past 2-3 months but we firmly believe the wait will prove to be worthwhile…Sidon closed the week up half a penny at 6.5 cents…
North Arrow Minerals (NAR, TSX-V)
North Arrow is a truly exciting opportunity and its time to shine is drawing near…we added NAR to the BMR Portfolio in early April and cautioned investors this is not a stock to get into for a quick flip…North Arrow is led by one of the very best there is at grassroots exploration, Gren Thomas…the possibility of Thomas making a major discovery with one of North Arrow’s properties, in particular its Las de Gras diamond property in the Northwest Territories, is very real…Thomas and Dr. Chris Jennings (who is working with North Arrow on its Lac de Gras property) together discovered the very rich Diavik diamond deposit nearly 20 years ago…they are doing everything they can to repeat that success with North Arrow this summer…the company will begin drilling at Lac de Gras likely within the next 4 to 6 weeks…Jennings, using proprietary technology, has identified some 70 high priority kimberlite targets (only 1 of which has ever been drill tested) on North Arrow’s land holdings…Diavik trends right through the middle of North Arrow’s property…North Arrow is also developing its Beaverdam Lithium Project in North Carolina…the stock closed Friday at 16 cents, down 2 pennies for the week…at that price North Arrow is a tremendous bargain for an investor looking for a potential home run opportunity over the next 3 to 6 months…
Richfield Ventures (RVC, TSX-V)
Drilling has proceeded slowly since April at Richfield’s Blackwater Gold Project in central British Columbia which helps explain why the stock has been a poor performer over the past couple of months…initial results from a few holes have been decent but certainly not spectacular…technically, the stock has strong support at 90 cents which must hold…Richfield closed down 14 cents this week to exactly $1…a second drill rig is due to arrive at Blackwater within a few weeks which should give some much-needed momentum to the drill program…we remain very bullish on the prospects for Blackwater which has excellent potential to host a world class bulk tonnage gold/copper deposit…one really good drill hole should get Richfield going again and we’re confident that will happen – the only question is, when?
Kent Exploration (KEX, TSX-V)
Kent got some good news this week with the resignation of Australian Prime Minister Rudd who proposed an insane “super tax” on producing mining companies in that country which chased away a bunch of investors and investment capital…changes will no doubt be made to that proposal to help appease a very nervous mining industry…however, at BMR we have little faith in governments – especially left-leaning ones – so the only real answer to that problem in Australia is an ousting of the Labor Party in elections later this year…Kent holds the Gnaweeda Gold Project in Western Australia which it’s eventually hoping to spin-off into a proposed new public company, Archean Star Resources…Kent has some very promising non-Australian projects which it hopes to advance over the second half of this year, namely the Alexander River Gold Property in New Zealand and the Flagstaff Barite Property in Washington State…Kent is currently trying to complete a proposed $600,000 financing at 10 cents…the stock was unchanged for the week at 11 cents…
Colombian Mines Corporation (CMJ, TSX-V)
We’re expecting an exploration update shortly from CMJ which was ahead 3 pennies this week to 87 cents on light volume..the stock is sitting just above its rising 200-day SMA where it has excellent support…this is a company with a very large portfolio of grassroots properties in Colombia…drilling news from Yarumalito, which has been very encouraging so far, will dicate the next move for this stock…
Greencastle Resources (VGN, TSX-V)
Greencastle continues to languish in the 12 to 13.5 cent range where it has traded since early last month…it closed at 12 cents Friday, giving it a market cap of only $5.4 million which was its working capital position as of March 31…the company is taking in approximately $120,000 a month in oil royalties from its Primate Property in Saskatchewan…for patient and long-term investors (minimum 12-month time horizon), Greencastle is a no-brainer opportunity at current levels…over the short to medium term there are certainly better opportunities in the market…
CDNX and Gold
The CDNX continues to lack direction though the signs late last week were quite bullish…what seems to be happening is that the Venture is basing out in preparation for an uptrend that we’re convinced will occur…our BMR technical analyst gave some good advice this week…”one big lesson I’ve learned over time in studying TA is don’t tell the markets what to do,” stated John, who added he had to remind one of his friends to stop ‘talking to his charts’…in otherwords, the market will do what it wants to do and when it chooses to do it…the CDNX charged higher in the early hours of trading Monday morning, almost touching 1500 (1498), then suddenly reversed as Gold unexpectedly turned negative…the CDNX found support at 1450 and closed the week on a positive note at 1459 with a 7-point gain Friday…volume continues to be light…there have been only 4 100+ million share days in June…every single trading day in both April and May featured over 100 million shares with the exception of the final 2 days in May…there are fewer buyers at the moment rather than more sellers…we saw declining and light volume in June of last year before activity picked up significantly in July, so history could be set to repeat itself…Gold finished last Friday at a new record high, took a dive on Monday and then headed north again later in the week…it hit a new all-time high Friday of $1,259.50 before closing at $1,255.70…as we stated last Friday, it seems quite clear that Gold is headed to at least $1,300 and perhaps as high as $1,350 over the short term (anytime over the next few months) based on technical factors alone…fundamentally, the market was encouraged today by the fact that the new U.S. financial regulation bill allows investment banks to remain in the gold business as they’ll still be able to use 3% of their funds to trade the market…they’ll also be able to use credit default swaps in “safe” assets like gold to hedge risk…what will be important is to see in the near future is if the TSX Gold Index can break out to a new all-time high and therefore finally confirm the new high in Gold…the Index closed at 387 Friday, just 9 points shy of the all-time high when Gold ran just over $1,200 early last December…the TSX Gold Index is at the same level now as it was in early January, 2008, when Gold was trading at only about $850 an ounce…
Gold is trying hard to break through resistance in the $1,250′s…as of 8:50 am Pacific time, Gold is ahead $13 an ounce to $1,256…the CDNX, trying to snap a 4-session losing streak, is up 2 points to 1,454…Seafield Resources (SFF, TSX-V) is looking extremely attractive at the moment…we first introduced Seafield nearly a year ago when it was sitting at just 6 cents, so this is a company we’re very familiar with and have been following closely…a series of events have occurred over the last few months with Seafield that are quite interesting which we will expand on in more detail over the weekend…Seafield is in a strong cash position (approximately $5 million) and has assembled a solid portfolio of gold properties in the Quinchia District of Colombia where drilling will commence shortly…the company has the right people in Colombia to advance those projects…Seafield also holds the Elora Gold Property in northwestern Ontario (Manitou Gold, MTU-TSX-V, is currently drilling immediately adjacent to Elora) and the Picachos silver-gold-zinc project in Mexico…some “movers and shakers” are involved with Seafield which clearly has the potential to succeed in a big way on the exploration front…technically, the stock has formed an impressive base around current levels and is resting just above its rising 300-day moving average…the stock is off a penny this morning to 17 cents where there is strong support…the funny thing is, many investors don’t approach the market in the same way they approach their everyday purchases…in otherwords, when a quality stock is “on sale” (languishing or dropping in price) a lot of investors are too scared to make a purchase…they’d rather wait until everyone else starts buying before jumping in and paying a higher price…Gold Bullion Development (GBB, TSX-V) is up 3 cents this morning to 70 cents but on fairly light volume in the context of GBB (270,000 shares)…technically, the stock is in the “overbought” area based on Stochastics and RSI, so near-term we expect some further consolidation as we’ve witnessed before with GBB when it has shot up into overbought territory…Fire River Gold (FAU, TSX-V) is quiet this morning, down a penny to 64 cents…we like this opportunity a lot (we first mentioned Fire River when it was in the low-to-mid 50′s) but the stock is likely “range bound” until the company closes its proposed $5.5 million financing at 50 cents and receives CDNX approval…it should be an interesting summer for Fire River as it drills its Nixon gold mine project in Alaska…