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It has been a wild few days for Gold…the yellow metal was down as much as $50 again this morning, hitting a low of $1,702, but it found support and has recovered almost all of its losses…what we’ve witnessed since Monday is one of the 10 largest corrections in Gold since the early 1980’s and it was one we warned was likely to happen, though it didn’t take a rocket scientist to figure out that Gold had become extremely overbought on the charts…despite the $200 drop, Gold is still the second-best performing commodity so far this year, up 24.6% through yesterday which is just below Silver’s 30% gain this year…Gold’s sharp rise this month to slightly above $1,900 did not represent a final “blow-off” in a “bubble phase” as some analysts have stated…our contention, based on all the technical and fundamental evidence at hand, is that the “bubble phase” in Gold has not even started yet…the worst of the decline in Gold is now over and a consolidation phase has set in…after a $200 drop, a rally can certainly be expected but we caution that Gold likely won’t bottom out until it retraces down to just above $1,600 an ounce – a process that could take a couple of months…the final quarter of the year could be quite spectacular for Gold if John’s chart proves correct…his track record has been exceptional and his $1,938 target for Gold was only 1% off the mark…

Here’s how the scenario could play out in terms of a timeline for Gold bottoming out around $1,600…

Below is another interesting chart on Silver that shows how it needed a couple of months to consolidate and unwind an extremely overbought technical condition like Gold was just in…

Gold and the equity markets have had an inverse relationship during Gold’s rapid climb above $1,900, so it’s safe to assume that with Gold in a consolidation pattern for a while, the equity markets should rally despite this morning’s weakness…that means we likely saw important lows put in on the major indexes in early August (10,614 on the Dow August 9 and $11,618 on the TSX August 8)…the August low for the CDNX came on the 8th at 1676…strength in the major markets and a changing of the calendar from August to September should help the CDNX…in fact, even with Gold acting a little sloppy, the potential for a significant move to the upside in the CDNX next month is very real, especially if some good exploration news rolls in…a tsunami of drill results is expected over the next couple of months…markets are nervous today ahead of Fed Chairman Ben Bernanke’s speech tomorrow at Jackson Hole, and speculation about a possible short-selling ban in Germany has rattled some investors…Gold is well off its lows, trading down just $5 an ounce as of 9:15 am Pacific…news of another margin hike for Gold contracts by the CME (27%) contributed to weakness overnight…the CDNX is off 2 points at 1734…Gold Bullion Development (GBB, TSX-V) is up half a penny at 37 cents after releasing an exploration update on its Castle Silver Property near Cobalt, Ontario…GBB intersected numerous vein structures independent of the existing mine workings which is highly encouraging…the best result out of 12 holes drilled was 189 ounces (6,476 g/t Ag) over 3.09 metres (true width unknown) which included a half-metre section of extremely high grade, 1,194 ounces (40,944 g/t Ag) per tonne…Castle is a promising asset and if you’re a big believer in Silver over the long-term, as we are, it makes sense for GBB to continue to explore this property aggressively which means spinning it out into a separate entity as a dividend for GBB shareholders…considerable work and expenditures will have to be dedicated to Castle…August has been a terrible month for equities, so when you see a stock that is out-performing the market you need to pay attention…Visible Gold Mines (VGD, TSX-V) was up 49% for July and it’s currently unchanged for the month of August at 33.5 cents…that’s an amazing fact given the state of the markets recently and it suggests to us that VGD’s fundamentals have turned very bullish and that we could see a major breakout in this play in September…the company is focused on two outstanding exploration areas at the moment, the Wasamac area just west of Rouyn-Noranda as well as the former Joutel mining camp about 150 kilometres to the north of Rouyn-Noranda…more assay results are pending from VGD’s Wasa Creek Property where the first hole intersected several zones of significant Gold mineralization where virtually no exploration had previously occurred…VGD seems to have rock-solid support at 33 cents, its low this morning, and is now up half a penny at 33.5 cents…Richmont Mines (RIC, TSX) hit the support zone we identified between $8.40 and $8.60 this morning and has rocketed higher in a major reversal to $9.20…encouraging drill results from Kaminak Gold’s (KAM, TSX-V) Coffee Project in the White Gold District…KAM has been as high as $4.16 this morning and is currently up a dime at $4.00…much more on individual stock situations tomorrow…

As we prepare for our upcoming visit to northwest Quebec, and during that visit, we will be sending out some special BMR eAlerts.

We are also in the process of updating our list.  If you wish to be included in the BMR eAlert system, which sends out occasional important market information that’s not always posted on our site, simply click on the “Contact Us” button you see in the top right hand corner of this page, type in “Alert” in the subject line, give us your first name, and hit the send button.  We send out only occasional eAlerts but when we do, they are significant.  And your email address is not given out to any other party.

Again, use the “Contact Us” button you see in the top right hand corner of this page or send us an email at:  alert@bullmarketrun.com

Gold is getting hammered today but that’s not surprising after the recent run-up…as of 9:05 am Pacific, the yellow metal is down $41 an ounce at $1,788 after falling as low as $1,775…Gold came within 1% of John’s Fibonacci target of $1,938 and really needs to take a breather and consolidate for a period of time in order to set the stage for the next leg up…there’s no reason to panic…John updates the Gold chart below and the various support levels…

Silver is off $1.20 at $40.60…Copper is up a penny at $4.01…Crude Oil has gained 55 cents to $85.99 while the U.S. Dollar Index is up slightly at 74.06…new orders for long-lasting U.S. manufactured goods surged in July on strong demand for transportation equipment, government data showed this morning…the Commerce Department said durable goods orders jumped 4% after a 1.3% drop in June… economists had expected orders to rise 2% last month…though durable goods orders are extremely volatile, the data eased fears the economy was slipping back into recession after a raft of weak sentiment surveys…economic weakness in the euro zone continues to be a concern…German business confidence tumbled this month at the fastest rate since the aftermath of the Lehman Brothers collapse, as the country felt the impact of financial market turmoil and fears about the global growth outlook…a Munich-based institute said its “business climate” index dropped more than expected, from 112.9 in July to 108.7 in August, the lowest level since June last year…the monthly fall was the biggest since November, 2008, when economic confidence was plummeting globally in the wake of the Lehman Brothers investment bank failure…the fact Gold is settling down suggests the equity markets may start to gain traction and reverse some of their steep August losses…this will also be a good opportunity in our view to pick up some quality Gold producers whose share prices will correct somewhat as Gold consolidates…the TSX Gold Index has already fallen from a high of 432 Monday to a low of 397 this morning…meanwhile, the exploration stocks should soon start to play some “catchup” to the overall higher Gold price environment in the event of an improved equity market…as of 9:05 am Pacific, however, the CDNX has backed off 17 points to 1744…Currie Rose Resources (CUI, TSX-V) has completed 20 holes at its Mabale Hills Project in Tanzania and drilling is set to begin at Sekenke, which is a project we’ve been very bullish about since we first discovered CUI about a year ago…assay results are still pending from Sisu River and Dhahabu at Mabale Hills but it’s interesting to note that disseminated sulphides were intersected in each and every hole drilled at both properties…that was not the case in the initial Phase 1 program at Sisu River last winter…drilling has yet to commence at Mwamazengo which is certainly a property of considerable merit given CUI’s previous drilling success there…CUI has gained a penny-and-a-half to 18 cents…we received an email from one of our regular readers yesterday concerning Spanish Mountain Gold (SPA, TSX-V) which we haven’t mentioned for a while but we like this company’s project a lot…we first started paying attention to SPA last fall when we interviewed legendary British investor Jim Slater…the Spanish Mountain low-grade deposit in central British Columbia is an advanced project with a significant 43-101 resource…it certainly could be very profitable with $1,500 Gold and higher…the stock has held up well in recent months during the CDNX correction and has a current market cap of approximately $110 million at the current 66 cent price (up a penny for the day)…John updates the SPA chart below…

Richmont Mines (RIC, TSX) dropped as low as $8.71 this morning given the weakness in the TSX Gold Index…on Monday, RIC hit a new all-time high of $9.98…the stock has very strong support in about the $8.40 to $8.60 range, a zone of previous resistance…given its earnings momentum and developments at Wasamac, John’s next Fibonacci level of $12.16 for RIC seems very achievable over the coming few months…RIC released some drill decent drill results from its Monique Property this morning as the company continues to evaluate the possibility of a small open-pit operation there…by small, we believe they’re probably thinking in terms of about 20,000 ounces per year as a possibility for Monique…the ore could be processed nearby at the company’s Camflo Mill which has unused capacity…a 43-101 technical report on the property is expected by year-end and more drilling will be taking place…an exploration update on Wasamac, where RIC currently has five rigs in action, is expected soon…Visible Gold Mines (VGD, TSX-V) has two rigs in operation immediately adjacent to Wasamac at Wasa Creek…more assay results are pending and President and CEO Martin Dallaire appeared very confident about the project in his Smartstox interview with Stanlie Hunt…VGD is currently off a penny-and-a-half at 34 cents…the VGD chart looks very positive and is certainly one of the better ones on the Venture at the moment…Silver Quest Resources (SQI, TSX-V) dropped yesterday for the first time in 11 sessions…it fell as low as 99 cents this morning but is now bouncing back, up 3 pennies for the day at $1.05…SQI’s chart continues to look very strong and the fundamentals also suggest SQI should remain of the top performers on the Venture…GoldQuest Mining (GQC, TSX-V) has just released an update on its activity in the Dominican Republic…among other developments, the company has engaged Micon International, a highly respected Toronto-based mineral consultancy firm, to carry out preliminary economic assessments (PEA) on GoldQuests’s La Escandalosa Sur and Las Animas projects…

Gold is pulling back this morning, not surprisingly, after surging to another all-time high overnight of nearly $1,920 an ounce (just $18 shy of John’s near-term Fibonacci target)…in what potentially could be the beginning of a much-needed correction, Gold has retreated $32 an ounce at $1,866 as of 9:10 am Pacific…Silver is off 96 cents at $42.76…Copper has gained 4 pennies to $4.00, Crude Oil is up 23 cents at $84.65 while the U.S. Dollar Index is off one-third of a point at 73.87…Gold is up nearly one-third since the start of July and, based on the past 13 weeks, is rising at an annualized pace of about 110%…that compares with a climb of about 50% in the past 52 weeks…even a 10% pullback in Gold would be pretty much a non-event and would set the stage for a powerful advance to $2,000 and potentially higher before the end of the year…of course the so-called experts will be popping out all over the place and saying, “Gold’s ‘bubble’ is over”, assuming of course that what we’re currently witnessing constitutes a “bubble” in the first place (according to some, Gold has been in a “bubble” since it hit $500)…there were some great quotes this morning from John Wadle, the head of research at Mirae Asset in Hong Kong, in an article by Patrick Allen at CNBC.com…”Gold is not money (no, John, it’s actually better than money because it holds its value and is less susceptible to what central banks are doing to their currencies) and has no investment yield and in fact incurs carrying/storage costs…with the 10-year U.S. treasury rate at 2% and storage cost of 1-1.5%, this implies an annual opportunity cost of 3-3.5%…Gold is now in a bubble compared to U.S. blue chip stocks…for those pundits that believe Gold will keep rising to $2,500 an ounce, let’s do some simple math:  the current reservoir would be valued at $12 trillion and the next 20 years of production would produce Gold worth about $3.8 trillion, bringing the total value to $15.8 trillion…even assuming earnings for the Dow stocks rise by only 2% (Japanese deflation scenario) over the next 20 years and the market only trades on a P/E of 10x, an investor would still make 130% over this period”…to match this return, according to Mr. Wadle, Gold would need to top $4,400 an ounce…

Mr. Wadle is obviously not a Gold bug but that’s perfectly okay…a bull market requires plenty of naysayers and doubters…Gold remains in a Perfect Storm and Mr. Wadle in our view is more likely to first see $4,400 an ounce for Gold than a 130% return on the Dow…the value of Gold and Gold mining stocks as a percentage of world assets is still miniscule – around 1% – compared to what it used to be, and that is just one of long list of reasons why the yellow metal still has a long way to go on the upside…for now, though, some weakness is not surprising as John’s chart shows…

The bulls are setting the tone in the equity markets today, though the CDNX is fairly quiet as it hovers around the 1760 support area…HSBC’s “flash” survey of China’s manufacturing sector is evidence this morning that, even as more developed nations struggle economically, there remain strong areas of global growth…Bank of Canada Governor Mark Carney made note of that in his testimony before a Commons committee last Friday…although this morning’s China report from HSBC suggested a slowdown in factory output for the world’s second-largest economy, it was still consistent with overall growth of about 8 to 9%…

Another U.S. recession isn’t likely over the next 12 months…neither is any meaningful improvement in the economy…that’s the picture that emerges from an Associated Press survey of leading economists who have grown more pessimistic in recent weeks…they say high unemployment and weak consumer spending will hold back the U.S. economy into 2012…their gloominess comes at a time when Europe’s debt crisis threatens to infect the global financial system…it also coincides with an annual economic conference late this week in Jackson Hole, Wyoming, and speculation about whether Federal Reserve Chairman Ben Bernanke will unveil any new steps there to help the struggling U.S. economy…of course at last year’s meeting, Bernanke set off a stampede in the equity markets when he hinted at what eventually became a $600 billion quantitative easing bond-buying program known as QE2…will Bernanke give the markets a boost again Friday?…we’ll have to wait and see…

History has shown that this is a prime time of the year for Gold and other discoveries by companies on the Venture Exchange…a tsunami of drill results is about to roll in over the next several weeks, so investors have to pay close attention to breaking news in these “dog dogs” of August…just when people are not too interested in the market, that’s when there’s the greatest potential for a surprise…our advice is that everyone needs to be on alert…the CDNX is currently off 4 points at 1763…Probe Mines (PRB, TSX-V), which we’ve mentioned on several occasions over the past couple of months, has received a very positive initial mineral resource estimate from Micon International for its Borden Lake Gold Project near Chapleau, Ontario…the indicated resource is 305,000 ounces of Gold (11,607,000 tonnes grading 0.82 g/t Au at a 0.3 g/t cut-off) while the inferred resource is 3,755,000 ounces (169,322,000 tonnes grading 0.69 g/t Au at a 0.3 g/t cut-off)…PRB was halted prior to the open this morning and just resumed trading at 8:15 am Pacific…it opened at $1.50, ran to a high of $1.76, and as of 9:10 am Pacific it’s at $1.75 for a 25-cent gain so far today…that gives PRB a market cap of $99 million which values each inferred and indicated ounce of Gold at Borden Lake at just $25…drilling continues…with Gold in a bull market of a lifetime, a company like Probe Mines offers strong intrinsic value…Manitou Gold (MTU, TSX-V) released some interesting results this morning including 31 metres grading 1.8 g/t Au in hole G-11-12 at its Gaffney Extension Project in northwest Ontario…Gold mineralization at Gaffney is hosted within a highly altered quartz eye intrusion which contains narrow quartz veins and stringers with disseminated pyrite and pervasive ankerite alteration…the alteration zone shows considerable widths of Gold mineralization exemplified by hole #12…what’s interesting is that a second style of Gold mineralization has been identified at Gaffney and consists of quartz feldspar porphyry dikes which contain 1-3% disseminated pyrite…the widespread distribution of the dikes along the mineralized trend and the tenor of Gold in the dikes are identified as important indicators of a prolific Gold bearing system…Manitou had working capital of $11 million at the end of March and is worth following closely…it’s currently up a nickel at 50 cents for a market cap of $24 million…below is a picture from one of our geological contacts in the Yukon whose advice is, “keep a close eye on the Yukon”…

A camp on the Rackla River airstrip near Nadaleen Mountain (not in photo), not far from ATAC's (ATC, TSX-V) projects looking for Carlin-style deposits in the Yukon.

Pacific Ridge Exploration (PEX, TSX-V) has received $915,000 from the exercise of 15-cent share purchase warrants with an expiry date of August 20, 2011…the company had working capital of $3.4 million as of the end of June as it continues to drill its promising Mariposa Property in the Yukon’s White Gold District…the stock is currently off a penny at 46 cents but is in a strong support zone, just 2 pennies above its rising 50-day moving average (SMA)…elsewhere in the Yukon, our favorites (besides ATC) include Kaminak Gold (KAM, TSX-V), Golden Predator (GPD, TSX), Silver Quest Resources (SQI, TSX-V), Ethos Capital (ECC, TSX-V), Northern Tiger (NTR, TSX-V) and a low-priced very speculative sleeper (Dawson Gold, DYU, TSX-V) which has arranged a private placement and a share consolidation…DYU is trading at just 6 cents and would be one to tuck away for a while…Visible Gold Mines‘ President and CEO Martin Dallaire slipped in a subtle clue in an interview with the well-known Stanlie Hunt in a Smartstox interview that came out last night…Dallaire was commenting about Wasamac as well as VGD’s drilling at Wasa Creek and stated the core is looking “visually good”…assay results are pending on 8 of 9 holes completed by VGD at Wasa Creek as of last Tuesday…aggressive drilling continues at that project…VGD is unchanged this morning at 35 cents…

Gold pushed to a new record-high this morning after advancing $107 last week and $82 the week before…the yellow metal hit $1,896, just $42 shy of the $1,938 Fibonacci target John gave us just recently…as of 8:15 am Pacific, Gold is up $32 an ounce at $1,885…we do expect Gold to soon pull back as it has clearly become overextended on a temporary basis…the charts show a very overbought condition…Gold is making its longest run of weekly gains since April, 2007, and that’s when corrections usually happen…Gold is also trading abnormally above (28%) its 200-day moving average (SMA) which was $1,470 as of Friday…a 10% correction in Gold can’t be ruled out but that should go hand-in-hand with a rising equity market, so the exploration stocks should start to play some catch-up to this higher Gold price environment…

Gold may reach $2,000 an ounce by year-end, extending this year’s gain to 41%, according to the median forecast in a Bloomberg survey of 13 traders and analysts at a conference in Kovalam, India, Saturday… that would be the biggest yearly jump in the Gold price since the 127% surge in 1979, according to Bloomberg data…below is an interesting chart from Bloomberg comparing Gold with the S&P 500 since 1971…in 1980, one ounce of Gold was 7.6 x the S&P 500…Gold’s relative performance then declined for the next 20 years with the S&P taking the lead in 1992 and peaking at 5.3 x the value of Gold in 1999…currently, Gold’s value is roughly 1.6 times greater than the S&P 500…it’s a very telling chart and the trend seems likely to continue…

Citibank has substantially increased its projected 2012 Gold price from an average of $1,324 an ounce to $1,650 (which they may have to revise upward yet again)…”Increased global risk, U.S. dollar weakness, growing inflationary fears, the U.S. debt downgrade and continuing sovereign debt risks in Europe have increased investor appetite for Gold, triggering recent price strength,” Citigroup declared…they see an average price of $1,500 for 2013, up from their earlier estimate of $1,225…Citibank seems to be behind the curve on the yellow metal…

All eyes will be on Fed Chairman Ben Bernanke Friday when he’ll be giving a much-anticipated speech at a symposium in Jackson Hole, Wyoming, which will be closely watched for any signs of Fed policy direction…at the same meeting a year ago, Bernanke made strong hints regarding a potential “QE2” and markets, including Gold, took off to the upside…can Bernanke pull a rabbit out of the hat again and produce some “shock and awe”…we’ll have to wait and see…

The economic data that really spooked the market last week was the huge fall in the Philly Fed Index…the decline of nearly 34 points in the headline index to -30.7%  was the biggest drop in measure of economic confidence since October, 2008, one month after the fall of Lehman Brothers…there’s a belief among some analysts, however, that instead of being driven by the economy, the drop in confidence shown by the Philly Fed Index may have been motivated more by the recent volatility on Wall Street and the financial capitals of the world…the markets seem to be pricing in a U.S. recession but what may actually occur is just a period of very slow growth…meanwhile, robust growth continues in the emerging markets and that was a point emphasized by Bank of Canada Governor Mark Carney in his testimony before a Commons committee Friday…“Ongoing strength in major emerging markets should also help maintain commodity prices at relatively high levels,” Carney stated…that’s a positive for the commodity-dependent Venture Exchange…

As of 8:15 am Pacific, Silver is looking bullish, up 77 cents at $43.67…Copper is off 2 pennies at $3.96, Crude Oil is off its highs but is still up 87 cents to $83.13 while the U.S. Dollar Index is off one-fifth of a point to 73.95…the major indexes are recovering this morning…the Dow and TSX are strong this morning while the CDNX is following through on an encouraging performance Friday and is up 12 points at 1777…the CDNX held its ground Friday in the face of sharp declines in New York and Toronto and appears to have found strong support in the 1760 area…

The TSX Gold Index has blasted through resistance at 416 and is up 15 points at 429…Richmont Mines (RIC, TSX-V), one of our favorite small producers, has hit a new all-time high of $9.95 and is currently up 60 cents at $9.81…immediately beside Richmont’s Wasamac Property is Visible Gold Mines (VGD, TSX-V) with two drill rigs in action and a potential discovery at Wasa Creek where assays are still to come on eight of nine holes completed as of last Tuesday…with Wasa Creek, Wasa East and Joutel, VGD has an opportunity to explode in the coming weeks and now is the time to be positioned given what’s developing on the ground for VGD and the stock’s favorable chart patterns…VGD is currently up 2.5 pennies at 33.5 cents…Currie Rose Resources (CUI, TSX-V) has been very quiet on the news front so far this summer since launching a 10,000 metre drill program early last month…CUI has been holding up well, despite the recent overall market weakness, and continues to trade in a horizontal trend channel as John shows below in an updated CUI chart…the company’s properties at Mabale Hills and Sekenke are quite capable of producing a discovery, though we’re most excited with Sekenke’s potential given the fact it surrounds and runs in between two past producing high-grade mines…CUI’s summer drill program started about seven weeks ago at Mabale Hills while potential targets continue to be nailed down at Sekenke…

Kaminak Gold (KAM, TSX-V) is looking good this morning, up 11 cents to $4.28…Silver Quest Resources (SQI, TSX-V), which has a strong presence in both the Yukon and British Columbia with high quality land packages including a 25% interest in the northern portion of New Gold’s (NGD, TSX) Blackwater deposit, is 3 pennies higher at $1.13…Goldex Resources (GDX, TSX-V) is beginning to firm up after strangely falling to 7.5 cents last week following the release of very promising drill results from its El Pato Gold Property in Guatemala that included 5.04 g/t Au over 30.48 metres…GDX is up a penny at 8.5 cents…more assay results are pending from El Pato…the company continues with bulk sampling there and is expected to soon start a drill program at its El Arco Property in Mexico…with a market cap of just $8.5 million, GDX holds good potential…

Just recently, John showed us “textbook” chart patterns for Richmont Mines (RIC, TSX) that allowed some of our readers to jump in on that producer at a very favorable entry point.  Richmont climbed as high as $9.72 last week and is expected to provide an exploration update on its growing Wasamac deposit any day now.

The company most active in the immediate vicinity of the increasingly important Wasamac play is Visible Gold Mines (VGD, TSX-V) which is aggressively drilling its Wasa Creek optioned property with two rigs.  Assays from the very first hole that VGD drilled, announced August 11, were highly encouraging and results are pending for eight of nine holes completed as of a week ago.

VGD is also displaying “textbook” chart patterns as John shows below.  Note how the stock is in an ascending triangle and that RSI(14) is in a supporting position.  The stock has been gaining momentum ever since the 50-day moving average (SMA), not shown here, reversed to the upside last month.  For the last 7 sessions VGD has traded above its 100-day SMA which has flattened out and is currently sitting at 30 cents.

Note:  Both John and Jon continue to hold positions in Visible Gold Mines (Terry does not hold a position).

As we prepare for our upcoming visit to northwest Quebec, and during that visit, we will likely be sending out some special BMR eAlerts.

We are also in the process of updating our list.  If you wish to be included in the BMR eAlert system, which sends out occasional important market information that’s not always posted on our site, simply click on the “Contact Us” button you see in the top right hand corner of this page, type in “Alert” in the subject line, give us your first name, and hit the send button.  We send out only occasional eAlerts but when we do, they are significant.  And your email address is not given out to any other party.

Again, use the “Contact Us” button you see in the top right hand corner of this page or send us an email at:  alert@bullmarketrun.com

Visible Gold Mines (VGD, TSX-V)

Visible Gold Mines pulled back slightly last week but its uptrend remains firmly intact as John will demonstrate in a chart we’ll be posting in the morning…the 3.5-cent weekly drop to 31 cents gave some investors an ideal opportunity to add to positions or jump in for the first time on VGD at favorable prices…total volume and daily trades have increased quite substantially over the last month…the stock has stayed above its 100-day moving average (SMA) at 30 cents for the last 7 sessions, since the news August 11 regarding Wasa Creek and Wasa East, and the rising 50-day SMA at 28 cents has been providing rock-solid support since VGD broke above its 50-day in early July…at the moment VGD has to be considered the most exciting play in the BMR “stable”…the company came out with more news last Tuesday, this time regarding its Joutel Extension Property where a 7,500-metre, Phase 1 drill program is almost set to begin…we love this property because three former gold mines (one open-pit, two underground) and two former copper mines are within the immediate vicinity just a few kilometres to the northwest and the southwest, respectively…it’s hard to imagine there aren’t more deposits in the area, ones that simply weren’t discovered in the 70’s, 80’s and 90’s…and we can’t think of a better geologist to find one or more new deposits there than Robert Sansfacon whose re-interpretation of Canadian Malartic helped Osisko (OSK, TSX-V) nail down a 10 million+ ounce monster…Sansfacon is challenging some previous geological assumptions concerning Joutel and he’s applying a new model, taking a structural approach as opposed to a stratigraphic one…two-thirds of the Phase 1 drilling will test the extension of a northwest-southeast mineralized structural pattern that based on geophysical surveys appears to strike directly southeast of Agnico-Eagle’s (AEM, TSX) past-producing Telbel, Eagle and Eagle West mines for two kilometres and may extend farther to the former village of Joutel and beyond…the Joutel mines gave birth to Agnico-Eagle, and the major would love nothing more than to see this old mining camp come back to life…if anyone can make that happen, it’s Sansfacon who’s highly regarded in Quebec mining circles…meanwhile, down south along the Cadillac Trend, VGD continues to aggressively drill its Wasa Creek Property…9 holes were completed as of last Tuesday with results pending on 8 of those holes…two rigs are on the property, drilling in all directions around LBWC-11-03 (the first hole completed)…what impresses us the most about LBWC-11-03 is that it was essentially a “blind hole” – this property has been virtually ignored in terms of any previous exploration and on the very first hole, VGD intersects several zones of significant Gold mineralization…of particular interest is the 16.4-metre section that shows the same style of mineralization as Richmont’s (RIC, TSX) Wasamac deposit – close co-existence of Gold and pyrite disseminated in an altered shear zone…it’s still very early in the game for VGD at Wasa Creek but at least now they have a trail of mineralization to follow, and that’s important…the market has plenty to speculate about with a lot more assays coming…you have to like the fact the prolific Cadillac Fault runs right under the middle of the 650-hectare Wasa Creek Property…in addition, VGD geologists believe they may have discovered some sort of connection between the Wasa Shear and the Cadillac Fault at Wasa East with that property right in between those two Gold-bearing systems…given developments at Wasa Creek and Wasa East, along with Joutel of course, news flow should be strong with VGD and some drama could quickly build…in addition, Richmont is expected to provide a major exploration update on its Wasamac Property any day now…technically, VGD is looking very strong as John will outline in the morning…VGD has momentum, along with $6 million in working capital, and is being driven by some exploration stories that appear to have some serious “legs”…

Cadillac Mining (CQX, TSX-V)

Cadillac has been held back because of its poor cash position and the fact the company has yet to put its strategic Wasa claims, adjoining the northern boundary of the Wasamac Property, into play…we emphasize “yet” because our hope is that something may happen soon…Wasamac is hot and Cadillac must seize the opportunity…an expected Wasamac update from Richmont may have positive implications for Cadillac, we’ll have to wait and see…CQX fell 3 pennies last week, equaling its lowest closing price of the year Friday at 9.5 cents…with a market cap of just $2.4 million, CQX certainly offers major upside potential simply given its current deal with VGD which allows CQX to retain a 40% interest in Wasa Creek, Wasa East and the entire Lucky Break/Cadillac Break Projects…what could really cause CQX to explode, however, is if it’s able to raise some cash and put its 100%-owned seven Wasa claims adjoining the northern portion of Richmont’s Wasamac Property into play…that’s what CQX has to do for the benefit of its shareholders…the company had a glorious opportunity to raise cash and build shareholder value earlier this year because of Wasamac and failed to do so…now they have another opportunity…second chances don’t come often in life but Cadillac management has been blessed with one in this instance, and hopefully they take advantage of it…we give CQX credit for securing an excellent project (Goldstrike) in Utah on fabulous terms but several million dollars is going to be required to explore Goldstrike in the right way…the best solution in our view is for Cadillac to cut a deal with another company for exploration of its Wasa claims and the natural partner for that appears to be VGD which has all the money and expertise necessary to unlock the value of those claims and create excitement in the market…Cadillac could let others do all the heavy lifting at and around Wasamac and then focus its energies on developing the Goldstrike Project…

Abcourt Mines (ABI, TSX-V)

Patience continues to be the name of the game here…Abcourt was off a penny last week, closing at 10.5 cents Friday…ABI faces stiff overhead resistance with a declining 100-day moving average (SMA) at 13.5 cents and a declining 200-day SMA at 15 cents…if you’re bullish on Silver and Zinc prices, however, which we are, you have to love this play as the current market cap ($15.5 million) really doesn’t take into account the value of the company’s Abcourt-Barvue Silver-Zinc deposit near Val d’Or…ABI is ripe for an eventual takeover given the value of its assets and management’s obvious inability to unlock that value which is why we still view this company with considerable interest…ABI’s decline from a 52-week high of 25.5 cents in late March was brought on by the closing of a financing (35 million units at 18 cents), a sharp drop in Silver, overall CDNX weakness, and selling by MineralFields Group…the company released more results from Abcourt-Barvue August 2 including 2.1 metres grading 422.35 g/t Ag…drill results to date should significantly upgrade and increase all-category reserves and resources, most of which can be mined by open-pit…four years ago, GENIVAR produced a very positive feasibility report for the project which showed robust economics…more drilling will take place at the property this year…the rig was temporarily moved to the Vendome Property (Gold, Silver, Copper, Zinc) approximately 13 kilometres south of Abcourt-Barvue where 4 holes were drilled to confirm historical data…results were announced August 9 and included 33 metres grading 1.69 g/t Au…more results were released July 5 from the company’s Elder-Tagami Gold Property near Rouyn-Noranda including 8.50 metres grading 3.71 g/t Au…that was from the Tagami area to the north which has untapped potential including some higher grades…the latest NI-43-101 resource estimate of 216,000 ounces was released in the summer of 2009…the possibility of Abcourt expanding that resource beyond 500,000 ounces certainly exists given the encouraging results to date (look what Richmont has done at Wasamac)…the heavy accumulation that began in Abcourt in December was no fluke in our view…this is a company with significant assets that could justify a substantially higher valuation…nearly 60 million shares of ABI changed hands on the CDNX in December and January – record volume for this stock, accompanied by a price jump from 14.5 cents…while the stock price is now slightly below that level, the record volume in ABI since late last year (take a look at a 10-year chart) is still a very bullish sign…Abcourt has been under significant accumulation and our best guess is that some savvy players like the assets in the ground…continued drilling success and higher prices for Gold, Silver and zinc would be exciting developments for this stock which has a history of major moves…from mid-2005 to early 2006, Abcourt rocketed from 15 cents to nearly $1.40…

Greencastle Resources (VGN, TSX-V)

Greencastle was very quiet last week, down a penny-and-a-half at 18 cents…the 100-day moving average (SMA) has flattened out at 19.5 cents but a breakout above the still-rising 200-day SMA at 23.5 cents is what we’re watching for to confirm that a new uptrend is underway…as far as the fundamentals go, our gut feeling is that something is cooking here – President and CEO Tony Roodenburg has been quiet for too long, but knowing the conservative Roodenberg he may wait until the markets stabilize and turn higher before he launches into anything in a major way…the company released its Q1 financials June 9 which show working capital of 16.4 cents per share ($7.5 million)…oil royalties have declined significantly – just $212,000 for the first three months of 2011 vs. $355,000 over the same period a year ago which underscores the need for VGN to make some major changes as Primate just isn’t the cash cow it used to be…the fact Roodenburg is no longer at the helm of Seafield Resources (SFF, TSX-V) is a positive development in our view for Greencastle…Roodenburg had been trying to ease his way out of Seafield since 2009 without much success until a couple of months ago…he’s now able to focus almost exclusively on Greencastle which has been a favorite project of his for many years…we suspect he’s going to take a serious look at spinning out the oil assets or the Gold assets into a separate company…something needs to happen here to move VGN forward and boost shareholder value, but we’re confident Roodenburg will do it – sooner or later…Greencastle’s market cap of $8 million means the stock is now trading just 2.5 cents per share above its cash value…history shows that whenever VGN is near cash value, a terrific buying opportunity has opened up though investors must be patient…Greencastle tripled over a six-week period from late October to early December…since the beginning of January, though, the stock has struggled due mostly to impatient investors frustrated with the lack of news…patience is definitely required with VGN or one shouldn’t invest in it…over the years the successful strategy with Greencastle has been to accumulate on weakness when the stock is near cash value and then sell into strength when something develops…with strong working capital, three Gold properties (including land near the Blackwater Project and a couple of very good Nevada properties) and monthly (albeit declining) cash flow from an oil royalty, it doesn’t take a rocket scientist to figure out that Greencastle does offer excellent value at current levels…the long-term chart remains encouraging with strong support zones and a rising 300-day (SMA), though the 200-day SMA is now starting to decline…it’s also important to note that Roodenburg, a large shareholder in VGN, refrained from selling any of his holdings during the late 2010 run-up in the share price…this is different from past runs in the stock and adds further credence to our view that we haven’t seen the highs in this cycle yet from Greencastle…the stock is up 22% since we added it back in to the BMR model portfolio last October…

Sidon International (SD, TSX-V)

Still nothing new to report here…we’re all entitled to have one dog in our portfolio and Sidon is that dog for us at the moment, though it did increase five-fold for us last year and still holds potential…things remain very quiet on the Sidon front with the stock down another half-penny last week at 3 cents on relatively light volume…the company hasn’t been able to recover yet from its fall in March, one day after the CDNX correction began, on poor drill results from its Morogoro East Gold Property in Tanzania…there has been no news from the company since March 14 – they have effectively “sat out” the correction in the CDNX – when it announced a proposed private placement at 8 cents and an option to acquire an 80% interest in a 50-square kilometre property adjacent to Canaco’s (CAN, TSX-V) Handeni discovery in Tanzania…the 6 shallow holes drilled in December at Morogoro East failed to produce significant results, the best hole showing 3 metres grading 1.7 g/t Au…the company has drilled 4 deeper holes with results for those still pending…what the initial 6 holes have given Sidon, however, is a better understanding of the Morogoro geological structure which would aid in any future drilling…exploration, especially at such an early stage, is never easy and disappointing early results don’t necessarily mean a property doesn’t hold excellent potential…the company is also trying to develop a placer operation at Morogoro…there is certainly the possibility of better days ahead for Sidon but the lack of news is not encouraging…the climb back up won’t be easy and the company potentially may have to look at a consolidation of its capital or even a new group to come in and take things over…Sidon ran as high as 26.5 cents last winter but is now off 2 pennies since we introduced it to BMR readers in the spring of last year at a nickel…the company currently has approximately 140 million shares outstanding for a market cap of $4.2 million…