BullMarketRun.com

Gold is off its lows of the day and as of 8:00 am Pacific time is trading unchanged at $1,168…major bullish forces are coming together in Gold, and yesterday we believe was a watershed day as Gold advanced sharply at the same time the U.S. dollar also made a big move to the upside…the CDNX is off 6 points to major support at 1653, its rising 20-day moving average…based on the technical patterns we’ve seen in the CDNX over the past year, this market appears ready for another major move to the upside…Gold Bullion Development (GBB, TSX-V) is off 2.5 cents this morning at 37 cents…John, BMR’s technical analyst, says GBB is in a bullish consolidation phase with Fibonacci retracement levels showing the buy target is between 35 and 37 cents…with everything we know about Gold Bullion, and with Gold itself set to challenge its all-time high and perhaps make a run to $1,300, any weakness at all in GBB must be taken advantage of…another accumulation opportunity continues to be Sidon International Resources (SD, TSX-V) which we are extremely bullish on…technical and fundamental factors are such with Sidon right now that we believe it’s very close to breaking out above resistance at 7 cents…we will have more on Sidon tomorrow…SD is unchanged this morning at 6 cents…Richfield Ventures (RVC, TSX-V) jumped to $2.20 this morning, where there is some resistance, and is currently at $2.17, a 9-cent increase on the day…Seafield Resources (SFF, TSX-V) has pulled back to 19.5 cents this morning, just above its rising 200-day moving average of 18.5 cents where there is extremely strong support…we expect Seafield to bounce back sharply next month as exploration ramps up on its Colombian gold properties…Seafield’s long-term technical uptrend is still very much intact…Kent Exploration (KEX, TSX-V) is strong this morning at 20.5 cents, up half a cent with solid bids…BMR is still in Vancouver, gathering information on several situations including Kent…we’ll be updating our readers on Kent possibly by this evening or at the very latest tomorrow morning…

The U.S. dollar is very strong this morning but interestingly Gold is down just $1 an ounce to $1,151 as of 7:15 am Pacific time…the overall strength of Gold given the much higher U.S. dollar since the beginning of the year is another extremely bullish sign we believe for precious metals…the CDNX is down 3 points to 1670…the current strength in Gold Bullion Development (GBB, TSX-V) was clearly on display first thing this morning as buyers immediately stepped in on some weakness that took the stock to 38.5 cents, Jordan Capital being one of the buyers which is significant…the fundamentals support a much higher GBB stock price and we have no doubt that’s going to occur, but some consoldiation at the moment in GBB is normal and healthy from a technical standpoint…John, BMR’s technical analyst, says there is strong Fibonnaci support for Gold Bullion at 37 cents…any weakness is considered a buying opportunity…the stock was unable to get through resistance at 42 cents yesterday but it’s just a matter of time in our view, and John’s view, before that barrier is broken…Seafield Resources (SFF, TSX-V) is bouncing back after yesterday’s ridiculous drop to 18.5 cents, which is its rising 200-day moving average…Seafield is up 2.5 cents this morning to 21 cents…the drop yesterday was fueled by the Greystar (GSL, TSX) news which spooked some investors though we believe the reaction to Colombia’s new environmental law pertaining to certain mining areas (mainly very high elevations) was overdone…these new regulations will have no impact on Seafield as confirmed by Seafield in a news release yesterday, and we’re confident Greystar will sort out its difficulties…Colombia has proven to be a great country for mining and exploration but does require patience, resolve and strong boots on the ground who understand the country and its political dynamics…BMR is visiting the offices of North Arrow Minerals (NAR, TSX-V) and Kent Exploration (KEX, TSX-V) today in Vancouver…we are very bullish on both companies and hope to round up some new information today…

The time to buy is often when others are selling, and Seafield Resources (SFF, TSX-V) was an excellent example of that today. We were buyers in this market today and so too were some of our readers.

Seafield got hammered down to a closing price of 18.5 cents on nearly 2 million shares today.    The stock has shown some weakness recently, for reasons we have already outlined here at BMR, but the news regarding Greystar Resources (GSL, TSX) and its need to file a new environmental impact assessment for its Angostura gold-silver mine seemed to spook a few more people into dumping their Seafield stock for no reason at all.

Seafield confirmed in a news release after the market close that Colombia’s new environmental legislation has no impact on its Quinchia properties which are all at a much lower elevation than Angostura.  The action in Seafield was particularly difficult to understand today given the fact that neighbor Medoro Resources (MRS, TSX-V) actually increased in value.

Seafield closed today exactly at its 200-day moving average (SMA) where it has incredibly strong support.  The stock recently dropped below its 100-day SMA for the first time since last summer, but it’s important to point out that Seafield’s overall uptrend remains firmly intact with rising 100 and 200-day moving averages.  The stock is at very oversold levels and we do believe today was an important “capitulation” moment which is actually healthy from a technical point of view.  The stock will strengthen from here.

Fundamentally, Seafield is in a strong cash position, has a portfolio of excellent properties at Quinchia and the right people in place to advance them.  The company is in the process of ramping up its exploration efforts at Quinchia with drilling expected to commence soon.

Bottom line:  Seafield is a strong buy in these very oversold conditions, and we believe the best is yet to come from this stock which BMR first introduced last summer at just 6 cents.

Gold is down just very slightly this morning, $2 an ounce to $1,155, as of 8:05 am Pacific time after a big move to the upside Friday…the CDNX, which was also very strong Friday, is up 1 point to 1672…Gold Bullion Development (GBB, TSX-V) hit a new all-time high of 42.5 cents and as of 8:05 am is at 41.5 cents, up 3.5 cents on the day on heavy volume of nearly 2 million shares…it’s interesting to note that Jordan Capital, which accumulated a lot of GBB stock under 10 cents last December and also handled the 7-cent financing at that time, simply isn’t selling at these levels…they’ve been quiet this morning, buying 25,000 and selling 20,000 in the first 1.5 hours of trading…they sold very little in the 8.6 million share day Friday…Jordan is clearly long on this stock and anticipating much higher prices…Kent Exploration (KEX, TSX-V) is enjoying a strong day, up 2 cents to 20.5 cents…Kent’s Archean Star spinoff of its Gnaweeda Gold Project will be ratified at the company’s AGM Friday…we’ll be reporting more on this as the week unfolds…Sidon International Resources (SD, TSX-V) is very close to breaking through major resistance at 7 cents…Sidon is trading at 7 cents at the moment on 2 million shares…not surprisingly, technical weakness is putting pressure on Seafield Resources (SFF, TSX-V) which could very well test its 200-day rising moving average of 18.5 cents…Seafield is down 2.5 cents to 20 cents after dropping as low as 19 cents this morning…as the saying goes, buy into weakness…

The first drill rig, likely followed by more in the coming weeks and months, is scheduled to arrive at the Granada Gold Property in northwestern Quebec in just six days.  Much was learned from Gold Bullion Development’s (GBB, TSX-V) first round of shallow “drilling for structure” at the LONG Bars Zone over the winter and now it’s time, as President & CEO Frank Basa stated, to extensively drill this highly prospective property for grade and tonnage.  Yes, things are really going to start to get interesting now at Granada with a whopping 20,000 metres of drilling about to commence.

Gold Bullion took a very conservative approach, we believe, in arriving at its estimate of a potential 2.4 to 2.6 million ounces within a defined area of the LONG Bars Zone as outlined in its Preliminary Block Model released Thursday.    The current strike length of the LONG Bars Zone is 1,100 metres, as proven by Gold Bullion’s recent 25-hole drill program, but the Block Model has taken into account only 55% of that – 600 metres.  So outside the Block Model – particularly east, west and north – there is massive potential as demonstrated by GR-10-17 as well as the two following statements in recent Gold Bullion news releases (March 1 and April 22, respectively):

1. “A prominent zone of deformation, hydrothermal alteration and quartz-veining extends for at least five kilometres around the old mine workings.”

2. “Gold Bullion’s exploration to date in the northeast area, along with historical work that included detailed ground geophysics and geological mapping, has outlined a number of significant auriferous structures contained within a wide, east-west trending zone of shearing, alteration and quartz veining north and east of the Block Model.”

In the southwest corner of the LONG Bars Zone, GR-10-21 returned a very nice intersection of 65.50 metres grading 0.72 g/t Au.  That hole is 50 metres outside the western boundary of the Block Model.

And in the northwest corner of the LONG Bars Zone, approximately 150 metres outside the Block Model and directly to the west of Pit #1, BMR has discovered through technical reports that two holes drilled by KWG in the early 1990’s returned 4.7 g/t Au over 3.4 metres and 6.3 g/t Au over 2.35 metres, respectively.  That area holds considerable promise as well.

In short, the strike length of the Granada Gold Property could be huge.  The Block Model takes into account a section of land that represents only a tiny fraction – less than one per cent – of Gold Bullion’s current total land package of 5,000 hectares.

But within the Block Model itself, there is also enormous potential as it is open at depth.  The underground workings at Granada went to about 300 metres vertical depth which the Block Model has taken into account as best as possible (underground workings don’t reveal everything).  But the deepest vertical hole drilled by Gold Bullion in its December/January program was only 140 metres while almost all the holes drilled by previous operators were even shallower (less than 100 metres).  There could be some pleasant surprises as Gold Bullion soon drills to expected depths of 300 to 500 metres within the Block Model.

The nature of the Cadillac Trend is such that grade can often improve as drilling goes deeper.  An excellent example of this at Granada is one deeper hole (>200 metres vertical) that KWG did drill in 1990 along the No. 5 Vein in the northern section of the Block Model – it returned 12.34 g/t Au over three feet.  Deeper down is also where Gold Bullion may find the source of the silver and curious base metal mineralization that they’ve seen evidence of close to surface through their 2007 bulk sample and in each of the four holes they tested for non-gold content from their winter program. Even low grade copper, silver and nickel – we have no idea why evidence of nickel would be showing up in this area – might be economical to recover and add to the bottom line, further enhancing the potential of the current Block Model which does not take into account any silver or base metal mineralization.

Gold Bullion will be removing the large amount of rock (400,000 tonnes) from the waste pile within the Block Model (they will use it apparently for road construction, meaning even the roads will be golden at Granada) and will start extensively drilling this area where limited historical exploration has taken place.  Geologists we spoke to during our site visit last month were excited about the possibilities of this area which is about 200 metres by 150 metres.  Holes GR-09-01 and GR-09-03, drilled at the very western edge of the waste pile, delivered good results.

So Gold Bullion has an excellent opportunity to substantially increase possible resources just within the Block Model.  We expect they’ll have a second drill rig arrive on the property sometime next month, and the sensible strategy it seems would be to put one rig within the Block Model and the other outside the Block Model to cover areas to the east and north.  Additional drill rigs will likely arrive on the scene later as we believe Gold Bullion is going to get very aggressive at Granada which may ultimately mean 100,000 metres or more of drilling.  An updated Block Model is expected by the Fall and a preliminary 43-101 by year-end.

The Block Model diagram that Gold Bullion released Thursday is very simple and clean, likely by design so as not to confuse the average investor.  We don’t see any cross sections and not even probably half the vein structures.  No doubt GENIVAR, Gold Bullion’s geological consultant and one of the best in the business, has an incredible array of detailed material on Granada including computer-generated 3D geological modeling.  For competitive reasons we’re certain that Gold Bullion is holding some of its cards close to its chest.  Basa and his geological team are also quite conservative, preferring to release information only when they know for sure they have confirmation and all the facts.

Through speaking with geologists, visiting the property, reviewing results and studying numerous technical reports, it’s BMR’s conclusion that Granada ultimately has the potential to host not just five million ounces of gold but perhaps even 10 million ounces.   We caution it’s still early in the game, so throwing around a figure like 10 million, we admit, is highly speculative and premature.  But the possibility certainly exists as Gold Bullion already appears to be a quarter of the way to double digits with so much blue sky potential remaining.    We’ll have a much better idea in six months, but for what it’s worth our “intuition” tells us this is going to end up being a world class bulk tonnage, giant open-pit deposit surrounded by all the necessary infrastructure in the best mining jurisdiction in the world.

A fact that cannot be underestimated in its importance is Gold Bullion’s 30,000 tonne bulk sample three years ago.  That’s a large sample and clearly shows that this company is on the right track in its approach at Granada.  The bulk sample helps determine grade, recovery and costs.  “For us the bulk sample was like the turning point,” Basa told us in our Thursday interview with him.  Recoveries have consistently proven to be high at Granada (90% or better) and mining costs should be low.  The estimated grade within the Block Model is 1.38 g/t Au to 1.46 g/t Au, numbers Basa can have a high degree of confidence in due to the bulk sample.

Much more is going to be understood about what’s driving the mineralization at Granada in the coming months.  Quite simply, as best we can tell from technical reports and speaking with geologists, the rocks at Granada are characterized by intense sericitic alteration with disseminated pyrite and arsenopyrite and carry quartz veins and stringers.  Interestingly, there appears to be a significant pyritic alteration “halo” effect in the LONG Bars Zone – the veins appear to be located within a very wide, low-grade halo that can be economically mined.  The 2006 Technical Report on Granada alluded to this halo effect, which also exists at Aurizon Mines’ (ARZ, TSX) Joanna Project 20 kilometres to the east-northeast, and Gold Bullion’s drilling and bulk sampling seems to confirm it.

Gold mineralization at Granada is running between the quartz veins, carried we believe in disseminated sulphides with pyrite being the dominant sulphide.  The wall rock – the material between the veins – was considered as waste by previous Granada operators and thrown away.  After completing its large bulk sample as well as testing the waste pile, Gold Bullion discovered this material in some cases ran even higher in gold content than the veins themselves because of free gold in the stringers.

Results from Gold Bullion’s winter drill program demonstrate that mineralization is carrying through the length of each hole at Granada, a very encouraging sign.

Geologically, there’s a lot going on here and much, much more is going to be learned from the 20,000 metres of new drilling that is almost set to begin.

The prolific Cadillac Fault runs through the northern edge of the Granada Property and has obviously had a major influence on the geological dynamics of the LONG Bars Zone.

With hard work, a fresh and insightful new approach to this historic producing property, and a little bit of luck, Gold Bullion Development is well on its way to becoming a major new player along the Cadillac Trend with the makings of a multi-million ounce deposit.

John, BMR’s technical guru, has so far been bang-on with his GBB analysis –  his 42 cent initial price target has been achieved  – and now he’s suggesting a move above 60 cents appears to be in the works.

“The chart and indicators predict that if the high volume continues next week we will see prices climb a lot higher once the resistance band has been overcome.”

GBB’s updated chart and John’s full analysis are below.  Tomorrow morning we are issuing an important update on the geology of the LONG Bars Zone after a few days of examining the recently released Preliminary Block Model and reviewing historical information on Granada.  Bottom line: Our estimate that Granada will become at least a 5 million ounce gold deposit is conservative, and we’ll explain why.

GBB's chart and indicators predict that if the high volume continues in the week ahead, we will see prices climb a lot higher once the resistance band has been overcome.

John: On Friday Gold Bullion traded a huge 8.4 million shares for a gain of 2 cents on the day and 5 cents on the week.

This type of trading pattern was to be expected as the news regarding the potential 2.4 to 2.6 million ounces in the LONG Bars Zone Preliminary Block Model was released at a time when the stock price was at the edge of a strong resistance band between 38 cents and 42 cents, the Fibonacci target level (two horizontal blue lines).

With continued high volume we should see a breakout above 42 cents early next week.  The next Fibonacci target level is 62 cents.

The chart shows the stock is still trading within the upsloping channel (green lines), creating stronger trading level bases as it slowly moves up.

The RSI has an upsloping trendline, showing continued strength, without shooting high into the overbought region.

The Slow Stochastics shows the %K (black line) in the overbought area and is above the %D (red line) which is still climbing.  This is bullish.  Both the %K and %D lines can remain in the overbought area for a long time during an extended uptrend period.  With the strength shown by the RSI and the trading pattern, we expect this situation to continue.

This is also supported by the ADX indicator which has the trend strength ADX (black line) high and still rising, above the +DI (green line) which is above the -DI (red line).

The chart and indicators predict that if the high volume continues next week we will see prices climb a lot higher once the resistance band has been overcome.

Further analysis of Gold Bullion Development’s (GBB, TSX-V) Preliminary Block Model for the LONG Bars Zone, released Thursday afternoon, and historical information have combined to shed dramatic new light on the potential of the Granada Gold Property.  BMR will be posting this important story by 6 am Pacific time Monday.

CDNX and Gold

The CDNX was up slightly overall for the week with Thursday being a crucial short-term bullish turning point.  The major markets were getting hit hard Thursday, and so too was gold.  Intra-day the CDNX dropped 15 points to 1632, landing right at its rising 20-day moving average.  Then came the reversal – the major markets recovered their losses and so did the CDNX, successfully bouncing off its 20-day SMA as it did last month.  The Index closed up 5 points on the day on big volume and carried that momentum into Friday with a 19 point gain to close at 1671,  a 4 point increase for the week.  This type of action is technically very bullish and strongly suggests the CDNX will now take a run at its recent 52-week high of 1691 and quite possibly push through 1700.  Gold, after dropping as low as $1,123 early Monday morning, rebounded nicely by the end of the trading week to close at $1,158.  All of Gold’s moving averages are in bullish alignment and the recent sell-off from $1,170 to $1,123 was actually healthy from a technical perspective, cleansing Gold’s temporarily overbought condition.  This sets up an excellent chance for a successful near-term move through $1,170 and a challenge of Gold’s all-time high of $1,225 set early last December…

The BullMarketRun Portfolio

Gold Bullion Development (GBB, TSX-V)

Gold Bullion Development (GBB, TSX-V) put in an incredible performance this week which culminated in Friday’s massive volume and a record new all-time high for the stock of 42 cents after the release of its LONG Bars Zone Preliminary Block Model for the Granada Gold Property…excluding the recent northeast discovery and a potential new find in the southwestern section of the LONG Bars Zone, the Preliminary Block Model came out with an estimate (non-43-101 compliant) of 2.4 to 2.6 million potential ounces within the defined area…the company also announced that it’s starting a new 20,000 metre drill program at Granada within 2 weeks…investors reacted favorably to the news with the stock closing at 38 cents Friday – up 5 cents on the week – on volume of 8.6 million shares…the number of GBB trades was over 1,000 for the first time ever on a single day for this stock…Gold Bullion has now gained a whopping 443% since we introduced the company to BMR readers just four months ago…with a potential multi-million ounce gold deposit on its hands, Gold Bullion’s current $40 million market cap still considerably undervalues this play in our view…the more drilling at Granada, the better Gold Bullion looks…we believe GBB has the potential to attain a market cap 10 times where it is now by year-end, if not sooner, if it’s able to prove up the 5 million+ ounces that we’re convinced are in the ground at Granada…the company is also a potential takeover target so we anticipate exciting times ahead for Gold Bullion investors…the first of what we expect will ultimately be several drill rigs arrives on the property in a week…speculation is going to be intense moving forward with GBB and we highly recommend investors maintain a core position with this very special situation…

Seafield Resources (SFF, TSX-V)

Seafield seems a little unloved by the market right now but we suspect that’s going to change as the month of May rolls around and exploration ramps up at the company’s promising Colombian gold properties…Seafield closed Friday at 22.5 cents, a 2.5 cent loss on the week despite news that its Miraflores Property contains a NI-43-101 inferred resource of 776,000 ounces of gold…Seafield holds other properties in the immediate area around Miraflores and we believe the company’s plan is to build a package of strategically located deposits in the Quinchia District including MiraFlores and Dos Quebradas… from a technical standpoint, Seafield has dropped below its 100-day moving average for the first time since last summer…that has put some additional downward pressure on the stock which is great for investors who see the value here and want to jump in at these attractive levels or add to their positions…Seafield has tremendous support at its rising 200-day moving average of 18.5 cents…the only explanation for the current weakness in the stock is some supply overhang that still exists from last year’s cheap private placements including a 12.5 cent PP that became free trading just last week…Seafield’s current market cap is just $17.1 million…

Kent Exploration (KEX, TSX-V)

Kent had a surprisingly quiet week, closing unchanged at 18.5 cents…action should heat up next week when investors have a final chance to get their free shares of Archean Star Resources from the Kent spin-off which will be ratified next Friday at Kent’s AGM…Archean Star is expected to begin trading on the TSX Venture Exchange by early May and will hold the Gnaweeda Gold Project as its flagship property…we are extremely bullish on Gnaweeda with drill results due from the Turnberry Prospect by mid-May…Kent’s 100-day moving average has reversed course to the upside, an important technical development…we believe Kent will do extremely well focusing on its highly prospective Alexander River Gold Property in New Zealand (over 600,000 historical ounces) and its Flagstaff Barite Property in northeast Washington State…

Sidon International Resources (SD, TSX-V)

Sidon has been under incredible accumulation over the past 5 weeks with nearly 60 million shares traded, 75% of the entire outstanding shares…Sidon closed the week on a very powerful note, climbing 1.5 cents Friday to 6.5 cents on volume of 5 million…a move through resistance at 7 cents, which we expect could happen next week, will send Sidon north in a hurry…the company announced this week that it’s raising up to $750,000 in a private placement at 5 cents…the financing will help the company complete its option deal to acquire an 80% interest in the high grade Morogoro Gold Property in eastern Tanzania, a mining friendly jurisdiction that revamped its Mining Act a decade ago to spur new investment…Tanzania now has 50 million ounces of reserves, up from just 1 million 10 years ago…the Morogoro Property is in the under-explored eastern area of Tanzania where more gold has come out of the ground than exploration dollars have gone in…Morogoro is full of high grade showings and artisan miners have done extremely well there…Sidon’s market cap is just $5.2 million, so there’s plenty of upside here…trading patterns are similar to those we saw in Gold Bullion and Seafield prior to their big moves to 10 cents and then beyond…

Richfield Ventures (RVC, TSX-V)

Richfield had a strong week and closed at $2.00, up 11 cents from last Friday…the company has started a 25,000 metre drill program at its Blackwater Gold Project in central British Columbia where it made a significant discovery in an 18-hole program last year (most holes were less than 200 metres in depth)…they are first deepening Discovery Hole BW-59 to 700 metres from 329 metres…Richfield reported Monday that the hole was at 509 metres and had intercepted similar volcanic lithologies, alteration and sulphide mineralization as seen in the upper 329 metres…Richfield will be conducting both exploration drilling and resource drilling in the 25,000 metres and hopes to have a 43-101 compliant resource estimate for Blackwater by early next year…given the multi-million ounce potential of Blackwater, the company’s current market cap of only $52 million makes it very attractive from a risk-reward standpoint…

Colombian Mines Corporation (CMJ, TSX-V)

CMJ firmed up this week and closed at $1,35, a 15-cent increase from the previous Friday…the first set of drill results are expected soon, likely next week,  from CMJ’s Yarmualito Gold Property…the company has a current market cap of $31 million but holds a very large package of highly prospective properties in Colombia where management has many years of experience…

North Arrow Minerals (NAR, TSX-V)

North Arrow has formed a very nice base at and just above 20 cents…the stock closed at 22 cents Friday for a 2 cent gain on the week…we introduced North Arrow at BMR just recently when it was sitting at 20 cents, and we’re expecting big things out of this company which is run by mining legend Gren Thomas…we’ll be interviewing Gren Monday in Vancouver as we intensify our coverage of this interesting stock which has an impressive portfolio of lithium, diamond, base metal and gold properties…North Arrow has just started drilling its Beaverdam Lithium Property in North Carolina, a follow-up to a successful first round of drilling there last year…we’re expecting some interesting results…the next project on North Arrow’s list is its Lac de Gras diamond play, a joint-venture with diamond guru Dr. Chris Jennings…

Greencastle Resources (VGN, TSX-V)

Greencastle continues to languish but this is a stock we know will make a nice run at some point this year…the company suffered a recent setback with a couple of dry wells in southwestern Saskatchewan where it was hoping to make a significant oil discovery…Greencastle has plenty of cash in the bank, approximately $5 million or 11 cents a share,  so at this week’s closing price of 13 cents the stock is barely above its cash value…monthly revenue of about $125,000 continues to flow in from its Primate royalties…Greencastle also has some good gold properties in Nevada along with coal interests in Manitoba…it’s the only stock in the BMR portfolio that has actually dropped in value from the time we introduced it, but Greencastle’s strong underlying fundamentals give us complete confidence it will recover and thrive…