BullMarketRun.com

Gold is down again this morning but off its lows of the day…gold touched $1,091.50 an ounce and as of 8:30 am Pacific time is at $1,098, off $10…crude oil is also weak this morning but has recovered some of its losses…it’s currently down just under a dollar per barrel to $79.72…the TSX Gold Index is holding up reasonably well and is down just 2 points at the moment to 319…we believe the HGD, the short Gold Index ETF, is a hedge worth considering at this time for experienced investors…the CDNX has shed 13 points to 1,551, confirming our view expressed over the weekend that a new correction is underway in this market…we believe it’s wise to immediately increase cash levels for portfolio protection purposes and to take advantage of bargains down the road…we are working on a separate article with a very interesting chart to provide more detail on that analysis…Gold Bullion Development (GBB, TSX-V) hit a new 52-week high of 31 cents this morning and is currently trading at 28.5 cents, down half a penny…

CDNX

Traders beware – we call ’em as we see ’em, and a few cracks started to appear in the CDNX this past week – some “red flags” – that suggest to us that a minor correction (at the very least) has already started and will likely lead to a sell-off down to support around the 1,500 level.    On Tuesday the Venture jumped 17 points to close at 1,579 and appeared ready to make another assault on 1,600 (the 52-week high is 1,629).  But the momentum fizzled and the Index dropped the next three days to close the week at 1,564, a 4-point decline from the previous Friday.  Of particular concern is that the CDNX’s 50-day moving average, which has been steadily rising without fail for over a year now, started to decline this past week when there was no follow through from Tuesday’s advance – this is a technically bearish short-term development and an “early warning” sign that we would be foolish to dismiss.

The CDNX has very strong technical support between 1,485 (the 100-day moving average) and 1,500, so our worst-case scenario at this point is about a 5% drop in the Index which could take some stocks down roughly 10 to 20%.  Stochastics show the CDNX (along with the broad market) is also currently significantly overbought, further suggesting the likelihood of at least a minor correction.  Trading action very early this coming week will be important to watch – an immediate and major reversal to the upside (through last week’s high of 1,582) would be required to change our view, while additional weakness would confirm our stance.

Our intermediate and long-term outlook for the CDNX remains very bullish as we see a strong possibility of the Index climbing to at least the 1,950 level this year.  The divergence between the CDNX, gold and the TSX Gold Index since early December is very bullish as the CDNX has proven to be an incredibly accurate leading indicator of precious metal and commodity prices in general.  The CDNX is up 6.7% since early December while gold is off 10.5% and the TSX Gold Index is down 19%.  If a crash were coming in commodities, the CDNX would be leading the way down as it did in July of 2008.  So all we see right now is the high potential for a healthy pullback in the CDNX, erasing about half the gains we’ve seen from February 5 when the most recent correction ended.  A drop below February’s low of 1,429 would be an all-out sell signal for the CDNX and would suggest major trouble for commodities and the broad overall market.

Gold sold off sharply on Friday and its inability to gain major traction after February’s breakout is cause for concern.  Also worrisome is the fact that commerical traders have recently ramped up their short positions in gold, and they’ve also taken a strong short position in oil.  The U.S. dollar is showing renewed strength and is on the verge of another upside breakout.  Given the American financial mess and the anti-business, far-left approach of the Obama administration, it’s hard to imagine the U.S. dollar being as strong as it is but everything is relative and it could be that it’s simply just the best of a bad bunch.

The HGD (TSX Gold Index short ETF) looks technically very attractive at $4.61 and could be the trade of the week if we get a breakdown in resource stocks.

The BullMarketRun Portfolio

Gold Bullion Development (GBB, TSX-V)

Gold Bullion had another spectacular week, closing at 29 cents (up a nickel for the week) on total volume of 13.7 million shares (GBB’s stock price has jumped a whopping 314% since we initiated coverage three months ago at 7 cents just prior to Christmas)…we spent three days at the Granada Gold Property this past week which confirmed our view that it has tremendous potential to develop into a very large bulk tonnage, open-pit deposit…the LONG Bars Zone northeast discovery has triggered major excitement in Gold Bullion, reflected in part by the company’s announcement last Tuesday of a $3.22 million private placement at 21.5 cents…assay results on another 13 holes are yet to come, and a huge round of new drilling is expected to commence around late April/early May…speculators and pro traders are already sinking their teeth into GBB, so the stock is likely going to be very volatile in the days and weeks ahead…one effective strategy, we believe, is to maintain a core position in GBB as well as a trading position, selling that trading position into strength and buying into weakness…technically, Gold Bullion is currently overbought based on Stochastics and RSI but that condition could persist for a while…

Seafield Resources (SFF, TSX-V)

Seafield was down 2 cents on the week to 26 cents which still represents a 333% gain for BullMarketRun readers who jumped in on this play at 6 cents last summer and have held on…the stock has pulled back, as predicted, from its late February high of 35.5 cents and is now in a zone where it should be aggressively accumulated once again…the worst-case scenario on the downside over the short term, we believe, is 22 cents – the 100-day moving average…but it’s also possible the stock already bottomed out last Wednesday at 24.5 cents…since last fall, Seafield has been a tremendous buy any time it has dropped below its 50-day moving average which it did last Wednesday…Stochastics and RSI are also now at levels where the stock has rallied from before…the company has completed its Colombian gold property acquisition agreement with Caribbean Copper and Gold Corporation, and exploration work in advance of drilling has already started at Seafield’s Quinchia district properties which are very close to Medoro Resources‘ (MRS, TSX-V) massive Marmato Mountain Deposit…the accumulation in Seafield has been incredible in recent months, leading us to believe this stock could be a repeat of Galway Resources’ (GWY, TSX-V) incredible run from under 10 cents to nearly $2.00…in short, despite Seafield’s 333% gain since we brought it to readers’ attention last summer, we believe the best has yet to come from this company which holds highly prospective properties in Colombia along with additional quality projects in Mexico and Ontario.

Kent Exploration (KEX, TSX-V)

Kent has yet to break out like others on our list but we strongly believe its time will come…this is a very well-run company with high quality exploration projects in Austalia, New Zealand and North America…Kent’s proposed spin-off of its Gnaweeda Gold Project is an astute strategic move, and amounts to a substantial dividend for Kent shareholders who would receive one share in Archean Star Resources for every four shares held in Kent…the stock closed Friday at 18 cents, down a penny on the week…the company is currently drilling at Gnaweeda and is also expected to commence drilling soon at its Alexander River Project in New Zealand.

Greencastle Resources (VGN, TSX-V)

Greencastle had a bad week, plain and simple…the two wells Greencastle and its partners were testing in the Cabri area of southwestern Saskatchewan turned out to be unproductive, and the stock responded by dropping to as low as 13 cents before closing Friday at 14 cents – a two-cent loss on the week…by drilling and testing those two wells, however, Greencastle has earned an interest in a large land package around Cabri which is considered very favorable for oil and gas exploration…at 14 cents, Greencastle is trading essentially at cash value which has always been a great time to accumulate this stock…for long-term investors this is a low risk opportunity with very significant upside potential as Greencastle has demonstrated before.

Richfield Ventures (RVC, TSX-V)

Richfield has been on fire the past few weeks and closed Friday at $2.15, a 28 cent gain on the week…drilling starts next month at Richfield’s Blackwater Project in central British Columbia which has world class potential as a bulk tonnage, open pit deposit…the stock, however, has become extremely overbought based on Stochastics and RSI, and right now the only thing that will likely force it into retreat is a broad market decline – an event that has become increasingly likely as we outlined above…so we do envision a pullback in this stock, below $2.00, and a cleansing of the overbought condition, before another possible dramatic move to the upside.

Colombian Mines Corporation (CMJ, TSX-V)

Colombian Mines has been another star performer in our portfolio, hitting a new 52-week high of $1.62 this past week…CMJ is currently drilling its Yarmualito Property in Colombia and has also now completed its recently proposed private placement at 95 cents (4.1 million shares)…the stock closed Friday at $1,39, up 24 cents on the week…any significant pullback in CMJ triggered by a broad market decline would make for a very attractive buying opportunity, especially around the $1.00 level…CMJ is a well managed company with a high quality portfolio of exploration projects in Colombia.

Disclaimer

Markets are weak this morning with gold off $23.00 an ounce to $1,103 as of 9:15 am Pacific time, while the CDNX has shed 14 points to 1,561…the Venture Exchange has looked a little short-term “toppish” in recent days, stalling about 50 points below its 52-week high, and the possibility of a retreat to the 1,500 level (just above the 50-day moving average) now has to be considered a strong possibility…for the first time in over a year, the CDNX’s 50-day moving average has started to decline – albeit very marginally – and this raises some short-term technical concerns…this market has had a nice run (up 10%) since the lows of early February, so a pullback of half those gains would take the Index back down to just above 1,500 which would be a very attractive re-entry point across the board…we’ll see how things play out over the next couple of trading sessions, but we believe it would be wise to lock in at least some profits and raise some cash in the event of a 5% or so CDNX pullback…Gold Bullion Development (GBB, TSX-V) has traded a whopping 4.3 million shares already today and hit a new 52-week high of 29.5 cents…it’s currently down half a penny to 27 cents…maintaining a core position in this stock and a trading position would be a wise and effective strategy…strong new technical support for GBB is now at 25 cents, up from the previous 21 cents…we’re still sorting through information we gathered from our Granada Gold Property visit Monday through Wednesday, so we’ll be reporting more on GBB next week…we’re also preparing a report on Seafield Resources (SFF, TSX-V) which is looking very attractive in the mid-20’s…Colombian Mines (CMJ, TSX-V) and Richfield Ventures (RVC, TSX-V) have both enjoyed strong weeks and we’ll be reviewing them in more detail in our Week in Review feature which we will be expanding this weekend due to the fact we have so much to cover…we had a great trip to Rouyn-Noranda, Quebec, and we thank everyone there for their tremendous hospitality…

Welcome to our site, or at least a sneak preview of it! The final version will look much different than this as we develop a fully-integrated and very unique business, investment and money-management resource site.

An important component of this site is going to be 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 criteria – because without superb or solid management, a company with the best properties in the world is either going to underperform or flat-out fail. As simple as that. So we look for superior management guided by strong business ethics and integrity, followed by an outstanding portfolio of projects.

Disclaimer:

BullMarketRun.com is completely independent from any companies we cover. We accept no compensation of any kind from any groups, individuals or corporations mentioned on our site. Our stock coverage is for informational purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion 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 BullMarketRun.com writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.

From Rouyn-Noranda, Quebec – 11:30 pm EST 03/17/10

After three days at Gold Bullion Development’s (GBB, TSX-V) Granada Gold Property there’s no question we have a much better understanding of the scale and potential of this project.  It’s one thing to sit in the comfort of an office and review technical reports, drill maps and assay results, and look at some nice pictures, but it’s quite another to actually strap on the boots, walk the property and get dirty and wet.  It was our goal this week to get intimate with this property and that’s exactly what we did.

We encountered some knee-deep snow, some mud and a few obstacles to get to certain site areas and drill hole locations.  We climbed some rocks and picked some up.  We walked a lot and asked many questions.  We spoke to geologists and metallurgists, and in general we got a great feel for the land and the possibilities and challenges ahead for Gold Bullion as it attempts to define a major bulk tonnage, open-pit gold deposit just six kilometres south of Rouyn.

We can now speak with a greater degree of authority on this project and we will state this emphatically:  Gold Bullion has an incredible opportunity to turn the Granada Gold Property into a multi-million ounce deposit – near surface, bulk tonnage, open-pit.  If you’re looking for serious “blue sky” potential in a mining exploration project, you have it right here with Granada.  Bring out the drill rigs, drill and keep on drilling, Mr. Basa.  Hundreds of holes and tens of thousands of metres.  We believe that’s exactly what he’s going to do and we also believe he will succeed.

Areas to the north (the “Cadillac Trend” runs right through Gold Bullion’s northern claims) and the east hold the most potential at Granada – this covers a very large footprint – and will be priority targets once the next round of drilling starts, likely around the end of April/early May.

There’s evidence of mineralization almost everywhere at Granada, from the 400,000 tonne waste pile to the old mine workings to the rocks alongside the trails that lead out to the northeast discovery area.  The LONG Bars Zone is generally quite flat or gentle sloping with limited overburden and an elevation of about 300 metres.

Below, we have a picture of Granada Mine Manager Karol Mikulash with Nathan Jourdain of GENIVAR, Gold Bullion’s geological consultant.  They are standing at infamous Hole #17 , the easternmost hole drilled to date by Gold Bullion in the LONG Bars Zone (Karol on the right is a renowned metallurgist who’s worked on 10 mines in three different countries.  He did Gold Bullion’s bulk sample and is tremendously excited about Granada’s prospects).

GR-10-17 intersected 65.5 metres of 1.21 grams per tonne gold (from 3.5 metres to 69 metres) within a wider interval of 0.953 gram per tonne gold over 99.2 metres, including 31.5 metres of 2.39 grams per tonne gold, and remains open at depth.

Prior to heading out to #17 today, we spent nearly two hours with Nathan and Karol at the core shack in town to examine three completed and reported Granada holes – #17, #12, and #1.  Below are just two core sample photos we took  from GR-10-17 – more to come from #17, #12 and #1.

GR-10-17

GR-10-17

Granada is a quartz vein system that interestingly is showing a porphyry component (felsic porphyry dikes appear to be associated with the quartz veins based on Gold Bullion drill results to date, the significance of which has yet to be determined).  These are early days and there’s much yet that needs to be understood, but continued analysis of drill core and data (assays from 13 holes are still pending) along with more drilling will provide some answers.  GENIVAR is a world class geological consulting firm and Gold Bullion is very fortunate to have them managing this project which is growing in scope and magnitude each day.

We have compiled a great deal of information over the last three days from our Granada site visit which we will be reviewing before issuing a comprehensive report in the near future.

The bottom line for now is this:  The LONG Bars Zone (lots of new gold bars) is everything it has been made out to be and then some.  As we head home we’re struck with the magnitude and potential of this large mineralized system that could ultimately hold millions of ounces.  The prolific “Cadillac Trend” is showing its magnificence yet again.

Last summer we uncovered a terrific gem in Seafield Resources (SFF, TSX-V) when it was sitting at just six cents.  Readers who jumped in at that price have made a bundle.  Seafield closed yesterday at 27 cents and has gone as high as 35.5 cents this year.   There has been incredible accumulation of Seafield stock over the past six months with the likes of M Partners, Octagon, CIBC and others gobbling up huge chunks of stock.  And they continue to do so.  Some powerful players have lined up behind Seafield and for good reason – the company has picked up a high quality package of gold properties in the Quinchia District of Colombia, less than 10 kilometres from Medoro Resources‘ (MRS, TSX-V) multi-million ounce Marmato Property.  Seafield also has attractive properties in Mexico and Ontario and is now starting to put to use the millions it has raised over the last nine months.

Seafield is up several hundred percent since we first brought it to investors’ attention last summer.  However, we suspect Seafield’s run is just in its infancy and at the very least this stock is another Galway Resources (GWY, TSX-V) which went from under a dime last year to nearly $2 per share.

Two days ago Seafied released further details on some of the ground in Quinchia it has acquired through privately held Caribbean Copper and Gold Corporation (CCGC).  One property that has now been confirmed (we speculated on this acquisition last fall) is Dos Quebradas which contains an inferred (non-compliant) resource of 2.1 million ounces of gold as a low grade, bulk tonnage deposit.  That information comes from a technical report on Quinchia produced by CCGC in early 2008 which we expect to make available on our site as early as tomorrow.

Bottom line:  Seafield has recently pulled back from the mid-30’s to the upper 20’s where it is considered extremely attractive fundamentally and technically.  The kind of percentage move we’ve seen since last summer in this stock could very easily be repeated again (or exceeded) by this summer. The big boys who have lined up behind Seafield, including the likes of Scott Paterson, are not in this for mere pennies per share but more like dollars per share.

From Rouyn-Noranda, Quebec     11:30 pm EST 03/16/10

The news of a Gold Bullion Development $3.2 million financing did not surprise us today.  It’s another sign of the huge appetite for this story and that things are moving rapidly with Gold Bullion after its recent Granada Gold Property discovery.  The company will have more money in its coffers than ever before as it prepares to launch a massive LONG Bars Zone drill program beginning late April/early May in an effort to confirm a major near surface bulk tonnage, open-pit deposit along the prolific “Cadillac Trend”.

“The chances are that we might have a porphyry zone,” stated Frank Basa in an interview with us from the property Monday.  Interesting comment, indeed – a quartz vein deposit with some sort of newly-discovered porphyry component.   It’s true that the northeast discovery looks a little different from the rest of the structure at Granada.  What begins to unfold as Gold Bullion heads further north and east in its next drill program is going to be a matter of incredibly intense speculation.

We walked through much of the LONG Bars Zone today and what struck us is not only how large this mineralized system already is, but how much bigger (and even better) it could become.

The two pictures below give a good visual of the blue sky potential of Granada.    Mine Manager Karol Mikulash and I were walking east along a trail, away from Pits 2 and 2 A (past holes GR-09-05, GR-09-09 and GR-09-10 if you refer to the drill map on the Gold Bullion web site).  Going along this trail we came to a fork.  In the first picture below you’ll notice a sign.  If you turn left at that sign, you’ll head north toward holes GR-10-14, GR-10-15, GR-10-16 and GR-10-17 (you have to go another kilometre or so past #15, the most northerly hole, to hit the northern edge of the property).  A right turn at the sign takes you south, while straight ahead is east.  We walked for a considerable distance straight ahead (Karol estimated over a kilometre) where no drilling has yet taken place, and came to a huge cleared area as you can see in the second picture below.  It just goes on and on and on.

Picture #1

Picture #2 - Looking East

My point is very simple.  Most of this nearly 5,000 hectare land package has yet to be explored.  Gold Bullion has drilled only 2,800 metres and 25 holes – merely the tip of the iceberg.

The next round of drilling is likely going to be even more successful because of the amazing work GENIVAR, Gold Bullion’s geological consultant, has been doing to get a better understanding of the entire structure at Granada.  GENIVAR’s  impressive efforts are going to provide more precise drill targets which in turn should pay off big-time, we believe, for Gold Bullion and its shareholders.

We are touring the property again Wednesday.

From Rouyn-Noranda, Quebec

To listen to a very interesting 19-minute interview with Gold Bullion President/CEO Frank Basa from the Granada Gold Property, simply click on the link below (MP3 file).

We’ll be commenting on this interview in our next report from Rouyn-Noranda late tonight.  We suggest you pay particular attention to what Basa says regarding the northeast discovery.

Gold Bullion Interview

We’re back at the Granada Gold Property this afternoon and we’ll be filing another report late tonight at approximately 11:30 pm eastern time.