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October 18, 2012

BMR Morning Market Musings…

Gold is holding up well under some minor selling pressure today…as of 8:30 am Pacific, the yellow metal is down $6 an ounce at $1,744 after falling as low as $1,737…Silver is off 19 cents at $33.01…Copper is flat at $3.72…Crude Oil has lost 43 cents a barrel to $91.69 while the U.S. Dollar Index is up less than one-tenth of a point at 79.16…

U.S. Economic Data

Weekly applications for U.S. unemployment benefits jumped 46,000 last week to a seasonally adjusted 388,000, the highest in four months…the increase represents a rebound from the previous week’s sharp drop…both swings, analysts say, were largely due to technical factors…the Labor Department reported that the four-week average of applications, a less volatile measure, fell slightly to 365,500, a level consistent with modest hiring…other data out this morning shows that factory activity in the U.S. mid-Atlantic region grew in October, although the pace of expansion was still modest…the Philadelphia Federal Reserve Bank said its business activity index rose to 5.7 from minus 1.9 the month before, snapping five months of contraction…that topped economists’ expectations for a gain to 1, according to a Reuters poll…meanwhile, the Conference Board reported that leading indicators rose 0.6% in September after falling 0.4% in August and rising 0.4% in July…the previous months were revised down slightly…the strength in September came from a big jump in applications for building permits, which the government reported yesterday had climbed to a four-year high that month…

China Economic Date Meets Expectations With Signs Of Improvement

China said its economy continued to slow in the third quarter just weeks before it embarks on a once-a-decade change in leadership…but in a positive sign for the world’s second-largest economy, data released last night showed signs that China is likely at or close to the bottom of its downturn…investment, retail sales and industrial production all accelerated at the end of the quarter, leading Premier Wen Jiabao  to declare that the worst was probably over…“It might take another couple of quarters for growth to significantly recover, but we believe the risk for a hard landing is getting increasingly smaller,” said Lu Ting, an economist at Bank of America Merrill Lynch…growth in China’s gross domestic product fell to 7.4% in the third quarter compared with a year earlier, China’s National Bureau of Statistics reported, down from 7.6% in the second quarter and the weakest since the beginning of 2009…the seventh consecutive deceleration reflected a combination of weak demand from abroad, flagging investment at home, and insufficient spending by China’s households to pick up the slack…however, there are signs of recent improvement…industrial production accelerated in September, growing 9.2% from a year earlier, compared with 8.9 per cent growth in August…fixed-asset investment accelerated from 20.2% growth in the first eight months to 20.5% growth in the first nine months. Meanwhile, retail sales jumped from 13.2% growth in August to 14.2% in September…Dariusz Kowalczyk, senior economist and strategist for Asia ex. Japan at Credit Agricole, told CNBC, “Quarter-on-quarter growth accelerated to 2.2%, the most in a year and 9.1% in annualized terms – well above the 7.5% (official) growth target…“Clearly, concerns over continued slowdown can now be put to rest…it is very positive for all risk assets”…

Sentiment of Mining Executives “Vastly Improved”

Mineweb.com reports that a survey of 125 mining executives internationally reveals that the outlook for the mining industry “has vastly improved” in the last four months, according to Andrew Pollard, president of Vancouver’s Mining Recruitment Group Ltd…”2012 has been a year of tremendous volatility for the industry, felt by resources companies across all stages, from the junior explorers up to the large cap producers,” Mining Recruitment Group (MRG) observed…”Thankfully, this new report provides evidence that the worst may in fact already be behind us”…more than half of the respondents (55%) surveyed in the first week of October believe the mining sector will perform better in the second half of this year than it did in the first half…this is up significantly from the 22% of respondents surveyed in June who thought things would get better in the second half of 2012…”When asked about their short term (6-12 month) outlook on the overall strength of the mining industry, 47% of respondents hold a bullish view,” said Pollard…”This is up remarkably from our Q3 polling where only 8% of executives held a bullish outlook and 38% had stated they were bearish”…while the executives’ short term outlook has improved, 59% of those surveyed “were moderately to extremely concerned over a lack of investment capital moving into the industry over the next two years, down from 76% who held this view during our last polling in June”…

Today’s Markets

Asian markets were strong overnight with China’s Shanghai Composite gaining 26 points to 2132 as some important economic data (see below) included encouraging signs…Europe is mostly slightly positive today while the Dow is essentially unchanged as of 8:30 am Pacific…the Venture Exchange, after climbing back above the 1300 level yesterday, is up 4 more points to 1308 as of 8:30 am Pacific

Updated Euro Chart

Further to the bearish U.S. dollar chart we posted this morning, John has an interesting euro chart that shows why the outlook for Gold remains very positive as the euro is clearly in a strong uptrend…yesterday, the euro confirmed a breakout and a continuation of its uptrend as you can see in the 6-month daily chart below (there is a close correlation between the euro and Gold)…


Cascadero Copper (CCD, TSX-V)

One of the volume leaders this morning on the Venture is Cascadero Copper (CCD, TSX-V), and what’s driving it is the company’s strategically situated properties (Francisco 1 and Francisco 2) in northwest Argentina that are now part of a joint venture deal with Lumina Copper (LCC, TSX-V) as announced this morning…we’ve mentioned these properties before as CCD’s exploration has shown they could be extensions to Lumina’s 1.7 billion tonne Taca Taca Cu-Mo-Au deposit…Francisco 1 and Francisco 2 are immediately adjacent to Taca Taca, and some of Lumina’s recent drilling (with good results) has almost come within spitting distance of the boundary…the bottom line here is that CCD is a potential takeover candidate by Lumina in order to enhance Lumina’s value as a takeover candidate…Lumina has already itself up on the block…Cascadero’s properties hold strategic value to Lumina, and not just perhaps because they could be extensions to Taca Taca…as we’ve seen in the Blackwater district with New Gold, a company’s land package adjoining a major deposit can hold considerable value for infrastructure purposes, tailings area, etc…drilling of Francisco 1 is expected to start within a couple of days…Lumina is the joint venture operator..

Gold Bullion Development (GBB, TSX-V)

Gold Bullion announced a western extension of the LONG Bars Zone this morning…GR-12-400 returned 0.45 g/t Au over 85.50 metres from 30.0 to 115.5 metres including 2.19 g/t Au over 4.50 metres near-surface…this hole was collared almost 200 metres west of the current Granada resource model…the total extent of confirmed mineralization now reaches an impressive 1,400 metres east-west by 950 metres north-south with much of the property still unexplored…

Corvus Gold (KOR, TSX) Updated Chart

Corvus Gold (KOR, TSX) has been holding up well despite announcing a $3.5 million financing at $1.07 on Tuesday…the company has enjoyed strong success in Nevada this year with its North Bullfrog Property, and John’s 2-year weekly chart shows clear support areas and an upsloping channel that has been in place all year…

Strategic Metals Ltd. (SMD, TSX-V)

Strategic Metals Ltd. (SMD, TSX-V) is sitting on almost enough cash to bail out Greece – we’ll see if they do anything with it…we’ve pointed this one out before, and the chart is looking even more interesting now…

Note: Terry holds a share position in GBB.

16 Comments

  1. BMR,

    I thought you had some news and/or update on RBW. I believe you were talking about an interview?

    When will we see the information on this?

    Thanks

    Comment by Stuart — October 18, 2012 @ 7:44 am

  2. Hi Stuart, no worries, it’s coming…this is quite detailed and involves more work than previously thought, so I’m targeting Monday at the latest at this point. We’re including more than just the interview.

    Comment by Jon - BMR — October 18, 2012 @ 7:55 am

  3. Suite 1005, 1155 Rene Levesque Street West
    Montreal, Quebec H3B 2J2
    Tel: 514-397-4000 / Fax: 514-397-4002
    GOLD BULLION PROVIDES MINERAL RESOURCE ESTIMATE FOR GRANADA
    April 2, 2012 – Gold Bullion Development Corp. (TSXV: GBB) (OTCPINK: GBBFF) (the
    “Company” or “Gold Bullion”) is pleased to provide an independent NI 43-101 compliant gold
    mineral resource estimate on its Granada Gold Property, located along the prolific Cadillac trend
    in North-western Quebec, 5 km south of the city of Rouyn-Noranda.
    Highlights include the following:
    • The in situ measured resource is 97,700 ounces (3.02 million tonnes grading 1.01 g/t),
    indicated resource is 543,400 ounces (17.04 million tonnes grading 0.99 g/t), inferred
    resource is 846,600 ounces gold (23.93 million tonnes grading 1.10 g/t Au) using a cutoff grade of 0.40g/t.
    • The selected base case in-pit measured resource is 95,300 ounces (2.9 million tonnes
    grading 1.02 g/t), indicated resource is 435,600 ounces (12.49 million tonnes grading
    1.08 g/t), inferred resource is 135,600 ounces gold (3.4 million tonnes grading 1.24 g/t
    Au) using a cut-off grade of 0.40g/t based on a Whittle-optimized pit shell simulation
    using estimated operating costs, a gold price of CAN$1300 per ounce and a
    corresponding lower cut-off grade of 0.4 grams per tonne gold.
    • Remaining underground resources under the selected base case in-pit surface above a cutoff grade of 2.0 g/t is 273,200 ounces (2.32 million tonnes grading 3.66 g/t).
    • Previous small open pits have been taken into account and are starting surfaces of
    optimization while the historical production of 51,476 ounces (181,744 sT @ 0.28 oz/sT)
    from 1930 to 1935 are included in the resource statement (cannot physically remove from
    measured, indicated or inferred).
    • The mineralized system is still open at depth and laterally.
    SGS Canada Inc, (SGS Geostat office of Blainville, Québec, “SGS”) are the independent resource
    estimate consultants for the Granada project who have authorized the release of the following
    estimates.
    The table below summarizes the SGS Geostat block model estimates using variable cut-off
    grades:Granada Gold Deposit In Situ Resource Estimates
    Class Tonnage Au g/t Au Cut-off
    (,000) tonnes Grade Oz
    Measured
    100 4.56 14,400 3.0+
    300 3.24 26,300 2.0+
    900 1.88 56,300 1.0+
    1,100 1.74 61,100 0.9+
    1,300 1.59 67,500 0.8+
    1,600 1.46 73,100 0.7+
    1,900 1.30 80,700 0.6+
    2,400 1.16 88,600 0.5+
    3,000 1.01 97,700 0.4+
    4,000 0.85 108,100 0.3+
    Indicated
    600 4.67 97,500 3.0+
    1,400 3.41 161,000 2.0+
    4,600 1.99 306,300 1.0+
    5,400 1.84 329,700 0.9+
    6,500 1.67 361,500 0.8+
    7,700 1.52 392,400 0.7+
    9,800 1.34 436,400 0.6+
    12,500 1.17 485,200 0.5+
    16,400 0.99 543,400 0.4+
    22,700 0.81 614,500 0.3+
    Inferred
    1,700 4.48 255,800 3.0+
    2,900 3.60 346,700 2.0+
    6,500 2.35 513,600 1.0+
    7,600 2.16 545,700 0.9+
    9,500 1.90 600,700 0.8+
    10,900 1.74 636,800 0.7+
    13,500 1.53 692,200 0.6+
    17,800 1.30 768,800 0.5+
    23,100 1.10 846,600 0.4+
    33,200 0.87 961,300 0.3+
    Note: rounded numbers, base case cut-off >0.4 g/tSGS also estimated an in-pit resource within a Whittle-optimized pit shell using a base case gold
    price of CAN$1300 per ounce. The table below summarizes the in-pit resources with the selected
    base case in Whittle optimizations:
    Classification Tonnage Au g/t Au
    inpit Grade Oz
    Measured
    2,902,000 1.02 95,300
    Indicated
    12,490,000 1.08 435,600
    Inferred
    3,403,000 1.24 135,600
    Mea+Ind
    15,392,000 1.07 530,900
    The in-pit estimate is based on a mining cost of CAN$2.00 per tonne and a processing cost of
    CAN$16.00 per tonne (including general fees and administration costs), assuming gravity
    cyanidation treatment of the mineralized material, giving base cost of CAN$29.30 per tonne
    including stripping. Other assumptions include 94.1% recovery of gold and pit wall slope angle of
    45 degrees in the south footwall and 50 degrees in the north hanging wall.
    Details on the parameters of the resource estimates are as follows:
    • The database used for Granada comprised a total of 57,803 metres of drilling obtained
    from the 2009-2010-2011 Gold Bullion Development Corporation drill programs, now
    326 of the 404 holes drilled to date.
    • Most NQ assays reported by Gold Bullion were obtained by standard 50 g fire assayingAA finish or gravimetric finish and another fraction by screen metallics at various
    laboratories ALS Chemex laboratories in Val d’Or, Quebec, Accurassay, Lab Expert and
    Swastika. As additional QA/QC, SGS Geostat has carried an extensive independent
    sampling program with total gold testing, pulp reassays from various laboratories in
    addition to half witness core complete re assay program in order to get confidence and
    enable preparation of a NI 43-101 compliant estimate of resources.
    • The SGS database made of Gold Bullion validated data also comprised a total of 57,689
    assays.
    • The estimates were done using Inverse Distance Square (ID2) as the interpolation method
    based on 1.5 metre analytical composites.
    • Composites calculations are based on original samples value and were afterward capped
    at 20 g/t.
    • All estimates are based on a Parent Cell dimension of 5 metres E, 5 metres N and 5
    metres height with search ellipsoid and estimation parameters determined for the
    mineralized zone geometry. The block model grid extends from UTM 646,200E to
    647,650E and 5,337,600N to 5,338,850N from (350m) to -250m above sea level site
    surface elevation around 320m.
    • Geological interpretation for the deposit identified one main structurally-controlled
    mineralized domain including higher grades within the envelope hosted by conglomerates
    of the Timiskaming group. The estimation of the mineralized domain was done in 3 runs
    where the first required a minimum of 4 holes using a maximum of 3 composite per hole
    within a search ellipsoid of 50m by 30m by 5m dipping 47 degrees north, while the
    second run used a minimum of 3 holes within a search ellipsoid of 100m by 60m by 10m dipping 47 degrees north, and the last run one hole within the domain minimum 3
    composites in a 150m by 100m by 15m dipping 47 degrees north.
    • For the classification 4 holes with 3 composites within a 30m by 20m by 5m ellipsoid for
    measured, 3 holes with 3 composites within a 60m by 40m by 10m ellipsoid for
    indicated, the rest being inferred.
    • Underground voids (shaft & drifts) were modeled from historical mine plans and adjusted
    according to positions of drill intersections in stopes and drifts. The stopes could not be
    placed in space with accuracy. Historical production from underground needs to be
    subtracted from the resource estimate.
    • Tonnage estimates are based on rock densities of 2.70 tonnes/cubic metre.
    • The resource estimates using the lower cut-off of 0.4 g/t Au is emphasized for reporting
    purposes as this is the in-pit cut-off estimated for the CAN$1300 Whittle shell, which
    represents the reasonable potential of economic extraction in SGS QP’s opinion.
    • Additional details will be provided in the technical report to be issued within the next 45
    days.
    Mr. Claude Duplessis, Ing. of SGS is the Qualified Persons who has reviewed this news release
    and is responsible for the technical information reported herein, including verification of the data
    disclosed.
    About Gold Bullion Development Corp.
    Gold Bullion Development Corp. is a TSX Venture-listed junior natural resource company
    focusing on the exploration and development of its Granada Property near Rouyn-Noranda,
    Québec. Additional information on the Company’s Granada gold property is available by visiting
    their website at GoldBullionDevelopmentCorp.com and on SEDAR.com.
    “Frank J. Basa”
    Frank J. Basa, P.Eng.
    President and Chief Executive Officer
    For further information contact:
    Frank J. Basa, P.Eng., President and CEO at 1-514-397-4000 or
    Progressive Investor Relations (Canada) at (604) 689-2881 or via email: [email protected]
    Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in
    the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of
    this release. This news release may contain forward-looking statements including but not limited
    to comments regarding the timing and content of upcoming work programs, geological
    interpretations, receipt of property titles, potential mineral recovery processes, etc. Forwardlooking statements address future events and conditions and therefore, involve inherent risks and
    uncertainties. Actual results may differ materially from those currently anticipated in such
    statements.

    Comment by Arjan — October 18, 2012 @ 8:26 am

  4. And once again no comments on GBB’s NR by Bullmarketrun. Once their favourite pick. Last months show good drill results and that the envelope to further explore is still growing. In Quebec, Canada starting with an open pit mining and good infrastructure. Late november/ december the 2nd RE 43-101 will be expected as well as later this year plans for mining offsite the property, royalty programm and Castle can be expected to be announced. A bargain at this pricelevel. BMR should look into it again or contact GBB and then come with their view and opinion. The story is now with SGS on board unfolding. GLTA…

    Comment by Arjan — October 18, 2012 @ 8:31 am

  5. Incorrect. Not sure you read fully today’s Morning Musings.

    Comment by Jon - BMR — October 18, 2012 @ 8:32 am

  6. I’ve read but it’s just a few sentences to what I was used from BMR in the past. In the past you were way more into it and detailed into the story. And also you haven’t had any interview te last year with Frank Basa, Roger Thomas or Annemette Jorgensen. Just by contacting them would give more information to the story unfolding. Seems with SGS they are really back on track. Or what happend with your relation with GBB? In the past you even visited the site and the people? Last months NR’s show the bigger unfolding picture. And once again Rome is not build in one day. Good work takes time too. Have a good evening. GLTA

    Comment by Arjan — October 18, 2012 @ 8:41 am

  7. As the numbers continue to come in, we’ll be expanding on GBB.

    Comment by Jon - BMR — October 18, 2012 @ 8:44 am

  8. Could you provide clarification on the relationship between BMR and Rainbow Resources, since BMR is helping Rainbow do PR stuff such as giving presentations on Rainbow. I was wondering if there was any more details on the relationship between the two that readers might not be aware of, your disclaimer says you are not receiving compensation from any of the companies you cover. Thanks and I like the website.

    Comment by Justin — October 18, 2012 @ 8:51 am

  9. Hi Jon,

    It would be great if you can come with an updated detailed view on GBB. And are you considering an interview with Frank or Roger in the near future? And sharing it on the website here. Thank you in advance. Have a good evening. Warmest regards…

    Comment by Arjan — October 18, 2012 @ 8:54 am

  10. Just my opinion on GBB. To me itwas aparent over a year ago that this stock would eventually become a winner. I sold my position about 2 years agom y wife kept her 10,000 shares. I

    Comment by richard l — October 18, 2012 @ 9:27 am

  11. BMR receives no compensation from any companies it covers. In the case of RBW, in the spring of this year, Jon was asked by RBW to do the voice-over on a video and did so, and just in the last few days was asked to handle the narration for an online presentation which he has agreed to do on a temporary (and volunteer) basis only, as a courtesy for the company in launching this service. These are things that may occur with other companies occasionally. We are here to try and help the industry where we can.

    Comment by Terry - BMR — October 18, 2012 @ 9:32 am

  12. sorry hit the wrong button. I have not bought back in yet but will in future. I did not want to tie up capital and am prepared to wait awhile yet. I keep stocks like this on watch list. I think that BMR coverage of this stok has been excellent. GBB has a lot of overhang to go thru, many people. Their news is excellent for the future but it might be a liile early yet. I will probably not buy until 43-101 comes out. richard l

    Comment by richard l — October 18, 2012 @ 9:37 am

  13. Nice day for the venture! Especially the last hr and a half where it powered up to 1308.

    Comment by Tony T. — October 18, 2012 @ 12:18 pm

  14. hi jon,looks like support on gqc about 90,looking at the pattern results on latest holes sometime next week?? can you please tell me the latest on evr,havent seen or heard anything lately ,thanks ,keep up the great work.

    Comment by tom — October 18, 2012 @ 12:38 pm

  15. My sixth sense on GQC… will not stay too long 90 cents… going down to 70 cents! Day trade remains a good choice to play with.

    Comment by Theodore — October 18, 2012 @ 5:58 pm

  16. my 7th sense on GQC… stay away for a cpl weeks while cheap paper gets burns through. 45c warrants are free trading on monday…

    Comment by db — October 18, 2012 @ 10:29 pm

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