With BMR conducting a property visit and meetings this morning in southern Quebec, the regular BMR Morning Musings feature returns tomorrow.
August 30, 2010
From Montreal, 10:50 am eastern
Gold has traded within a tight range of $1,233 to $1,239 today…as of 11 am eastern, the yellow metal is down $1 an ounce at $1,237…the CDNX continues to power higher which suggests Gold will reach new all-time highs in the near future…the CDNX is up 8 points to 1497…the Venture is threatening to make a move through the critical 1500 area…there is heavy resistance between 1500 (the June high) and 1515 (the May 31 high, just above the rising 200-day SMA)…it’s impossible of course to say exactly when the CDNX will blast through this resistance but we’re certain that it will, and probably sooner (within a week perhaps) rather than later…check John’s excellent article yesterday outlining the technical case for a move to 1700 on the CDNX during the 4th quarter…Gold Bullion Development (GBB, TSX-V) is off a penny at 54 cents…as we mentioned in our Week In Review feature yesterday, Gold Bullion continues to advance the Granada Gold Property in a very strategic, efficient, systematic, forward-thinking and effective way…after 3 site visits and exhaustive research, we have complete confidence that the best is yet to come from Granada…GENIVAR, respected throughout the world, has a complete grasp on all aspects of this large project…as Gold Bullion President and CEO Frank Basa told us in Friday’s interview from Hole 78, Nicole Rioux – the Granada Project Manager from GENIVAR – “has a natural gift for finding orebodies“…September should be a big month for GBB as more drill results flow in and the company completes its 20,000 metre Phase 2 drill program…our gut feeling, based on last month’s news and our latest walk on the ground, is that something very significant could be emerging in the LONG Bars Zone eastern extension…the Preliminary Block Model is on track, and still has exploration upside, but it’s the vast area east of the Block Model that gives Gold Bullion its incredible blue sky potential…we’re keeping a close eye on Richfield Ventures (RVC, TSX-V) which is expected to release more drill results this week from its Blackwater Project in central British Columbia…Richfield has doubled in value from early last month and has plenty of potential further upside, with a current market cap of just $50 million or so, if assays continue to show long intersections of mineable grade…there are now 2 rigs at Blackwater so the drilling pace is picking up after a slow start this past spring…besides a potential multi-million ounce gold deposit, Blackwater also has some copper and silver which would significantly aid project economics if a large deposit is confirmed…Richfield is down 7 cents to $1.83 on very light volume so far today…volume in Seafield Resources (SFF, TSX-V) is picking up and we like this situation a lot going into September and the balance of the year…Seafield is expected to add significant ounces in the ground at its Quinchia Project in Columbia over the next 6 months…initial drill results from Miraflores are expected sometime next month along with the start of drilling at another excellent target, Dos Quebradas…Seafield is up half a penny to 17 cents on nearly 800,000 shares…we are still in Quebec but in the southern part of the province where we will be visiting the Excel Gold Mining (EGM, TSX-V) Montauban Mining Camp Project tomorrow…
August 29, 2010
The BMR Portfolio (GBB was covered separately in Part 2)
Sidon International (SD, TSX-V)
Sidon has pulled back from a 52-week high of 18 cents, reached on August 3, and closed down another penny this past week at 11.5 cents…we view this as a normal and healthy correction after a very sharp rise in this stock over a short period of time…the company is now in the process of completing a small financing ($1.2 million) at 10 cents where there is VERY strong technical support…the rising 50-day moving average, in fact, is at 10.5 cents…the primary trend with Sidon remains bullish and the the final 4 months of the year should prove interesting as the company ramps up exploration at its Morogoro East Gold Property in Tanzania…we are attracted to this stock because of the potential of Morogoro (it’s in a highly prospective, under-explored region of Tanzania approximately 100 kilometres south of Canaco’s Handeni Project) as well as SD’s strong liquidity and very favorable looking chart…this is an interesting play for speculators but don’t get married to the stock…
Richfield Ventures (RVC, TSX-V)
Richfield has been a terrific performer over the past couple of months and is now up 58% since we introduced it to BMR readers at $1.20 last December…the company’s 25,000 metre drill program, which got off to a slow start this past spring, is picking up steam with 2 rigs now at the Blackwater Project in central British Columbia…Richfield closed at $1.90 Friday for a 25-cent weekly gain…more drill results are expected this coming week – if investors decide to “sell on news”, smart money will jump in and accumulate…since last summer, when results first started flowing in from Blackwater, Richfield has consistently drilled long intersections with very mineable grades (typically over 1 g/t Au)…Blackwater also has some copper and silver which will add to the economics of this project if a large deposit is proven up and it goes into production (we doubt Peter Bernier is interested in production – he’s priming this for a buyout)…Richfield’s chart looks strong…there is major resistance at the 52-week high of $2.25 but this could be shattered quite easily on a really good hole or 2…the company has several million in its treasury and a current market cap of only $53 million…
Seafield Resources (SFF, TSX-V)
There’s not a great amount of interest in Seafield at the moment which is why this is such a good time to take a serious look at this stock…Seafield closed Friday at 16.5 cents, unchanged for the week…its 50-day SMA has flattened out after being in decline since early May…its 200 and 300-day SMA’s continue to rise, confirming the primary trend is still up…what will move Seafield in the coming weeks and months, we believe, is a growing resource at its Quinchia Gold Project in Colombia…investor patience is required here…the company has been drilling at Miraflores since late June and initial assays are not expected until sometime next month…drilling should also start soon (in September) at another excellent target, Dos Quebradas…Seafield has the right people on the ground at Quinchia, led by Ian Park who knows Colombia like the back of his hand and was instrumental in putting together Medoro’s (MRS, TSX-V) land package…Park has stated himself, and we find this reasonable, that Seafield should be able to increase the 43-101 inferred resource at Miraflores from nearly 800,000 to 1 million ounces by year-end…Dos Quebradas does not have a compliant inferred resource yet (there is an in-house estimate by Anglo of 800,000 ounces) but Park is hopeful he can get that to 1 million inferred within the coming months after the upcoming drill program…Seafield had nearly $4 million in the bank at the end of June and has all the cash it needs to complete its work programs at Quinchia this year…another really exciting target is Chuscal but that likely won’t be drill ready until sometime next year…with a market cap of just under $16 million, the risk-reward ratio here is very attractive as Seafield attempts to put together a series of deposits at Quinchia that have the potential to add up to 3 to 5 million ounces…
Colombian Mines Corporation (CMJ, TSX-V)
Colombian has been showing a few signs of life lately and closed Friday at 68 cents for a weekly gain of a nickel…what we like about this stock from a technical perspective is how it has held up so well and formed such a beautiful base at the 60 cent level over the past couple of months…the stock is currently sitting almost at its 50-day SMA (70 cents) which it has traded below since the end of April…like Seafield, CMJ has rising 200 and 300-day moving averages and an identical market cap ($15.5 million)…CMJ doesn’t have a property with a 43-101 inferred resource yet but it does hold a huge land package in Colombia (more than 150,000 hectares) which includes the Yarumalito Gold-Copper Project where CMJ has been getting some encouraging drill results (drilling continues there)…
North Arrow Minerals (NAR, TSX-V)
Volume in North Arrow has really tapered off recently as investors wait to see if the company receives a drill permit for its Lac de Gras diamond property…North Arrow did announce this past week that early next month a geophysical crew will be mobilized to carry out ground magnetic and electromagnetic surveys over the Hammer kimberlite (500 km north of Yellowknife), a joint venture between the company (25 per cent) and Stornaway Diamond Corp. (75 per cent)…once completed, the geophysical crew is scheduled to move to North Arrow’s Lac de Gras diamond project and carry out ground magnetic and electromagnetic surveys on approximately 20 priority kimberlite targets there…our concern now is that even if North Arrow receives approval to drill at Lac de Gras, we’re not exactly certain when that’s going to take place…timelines seem to be getting pushed back which investors never like…North Arrow does have a lot of blue sky potential, and mining legend Gren Thomas is one of the best in the business at grassroots exploration, but we will be re-assessing this company in the coming week to see if we will continue to include it in the BMR Portfolio…
Excel Gold Mining (EGM, TSX-V) continues to show good volume and finished the week at 15.5 cents, a drop of just 1 penny from the previous Friday…Excel is developing its Montauban Mining Camp Project approximately 120 kilometres west of Quebec City…this project includes the former producing Montauban Mine which features near-surface gold, silver, zinc and copper mineralization…we believe there’s an exciting geological story in the works here and we’ll be visiting Montauban this coming week…Excel is taking a fresh approach to this former mine…other successful companies in Quebec, the most notable of course being Osisko (OSK, TSX), have demonstrated the best place to find a new mine is near an old mine…we like the potential of Excel – its chart is also phenomenal – and we look forward to further due diligence on this company…
The BMR Portfolio (Week in Review Part 2 of 3)
Gold Bullion Development (GBB, TSX-V)
Gold Bullion closed Friday at 55 cents for a very modest 2-cent weekly gain…our visit to the Granada Gold Property was ideal timing for our readers, we believe, just prior to a very important month of September for this company with more drill results on the way and the completion of its 20,000 metre Phase 2 drill program…our latest site visit confirmed that everything is on track with Gold Bullion including the Preliminary Block Model, where there is still plenty of exploration upside, and a growing LONG Bars Zone eastern extension…we encountered a very upbeat and energetic crew on site, all working well together, which is an important sign…we are impressed with how Gold Bullion is advancing Granada in a very strategic, efficient, systematic, forward-thinking and effective way which is why we continue to be so bullish on this project…we found our interview with Frank Basa to be informative and encouraging though he was clearly holding back some of his enthusiasm…he obviously had to be careful with his comments…having said that, we believe he handled himself extremely well and articulated a clear vision for the near and longer term…Basa is quite conservative by nature – he’s not one to engage in hype – and he adheres to the philosphy that it’s always best to “under-promise” and “over-deliver”…on the one hand he was careful with his words…on the other hand, though, the symbolism of him standing at Hole 78 was more than just a subtle message in our opinion…it could not have been a coincidence that this hole was specifically singled out in Gold Bullion’s July 29 news release…it was collared 250 meters east of Phase 1 discovery hole 17 and encountered visible gold as well as large alteration and intrusive zones to a vertical depth of 350 metres…something significant appears to be developing in the east which Basa boldly stated is “an area of extreme interest”…the amount of altered feldspar porphyry being intersected in the east, as disclosed by Gold Bullion last month, is raising eyebrows among a few geologists we’ve spoken to…if some of this porphyry contains abundant sulphides – we know from historical reports that this is the case further east around the old Aukeko shaft in LONG Bars Zone 2 – then we are guaranteed to have a dramatic game-changing event on our hands…Jordan Capital’s continued appetite for Gold Bullion demonstrates the smart money is fully behind this…after our third site visit of the year, and further research, we can state with complete and total confidence that the best is yet to come from this very exciting project which has multi-million ounce potential written all over it…
CDNX and Gold
The CDNX was up another 9 points this past week, closing at 1489 (right at its declining 100-day SMA) and is now resting just beneath major resistance between 1490 and about 1515. As BMR’s technical analyst pointed out so effectively in an earlier post today, a CDNX breakout is imminent and after getting through this resistance the Index should challenge its 52-week high of 1691 during the final quarter of this year. That means there is some exciting trading ahead and potentially a lot of money to be made if you’re invested in the right stocks. This is a very similar situation to 2004 when the CDNX climbed 25% by the end of the year from its late July low. While the CDNX still has a declining 100-day SMA, its 50-day SMA has recently reversed to the upside which is providing fresh fuel for this market to push through resistance. The 200 and 300-day SMA’s continue to rise with no threat of any change there, confirming the CDNX’s primary bull market trend. The fact the CDNX has outperformed the major markets, Gold and the TSX Gold Index since early July is hugely bullish and suggests the world economic recovery is not quite as fragile as some are suggesting. In the United States, where there does appear to be a slowdown in economic activity, the Fed can be expected to pull out all the stops which includes more QE (quantitative easing), which could adversely affect the Dollar, and continued low interest rates. A potential Republican takeover of the House in November’s Congressional elections should be viewed positively by the market as the Republicans will push hard for lower taxes and put the brakes on Obama’s radical left agenda. Gold has been rising steadily for four straight weeks while Silver has recently broken out of a sizeable triangle pattern (very bullish). Gold was up $10 for the week and technically appears to be getting ready to hit new all-time highs, likely sometime in September or October, which coincides with our bullish outlook for the CDNX. This is a very interesting time in the markets with a lot of opportunities to make some serious money.
BMR turned very bullish on the CDNX in mid-July when we saw many technical indicators that suggested this market had bottomed out for the year at 1343. Since that early July low, the CDNX has climbed almost 11%. This is no “sucker rally” – it is the real thing as we have been emphasizing over the last 6 weeks (contrary to the many dire predictions of another market crash). A major breakout through the 1500 area on the CDNX is now imminent as BMR’s technical analyst explains below:
John: Last week the CDNX opened at 1479, drifted lower to 1453 and then closed at its high of 1489 on good volume for a gain of over 9 points for the week.
On August 18 we showed that the expected breakout to the upside from this year’s low occurred during the 3rd week of July – 2 months earlier than our comparative year of 2004. This is important for it indicates stronger interest in the small and microcap stocks of the CDNX.
Today we will evaluate where the Index is in its development at this crucial time by analyzing the 19 month weekly chart. Looking at the chart we see that starting in March, 2009, to the end of May, 2010 (14 months), there is a 5 Wave Motive Phase (green lines) in accordance with Elliott Wave Theory, then a 3 Wave Corrective Phase (blue lines) from the beginning of May this year to the end of June. Following that, a new Motive Phase (green line) Wave 1 started which is where we are at now.
The supporting moving average for the Motive Phase was the weekly SMA-20 (blue line) which broke to the downside this past May with the Corrective Phase. The new Wave 1 has climbed from the 2010 low and on Friday closed just below the weekly SMA-20. I expect the CDNX to cross above this SMA in the near future and resume its role of support. The CDNX is almost at the 1500 level where there is significant resistance. Once this is broken the next major resistance is at 1700.
Looking at the indicators:
We have said before that often the best indicator is volume. If you compare the Mauve volume lines with the Motive Phase Waves you will see they move in concert, thus volume can be a good indicator of when a Wave is peaking. Also we see that at the end of the 3rd Wave there was a bearish divergence of the CDNX and volume (orange lines). When the volume falls during the Corrective Phase this indicates the uptrend is still intact.
The RSI shows a bearish divergence at the end of Wave 5 (orange lines), indicating the 5th Wave was about to end and the Corrective Phase was set to begin. During the Corrective Phase the RSI dropped to the oversold region but has recovered during this new Wave 1 and is now in bullish territory, above 50% and climbing. - very bullish.
The Slow Stochastics had the %K (black line) cross above the %D (red line) below 20% at the low point of the Index and has since climbed above the 50% level and is still climbing – very bullish.
The Chaikin Money Flow (CMF) indicator is above the zero line at the .28 level which is considered very bullish. It’s interesting that the CMF remained bullish even during the Corrective Phase. This indicator has remained bullish for the last 18 months.
Outlook: The chart says it all. The Index has just started a new Wave 1 of a Motive Phase and should have many months of uptrend remaining. This is a VERY bullish scenario going into the usually strong September to May trading season. Buckle up – we are going to have a lot of strong trading.
August 27, 2010
We experienced the vastness of the LONG Bars Zone today as we ventured out to Hole #78 for an interview with Gold Bullion Development (GBB, TSX-V) President and CEO Frank Basa. Hole #78 was visually very impressive as reported by Gold Bullion July 29. Through the end of July it was also the easternmost hole drilled in the company’s 20,000 metre Phase 2 program, nearly 400 metres east of the Granada Gold Property Preliminary Block Model where a potential non-compliant resource of 2.4 to 2.6 million ounces has been outlined. Click on the link immediately below to listen to BMR’s interview with Basa. Below that link is another picture from Hole 78 as Basa and a GENIVAR geologist hold up a LONG Bars Zone geological map. Much of the Block Model is shown on this map (far left) and you can see how it is dwarfed by the surface area of just a portion of the very promising eastern extension.
From Rouyn-Noranda, Quebec, 6:40 am eastern
Gold has traded within a range of $1,234 to $1,238 so far today…as of 6:40 am eastern, the yellow metal is up $1 at $1,237…Silver, which this week has broken out of the triangle it has been stuck in since May, is up 7 cents at $19…Silver’s out-performance vs. Gold recently is certainly an encouraging sign…as an industrial metal, in addition to a precious metal, a strong Silver market is a valuable leading indicator…many eyes will be on Fed Chairman Ben Bernanke today as he speaks on the U.S. economy and Fed policy at a morning address in Jackson Hole, Wyoming…revisions to U.S. second quarter GDP also come out at 8:30 eastern time…the CDNX, which is in a powerful new uptrend that bodes very well for September, out-performed the major markets again yesterday, inching up 6 more points to 1469…as we’ve stated here repeatedly recently, the CDNX has been giving consistent indications since last month that it could explode to the upside in the coming weeks…we’re embracing any pullbacks in anticipation of a convincing move through 1500 very soon…today is our last day in Rouyn-Noranda and we are capping it off with another visit to the Granada Gold Property this morning, something we were not expecting, as we’ll be interviewing Gold Bullion Development (GBB, TSX-V) President and CEO Frank Basa…Basa had promised an interview with us a while ago but we weren’t sure if that would be over the phone or in person or even exactly when it would be…for reasons he would not confirm – it certainly wasn’t just to accomodate us – Basa rushed from Montreal to the Granada Property yesterday…he then committed to an interview with us this morning at the Property…we expect to have the interview ready to be uploaded to our site by late this afternoon eastern time…while we are leaving Rouyn-Noranda later today, we have more to report over the weekend on Gold Bullion from our visit…Richfield Ventures (RVC, TSX-V), which we first introduced to BMR readers at $1.20 last December, had another powerful day yesterday as it jumped 21 cents to $1.95 on CDNX volume of nearly 600,000 shares…that was just the 7th time in its short history (since 2007) that Richfield has traded more than half a million shares in a single day…we expect a strong final 4 months of the year for Richfield as drilling intensifies and a steadier stream of results starts flowing in from the company’s highly prospective Blackwater Project in central British Columbia…Richfield stated recently it expects to release assays on five more holes sometime next week…Blackwater holds multi-million potential (also has silver and copper values) with Richfield having reported some outstanding intersections over the last year…they’re in the midst of a 25,000 metre drill program with operations set up to run year-round, even through a potentially cold and snowy winter…Sidon International (SD, TSX-V) came out with news yesterday from its Morogoro East Gold Property in Tanzania and also announced a small ($1.2 million) proposed private placement at 10 cents where the stock has very strong technical support…Sidon is gearing up to drill Morogoro (many local miners have descended on the area, digging for Gold and finding it) which is situated about 100 kilometres south of Canaco’s (CAN, TSX-V) Handeni Project…
August 26, 2010
From Rouyn-Noranda, Quebec, 1:35 pm eastern
Gold Bullion President and CEO Frank Basa has confirmed an interview with BMR to take place tomorrow at the Granada Gold Property.
From Rouyn-Noranda, Quebec, 11:10 am eastern
Gold has traded within a range of $1,235 and $1,245 so far today…as of 11:10 am eastern, the yellow metal is down $2 an ounce to $1,238…we believe Gold will reach new all-time highs soon, perhaps as early as next month, but not before a re-test of the $1,200 area as John detailed in his excellent technical analysis yesterday…the CDNX bounced off its rising 20-day moving average yesterday, hitting a low of 1453, and as of 11:10 am eastern the Venture is up 6 more points to 1469…the 9% move from 1343 to current levels since early is no “sucker rally”…this is a market in the midst of a powerful new uptrend that we believe could accelerate rapidly next month on a convincing move through 1500…this appears to be 2004 all over again with the CDNX which is also showing that Gold is indeed going to new highs…Gold Bullion Development (GBB, TSX-V) is unchanged at 54 cents…our Granada site visit yesterday clearly demonstrated to us that the massive LONG Bars Zone project is moving forward very efficiently..there is a continued sense of excitement on the ground…what has caught our attention with Gold Bullion in recent weeks, after the 2 news releases last month, is how the area east of the Preliminary Block Model is becoming more and more interesting from a geological point of view…something a little different seems to be coming together in this part of the LONG Bars Zone with the amount of altered feldspar porphyry that is being intersected and appears to be mineralized based on what Gold Bullion reported July 13 and again July 29…initial assays, expected soon, will start to tell the tale and give a much better understanding of what’s happening…it’s very interesting to note, as we mentioned in our article last night, that Willoughby’s 1994 publicly available report on the Granada eastern extension stated, “Sulphides (mainly pyrite) are abundant in porphyry on East Granada, in the area of the Aukeko Shaft.” Our question is, could they be abundant elsewhere, too?…the area east of the Preliminary Block Model has historically never been explored to the extent that it is now by Gold Bullion…GENIVAR’s visual observations, reported last month by Gold Bullion, are highly interesting…if there are disseminated sulphides in the porphyry east of the Block Model, and an abundance of them, tonnage implications for this area (which has the potential of being extended much further east) could be very significant…we’re in Rouyn-Noranda again all day today, doing additional research, prior to our departure from here tomorrow afternoon…Richfield Ventures (RVC, TSX-V) is powering higher…Richfield is up 11 more cents to $1.85…we first brought this company to BMR readers’ attention last December when it was sitting at $1.20…Jay Taylor endorsed RVC August 16…like Granada, Richfield’s Blackwater Project in central British Columbia has multi-million ounce potential and higher gold prices are going to make Blackwater even more attractive…Richfield is expected to release results on several more holes next week…Blackwater also has copper and silver values…Excel Gold Mining (EGM, TSX-V) is down half a penny to 14.5 cents…we are departing in the near future for southern Quebec where we will be checking out Excel’s highly prospective Montauban Mining Camp Project, 120 kilometres west of Quebec City…Excel’s 130 square kilometre land package includes the former producing Montauban Mine (near-surface gold, silver, and base metal mineralization) which the company is taking a fresh look at…Excel has a powerful looking chart with a volume surge in recent months that suggests something exciting is in the works here…