CDNX and Gold
The CDNX closed a strong month of April at 1674, a very modest 3-point advance for the week. For the month the Index was up 97 points or 6.2%. The CDNX, which is a very accurate leading indicator, was much more cautious than the TSX Gold Index this past week which jumped 6.6% as Gold itself broke through important resistance around $1,170. What this tells us is that Gold may not be quite ready yet to challenge its all-time high of $1,225 – we could be looking first at a minor pullback or a brief period of consolidation. The TSX Gold Index has advanced 8 consecutive days and is in overbought territory, so it is certainly due for a minor correction. The CDNX remains very healthy from a technical standpoint and all of its moving averages are in bullish alignment, but it will need to break out to a new 52-week high and get over the 1700 level during the first half of May for a needed momentum boost.
The BMR Portfolio
Gold Bullion Development (GBB, TSX-V)
Gold Bullion enjoyed another solid week with continued high volume and a 2-cent jump to 40 cents…nearly 20 million GBB shares have changed hands over the last 6 trading sessions following the release Thursday, April 22, of the LONG Bars Zone Preliminary Block Model with an estimate (non-compliant) of 2.4 to 2.6 million ounces within a defined area of the LONG Bars Zone…the stock is finding strong resistance at 42 cents and strong support at 36 cents…as long as the overall market remains in a neutral to bullish state, GBB should have little problem reaching new highs in the near future especially with a new round of drilling (20,000 metres) set to begin at the LONG Bars Zone…the cheap 7-cent private placement stock that became free trading April 23 has likely now been largely absorbed by the market, given the very high volume recently, and that certainly has bullish implications for the share price…
Seafield Resources (SFF, TSX-V)
The speculative fervor for the Colombian gold plays seems to have waned considerably recently, especially after the Greystar (GSL, TSX) news, and Seafield has suffered accordingly…the stock closed Friday at 19 cents, a 3.5 cent weekly loss, and it’s clearly struggling to stay at or above its rising 200-day moving average…Seafield is oversold but it needs to break out of its doldrums very soon in order to avoid the onset of a declining 100-day moving average…Seafield will be ramping up its exploration efforts in Colombia this month, which will likely include the start of drilling, so we can’t help but think the stock has probably bottomed out at current levels…from a valuation standpoint, the stock’s market cap of $14.4 million seems cheap given its cash position and strong portfolio of properties in Colombia, Mexico and Ontario…
Sidon International Resources (SD, TSX-V)
Sidon was a star performer this past week, jumping 1.5 cents to 8 cents on a whopping 19 million shares…the interest in Sidon is related to its option to acquire an 80% interest in the highly prospective Morogoro East Gold Property in Tanzania, 100 kilometres south of Canaco’s (CAN, TSX-V) very promising Handeni Gold Project…the accumulation in Sidon since late March has been nothing short of spectacular…the stock broke through important resistance Thursday at 7 cents…the company is in the process of completing a financing for $750,000, showing that money is lining up for Morogoro…
Kent Exploration (KEX, TSX-V)
Kent shareholders overwhelmingly approved the company’s proposed spinoff of its Gnaweeda Gold Project into Archean Star Resources at Friday’s AGM in Vancouver…Kent shareholders will receive 1 share of Archean Star for every four shares of Kent they own…the effective date has not yet been announced, but we anticipate it’ll be around the end of this week…Archean Star is being financed at 25 cents and should begin trading on the TSX Venture Exchange within 2 weeks…Kent closed at 21 cents Friday, a 2.5 cent increase for the week…BMR sees exciting times ahead for Kent and Archean Star shareholders…
Richfield Ventures (RVC, TSX-V)
Trading volumes have picked up considerably in Richfield over the past couple of weeks as drilling continues at its Blackwater Gold Project in central British Columbia…Richfield, which is running into technical resistance at $2.20, closed Friday at $2.01…it was virtually unchanged on the week…the stock is building a nice base around the $2 level and RSI and Stochastics are both neutral at the moment…given the multi-million ounce potential of Blackwater, we expect it’s only a matter of time before Richfield powers significantly higher…
North Arrow Minerals (NAR, TSX-V)
We are extremely bullish on the prospects for North Arrow which is led by Gren Thomas, a 69-year-old mining legend who seems to be reinvigorated with this great little company…North Arrow holds 100,000 acres of prime real estate at Lac de Gras where it has an excellent chance of making a major diamond discovery…the Diavik trend projects through the centre of North Arrow’s property while the Ekati trend projects through the western margin…Thomas has reunited with an old friend, Dr. Chris Jennings, to explore North Arrow’s large landholdings at Lac de Gras…the two of them discovered Diavik and the richest kimberlite pipe in the world in the early 1990’s…they’re hoping for a repeat performance with North Arrow in 2010…Jennings has developed a proprietary technology that has identified a large number of high quality kimberlite targets on North Arrow’s 100,000 acres…the company is also currently drilling its highly prospective Beaverdam Lithium Property in North Carolina…last fall’s program was very encouraging and the possibility of Beaverdam turning into a lithium producer is very real…the property is surrounded by all the necessary infrastructure as North Carolina used to be the world’s most important lithium-producing region…it remains the centre of lithium processing and research and development activities in the United States…North Arrow closed at 24.5 cents Friday, a 2.5 cent jump for the week…a close above 25 cents would confirm a technical breakout with the next area of resistance in the 35 to 40 cent range…
Colombian Mines (CMJ, TSX-V)
CMJ reported very good results from its first three holes at Yarumalito but the stock dropped 21 cents last week to $1.14…again, investors for now seem to have lost their appetite for Colombian gold stocks especially after Greystar’s share price took a beating due to new environmental legislation affecting mining operations in that country at elevations above 3,200 metres…CMJ drilled 125 metres of 0.66 g/t Au and 0.13% Cu at Yarumalito…the two other holes CMJ reported were also very encouraging…we have to agree with the company, based on early results this year, that Yarumalito hosts a significant gold-copper porphyry and sheeted vein system with bulk mining potential…
Greencastle Resources (VGN, TSX-V)
Activity in Greencastle picked up considerably last week with the stock gaining a penny to 14 cents…bids strengthened and the stock got as high as 15 cents…clearly, VGN is undervalued at 14 cents but what management proposes to do to unlock that value remains uncertain…the company continues to collect royalties from the Primate oil field in Saskatchewan ($100,000+ per month)…its foray into an oil and gas area in southwestern Saskatchewan did not pay off…Greencastle has some interesting gold properties in Nevada, but for now it’s just a matter of being patient and waiting things out until President/CEO Tony Roodenburg pulls the trigger on a new project…