The action in GoldQuest (GQC, TSX-V) this morning underscores an important broader point – how critical it is to take advantage of temporary weakness in quality situations in order to make potential HUGE gains. We have been stressing this fact with our favorite exploration play, Rainbow Resources (RBW, TSX-V), and as a general overall principle – the best opportunities come in the darkest hours, like we’ve been experiencing in the markets over the past while.
What GoldQuest also demonstrates is that one still can’t beat the potential massive gains from exploration discoveries. GQC could have been picked up for a paltry 6 pennies 24 hours ago and we mentioned this to our readers in yesterday’s Morning Musings. It has more than quadrupled in one day.
More on Rainbow below which has the potential of becoming the next hot exploration story based on geological common sense. First, John has an intra-day chart for GQC which has been as high as 35 cents this morning. The Fibonacci .31 area seems to be key. As of 8:23 am Pacific, GQC is up 22.5 cents at 30 cents on total volume of 13.5 million shares.
And here’s another chart looking at just today’s activity…
Rainbow Resources (RBW, TSX-V)
Rainbow will soon commence drilling at its Big Strike Project with assay results also expected any day from initial sampling at its Jewel Ridge Gold-Silver Property in Nevada. In addition, RBW has had crews on the ground in the West Kootenays for a couple of weeks now and we believe there’s a good chance of a prospecting discovery considering how mineral-rich this area is.
Rainbow’s chart is still looking very favorable overall, and the stock is currently trading at the lower end of its recent range between 15 and 20 cents – that presents opportunity. As of 8:23 am Pacific, RBW is unchanged at 16.5 cents with RSI(14) showing signs of developing into a bullish “W” formation.
GoldQuest has made an important discovery in the DR. The prolific and under-explored West Kootenay region of southeast British Columbia is where we expect another important discovery, and Rainbow is clearly the leader in that area.
Zenyatta Ventures (ZEN, TSX-V)
This graphite play reported nice results this morning – a 450-metre step-out hole returned 6.6% graphite over 170 metres…it’s good exploration results like this that will help power the Venture higher. ZEN is up 6 cents at 39 cents as of 8:23 am Pacific.
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Hey bmr in your interview David mentioned thr Ref 10 000 tn sample would also generate revenue how much rev would you say or to early to say.
Comment by Gerry — May 24, 2012 @ 7:58 am
Looks like ANON selling on RBW has subsided for now…
Comment by db — May 24, 2012 @ 7:59 am
Any comment as how VGN might fare from good results at Jewel Ridge?
Comment by Ack — May 24, 2012 @ 8:02 am
Gerry, depends obviously on the grade…..one of the things that really intrigued me in my research on the Referendum is the similarities between the geology of that property and some situations in Quebec……the tourmaline is very interesting, and it’s also a stockworks system………tom cherry did his own small-scale mining on this property and did so from at and near surface over a zone, as RBW reported, of around 700 metres by 150 metres which is open in all directions….a bulk sample makes great sense, if that’s what Moose Mountain determines can be done……also gives a lot of valuable geo information…..on a 10,000 tonne bulk sample, theoretically, even if they average 1.5 g/t, you’re looking at about $800,000 in revenues at a $1,600 gold price….likely easy and cheap to extact…..great opportunity for RBW to keep share dilution at a minimum and help fund further exploration….
Comment by Jon - BMR — May 24, 2012 @ 8:06 am
sorry he said significant revenue.
Comment by Gerry — May 24, 2012 @ 8:08 am
VGN is currently trading only for its cash in the bank, $5 million. Total net assets, including investments, are almost $7 million or 15 cents per share. So the market is putting a value “0″ value on everything VGN has other than its cash, which is obviously ridiculous. I’ve seen this happen with VGN at various times over the last number of years. That’s the time to be a buyer and then you just sit on it for a period of time and wait until your money triples. Good results out of Jewel Ridge, especially drill results, could be the catalyst that wakes VGN up.
Comment by Jon - BMR — May 24, 2012 @ 8:16 am
Dave – any thoughts on ZEN for an entry today at .40? Looks like a confirmed reversal helped with the nr. If volume stays it could go to .50 on this run? RSI sharply upwards and %K through %D
Comment by Andrew — May 24, 2012 @ 8:19 am
thanks Jon
Comment by Gerry — May 24, 2012 @ 8:32 am
Thanks for you comments Jon
All the best Ackman
Comment by Ack — May 24, 2012 @ 8:40 am
Andrew – ZEN’S strongest resistance number prior to today was .38, the TA looks good in correction mode with more room to run. The way I see it, if ZEN closes .38 or above, she still has room to run. SRK – could be doing an inverted hammer today. I have always found that stocks run shortly after an inverted hammer. SRK gave a hint of news next week. Strong support at .18, so I went with SRK. Good luck.
Comment by dave — May 24, 2012 @ 8:46 am
By the way, if ZEN canoot break above that .50 cent level, you are probably looking at a head and shoulders pattern and she will correct.
Comment by dave — May 24, 2012 @ 8:50 am
Thanks Dave, much appreciated!
Comment by Andrew — May 24, 2012 @ 8:58 am
So ZEN is rocking today on assays…
Zenyatta Ventures drills 170 m of 6.6% C at Albany
2012-05-24 07:17 PT – News Release
“ZENYATTA VENTURES; 450 METRE STEP-OUT HOLE YIELDS 6.6% GRAPHITE OVER 170.0 METRES INCLUDING 7.1% OVER 76.0 METRES
Zenyatta Ventures Ltd. has provided the following significant assay results from the current drilling campaign on the Albany graphite deposit.
Drill hole No. 5 intersected a very large mineralized zone of graphitic breccia and veining, from 44.0 to 214.0 metres grading 6.6 per cent C (graphite) over 170.0 m. The upper graphite zone, from 44.0 to 132.0 m, yielded 6.5 per cent C over 88.0 m while the lower graphite zone, from 138.0 to 214.0 m, graded 7.1 per cent C over 76.0 m. Individual samples assayed as high as 13.1 per cent C. ”
ZEN is up 6.5c on the news.
Well ASW has mapped 15% graphite on less thaan 25% of their property, given we dont know what the lengths of the cores will be but that it looks like a possible 3km strike zone.
This bodes very well for RBW with properties both north and south of Anglo-Swiss’ Blu Starr project…
Comment by db — May 24, 2012 @ 9:32 am
EVR is getting attention with GQC latest hole. It also got a bounce as a result.
Comment by Andrew M — May 24, 2012 @ 10:54 am
A nice gain in GR today too, sentiment seems to be a lot more positive.
Comment by Andrew — May 24, 2012 @ 11:29 am
HRN has had a great second half today as well. Hopefully we can carry this momentum into tomorrow and next week as well.
Comment by db — May 24, 2012 @ 11:47 am