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GoldQuest Mining Corporation (GQC, TSX-V) has made an impressive move over the past 5 trading sessions, climbing from a low of 14.5 cents September 24 (last Friday) to a high of 24.5 cents this week.  We were looking for a modest pullback and it happened today as the stock fell to a low of 19 cents before strengthening toward the close and finishing at 20.5 cents.  Today’s market weakness gave BMR the opportunity to add GoldQuest Mining to its “Portfolio” which now consists of 7 stocks – Gold Bullion Development, Richfield Ventures, Seafield Resources, Sidon International, Colombian Mines Corporation, North Arrow Minerals and now GoldQuest Mining.  Over the past year the BMR Portfolio has gained a whopping 156% (this is for 8 stocks in total including the 2 that we deleted in August, Kent Exploration and Greencastle Resources).

This morning we stated the fundamental case for GoldQuest.  Tonight we examine the technical condition of this stock which is extremely bullish:  There has been a recent volume breakout; all moving averages are in bullish alignment; and the stock has come out of a 2-year consolidation.  BMR’s technical analyst provides his insight into GQC below:

John: Today GoldQuest opened at 21.5 cents, its high for the session, drifted down to a low of 19 cents and then closed at 20.5 cents for a loss of 1.5 cents on the day on total CDNX volume of 843,000 shares.

Looking at the 6-month daily chart we see that on June 18 GQC reached an intraday low of 9.5 cents and from there proceeded to climb to a high of 19.5 cents, culminating in a black candle on July 4.  The significance of a black candle at the end of a run is that of exhaustion. On that day there is a lot of buying pressure initially which causes the share price to gap up at the open but the sellers come out in force and through the day drive the price down. The black candle is usually a very reliable indicator that a run-up is finished, at least for a while.

GoldQuest then gradually declined to a base low of 10.5 cents and then took off to another high of 18.5 cents on heavy volume September 17.  Thus, between July 4 and Sept 17, the stock made a well-formed cup (mauve lines) pattern that is ideally “u” shaped. Then the share price started to decline for a few days on low volume to create a well-formed handle (downsloping blue and green lines) for the cup.  Note that the handle only retraced about 50%, thus the pattern is very valid.

On Friday, September 24, GQC broke above the top blue line of the handle (long white candle) to close at 17.5 cents near the top of the handle on high volume.  On Monday, the stock gapped up (rising window) to start at 19.5 cents and proceeded to trade in a range of 19 cents to 22 cents on volume of nearly 4 million shares (the second highest volume ever for this stock).

Monday’s trading was extremely significant for this was a well defined breakout from a 2-year consolidation.

Tuesday saw a further rise to a high of 24.5 cents on a much reduced CDNX volume of 1 million shares. Wednesday saw a pullback from a high of 24.5 cents to a low of 20.5 cents with a closing price of 22 cents.   Today the pullback continued, as expected, with a low of 19 cents right at the top of the window. With this continued pullback we considered it to be an opportune time to officially add GQC to the BMR “Portfolio”.    The Volume, my favourite indicator, shows that when the bulls are in town, so to speak, they are in force and the stock moves up but there are not many bears around when the stock declines. High volumes should be in the direction of the trend.   This trading pattern has created a rising window, a bullish signal. The Japanese advise, “Go in the direction of the window” –  this makes sense as windows are continuation signals. If the bulls are willing to skip several price levels and pay higher prices for a security then they must be in control. This is a rising window, therefore the continuation direction is up.

The rising window is marked on the chart as two short green horizontal lines. They are green because the total space of the window is considered a support. For this the Japanese say, “Corrections stop at the window”. Note that on 3 occasions the stock price has tested the top of the rising window and the support has held.   I have shown the Fibonacci levels (blue lines) with 10.5 cents at the 0% base and 19 cents at the 100% level. This is the seed wave. Please note the Fibonacci tool does not show 3 places of decimals. The theoretical Fibonnacci target after the breakout above 19 cents is shown as 23 cents.   The next Fibonacci target by calculation (not a BMR price target) is 33 cents –  (seed wave range x 2.618) + 10.5 = (8.5 x 2.618) + 10.5 = 33 cents.

Looking at the indicators:  The RSI has dropped out of the overbought region to the 67% level and is pointing down, looking to continue to unwind the overbought condition until it reaches the support trendline (orange).

The Slow Stochastics has the %K (black line) crossed below the %D (red line) at 78% and is pointing down, also looking to continue to unwind the overbought condition.

The ADX trend indicator shows that the +DI (green line) has peaked and is in decline but it’s still above the -DI indicator which shows the trend is up. The ADX trend strength indicator (black line) is rather high at 42 and is flat,  showing that the bullish trend strength has stabilized and confirms the decline of the +DI.  As we have stated before, the +DI usually peaks before the ADX line.

Outlook:  The break above the handle put the stock in a slight overbought position which by today’s trading indicates that it has declined to the neutral region (area between overbought and oversold).   The overbought condition may continue to unwind over a brief period but this stock is clearly in a powerful new uptrend after 2 years of consolidation.

At BMR, we’re always on the search for unique opportunities in the junior resource sector – companies that have been overlooked by the mainstream analysts and newsletter writers.  We’re very selective and we don’t feature a lot of companies which allows us to get to know as much as we can about each one and track its progress for the benefit of our readers.  Our approach has been successful – over the last year the BMR Portfolio (we have selected eight companies in total) has gained a whopping 156%.  Past performance, of course, is no guarantee of future results.  We don’t issue price targets and our coverage of any company is for informational purposes only – it must not be viewed as a “buy”, “sell”, or “hold” recommendation as detailed in our disclaimer.  Our objective is merely to introduce opportunities for your consideration and due diligence, and of course it never hurts to also consult a qualified investment professional.

Having said that, we’re very excited to add a new company to the BMR Portfolio – GoldQuest Mining Corporation (GQC, TSX-V) which as of 10:05 am Pacific is trading at 19.5 cents.  We’ve actually followed GoldQuest quite extensively for over three years so we believe we have a very good “feel” for the direction it’s headed.  The company has been exploring in the Dominican Republic since 2001 and also now has a significant zinc/lead/silver project (Toral) in northwest Spain.  Both countries are mining-friendly jurisdictions.

We first alerted BMR readers to GoldQuest last Friday, September 24, in our Morning Market Musings when the company came out with some news that day and the stock traded between 14.5 to 17.5 cents.  GoldQuest got as high as 24.5 cents on Tuesday of this week before pulling back slightly yesterday to close at 22 cents.  It’s off again this morning with a low of 19 cents which has convinced us now is the time to strike.  We would have preferred, of course, to have added GQC to the BMR Portfolio at an even lower price but the recent increase in share value doesn’t concern us as what we’ve seen over the last three trading sessions is an important technical breakout from a two-year base.  This confirms that, indeed, GoldQuest has finally woken up after a long slumber and the next six months could be very interesting for this stock.  We don’t suggest jumping into GoldQuest for a “quick flip”.  This is a potentially tremendous opportunity, though, for patient investors with at least a six-month time horizon as the company is expected to be very active on the exploration front during that period and we could see some exciting developments.

GoldQuest’s explosive potential was clearly on display in early June, 2007, when the stock gapped up in one day from just below 40 cents to $1.20 on drill results from Las Animas.  It got as high as $1.80 and that’s when a long slide started with the stock finally bottoming out around a nickel in late 2008.

What has caught our attention recently with GoldQuest is a spike in volume that started a few weeks ago.  On September 17, on no news, the stock enjoyed one of its highest volume days ever (it has been trading since 2004) as over two million shares changed hands.  Volume, as BMR’s astute technical analyst has pointed out many times, is a hugely important indicator for investors.  So since September 17, in particular, we’ve been watching GoldQuest like a hawk which is why we brought it to readers’ attention a week later when news actually did come out.

So what are the fundamentals driving GoldQuest and why do we believe it could such a strong performer in the coming weeks and months?

GQC’s Dominican Republic Projects

The Dominican Republic has a population of approximately seven million and is pro-mining and pro-investment.  It’s famous for its exports of sugar, coffee, tobacco and some very good baseball players.  It’s also one of the best places in the world to search for Gold.  Barrick (ABX, TSX) and Goldcorp (G, TSX) are currently working on the largest project in the Dominican Republic right now, construction of the massive Pueblo Viejo Au/Ag/Zn Mine which is expected to commence production by late next year (Pueblo Viejo contains over 20 million ounces of Gold).

GoldQuest, as we mentioned, has been exploring in the DR for nearly a decade and they have built an impressive pipeline of projects in three separate districts:  Pueblo Viejo, Las Animas and San Juan.  They are also searching for potential new targets in a regional exploration program.  In a significant development in late 2009, GoldQuest re-acquired a 100% interest in all of its former joint venture projects with Gold Fields (JSE, NYSE) – the two companies had entered into a strategic alliance in 2003.    Gold Fields invested over $6 million in exploration on those projects, so GoldQuest is blessed with abundant and valuable geological information on many properties that it now has a 100% interest in.

Just one of those properties is Las Tres Palmas in the San Juan District where recent GoldQuest drilling delivered some very encouraging results including 18 metres grading 16.32 g/t Au (LTP-39) and 53 metres grading 3.02 g/t Au (LTP-41).  Results included silver, copper and zinc credits as well.

The company has been working on a game plan for more drilling in the near future on some of its high priority targets in the DR – and GoldQuest has many of them.

With the benefit of nearly 10 years of exploration in the Dominican Republic including a joint venture with Gold Fields that has generated an incredible geological database, GoldQuest is well positioned to make a major discovery in this country which has proven to be highly prospective for precious and base metal mineralization.

GQC’s Assets In Spain

In January of this year GoldQuest completed the acquisition of the Toral Project in northwest Spain which has an historical, non-compliant estimate of 5.4 million tonnes grading 9% zinc, 6% lead and 45 g/t Ag.  GoldQuest has recently commissioned Micon International to perform a NI-43-101 resource calculation for Toral using data from extensive prior work including some 42,000 metres of diamond drilling.  This drilling reportedly delineated a zone of mineralization that is 1,100 metres in length, 3.7 metres wide and over 400 metres high in a continuous, subvertical, tabular zone of coarse-grained lead-zinc-silver sulphide mineralization that is still open along strike and downdip. Lundin Mining (LUN, TSX) has a back-in right on the project (up to 65% if, among other things, it completes a feasibility study) but Toral is a valuable asset for GoldQuest and appears to have all the ingredients to develop into a producing mine.

GoldQuest has also secured a second polymetallic project, also in northwest Spain with similar characteristics to Toral, and further details on this will be announced by GoldQuest after full title has been received from the Spanish authorities.

Working Capital/Share Structure/Management

GoldQuest currently has 92 million shares outstanding for a market capitalization (at 19.5 cents) of $17.9 million.  The company has no urgent need of a financing – it had $2.4 million in the treasury as of the end of June.  GoldQuest has approximately 12.7 million warrants outstanding, all expiring in 2012 or 2013, with 84% of those warrants (10.7 million) exerciseable at 20 cents.  Fully diluted, GoldQuest has 112 million shares outstanding ($4.3 million would be added to the treasury if all current warrants and options were exercised).

The company has an experienced management team including newly-elected director Stephen Orr, President and CEO of Ventana (VEN, TSX).  It’s business as usual right now for GoldQuest even though the company is still searching for a new President and CEO after the resignation this past summer of Alistair Waddell.  Some new blood at the helm should further reinvigorate GoldQuest.

Conclusion

As we’ve repeatedly stated over the past few months, it’s our firm belief that the real bull market run in gold mining stocks and the CDNX (the “Mania Phase”) has not even started to kick in yet.  The general public is still uninvolved in this market.  A company like GoldQuest, with a high quality portfolio of projects (several at an advanced stage of exploration), can be expected to be a very strong performer in the kind of market we see unfolding over the next six months and beyond.  By breaking out of a two-year base this week on strong volume, GoldQuest has shown us that a significant turnaround is underway with this stock which got as high as nearly $2 in 2007.

As a matter of disclosure, BMR is completely independent from the companies it covers and has received no compensation from GoldQuest for this report.  The writer holds a position of 40,000 shares in GQC.

Gold has retreated on profit taking, stronger U.S. economic data and a higher U.S. Dollar after hitting a new record high of $1,317 this morning…as of 8:55 am Pacific, the yellow metal is off $8 per ounce to $1,302 (it fell as low as $1,295)…the CDNX got as high as 1722 in early trading but has also pulled back on this final trading day of the month and quarter…the CDNX is now off 10 points to 1703…it has very recently found support around 1700 and above the previous high of 1691, so we’ll see if that continues…the Venture has enjoyed a terrific 3rd quarter, up slightly over 20%, and the successful strategy has been to buy on pullbacks as we’re experiencing today…Gold Bullion Development (GBB, TSX-V) is off a penny to 55 cents…the stock is showing tremendous resilience just above its rising 100-day moving average…we see a “breakthrough” 4th quarter coming up for Gold Bullion as results pour in from the LONG Bars Zone and drilling intensifies…Adventure Gold (AGE, TSX-V), Gold Bullion’s new neighbor at Granada, is up another penny this morning to 27.5 cents…we spoke with AGE President and CEO Marco Gagnon yesterday and our impression of him is very favorable…this 3-year old pure Gold exploration company has a talented group that has assembled a strong portfolio of 19 properties in 6 different highly prospective areas of Quebec and Ontario including some strategic claims at Granada…with that kind of a project pipeline in addition to $3.5 million in cash and stock, AGE has considerable upside potential in this strong market with a modest current market cap of $13 million…Seafield Resources (SFF, TSX-V) is down a penny at 23.5 cents, exactly at its rising 20-day moving average…Sidon International Resources (SD, TSX-V) has been weak lately without an “up day” since September 20…its primary trend, however, remains positive and powerful as the stock is strongly supported by rising 100 and 200-day moving averages…a correction in the stock in that kind of a situation has to be viewed in a bullish, not a bearish, sense…investors often lose sight of the bigger picture and have a tendency to get bearish when they should instead be bullish, or vice-versa…when there’s a Boxing Day sale, shoppers sometimes start lining up the night before…when there’s a stock sale, the same people often make the mistake of getting scared and they run away – the exact opposite of what they should do…successful traders and investors are patient ones who learn to conquer their emotions…fundamentally, Sidon has an excellent project with its Morogoro East Property in Tanzania…it has raised $1.7 million this month and is in a great position to make some things happen during the final quarter of the year…SD is currently up half a penny to 11 cents…

Gold has traded within a range of $1,300 to $1,315 so far today, and as of 9:05 am Pacific it’s up $2 an ounce to $1,311…the yellow metal continues to be underpinned by investment buying as well as numerous other factors including a weak U.S. currency whose primary trend, we believe, is bearish…the CDNX continues to hesitate in terms of making a convincing move past 1700…the CDNX is currently up 4 points to 1707 (it touched 1700 in early trading) after closing above 1700 yesterday for the first time this year…the Index has been showing signs of temporarily “running out of gas” over the last week or so, stalling around 1700, and a minor correction of approximately 5% would be a healthy development…however, as we saw yesterday when the Index quickly bounced off its 10-day moving average, there is an incredible amount of strength in this market right now and investors are aggressively buying into any dips…Gold Bullion Development (GBB, TSX-V) is off a penny at 56 cents…it’s our view the company will successfully complete its recently announced financing in short order and then ramp up exploration in the LONG Bars Zone…we’re intrigued with Adventure Gold (AGE, TSX-V) which has announced it has picked up 200 hectares at Granada including a small but very strategic claim block in the Eastern Extension…this pure Gold exploration company has been in existence for only three years and they’ve now amassed 19 properties in 6 different areas in Quebec and Ontario, and they also have partnerships with Agnico-Eagle (AEM, TSX) and Lake Shore Gold (LSG, TSX)…Adventure Gold has 47 million shares outstanding, giving it a market cap of $11.75 million based on yesterday’s 25-cent closing price,  and $3.5 million in cash and marketable securities (they hold 15,000 shares of Agnico-Eagle)…the stock is up a penny to 26 cents this morning…we suggest investors do some immediate due diligence on Adventure Gold…Seafield Resources (SFF, TSX-V) is a little quieter so far today after trading nearly 3 million shares yesterday on the CDNX…the company is expected to provide an update soon on its exploration program at Quinchia in Colombia…Seafield is unchanged at 26 cents on volume of just 225,000 shares…Richfield Ventures (RVC, TSX), which found strong support at $2.50 Monday, is back up to $2.96 for a 11-cent gain on the day…Richfield reported more excellent results yesterday from its Blackwater Project in central British Columbia…this stock should continue to perform very well…

The acquisition by Adventure Gold (AGE, TSX-V) of 200 hectares at Granada, announced Monday, was a cunning move that forced us to take a close look at this three year-old pure Gold exploration and development company.  As we’ve already explained we envision a strong Gold market and a powerful move by the CDNX over the next six months, and Adventure Gold is the type of company that has the potential to perform exceedingly well in this environment.   We are impressed by its strong portfolio of properties (19 in six strategic areas in Quebec and Ontario) including its recently announced partnership with Agnico-Eagle (AEM, TSX) at Dubuisson.  It also has a partnership with Lake Shore Gold (LSG, TSX) at Timmins West.  Adventure Gold has slightly over $2 million in cash and approximately $3.5 million in cash and stock (includes 15,000 shares of Agnico-Eagle).  With 47 million shares outstanding, AGE has a market cap of only $11.75 million based on yesterday’s 25-cent close.  It also has a very bullish chart.

Adventure Gold’s foray into Granada caught everyone by surprise and why these claims did not fall into the hands of Gold Bullion Development (GBB, TSX-V) we’re not exactly sure (Gold Bullion has done an excellent job tying up land around Granada).  Designating claims in Quebec can sometimes be a tricky and, in some people’s view, even an “unfair” process.  Fundamentally, Gold Bullion’s quest for a multi-million ounce deposit at Granada has not been impeded – it’s business as usual as they continue to explore north, east and south of their Preliminary Block Model – and if anything, this aggressive move by Adventure Gold underscores the argument BMR and others have put forward that there is potentially a massive amount of Gold to go after at Granada (Gold Bullion’s land package totals 50 square kilometres).  But things have changed fundamentally in our view for Adventure Gold.

The President and CEO of Adventure Gold is Marc Gagnon who we spoke to this morning.  He’s very upbeat about the Granada acquisition and he’s also quite familiar with the property as he was on it some years ago in his capacity with Inmet Mining (IMN, TSX).

Most of the property picked up at Granada by Adventure Gold is to the west of Gold Bullion’s Preliminary Block Model and doesn’t get us too excited at this point in time.  They’ve picked up some land immediately south of the Preliminary Block Model and historical Pits #2 West and #2 East, and we believe they have an area (approximately 800 metres in length and 100 to 200 metres in width) underlain by Timiskaming sediments (much more favorable than the Pontiac sediments immediately south) that is quite prospective based on Willoughby’s 1994 report on Granada that we have referred to numerous times here before.

The potential home run, however, for Adventure Gold is a small claim block that the company was astutely able to designate with the Quebec Ministry of Natural Resources over the summer that gives the term “area play” a whole new meaning.  The most important portion of this claim block is a section underlain by Timiskaming sediments measuring approximately 360 metres north-south and 200 to 300 metres in width.  It is approximately:

• 250 metres southeast of GBB’s Phase 1 Discovery Hole #17
• 200 metres east of Phase 2 Hole #86
• 90 metres south of Hole #78
• 85 metres southeast of Hole #73
• 44 metres east of Hole #93
• 40 metres east of Hole #68
• 20 metres south of Hole # 83
• 16 metres east of Hole #91

Earlier this month Gold Bullion reported a possible significant discovery of near-surface mineralization in the southernmost hole drilled to date in the Eastern Extension, #86.  Additional holes have recently been drilled in that area (Sept. 15 GBB News release).    Just 200 metres to the east of #86 is Adventure Gold’s claim block, so a good result from #86 and/or nearby holes will not only drive Gold Bullion significantly higher but is also likely to trigger a tsunami of buying into AGE.

Further to the north, GBB’s hole #73 was one of the holes that GENIVAR stated confirmed the extension of the LONG Bars Zone geological structure to the east of Phase 1 discovery hole #17.  Hole #73, by our calculation, is only 85 metres northwest of the northern edge of Adventure Gold’s Eastern Extension claim area.

Adventure Gold stated in its Monday news release:  “Our interpretation of the information released by Gold Bullion and those from the Quebec Sigeom database suggest that the LONG Bars Zone probably extends onto our new property and these extensions had never been drilled.  A prospecting program is slated to start this week.”

Based on all that we have studied on Granada – an exhaustive amount of material – there is little doubt in our mind that the overall LONG Bars Zone Granada Deposit extends right through this section now controlled by Adventure Gold.  How AGE decides to handle this is going to be very interesting.  No less than 66% of this company’s exploration budget last year was spent on drilling.  From what we’ve learned the last couple of days, there are some smart operators at Adventure Gold and they’re going to be as opportunistic as possible.  So it wouldn’t surprise us if they soon mobilize a drill rig and stir up some considerable excitement.  First, of course, they’ll need to bring in a surveyor to determine the precise property boundaries. Their aim obviously is to take advantage of Gold Bullion’s success and achieve some success themselves on the ground before possibly selling their land package or optioning it out to Gold Bullion.

Adventure Gold has scored a major coup – this company has a strong geological team and they’re also smart capitalists who understand how to drive share value.  In the mining business even a tiny sliver of land in the right location can prove to be extremely valuable.

We had never heard about Adventure Gold until it came out with its news release Monday.  But they certainly have our attention now.  We suggest investors do their due diligence on this company – we found AGE’s web site extremely informative, and part of our due diligence yesterday included a conversation with former Adventure Gold Chairman Andre Audet who runs Everton Resources (EVR, TSX-V), another company we like that we initially brought to BMR readers’ attention several months ago.  As a matter of disclosure, this writer purchased 100,000 shares of Adventure Gold yesterday as AGE’s new Granada holdings, combined with its existing portfolio, gives this company a very dynamic mix of opportunities and some serious home run potential.

The strength of the current Gold market was clearly on display this morning as the yellow metal fell to $1,279 an ounce and then reversed sharply…as of 10:10 am Pacific, Gold is up $13 for the day at $1,308…it has hit an all-time high of $1,311.20…the CDNX fell to 1678 and has also reversed…it’s now up 2 points to 1697…BMR has checked with various sources this morning and has confirmed that Adventure Gold (AGE, TSX-V), a company we had never heard of until yesterday, has indeed secured a small but strategic piece of land inside Gold Bullion’s LONG Bars Zone Eastern Extension…what we consider potentially quite valuable is an area measuring approximately 400 metres north-south and 200 metres east-west, underlain by Timiskaming sediments, approximately 100 metres south of GBB’s Hole #78 and 200 metres east of Hole #86….this was a very cunning move on the part of Adventure Gold which has purchased this particular claim block (which stretches south into Pontiac sediments) from Chantal Courcelles…how Gold Bullion missed out on this we don’t know…they successfully tied up everything with Mousseau Tremblay but this tiny parcel of land somehow slipped through their hands…Adventure Gold also picked up some additional land to the west and south of Gold Bullion’s Preliminary Block Model for a total package adding up to 200 hectares…while this could be an aggravating issue for Gold Bullion, it will add even more excitement to the LONG Bars Zone as it’s our view that Adventure Gold is not going to sit quietly on these claims…they are going to come in, we believe, with all guns blazing and a drill rig…there are many examples (Hemlo being just one) of tiny sections of land that suddenly become very valuable…specificially, from what we understand of Granada geologically and of course we’ve also had our boots on the ground there, the northern part of Adventure Gold’s claim block in Gold Bullion’s Eastern Extension is highly prospective ground with the overall Granada Deposit potentially running right through it…Seafield Resources (SFF, TSX-V) continues to look strong and is up half a cent this morning on a whopping 2.4 million shares…we’re expecting good news from Quinchia…Richfield Ventures (RVC, TSX-V) came out with more drill results this morning from its Blackwater Project in central British Columbia…their recent $15 million financing at $1.95 has also been approved by the CDNX…Richfield continues to drill long intersections of mineable grade…BW-75 returned 199 metres grading 1.47 g/t Au while BW-76 intersected 316 metres grading 0.95 g/t Au…as we’ve stated all along, this is shaping up to be a very impressive deposit…Richfield is up 24 cents to $2.75…

Gold moved slightly above $1,300 earlier today but has backed off to $1,297 (unchanged for the day) as of 10:35 am Pacific…the U.S. Dollar hit an 8-month low this morning, just above 79 on the Index…the CDNX continues to struggle trying to stay above 1700…the Venture got as high as 1708 shortly after the open but has drifted back down to 1695 for a loss of 5 points on the day…this kind of action shows the CDNX’s upside momentum is temporarily waning which leads further credence to John’s analysis last Thursday that an imminent minor correction is in the works…a pullback of 5% or so would be a healthy development from a technical standpoint…an unwinding of current overbought conditions would certainly allow the CDNX to gear up for an eventual successful push through 1700…Gold Bullion Development (GBB, TSX-V) is firmer this morning at 57 cents, up 2 pennies…the realization is sinking in that Gold Bullion’s 54-cent financing ($6 million) makes a lot of sense and will put the company in an excellent position to get even more aggressive in developing the Granada Gold Property…Seafield Resources (SFF, TSX-V) is unchanaged at 25 cents after dropping as low as 23.5 cents this morning…we’re very bullish on Seafield’s Quinchia Project in Colombia and we’re looking forward to an exploration update from the company in the very near future…Richfield Ventures (RVC, TSX-V) is off 17 cents to $2.59…there is very strong technical support for Richfield between $2.25, an area of previous strong resistance, and 2.45 where the rising 20-day moving average currently sits…the company is waiting for CDNX approval on its nearly $15 million financing at $1.95…some weakness continues in Sidon International (SD, TSX-V)…the stock is off another half penny to 12 cents…as the old adage goes, successful traders and investors buy into weakness…we see 10 cents as the “line in the sand” that Sidon is not likely to cross as there is rock solid technical support at a dime which is also just above the stock’s rising 100-day moving average…

At BMR we are focused on the junior resource market (specifically the CDNX) as well as identifying a small number of unique, undiscovered companies within that sphere that have tremendous potential (“home run” opportunities as we say).  We learn as much about those companies as possible and we follow them closely.  Our niche is monitoring the CDNX, a highly speculative and extremely interesting market, and putting forward some situations for your consideration that are worthy of further investigation and due diligence.  We don’t give price targets and none of our suggestions should be construed as a “buy” or “sell” recommendation – you must do your own due diligence and you should also consult with a professional investment adviser prior to making any investment decision.  We accept no compensation in return for coverage of any company at BMR, so we write what we choose to write.    We also of course follow Gold very closely which has important ramifications for the CDNX.

From time to time it’s useful to stand back and examine our performance – are the companies we have selected doing well?  Are we helping investors better understand the CDNX and the direction it may be headed?  Are we effectively analyzing the Gold market?  Of course we always appreciate hearing from our valued readers, whether it’s positive feedback or fair criticism, so by all means feel free to email us at:  [email protected].

In terms of the “BMR Portfolio” – these are stocks we have researched very thoroughly and have a high degree of confidence in.  We’ve never had more than 8 stocks in this group.  There are currently 6 and we will be adding 1 or 2 more in the very near future, as well as possibly eliminating 1 more (North Arrow) for under-performance.

Through Friday, September 24, the BMR Portfolio is up an average of 156%. This includes the 6 stocks in the current portfolio and the 2 we eliminated last month (Kent Exploration and Greencastle Resources).  Most of these stocks were introduced late last year or early this year.  Five of the 8 stocks have registered impressive gains since they were first introduced, a winning percentage of 63%.  Below, in order of performance, is the individual breakdown:

Up 686%     Gold Bullion Development (GBB, TSX-V)

Up 317%     Seafield Resources (SFF, TSX-V)

Up 150%     Sidon International (SD, TSX-V)

Up 130%     Richfield Ventures (RVC, TSX-V)

Up    53%     Colombian Mines (CMJ, TSX-V)

Down    20%    North Arrow Minerals (NAR, TSX-V)

Eliminated:

Down 31%          Kent Exploration (KEX, TSX-V)

Down 34%         Greencastle Resources (VGN, TSX-V)

The losses in Kent and Greencastle are based on the closing price of each stock August 13 when they were eliminated from the BMR Portfolio.  Some of the gains were much higher for some of these stocks earlier in the year.  Colombian Mines, for example, got as high as $1.62 for a gain of 170%; Seafield climbed as high as 35.5 cents for a gain of 492%; Gold Bullion hit an all-time high of 79 cents for a gain of over 1,000% early this month; and Kent Exploration, before we deleted it, was up as much as 53% at one point.

Past performance with all of these stocks of course is no guarantee of future performance with the BMR Portfolio.

We hope you appreciate what BMR has to offer, and again we would enjoy hearing from you at:  [email protected].

God Bless and we wish you the best of luck with your investments!