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March 30, 2011

BMR Morning Market Musings…

Gold, attempting to end a four-session losing streak, got as high as $1,431 this morning but has since pulled back and is now unchanged for the day at $1,419 as of 9:10 am Pacific…Silver has been volatile as well, climbing to nearly $37.80, falling to $37, and rebounding now to $37.34 for a 21-cent gain…the U.S. Dollar Index is up one-tenth of a point to 76.22…investors added 33.8 million ounces of Gold to their holdings in 2010, a 23% jump from 27.3 million ounces in 2009, according to the CPM Group which has been bullish on the yellow metal since November, 2000…Gold backing ETF’s increased to 70.5 million ounces by the end of 2010, up 11.3 million ounces from the previous year and representing one-third of physical investment demand for Gold…the U.S. labor market showed signs of further recovery in March as private employers added jobs and planned layoffs fell, according to the ADP Employer Services report…the key U.S. jobs report for March is coming out Friday…ADP reported that U.S. private employers added 201,000 jobs in March, largely in line with expectations…while encouraging, these job growth numbers in our view will have to continue for many more months and accelerate before the Fed becomes comfortable with the idea of ending its “quantitative easing” strategy…the unemployment rate is still stubbornly high and the U.S. housing mess keeps getting worse…American CEO’s, however, are confident about the future…in a survey released this morning, U.S. chief executives’ view of the economy brightened in the first quarter with 92% expecting sales to rise over the next six months and more than half looking to add jobs…the Business Roundtable’s quarterly CEO Economic Outlook index surged to 113 – the highest in the nearly 10 years the group has been doing the poll…markets are strong across the board today…the CDNX got as high as 2290 but has pulled back with Gold reversing…as of 9:10 am Pacific, the CDNX is 2 points higher at 2280…the “buy signal” we’re looking for with the CDNX is a push through last week’s high of 2328 on heavy volume…this market needs a jolt of excitement right now such as a major new discovery and area play…the speculative fervor has waned considerably recently…in this lacklustre market there are still opportunities, however…companies that are drilling aggressively, releasing excellent drill results and growing their deposits are being rewarded…a case in point is Richfield Ventures (RVC, TSX-V) which climbed another 80 cents yesterday to close at new all-time high of $7.33…it’s currently off 8 cents at $7.25…Richfild’s Blackwater Gold deposit in central British Columbia is already at 4 million ounces (NI-43-101, indicated and inferred) and current drilling will upgrade those resources and likely add more…Richfield has gained 511% since we introduced it to BMR readers in December, 2009…another company that has done well recently is Gold Canyon Resources (GCU, TSX-V) which appears to be well on its way to outlining a multi-million ounce deposit at its Springpole Project approximately 110 kilometres northeast of the Red Lake mining camp…the latest results released yesterday show this robust system is coming together nicely with deeper drilling expected to commence early next month…Fraser MacKenzie’s mining analyst sees the possibility for at least 5.5 million ounces…Springpole is a potentially new style of Canadian Shield Archean Gold deposit (alkaline intrusion) that could really add ounces in a hurry…the Portage Zone in particular is looking very interesting…GCU is up 6 cents this morning at $3.30 after getting as high as $3.38…we put this one in front of our chart specialist and John sees $3.40 as a key area…

Adventure Gold (AGE, TSX-V) continues to look strong…trading action in AGE since the end of January has been impressive indeed and the stock held key support during the mid-March meltdown…AGE is currently up 4 pennies at 68 cents…a turnaround in AGE’s 20-day SMA could come as early as next week and that’s always been a bullish sign for the stock…Currie Rose Resources (CUI, TSX-V) is off half a penny at 13.5 cents, half a penny above its 300-day moving average…CUI’s 100-day SMA recently turned negative, generating some technical selling, but the long-term trend remains bullish given the 200 and 300 day SMA’s which continue to rise and are in no danger of declining…accumulation at current levels makes sense for investors with at least a three-month time horizon as we see strong potential for CUI to strengthen considerably by summer with drilling starting up again in Tanzania during the second quarter…we are especially excited by the prospects for the company’s Sekenke Project which has never been drilled and surrounds two former high grade Gold mines…Abcourt Mines (ABI, TSX-V), which sold off yesterday to 16.5 cents, is up a penny-and-a-half to 18 cents (the financing price) on volume of nearly 2 million shares…Abcourt has too much going for it to not really bust loose at some point this year…

28 Comments

  1. Hello Jon, are you still just as bullish as ever with CQX? Shareholders don’t seem to want to part with this stock but it is possible to pick up every now and then at .185 do you think that’s a good purchase price given current trading patterns on CDNX? Thanks.

    Comment by Andrew — March 30, 2011 @ 9:05 am

  2. Hi Jon, GQC has been in slow decline lately on low volume. I would have expected results by now. What is your take on the amount of time it is taking to receive results? I heard two weeks ago that results would be released on 8 or 9 holes very soon and that the current drill campaign on La Escalandosa was a little over half completed.

    Regards & Thanks,

    Comment by Dan — March 30, 2011 @ 9:16 am

  3. am I the only one who is really concerned about the technicals on GBB???? like it could go way back… like way back…. and yep I’m nervous due to the lagging results regardless of 24/7 drilling etc.. the overhead resistance that has been created is not good!! someone please tell me I’m wrong..:)

    Comment by Jeremy — March 30, 2011 @ 9:53 am

  4. GBB will have a 43-101 in 3 months. It will be worth the wait in my opinion.

    Comment by jeff — March 30, 2011 @ 10:18 am

  5. Jeremy…..there is nothing wrong with the technicals on GBB……just market minupulators (brokers selling to each other to keep the price down and get YOU to sell to them). If you have a little more patience, you will be glad you did not fall victim to the MM…..hang in there Jeremy and you will be rewarded. Also, people like Brent Cook (with his negative feed on GBB)may have played a big part in bringing GBBs sp down….yes, the same Brent Cook that advised people to get out of another stock at .40 cents and that same stock WENT UP TO $6 IN A COUPLE OF MONTHS!

    Comment by Maria — March 30, 2011 @ 10:19 am

  6. Patience I have tons of:) the 50 going thru the 200 is the death cross yes?? 200 day is flat at best, 100 has already turned over.. and negative CMF…. and we cant get thru the falling 21 day… while I’m with you re the 43-101 and the probability of it being very reasonable, I just wonder about the chart and the real mess its in..
    and I think I hold that Brent Cook stock.. just cant remember which one it was:) additional thoughts are welcome for sure:) thx all for your comments

    Comment by Jeremy — March 30, 2011 @ 11:09 am

  7. oh and I forgot the weeklies are on the edge..

    Comment by Jeremy — March 30, 2011 @ 11:11 am

  8. Any take on technicals on Seafield? Do you still feel the same way for this stock. Ever since December this stock has been declining!

    Comment by Steve — March 30, 2011 @ 11:26 am

  9. Jon @ BMR. I remember you mentioning that GBB is planning to come out with NI43-101 in the early summer. I’m bit concerned about that because the most of the drill results to date are within the block model. There are lot of drill holes outside of the block model that are not reported.

    If those drill results are not included in NI43-101, then the resource number would be lower (than the expectation). Hence the stock is still not going to get its full value.

    Unless GBB plan on doing another NI43-101 soon (may be 6-months) after the first one, I don’t like that plan. GBB should rather wait for the drill result than do NI43-101. I think I’ll call up Roger.

    Comment by Bruce — March 30, 2011 @ 12:15 pm

  10. Jeremy……forget the charts….you know that GBB has the goods and it won’t be long before they prove it and then we can sit back and thank God for giving us the patience. In the meantime if you have any more money to invest……buy more…..as for me, I am waiting for some huge locked in term rrsps to mature next month so that I can buy a lot more of GBB (even if they are at $1 by then, I will still buy more). I wish you well with your investments. By the way,
    that stock (the one that B.Cook made a bad call on)is Colossus which is trading at $8 (can you imagine the investors who listened to Cook and sold at .40 cents)……they must have gone coookooo!

    Comment by Maria — March 30, 2011 @ 12:24 pm

  11. bmr did change in the last couple of months, iT got sold didn’t it? Frank Basa didn’t give them options they wanted or something..Now gbb kind a got pushed aside in the new bmr…Lots changed since they introduced it at 7c both at grenada and at bmr. know simple gbb questions don’t even get answered..

    Comment by steve — March 30, 2011 @ 12:56 pm

  12. Steve, nothing has changed in our stance with GBB….we posted a major article just a couple of weeks ago, perhaps you didn’t read it….there has been nothing written on GBB more positive than that…..the LONG Bars Zone is looking exceptional….we have expressed our disappointment on a few issues including the fact we believe they have not been aggressive enough on the exploration side…we are not the only ones who have stated that….we’re looking forward to continued coverage of GBB…..right now there’s not a lot to say until more results come out……..as simple as that……GBB is sitting on a lot of Gold and the potential of a multi-million ounce deposit at Granada is as good as ever…….we’re not pushing GBB aside at all but our readers are interested in other opportunities as well….there have been no changes with BMR since the spring of last year and my door is open to Frank for as many interviews as he wants to do….

    Comment by Jon - BMR — March 30, 2011 @ 1:14 pm

  13. hey steve? whats going on? you said BMR got sold? when? did i miss something? So who are the new owners of BMR now? I thought it was Jon, John and Terry?
    comments J, J or T?

    Comment by alec — March 30, 2011 @ 1:16 pm

  14. GBB stated in its last NR it intends on coming out with a 43-101 by early summer……I’m confident the 43-101 will be a very positive number for the market and something GBB can build on……don’t forget, with a 43-101 you build more legitimacy and gain more value for each ounce in the ground……you’re right, they won’t be able to incorporate all the Phase 3 drilling in that 43-101……but I imagine the plan is to come out with an updated 43-101 sometime next year after this summer……

    Comment by Jon - BMR — March 30, 2011 @ 1:20 pm

  15. i will like to know what is appening with SFF,I AM DOWN 50 PERCENT.

    Comment by claudette — March 30, 2011 @ 1:25 pm

  16. Am also wondering who dumped a huge quantity of their shares (at market) as soon as GBB put out their February 15th NR creating a market panic (looks like someone who was spiteful and wanted GBB sp to go down)…..although I am sure they picked up their shares for much lower once the panic took over. All I can say is that deception is a tool of the devil (not everyone who says “Lord Lord” is honest).

    Comment by Maria — March 30, 2011 @ 1:25 pm

  17. Dan, they just started drilling in mid-December……ideally, I’d prefer to see them release results on holes in several batches of 6-10 each time…….it’s possible they could be sitting on a few results at this point but want to wait for more……nothing wrong with that…..I’d be very surprised if this drill program doesn’t significantly expand the resource at Escandalosa….not every hole is going to hit, but I think they’re drilling about 40 or 45 holes so after all is said and done the hope is that this will start to look more like a 1 million ounce deposit as opposed to the current 400,000……as always, patience required……..Escandalosa is an excellent target and I don’t think we have anything to worry about……….

    Comment by Jon - BMR — March 30, 2011 @ 1:25 pm

  18. Andrew, when you’ve got a chunk of property like CQX does, tied on to a 1.4 million ounce deposit that is likely going to continue to grow, and the company has a market cap of only around $5 million, it’s hard not to be exceptionally bullish………add that to the fact Visible Gold is just about to start drilling other Cadillac ground in NW Quebec, plus the Utah gold-silver project, and you have a potential huge winner here…..so I have no worries about CQX…….I’d like to see them start doing something at Wasamac as soon as possible and get the ball rolling…..

    Comment by Jon - BMR — March 30, 2011 @ 1:29 pm

  19. Maria, I would agree…..in a few months a lot of people may be kicking themselves for not loading up on GBB at current prices…..

    Comment by Jon - BMR — March 30, 2011 @ 1:34 pm

  20. Thanks for the response Jon. Always appreciated. Yes, the Escalandosa is a great target and the fact that it is near surface with fairly high grade is also a bonus. I guess as shareholders we tend to become a bit impatient especially when the sp drops. Anyway lots of news to look forward to as the drill will move on to another property as soon as this one is completed.

    Thanks,

    Comment by Dan — March 30, 2011 @ 1:51 pm

  21. Alec, Steve’s information is simply incorrect….Terry Dyer is the owner of the BMR site and has been since the spring of last year…….John and I are contributors…….nothing has changed in the past 12 months.

    Comment by Jon - BMR — March 30, 2011 @ 2:04 pm

  22. Claudette, there’s really no reason and this is a situation that’s very comparable to last year when SFF got as high as the mid-30’s and then fell to a low of about 16 cents…..before exploding near the end of the year…….the overall market is a little soft right now which doesn’t help……this has not been a good quarter for Seafield (in terms of its share price) but I’m confident the second quarter will be much better once more results start flowing out of Quinchia…..the company is in a great cash position (about $15 million) and the potential for a significant discovery at Dos Quebradas is very high given all that we know….what’s required here is patience……despite the drop in the share price, the long-term trend remains up based on rising 200 and 300-day moving averages……..excellent support from the mid-to-upper 20’s, so the downside from here IMHO is very limited…..two drills on the property now, so work on the ground is progressing much more quickly….

    Comment by Jon - BMR — March 30, 2011 @ 2:13 pm

  23. Jon, thank you very much for your comments to my question and to everyone else’s – always much appreciated. have a good evening. 🙂

    Comment by Andrew — March 30, 2011 @ 4:30 pm

  24. Thanks for that correction Jon.

    Comment by alec — March 30, 2011 @ 5:59 pm

  25. Maria… ahhhh I remember now… cafe by the water, the gondolas sifting by and a little birdie said to me… you watch CSI???? I took that to be Collosus and bought a bunch at 1.01 … and still holding:) thats patience eh!!:) whew:) thx for the poke!

    Comment by Jeremy — March 30, 2011 @ 7:03 pm

  26. Guys be more grateful, BMR is the best. Jon, John and Terry don’t listen to ignorant people and keep up the good work. I love you guys.

    Brgds

    Peyman

    Comment by Peyman — March 30, 2011 @ 10:36 pm

  27. I know you guys dumped EGM a while back, but any opinion on yesterday’s news release… I have been noticing alot more volume lately and have heard through the grapevine that they really seem to have some serious Gold on their property.

    Comment by Pete — March 31, 2011 @ 4:09 am

  28. I’m surprised they didn’t release drill results or update the status of the drill program, sort of leaves shareholders guessing. They had already stated last year they were planning on releasing a 43-101…….still love the potential of the Montauban Project…..

    Comment by Jon - BMR — March 31, 2011 @ 5:46 am

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