Visible Gold Mines (VGD, TSX-V)
Visible Gold Mines is the newest member of our most closely followed group of companies as we added it to the BMR model portfolio Friday at 40 cents…this is a very special situation with powerful potential…we started our due diligence on Visible Gold Mines nearly three months ago during a visit to Rouyn-Noranda…the President and CEO of VGD is Martin Dallaire, a very successful entrepreneur in that city with an engineering degree who understands the mining industry and what an exploration company needs to do to succeed in a huge way…Dallaire is fluently bilingual, presents himself extremely well and knows how to run a business and make money…he thinks big but is focused…he has also recruited some key people including Robert Sansfacon, one of the most respected geologists in the country who honed his skills for many years with Lac Minerals…Sansfacon played a critical role in the discovery of Osisko’s (OSK, TSX) Canadian Malartic Deposit…in short, Dallaire has put something together you don’t often see in the junior speculative market – a powerful dynamic of business, geological and marketing expertise with a strategic plan to rapidly build shareholder value…he wants Visible Gold Mines to quickly emerge as an exploration leader in its area…the company’s niche and sole geological focus is northwestern Quebec where it has acquired several promising land packages, mostly west and north of Rouyn-Noranda…Dallaire is taking an aggressive approach to exploration and is armed with nearly $9 million in cash (about 20 cents per share)…he’s targeting under-explored areas and past producing mines where major new extensions are possible…on Thursday, Visible Gold Mines announced a deal with Agnico-Eagle Mines (AEM, TSX) that we like a lot…VGD has optioned the Joutel Property, 150 kilometres north of Rouyn-Noranda, which gave birth to Agnico-Eagle in the early 1970’s…Joutel’s Eagle and Telbel mines produced over 1 million ounces of Gold at a grade of 6 g/t Au and some Silver between 1973 and 1993 (Agnico Mines merged with Eagle Mines Ltd. in 1972, allowing for the development of Eagle Mines’ Joutel mining complex)…Agnico-Eagle closed the mine prematurely in the early 90’s in order to concentrate its efforts on the massive LaRonde Mine…the fact it would cut a deal with VGD on Joutel speaks volumes about their confidence in this junior…if anyone can unlock the value of Joutel, it would be Sansfacon…VGD’s exploration there could turn into a very exciting story…Visible Gold Mines is currently drilling its Silidor Property on the western outskirts of Rouyn-Noranda and will also commence drilling very soon near Vantex Resources‘ (VAX, TSX-V) Moriss Zone Discovery which is ground it optioned from Cadillac Mining (CQX, TSX-V) in December…technically, Visible Gold Mines has strong support around current levels and appears to be starting a new uptrend as the 40-day SMA, in decline since December, has just reversed to the upside…the 50-day has flattened out and could also reverse as early as this week…the 200-day at 40.5 cents continues to rise…volume is picking up nicely…
GoldQuest Mining (GQC, TSX-V)
GoldQuest closed Friday at 36 cents for a loss of four pennies on the week…volume was light, however, especially Wednesday through Friday…the stock is facing some technical resistance around 40 cents at the moment but that doesn’t concern us…the prospects for GQC this year are very bright given the company’s pipeline of quality Gold projects in the Dominican Republic where a mining boom is clearly in full swing…GoldQuest has been conducting a Phase 2 drill program at its promising La Escandalosa Property in the DR since mid-December and initial results are expected soon…based on the success of the last drill program, GoldQuest is getting closer to the centre of the mineralizing system at Escandalosa and we’re expecting results that could ultimately elevate this project to the 1 million+ ounce category…400,000 inferred ounces have already been outlined (43-101) based on just 25 drill holes…approximately 40 holes are being drilled in the current program…Escandalosa is a flat-lying, near-surface deposit where the Gold should be easy to extract…as Chairman Bill Fisher told us in a February interview, “the economics could be really quite compelling”…proving up a 1 million ounce deposit at Escandalosa could give GoldQuest production of at least 100,000 ounces a year…GQC’s other promising priority projects in the DR are Las Animas and Jengibre which are next in line for drilling after Escandalosa…GoldQuest released a NI-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…GoldQuest is up 85% since we introduced it to BMR readers last fall…
Greencastle Resources (VGN, TSX-V)
Greencastle gained a penny last week to close at 23 cents, its 50-day SMA which continues to decline…VGN’s strong underlying fundamental value is clearly shown in the latest financials which were released March 24…as of December 31, Greencastle held $5.1 million in cash and $2.6 million in marketable securities…some of those securities are likely shares in Seafield Resources (SFF, TSX-V) while the company disclosed it held 1,148,000 shares of Evrim Resources Corp. (EVM, TSX-V), formerly Avaranta, which started trading on the Venture Exchange January 25…at 23 cents, Greencastle’s market cap ($10 million) exceeds its working capital by just $2.5 million…the potential of higher oil prices in the coming months could bolster Greencastle’s monthly cash flow of approximately $130,000 as it receives royalties from heavy crude production at Primate in Saskatchewan…Greencastle tripled in value over a six-week period from late October to early December…since the beginning of January, though, the stock has struggled due mostly to impatient investors frustrated with the lack of news…patience is required here…over the years the successful strategy with Greencastle has been to accumulate on weakness when the stock is near cash value and then sell into strength when something develops…with $8 million in working capital, three Gold properties (including land near Richfield’s Blackwater Project) and monthly cash flow from an oil royalty, it doesn’t take a rocket scientist to figure out that Greencastle offers excellent value at current levels…the long-term chart remains very encouraging with rising 200 and 300-day SMA’s that are in no danger of reversing…it’s also interesting to note that President and CEO Tony Roodenburg, a large shareholder in VGN, has refrained from selling any of his holdings in recent months despite the fact the stock price more than tripled in value on high volume…this is different from past runs in the stock and adds further credence to our view that we haven’t seen the highs in this cycle yet from Greencastle – it’s poised for what we believe could be a massive breakout sometime this year…Pinetree Capital has also accumulated more shares in Greencastle, so there’s every reason to be very optimistic regarding this company’s prospects…investors need to be patient, however, as they often do with Roodenburg’s plays…Greencastle is up 64% since we added it back in to the BMR model portfolio nearly six months ago…
Adventure Gold (AGE, TSX-V)
Adventure Gold was off just a penny for the week, closing at 61 cents…it enjoyed a strong first quarter of the year, outperforming the market with a 29% gain…the latest financials, released after the close Friday, show the company with $3 million in working capital at the end of January…AGE runs an efficient operation and knows where to direct its energies…the stock remains in an overall long-term uptrend with the supporting 100-day moving average (SMA) at 52 cents…the rising 50-day SMA at 57 cents provides excellent support as well…the company released results recently from the first two holes at its Pascalis Colombiere Gold Property near Val d’Or…both holes were drilled approximately 150 metres west of the former L.C. Beliveau Mine and intersected Gold-bearing structures at various depths which is encouraging…the system is showing strong similarities to the one observed at L.C. Beliveau…hole #13 returned 5.4 g/t Au over 20 metres which included 2.9 metres grading 34.6 g/t Au…hole #14 intersected 7 g/t Au over 4.8 metres…results from seven more holes are pending…six of them were drilled west of the former mine while the other, which may prove to be very important, was drilled at depth to test the geometry of the Gold system below the underground workings…this former mine was a low cost producer and holds excellent potential for extensions laterally and at depth…it’s still early but Adventure Gold appears to be on track with its exploration goals at this property based on these early results…we expect AGE will begin drilling its Granada Extension Property in the near future…February’s results from Gold Bullion and the latest drill map on the GBB web site reveal exciting new potential over the far western portion of GBB’s Preliminary Block Model which supports Adventure Gold’s geological interpretation that it holds part of the western extension of the LONG Bars Zone…we first mentioned Adventure Gold to our readers in an article September 29, 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 34 cents October 28, so the gain since then is 79%…Adventure Gold has been around only since late 2007 and we are impressed by the company’s solid portfolio of properties (19 in six strategic areas in Quebec and Ontario)…also of immediate interest is AGE’s partnership with Lake Shore Gold (LSG, TSX) 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 is on track to reach the 2,400 metre target level by the end of May…if a discovery is made, AGE could explode…
Sidon International (SD, TSX-V)
Sidon seems to have found its footing after a brutal sell-off March 8 that essentially chopped the share price in half…Sidon climbed another half penny last week to close Friday at 7.5 cents…it appears the 20-day SMA is about to reverse to the upside after a decline that started in January…the CMF shows that buying pressure has increased recently…the company has arranged a private placement of up to $2 million at 8 cents and has also announced it has signed an option to acquire 80% of a property adjacent to Canaco’s (CAN, TSX-V) Handeni Project…initial drill results from Morogoro, announced March 8, fell short of market expectations…the six shallow holes that were drilled in December did not produce significant results, the best hole showing 3 metres grading 1.7 g/t Au…the company has drilled four deeper holes with results for those still pending…what the initial six holes have given Sidon, however, is a better understanding of the Morogoro geological structure which should help in future drilling…exploration, especially at such an early stage, is never easy and disappointing initial results don’t necessarily mean a property doesn’t hold excellent potential…the company is also trying to develop a placer operation at Morogoro…ground near Canaco’s discovery also helps…there is certainly hope here for better days ahead…from a technical standpoint, previous support between 9 and 10 cents will now provide resistance over the short term…Sidon is up 50% since we introduced it to BMR readers a year ago at a nickel…the company currently has approximately 140 million shares outstanding for a market cap of $10.5 million…
Seafield Resources (SFF, TSX-V)
Seafield hit a low of 29 cents last week before closing Friday at 32 cents (its 200-day SMA) for a loss of 1 penny for the week…volume picked up last week with the first 1 million+ share day in 12 sessions…the rising 300-day SMA at 28 cents is providing excellent support…on March 7, the company reported assays from the first three holes completed at Dos Quebradas with hole #2 intersecting a whopping 511 metres grading 0.58 g/t Au…the hole ended in mineralization…hole #1 delivered 269 metres grading 0.37 g/t Au while hole #3 was drilled to define the eastern limit of mineralization and returned no significant results…a total of nine holes were drilled at Dos Quebradas by early last month…significant intercepts well outside areas of historical drilling would start to get the market excited…a second rig has started drilling at the nearby Santa Sofia Property…the company has identified a promising porphyry target measuring 1,050 metres in length and 850 metres in width at Santa Sofia…a third target, La Loma, also appears very interesting…the geological case for Seafield’s Quinchia land package is compelling and we’re looking forward to more results from Dos Quebradas and elsewhere…the company has already outlined a NI-43-101 inferred resource of nearly 800,000 ounces at its Miraflores Property, a number that’s expected to increase following the 12-hole, 4,000 metre program recently completed there…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…the company is sitting on approximately $15 million in cash and has a very modest market cap of $48 million…Seafield has gained 433% since we made it the first company in the BMR model portfolio in the summer of 2009…it’s encouraging to see that Anglo-Ashanti Ltd., the world’s third largest Gold producer, pans to spend $300 million over the next three years on further exploration in Colombia…
