BullMarketRun.com

Welcome to our site, or at least the initial version of it!  BMR has been online for two years and strictly through word-of-mouth we have built a loyal following. 

We’re continuing with our plans to ultimately build a very unique investment and money-management resource site that goes considerably beyond what we have now.  While we focus very much on the Gold market and trends in the global economy, and of course the technical health of the TSX Venture Exchange (CDNX), an important component of this site will always be original research on small and undiscovered junior resource companies, mostly in the Gold exploration space, that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity.  However, investors must understand that these are still highly speculative situations and entail considerable risk, volatility and unpredictability.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. Always perform your own due diligence and please read our disclaimer at the bottom.

We use a combination of fundamental and technical factors in determining the value and potential of a stock.  In terms of fundamentals we look for a company with a superb project supported by strong management.  Management must possess integrity, solid ethics and a determination to succeed and build shareholder value.

At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop. The Bible teaches so much about money and how to handle it and invest it –  there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.  By examining the life of Jesus and reading the Word of God, we can all become fully equipped to be successful investors and handle money wisely in order to make it work for us.  If it’s the other way around –  if you’re a slave to money by being in debt for instance, or if you don’t respect the value of money and spend it foolishly –  you’re in trouble and you’ll never be blessed financially.  We have a God who thinks big – He created the universe – and He wants us to think big  in every area of our lives.  When we handle money from a Biblical perpective (His money that we have been given stewardship of) He will bless our financial decisions and an increase of tenfold or a hundredfold is always possible.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com (BMR) is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company. We strongly recommend that you consult with a qualified investment adviser, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions. The stocks we cover, by definition, are highly speculative and potentially very volatile. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

Gold Bullion Development (GBB, TSX-V)

GBB had a solid session Friday, posting a 3-penny gain on the best volume in nearly two weeks to close at 40 cents vs. 39 cents the previous week…the 40-cent close put GBB above its 50-day moving average (SMA) for the first time since mid-July…the stock is still facing some stiff technical headwinds, however, with declining 100, 200 and 300-day moving averages…the Slow Stochastic Oscillator is also in overbought territory again as it was at the stock’s highs in April, May and July…the fundamentals, however, look good, especially with Gold as hot as it is…GBB has a very valuable asset – Gold in the ground and close to surface at Granada…just how much of it remains to be seen but we’re optimistic as a 43-101 resource estimate from GENIVAR draws closer…one important point is very certain in this current equity and Gold environment…many producers, big, medium and small, are sitting on large piles of cash and are looking to add ounces to their production profiles…any junior with an advanced property like GBB, and a 43-101 resource to back it up, could be the target of a potential takeover…takeover activity in this sector is likely going to increase substantially in the months ahead…GBB has received approval from the TSX Venture Exchange to lower the exercise price of a total of nearly 8 million share purchase warrants to 58 cents (7.4 million from last October’s financing were priced at 75 cents)…these warrants expire October 27, 2011…having those warrants exercised would bring another $5 million or so into the GBB treasury, so a resource estimate by sometime in September would be timely…a move through the mid-50′s would also constitute a major technical breakout for the stock but that’s going to require a strong 43-101…GBB’s last drill results were released July 13…there was nothing spectacular in those numbers but hole #165, collared approximately 50 metres northeast of hole #108, offered encouragement with regard to the very promising northern portion of the Eastern Extension…#165 returned 141.5 metres grading 0.31 g/t Au (from 155 to 296.50 metres) with no high-grade spikes, showing an apparent consistency of mineralization…it included a 20.5-metre section grading 1.2 g/t Au…assays have yet to be reported on 8 more important holes drilled in this general area (168, 178, 183, 241, 243, 246, 254, 257) according to GBB’s most recent drill map…along with additional results, GBB’s 43-101 resource estimate is going to be critical along with the Castle spin-off and potential discoveries in LONG Bars Zone 2…infill drilling is GBB’s focus at the moment with drill hole spacing tightening (which could help to improve grade) in preparation for a resource calculation…the company’s current market cap of $67 million puts a value of just $22 an ounce on Gold in the ground at Granada if one were to assume the 43-101 will outline approximately 3 million ounces in the measured, indicated and inferred categories…that’s just a hypothetical number on our part at the moment but whatever number GENIVAR comes up with, we believe it should exceed the 2.4 to 2.6 million ounce conceptual figure that Gold Bullion gave in April of last year…based on all the drill results to date, this appears to be shaping up as a half-gram deposit with a higher grade starter pit and massive volume…it’s all about volume at Granada which is why the drills have to keep turning and why we want to see more than just two rigs in the LONG Bars Zone which has such incredible potential…the company provided an update on its Castle Silver Mine Project June 8…the 6,000 metre Phase 1 drill program is nearing completion and a strong new vein structure was intersected at the first IP target…a 43-101 technical report on the property has also been released…assay results from the 10 holes drilled so far are still pending…GBB plans to spin-off this asset into a separate publicly traded entity…GBB is up 471% since we introduced it to BMR readers in late December, 2009…

Currie Rose Resources (CUI, TSX-V)

Currie Rose gained a penny last week to close at 17 cents…its resilience in the face of a weak market since the end of July has been impressive…the stock remains in a zone of strong technical support and bids just keep popping up no matter what…John is preparing an updated chart on CUI which we’ll be posting Monday morning… a move through resistance in the low 20′s will require a more bullish overall market or some very good news from Tanzania, and either scenario is certainly possible…the Currie Rose drill continues to turn at Mabale Hills, so a summer of interesting action in CUI is likely though there has been no news since early July…three properties are being drilled at Mabale (Mwamazengo, Dhahabu and Sisu River) before the rig shifts to the flagship Sekenke Project about 200 kilometres to the southeast…CUI‘s first-ever drill program at Sisu River late last year gave reason for encouragement but this time the holes were pushed a little deeper in hopes of cutting wider intersections and higher grades…reading between the lines of the July 5 news release, it’s possible the geologists liked what they saw in the first 3 holes as 506 samples were delivered to a nearby lab for assaying and drilling continued…drilling will also test targets at Dhahabu and Mwamaznego…geochemical analysis has outlined a continuous anomaly over a few hundred metres that runs parallel to the west of a previously reported discovery at Mwamazengo where drill results included notable high-grade intercepts such as 34 metres grading 3.60 grams per tonne gold, 12 metres grading 9.11 g/t Au, 63 metres grading 2.59 g/t Au and 31 metres grading 5.97 g/t Au…we’re most excited, however, about the Sekenke Project which has “blue sky” written all over it…Sekenke is why we decided to start following CUI when it was trading around a dime last fall…results from satellite imagery provide additional evidence that Sekenke is a highly intriguing geological target and part of the same northwest trending structure that hosts Canaco’s (CAN, TSX-V) Handeni Project…satellite imagery has also shown that the structures at Sekenke are coincident with a strong alteration envelope…what’s unique about this project is that it surrounds and runs in between two former high grade Gold mines including Tanzania’s original producer…this greatly increases the chances of a discovery as it’s unlikely the former mines were fully exploited or explored as techniques a century ago in this industry obviously weren’t what they are today…CUI has a terrific chance to hit it big at Sekenke and we also wouldn’t be surprised if the company takes a shot at acquiring the former Sekenke Mine…that’s speculation on our part but it makes sense from a strategic point of view…pre-drilling exploration work continues at Sekenke to pinpoint the best targets…while its Tanzanian properties are the market’s major focus, Currie Rose could also benefit over the summer from continued good exploration news out of Trueclaim Exploration (TRM, TSX-V) which is currently conducting an 8,000 metre drill program at the Scadding Gold Property near Sudbury…Trueclaim, which continues to release decent assay results, has earned a 51% interest in Scadding and can acquire a full 100% interest by completing a feasibility study, paying $2 million to Currie Rose, and giving Currie Rose a 3% net smelter royalty…TRM announced July 26 that it has intersected a previously unknown area of Gold mineralization at Scadding with hole #48 assaying 5 metres grading 4.54 g/t Au (from 98 to 103 metres, assumed to be true width)…about 25 metres below that interval was a 10.25-metre section grading 1.37 g/t Au…TRM has drilled the North Zone, the South Zone and the Currie Rose Zone with promising results (the Central Zone, which could get really interesting, has yet to be drilled)…CUI announced a joint-venture deal January 25 with Australian-based Liontown Resources for Currie’s Jubilee Reef Gold Project in Tanzania…CUI’s focus is on the Sekenke and Mabale Hills Projects, so finding a partner for Jubilee Reef made sense…the deal commits Liontown to at least 5,000 metres of drilling at the property this year which will give Currie Rose a minimum of 23,000 metres of drilling at all of its properties in 2011…while Currie Rose has had its market cap shaved by more than half, from a high of nearly $40 million late last year to the current $15 million, what hasn’t changed is the quality of this company’s project portfolio which remains as high as ever…Currie Rose has all the cash it needs ($2 million) to complete an initial major round of drilling (10,000 metres) in Tanzania this summer, so there will not be any dilution of the stock at current levels as confirmed by President and CEO Harold Smith…

Adventure Gold (AGE, TSX-V)

AGE remains one of our favorites this summer with several exciting projects on the go…our theory is that there’s a very good chance at least one of those projects will “hit”…Pascalis-Colombiere is our pick…we recently spoke with President and CEO Marco Gagnon and we’re continuing to perform some additional research on AGE in advance of some postings in the near future, particularly during our upcoming trip to Rouyn-Noranda…Gagnon is a sharp operator who knows how to maximize every dollar the company spends…he also has the strong backing of Montreal investment firm Windermere Capital which holds just under 20% of AGE as disclosed January 21…the company has five active key projects, two of which are in the hands of joint venture partners Lake Shore Gold (LSG, TSX) and Agnico-Eagle Mines (AEM, TSX)…AGE is currently conducting a 5,000 metre Phase 2 program at its very promising Pascalis-Colombiere Property near Val d’Or…at the end of May the company reported highly encouraging drill results from this former producer including 4.8 g/t Au over 33.1 metres in hole #20 (plus lower grade halos over significant widths)…the Phase 2 program is designed to further define the Gold system, leading to a resource calculation which is already being worked on…Pascalis-Colombiere encompasses the past producing L.C. Beliveau Mine (Richmont’s Beaufor Mine is nearby)…we found a comment from Gagnon in AGE’s June 2 news release quite interesting…“Following positive drill results and the permitting process, an open-pit or an underground operation could be producing in the near future”…we believe Richmont Mines (RIC, TSX) could be very interested in this project as they are looking for an acquisition, preferably in the general area of their Camflo Mill…earlier this year we met with AGE’s Jules Riopel, VP Exploration, regarding the company’s strong portfolio of properties…he was very keen at that time on Pascalis-Colombiere and given the drill results, his bullishness on this property appears to have been justified…the former L.C. Beliveau Mine was a very profitable operation between 1989 and 1993, producing nearly 170,000 ounces of Gold for Cambior…we believe a lot of Gold was overlooked in that area…in addition, the geometry of the deposit is such that mining costs should be relatively low…considerable infrastructure is also in place…meanwhile, Agnico-Eagle has completed its 4,000 metre drill program at AGE’s Dubuisson Property near Val d’or…Dubuisson is contiguous to the Goldex Mine Property and also straddles a 5-kilometre segment of the prolific Cadillac-Larder Lake Gold break…also of immediate interest is AGE’s partnership with Lake Shore Gold on the Meunier 144 Property where deep drilling is still testing the down-plunge extension of Gold zones located at the Timmins and Thunder Creek deposits…the current initial deep drill hole onto the Meunier JV property is continuing and had reached a core length of 2500 metres as of mid-June with another 500 metres to go…if a discovery is made, AGE will instantly explode higher…AGE has completed an 8-hole Phase 1 program at the Lapaska Property near Val D’Or…results released July 21 for the remaining 6 holes at Lapaska were very mediocre compared to the first 2 holes (MZO-TSX-V has an option to earn up to a 70% interest in the property) but Lapaska still holds good potential…the Granada Extension Property will be worked on later this year…AGE’s latest financials, released June 29, show the company with $3.3 million in working capital as of April 30, a $300,000 improvement in working capital over the quarter ending January 31…we first mentioned Adventure Gold to our readers in an article September 29 last year, just a couple of days following the company’s announcement that it had acquired land at Granada, when the stock was trading in the low 20′s…we officially added AGE to the BMR model portfolio at just 34 cents October 28…Adventure Gold has been around only since late 2007…AGE is clearly a keeper for the long haul and we wouldn’t be surprised to see a major breakout in this play before the end of summer…

GoldQuest Mining (GQX, TSX-V)

GoldQuest had a quiet week and closed unchanged at 17 cents…technically, GQC has its challenges right now but there’s every reason to remain bullish regarding this company’s fundamentals…the 200-day moving average (SMA), currently at 29 cents, is now in decline but the 300-day (SMA) at 25 cents continues to rise…support for the stock has proven to be very strong in the upper teens…there’s no question in our view that GQC presents a great opportunity for patient and long-term investors…Chairman Bill Fisher has been buying GQC stock on the open market, his latest purchase being 20,000 shares July 12…he has bought nearly 250,000 shares over the past couple of months between 18 and 20.5 cents according to insider trading reports…GQC’s prospects remain solid as the company has an outstanding portfolio of projects in the Dominican Republic and Spain…the substantial drop in the share price from a high of 48.5 cents in early February was due to general market weakness and selling from speculators whose expectations may have been too high regarding initial drill results from the company’s La Escandalosa Project in the Dominican Republic…in addition, the company has stopped all drilling in the DR for the time being in order to conduct extensive IP surveys over Escandalosa and other properties…interest in the stock should pick up as soon as drilling re-starts…overall assay results from Escandalosa were decent though far from spectacular…the final set of assays for 7 holes came out May 16…the best intersection from Escandalosa Sur, where an initial 43-101 inferred resource of 400,000 ounces was outlined last fall, was 20 meters grading 1.32 g/t Au…results from this area overall (21 holes) were somewhat disappointing though more drilling is required and will take place later this year…however, the company drilled 3 holes at the Hondo Valle target 1.6 kilometres to the north (outside the resource area) and all 3 intersected significant mineralization including 29 metres grading 2.18 g/t Au in hole #65…that’s the thickest and highest grade mineralized section drilled to date at Hondo Valle…the theory is that mineralization trends north from Escandalosa Sur to Hondo Valle…GoldQuest has been carrying out a 16-square kilometre IP survey and magnetic ground geophysical survey from 2 kilometres north of Hondo Valle to 2.2 kilometres south of Escandalosa Sur…GQC will use the data to pinpoint key targets for an additional 3,000 metres of drilling…GoldQuest also has other promising projects in the DR (in particular, Loma Oculta – formerly Las Animas – where an exploration program aimed at identifying new drill targets is now underway) in addition to its lead-zinc-silver deposit in Spain…GoldQuest’s potential has not diminished whatsoever yet the share price has dropped by more than 60% from its early February high…the company released a 43-101 resource estimate March 2 on its Toral zinc-lead-Silver deposit in Spain…it showed slightly lower grades but much higher overall tonnage than the previous historical non-compliant estimate…as a result, total resources came out 15% higher…resources in the indicated category are 4.04 million tonnes grading 11.8% lead and zinc (5.3% lead, 6.5% zinc) as well as 41 g/t Ag and 0.11% Cu… inferred resources are 4.67 million tonnes grading 9.8% lead and zinc (4.44% lead, 5.4% zinc), 32 g/t Ag and 0.14 Cu…Toral has significant exploration and development upside as a majority of the historical drilling (40,000+ metres) was conducted over one relatively small part of the property…the zone of sulphide mineralization is open along strike to the northwest toward a known lead deposit as well as along strike to the southeast and downdip…the project is also an ideal candidate for a fast-track to production…the deposit is close to a power line, highway and rail line…a large smelter is located just 300 kilometers away by rail…meanwhile, GQC has been granted the Lago exploration concession, as reported last July 19, which is only a 30-minute drive northeast of Toral…the Lago property is the first permit granted of three applications by GoldQuest…securing an exploration concession for Lago, where mineralization is similar to that of Toral, is another important step for GoldQuest in building its assets in that region…a comprehensive mapping, geochemical sampling and ground geophysical program will be initiated at Lago to define both infill drilling and new targets that may warrant drilling in the vicinity of the known hydrothermal lead and zinc mineralization that remains open along strike and at depth…GQC is down 2.5 pennies since we added it to the BMR model portfolio last fall…

Seafield Resources (SFF, TSX-V)

Seafield’s new President and CEO Carlos Lopez continues to put the building blocks together with this company…we’re impressed with his actions over the last few months as he has strengthened Seafield both on the ground and in the office by adding some key personnel…he has also put his money where his mouth is, buying significant amounts of stock in the open market…Seafield declined 3 pennies last week to 23.5 cents…the stock has bounced up and down between the low 20′s and the low-to-mid-30′s the past few months…liquidity is certainly there for traders to play the rather predictable swings this stock has been experiencing…the company announced August 11 that Giovanny Ortiz, the former exploration manager of the Angostura Project, has been appointed General Manager of Seafield’s operations in Colombia…heavy selling came into the SFF market July 25 when the company announced drill results from Dos Quebradas which were disappointing, though we caution it’s still early in the game for that property…Seafield is currently drilling a promising area at Dos Quebradas approximately 250 metres wide (east to west) and more than 300 metres long (north to south)…the zone is open at depth and is interpreted to plunge to the north…meanwhile, Seafield has added a second drill rig at Miraflores in order to expedite a Phase 2 program there which is designed to better define the shape of the orebody, increase the resource confidence and extend mineralization…a total of 10 holes or 6,200 metres is expected to be completed by November (the rock is hard at Miraflores, so the drilling is slow which is why a second rig has been added)…the company announced July 5 that it has hired SRK Consulting for a preliminary economic assessment or scoping level study on Miraflores for completion by the first quarter of next year…SRK will evaluate the potential positive economics of developing an open-pit and underground operation at the property…it will also provide recommendations to advance the project to prefeasibility…Seafield released an updated 43-101 resource estimate for Miraflores May 26…the project has gone from an inferred resource of 776,000 ounces (at a cut-off grade of 0.5 g/t Au) to a measured and indicated resource of 1.2 million ounces and an inferred resource of 354,000 ounces (at a cut-off grade of 0.3 g/t Au)…Seafield exploded from the low 20′s to an all-time high of 77 cents in just one day last December but then proceeded to give up all of those gains…the company’s Quinchia land package in Colombia has a great deal of untapped potential and Seafield is also sitting on nearly $20 million in cash…patient investors have an opportunity to do extremely well with this play given the geological merits of Quinchia and the real potential for 5 million+ ounces from several potential deposits…we have confidence the new management group will unlock value by bringing fresh insight and new energy to this play along with a more aggressive exploration approach…Seafield has gained nearly 300% since we made it the first company in the BMR model portfolio two years ago…its current market cap is $39 million, only about twice the company’s cash value…

TSX Venture Exchange and Gold

It was another wild week on the markets with fresh concerns over economic growth in Europe and the United States as well as continued fears the euro zone may not be able to contain its debt crisis.  The Dow was off 4% for the week and has now endured its worst 4-week drop since March, 2009.  The S&P 500 fell 4.7% and has plunged 16% over the past month.  The Nasdaq dropped 6.7% for the week, the TSX declined 4.3% while the TSX Gold Index climbed 3% as the yellow metal reached yet another all-time high of nearly $1,900 an ounce.  The VIX (Volatility Index) closed at an extreme level of 43 which shows there is plenty of fear on the street.  From a contrarian standpoint, that’s an encouraging sign.

Thanks to record-high Gold prices, the CDNX fared better than the major markets and slid just 2.9% or 52 points to 1765 after posting a slight gain the previous week.    The Index has support around the 1760 area and held up extremely well Friday in the face of significant drops in New York and Toronto.  Volume remains low.  A lot of cash is sitting on the sidelines, waiting to jump in at just the right moment.

So what’s happening and where do things go from here?  Many investors are fearing a re-run of 2008 when markets started crashing over the summer with selling intensifying in the fall.  Rarely, however, does history repeat itself so exactly and so soon after such a major event.  There are significant differences between now and then, not the least of which is the fact there is no “credit crunch” like there was in ’08.

Bank of Canada Governor Mark Carney is well respected and we hope some of our Canadian readers had an opportunity to watch his testimony before a Commons committee Friday.  Below are some comments from Carney that we felt were very important:

“The Bank continues to expect that (Canadian) growth will accelerate in the second half of the year, led by business investment and household expenditures.  Ongoing strength in major emerging markets should also help maintain commodity prices at relatively high levels.”

“Recent events serve as a reminder that in a world awash with debt, repairing the balance sheets of banks, households and countries will take years.  As a consequence, the pace, pattern and variability of global economic growth is changing, and Canada must adapt.”

The emerging market growth story continues according to Carney and many others, and that’s critical for the resource-dependent Venture Exchange.  Investors, especially those in the United States, tend to think of “the economy” or “the market” as if the U.S. economy and the U.S. stock market were all that mattered.  While the U.S. remains the most powerful country in the world and has its share of problems at the moment, including a very weak President, the global economy includes 7 billion people, not 300 million.

Many U.S. companies with growing international operations are doing extremely well.  In fact, overall, second quarter earnings for companies in the S&P 500 Index have been superb with nearly 71% of company earnings beating expectations (source: ISI, International Strategy and Investment Group).  Generally, U.S. and Canadian companies have very strong balance sheets at the moment.

ISI also reports there has been a surge in U.S. money supply recently.  M2 has jumped $460 billion (about 5% or 38% on an annualized basis) over the past eight weeks.

While the CDNX has suffered some technical damage the last few weeks, its 300 and 500-day moving averages continue to rise which is unlike the situation in July and August, 2008.  From the March 7 high of 2465 to the August 8 low of 1676, the Index has fallen 32% which is very much within the norm of major CDNX corrections that are typically between 20% and 40%.

Below is John’s updated CDNX chart which shows Fibonacci support around 1760.  If this level holds again on Monday and the market is able to move higher early in the week, that would be a very positive sign.  Failing that, a re-test of the August 8 low could be in the cards.

In the “big picture” scheme of things, we can’t help but think with Gold at record prices, and likely to push even higher over the coming year, investing in quality Gold stocks (advanced exploration plays and producers) is a long-term winning strategy.

Gold

It was another amazing week for Gold as the yellow metal rocketed to another new all-time high of $1,879 on the Spot Market, closing at $1,853 per ounce for a weekly gain of $107.  That’s after a jump of $82 the previous week.

John’s near-term Fibonacci target is $1,938 and we could see that as early as tomorrow – who knows.  However, Gold has become hugely overbought technically at the moment.  It has simply gotten ahead of itself, albeit only temporarily.  A 10% correction would be a healthy development and certainly wouldn’t be surprising.  Gold is making its longest run of weekly gains since April, 2007.  That’s when pullbacks usually happen, and Gold has also climbed abnormally above its 200-day moving average (SMA).  The mainstream media are also now jumping on the Gold “story” and that’s another sign that we have just seen, or we’re about to see, a short-term top.  We emphasize short-term because, as we have repeated many times in this space, our belief is that we are witnessing the bull market of a lifetime in Gold and $3,000 an ounce as early as next year can’t be ruled out.

If we do indeed get a near-term pullback in the Gold price, producers are likely to back off at least a little.  This would set up a major buying opportunity in our view.  As John’s chart showed Friday, the TSX Gold Index is currently in a resistance band between 404 and 416 (closed Friday at 413).  A drop of 5% or so in the Gold Index to unwind current overbought conditions (the Index has jumped 18% since bottoming out in mid-June) could set the stage for a dramatic new push to the upside that could take out the resistance up to the 416 level.  Market-timing is never easy but that’s one potential scenario to watch for.

Silver is looking strong and closed $3.83 higher last week at $42.90.  Copper declined another 15 cents to $3.98.  Crude Oil slipped another $3.12 a barrel to $82.26 while the U.S. Dollar Index lost just over a half a point as it finished the week at 73.99.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, Gold is being driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, is having a huge impact on Gold.

The fundamental case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders in general, an environment of historically low interest rates and negative real interest rates (inflation is greater than the nominal interest rate even in parts of the world where rates are increasing), massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, investment demand, emerging market growth, geopolitical unrest and conflicts, and inflation concerns…the list goes on.  It’s hard to imagine Gold not performing well in this environment.  The Middle East is being turned on its head and that could ultimately have major positive consequences for Gold.

What’s also driving Gold is the weakness of the United States, brought on in no small part by one of the most ineffectual Presidents the nation has ever been saddled with.  America has lost its way and the recent S&P downgrade is both a real and a symbolic reflection of that.  Since the summer of 2009, the U.S. economy has produced a net total of just 2 million jobs while federal spending has gone through the roof.  Throughout its incredible history, the United States has demonstrated an amazing resiliency and the ability to bounce back from major economic, social and political troubles.  It will do so again but this will take time and a real Commander-in-Chief in the White House by November, 2012.  By then Gold will have climbed another 50% or more.

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

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Hmmm…I guess we’re just not paying enough attention to what’s happening here in North America…U.S. Vice-President Joe Biden is visiting China at the moment and according to his counterpart, heir apparent Xi Jinping, Biden briefed the Chinese Vice-President “about the efforts of the U.S. government in spurring growth and jobs, cutting the budget deficit, properly handling the debt problem, and preserving the confidence of global investors”…oh, and by the way China, about all those U.S. Treasuries you’re holding, “Very sincerely,” Biden stated, “I want to make clear you have nothing to worry about”…it’s always so reassuring when a politician speaks like that…well, at least the meetings between Biden and Chinese officials were a little more cordial than the “friendship” basketball game between the Georgetown University Hoyas and the Bayi Military Rockets that degenerated into a brawl…with just over one year left in his first and likely only term, and with U.S. unemployment sky-high, President Obama has finally discovered a sense of urgency regarding the U.S. growth and jobs deficit and will be making a major speech with proposals immediately after Labour Day…a big factor in Gold‘s move recently has been a loss of confidence by the markets in governments across-the-board, specifically the United States and countries throughout the euro zone…there is a lack of economic leadership and where that’s ultimately going to come from is hard to say…it seems Americans would have been far better off electing John McCain in 2008 who at least knows how to fight a real war…Obama has failed miserably so far in the economic war but we’ll see what he comes up with next month…he faces a very divided Congress but rather than complain about that, a truly great leader is able to overcome those obstacles and rally the nation…for now, the emerging market growth story continues which is critical for overall global growth as well as commodities…there’s also a significant amount of fear and negativity in the markets right now, and plenty of cash on the sidelines, which from a contrarian point of view is positive… Gold surged to another new all-time high overnight of $1,879…as of 9:00 am Pacific, the yellow metal has pulled back to $1,851 which is still a $26 jump from yesterday…Silver has climbed $1.40 to $42.04, Crude Oil is up 29 cents at $82.67, Copper has gained 3 pennies to $3.98 while the U.S. Dollar Index is off half a point to 73.86…the CDNX is off 2 points at 1769…while we normally focus on the Venture Exchange, this morning John has charts on the Dow and the TSX Gold Index that we believe are timely given that the Venture is being influenced so much by other markets at the moment…John sees a potential “squeezing” of the Dow’s bollinger bands in the near future which could lead to a market recovery…

John: The Dow is dropping toward the support area (green).  If it does not break below this support, it will form a “double bottom” pattern. This would be a strong base for a reversal.

There are 2 sets of Bollinger Bands shown –  BB blue (13, 2.33) and BB green (13,1).  When volatility declines the bands converge, and conversely they diverge when volatility increases. Two instances are shown where the bands (blue) have converged, causing a “squeeze” which is a low volatility period of about 1 week.   At the present time the two blue bands are heading down but if the support holds the lower blue band will quickly turn up and proceed to almost meet the top blue band which will continue to fall. Then the “squeeze period” will begin when the two bands flatten and move sideways. In the meantime the Index will be basing and preparing to reverse.

When the Index rises from the support the bands will diverge and the Index will climb between the top blue band and the top green band in a similar manner to the other two instances shown.

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The TSX Gold Index has been a strong performer since bottoming out in mid-June around 350…since then, the Gold Index has climbed 18% while the TSX has fallen approximately 5%…if economic conditions deteriorate more than expected in the United States and Europe, and globally, the TSX Gold Index should continue to shine as Gold will likely more even higher and input costs for producers will drop significantly…while we still see great opportunities in many advanced exploration plays on the CDNX, holding a producer or two in one’s portfolio makes a lot of sense…John’s chart shows the TSX Gold Index is generally looking very healthy but is currently in a resistance band – whether it has enough “juice” to push through this resistance at the moment is uncertain but the overall outlook, based on technicals and fundamentals, is very bullish in our view…

As of 9:00 am Pacific, the TSX Gold Index is up 8 points at 413…Richmont Mines (RIC, TSX), which is expected to come out with a Wasamac exploration update before the end of the month, is up 28 cents to $9.27…New Gold Inc. (NGD, TSX), also one of our favorites, is 35 cents higher at $12.50…speaking of Wasamac, Visible Gold Mines (VGD, TSX-V) fell to 30.5 cents this morning but bargain-hunters are beginning to step up to the plate with growing bids and volume…VGD is currently off a penny at 31 cents…the company continues to aggressively drill at Wasa Creek, bordering the western boundary of the Wasamac Property, and assay results are pending for 8 out of 9 holes completed as of early this week…the company will be ramping up its drilling by another couple of notches in the near future with programs at Joutel and Stadacona-East…Silver Quest Resources (SQI, TSX-V) continues to bounce back from its recent drop into the ’80’s where we hope some readers were able to scoop up some cheap stock…SQI is up 6 cents this morning to $1.11…Goldex Resources (GDX, TSX-V) is holding steady at 8 cents…with just an $8 million market cap, GDX offers strong upside potential given its recent drill results from El Pato and the coming program at El Arco in Mexico…there is good liquidity in this stock which is another advantage…

Gold has surged to another all-time high of $1,828 this morning on fresh euro zone debt concerns…European financial stocks sold off sharply overnight and the consensus seems to be that investors were less than impressed with the outcome of Tuesday’s meeting between French President Sarkozy and German Chancellor Angela Merkel…as of 8:45 am Pacific, the yellow metal is up $27 an ounce to $1,816…John’s latest Fibonacci target, outlined in last weekend’s chart, is $1,938…Silver is up 27 cents to $40.50, Crude Oil is off $4.25 a barrel on economic growth concerns to $83.33, Copper is down 7 cents to $3.96 while the U.S. Dollar Index is up nearly half a point to 74.26…Morgan Stanley has slashed its global growth forecast for 2011 and 2012, saying the U.S. and the euro zone were “dangerously close to a recession”, and criticized policymakers in Washington and Europe for not acting more decisively to contain the sovereign debt crisis…”Our revised forecasts show the U.S. and the euro area hovering dangerously close to a recession — defined as two consecutive quarters of contraction — over the next 6-12 months,” Joachim Fels, who co-heads Morgan Stanley’s global economics team, said in a research note dated this morning…that was not the bank’s base case scenario, he said, noting the corporate sector still looked healthy and lower inflation will ease pressure on consumers’ pocketbooks, while central banks such as the Federal Reserve and European Central Bank could try to loosen policy further…still, “It won’t take much in the form of additional shocks to tip the balance,” he added…”A negative feedback loop between weak growth and soggy asset markets now appears to be in the making in Europe and the United States”…the bank cut its global gross domestic product growth forecast to 3.9%  from 4.2% for 2011, and to 3.8% from 4.5% for 2012…CNBC reported this morning that the European Central Bank has lent dollars to a euro zone bank for the first time since February in the latest sign of escalating tensions in the region’s financial system…the major indexes are down sharply this morning but are trying to recover…the Dow fell as low as 10,885, just 271 points above its August 9 low, and is currently off 397 points at 11,014 which of course is weighing on other markets…the CDNX, despite Gold’s jump today, has declined 42 points to 1779…volume remains light, so it’s really an absence of buyers as opposed to an avalanche of selling…Goldex Resources (GDX, TSX-V) remains one of the most active traders…GDX has filled yesterday’s “gap” and is currently off half a penny at 8 cents…the company reported encouraging results yesterday from its El Pato Gold Property in Guatemala including an impressive 5.04 g/t Au over 30.48 metres…bulk sampling continues at the property while drilling is expected to commence soon at GDX’s promising El Arco Property located in Mexico’s Central Plateau Gold and Silver Belt…surface samples have confirmed the presence of both high grade Gold and Silver at El Arco…with a market cap of just under $8 million, GDX has our interest given the potential of both El Pato and El Arco…volume in GDX has been very high since early July which has likely helped to absorb much of the 5-cent private placement paper issued around the beginning of the year…John updates the GDX chart below which shows the stock has strong support around current levels…

Note: Both John and Jon hold positions in Goldex Resources (Terry does not)…

Market weakness does produce opportunities in the best exploration plays as those are always the companies that bounce back the quickest and the strongest in a market rebound…we suggest investors focus on the most promising exploration areas such as the Yukon and northwest Quebec…along the Cadillac Fault, one of the world’s most prolific mining areas, we’ve written extensively recently about the developing situation at Wasamac where Richmont Mines (RIC, TSX) has five drill rigs in action and could quite possibly turn that former producer into a new multi-million ounce deposit…Richmont is expected to provide an update on Wasamac before the end of the month (RIC fell as low as $9 this morning but has bounced back to $9.29)…in the immediate area, Visible Gold Mines (VGD, TSX-V) is also drilling aggressively and cut several zones of Gold mineralization on its very first hole at Wasa Creek as reported last Thursday…assays are pending on 8 of the 9 holes VGD has completed so far on that previously unexplored property…Wasa Creek is in a rich geological environment so the possibility of a significant discovery certainly exists…the Cadillac Fault even runs right through the middle of that property…VGD, through its option agreement with Cadillac Mining (CQX, TSX-V), borders both sides of the Wasamac Property with Wasa Creek and Wasa East…Cadillac, of course, holds 100% of 7 claims adjoining the northern border of Wasamac where the Richmont deposit could plunge at depth onto CQX’s ground…Wasamac in our view is one of the top geological stories on the Cadillac Trend right now but the street just hasn’t fully woken up to that fact yet – it will, mark our words…Visible Gold Mines is also getting set to commence a 7,500-metre drill program at its Joutel Property, 150 kilometres north of Rouyn-Noranda…the map of Joutel that VGD has released paints a very clear picture of the potential of the Joutel Extension Property with a structural pattern, as VGD reported Tuesday, that suggests there could be additional deposits to the southeast of the past producing Telbel, Eagle and Eagle West mines…if those deposits do exist, VGD senior geologist Robert Sansfacon will find them…VGD is off 2.5 cents at 30.5 cents at the moment but has a rising 50-day moving average (SMA) and other chart positives…elsewhere along the Cadillac Trend, Gold Bullion Development (GBB, TSX-V) continues to drill the LONG Bars Zone at Granada and with Gold prices like we’re seeing now, the low-grade Granada open-pit scenario looks better than ever…of course everyone is anxious to see the initial 43-101 resource estimate for Granada, and the geological analysis that goes with it, but we’re confident GENIVAR will be able to make a strong case for this property given all the historical information regarding Granada plus results from GBB’s drilling over the past 19 months…Adventure Gold’s (AGE, TSX-V) Pascalis-Colombiere Gold Property near Val d’Or is a potential big winner in our view and more drill results are expected in the near future…depending on the outcome of the 43-101 resource estimate for this property, which is currently being worked on, we see a strong possibility of a producer such as Richmont Mines acquiring Pascalis-Colombiere and putting it into production…so AGE, in our view, has a valuable asset on its hands especially in the current Gold-price environment…AGE is up 3 pennies at 50 cents this morning while GBB is off half a penny at 37.5 cents…

Investors should also of course continue to keep a close eye on developments in the Yukon where our favorites include the likes of Kaminak Gold (KAM, TSX-V), Golden Predator (GPD, TSX), Pacific Ridge Exploration (PEX, TSX-V), Northern Tiger (NTR, TSX-V), Ethos Capital (ECC, TSX-V), and Silver Quest Resources (SQI, TSX-V)…a low-priced potential gem that holds some interesting ground is Dawson Gold (DYU, TSX-V) which is trading at just 6.5 cents for a market cap of only $2.2 million…Silver Quest has plenty of intrinsic value especially considering it holds a 25% interest in the northern portion of New Gold Inc.’s (NGD, TSX) Blackwater deposit in central British Columbia…SQI is off 4 cents this morning at $1.01 but continues to have an attractive chart as John outlines below…

Note:  John holds a position in Silver Quest Resources (Jon and Terry do not)…

Markets are off their highs of the day…Gold inched closer to $1,800 again, climbing as high as $1,796, before pulling back…as of 9:00 am Pacific, the yellow metal is down $3 an ounce at $1,784…Silver is 10 cents higher at $40.01, Copper is up a nickel to $4.05, Crude Oil has gained $1.18 to $87.83 while the U.S. Dollar Index is off one-third of a point to 73.78…the United States has a huge growth deficit and we’ll see what President Obama comes up with immediately after Labour Day when he’s expected to deliver a major policy speech with proposed measures aimed at bolstering economic growth…it’s probably his final chance to show leadership and common sense on the economic front…the U.S. Congress, and that means both Republicans and Democrats, have to also stop playing political games…governments don’t create jobs but they do play a critical role in fostering the proper environment in which the private sector can flourish…Obama, who seems to be a socialist at heart, needs to do an abrupt reverse course and propose pro-growth policies and creative tax measures that encourage the great American entrepreneurial spirit…U.S. core producer prices rose at their fastest pace in six months in July, pushed up by higher tobacco and light truck costs, according to a government report this morning that could stoke inflation fears…the Labour Department said its seasonally adjusted index for prices paid at the farm and factory gate, excluding food and energy, rose 0.4% – the largest increase since January – after rising 0.3% in June…that compared with economists’ expectations for a 0.2% rise….overall prices received by producers rose 0.2% after falling 0.4% in June, above economists’ expectations for a 0.1% gain…the CDNX is up 16 points at 1824…Goldex Resources (GDX, TSX-V) is by far the most active stock on the Venture so far today…GDX gapped up to 11 cents on drill results from its El Pato Gold Property in Guatemala that included 30.48 metres grading 5.04 g/t Au…GDX has come off its highs and is currently up a penny at 9 cents on volume of over 9 million shares on the CDNX…results this morning were supportive of historical information on the property from UN and Guatemalan government drill programs in the 1980’s and 1990’s…assays are pending for 5 more holes and bulk sampling continues on the property…there’s a good chance this story could build out nicely in the coming days and weeks…at 9 cents, the company’s market cap is only $8.8 million…liquidity in the stock is strong and much of the 5-cent private placement paper from last January has likely been absorbed given the trading volumes this stock has had since July…the company is also about to start a 4,000-metre drill campaign at its promising El Arco Property which is located in the Gold and Silver trend of the resource-rich Mexican state of Durango…so we believe this has good potential and we like how the company has been presenting its story…Galway Resources (GWY, TSX-V) has been a strong performer lately…we most recently mentioned the company in late July after it reported some high-grade assay results from its California Gold Property in Colombia…the stock was trading around the $1 level at that time and yesterday closed at $1.39 on strong volume…the stock however is now at a resistance level and also overbought based on RSI and Stochastics, so some near-term consolidation is likely…GWY is currently unchanged for the day…we haven’t mentioned Currie Rose Resources (CUI, TSX-V) in a while…CUI continues to drill at its Mabale Hills Project in Tanzania and we’re expecting news soon based on the fact there hasn’t been any news since very early July, shortly after drilling commenced…the geology at Mabale Hills is certainly favorable for a discovery but action could really pick up in CUI once drilling starts at the Sekenke Property, approximately 200 kilometres southeast of Mabale Hills…CUI has held up well recently and closed yesterday at 17 cents…we love companies like Currie Rose Resources with strong geological foundations…significant discoveries can produce a 10-bagger in a relative hurry as we’ve seen with the likes of Gold Bullion Development (GBB, TSX-V) and Richfield Ventures before it was taken over by New Gold Inc. (NGD, TSX)…Visible Gold Mines (VGD, TSX-V) is another example of a company with excellent projects and the right people to unlock the value of those projects and make a potential major discovery…in VGD’s Robert Sansfacon, we see one of the best geologists in all of Quebec who has the ability to bring the Joutel camp back to life…he’s also overseeing a talented crew that’s aggressively going after a new discovery in the Wasamac area…the potential with VGD is considerable simply based on Sansfacon’s track record as his re-interpretation of Malartic was an important factor leading to Osisko’s (OSK, TSX) 10-million+ ounce discovery…

6:20 am Pacific

Goldex Resources (GDX, TSX-V), which we have mentioned in this space on several occasions in recent weeks, released some impressive initial assay results this morning from its recently-completed drill program at the El Pato Gold Property in Guatemala.

Hole #10 really stands out – 30.48 metres (from 97.53 to 128.01 metres) grading 5.04 g/t Au with mineralization consistent throughout the length of the hole.  It included a 9.15-metre section grading 12.38 g/t Au.  Holes 8, 9, 12 and 14 also intersected mineralization though to a much lesser degree.  Two exploratory holes (#2 and #17) did not return significant results.  Nonetheless, broadly speaking, Goldex is off to a promising start at El Pato and the market should respond favorably.

Assay results are pending on 5 holes which will give the market plenty to speculate about in the days ahead.   The 12-hole diamond drill program goes hand in hand with the bulk sampling taking place at El Pato.  The Cerrito West zone at El Pato has consistently showed high levels of near-surface mineralization with an average bulk sample grade of 28.64 g/t Au as reported by the company May 18th.

The drill program was designed to prove up average grades as indicated by the UN and Guatemalan government drill programs in the late 1980’s and 90’s as well as to map and explore the extent of the veins and structures present.  The company reports that hole #10 contains the typically expected mineralization present at El Pato while other holes allow for more precise mapping of the vein structures.

Goldex will proceed with additional bulk sampling in the principal sectors in an attempt to further demonstrate the nature of available mineralization at El Pato which includes high-grade surface zones as well as epithermal “pinching and swelling” of deeper veins.