Gold has traded between $1,520 and $1,529.60 so far today…as of 8:15 am Pacific, the yellow metal is up $3 an ounce at $1,529…its recent strength in the face of a higher U.S. Dollar has to be particularly encouraging for Gold bulls…Gold is going up no matter what…there are so many fundamental factors for that, not the least of which is that nasty four-letter word – “debt”…lingering and even worsening sovereign debt problems in the euro zone are creating even more demand for Gold, and of course the U.S. has its own debt issues to sort out – not just at the federal level but also at the state and local levels…federally, the U.S. is spending $4 billion a day more than it’s taking in, putting the country on an unsustainable fiscal path perpetuated by both Democrats and Republicans…the nation has hit its $14.3 billion debt ceiling and the wrangling continues in Congress over that issue and where and how deep to cut spending…we have little faith in government which makes us even more bullish regarding Gold…Silver has broken through some resistance at $37 and is currently 89 cents higher at $37.52…crude oil is off slightly at $99.54…Goldman Sachs has turned bullish on crude again after a bearish call last month…the U.S. Dollar Index is flat at 75.91…at BMR, we focus almost exclusively on the speculative juniors exploring for Gold deposits…many of these companies trade below 50 cents a share but have excellent prospects and could be the stars of tomorrow…but we also see great opportunities in some much higher-priced producers, one of which is Richmont Mines (RIC, TSX) which we’ve mentioned here many times in recent months because of our interest in the growing Wasamac deposit just west of Rouyn-Noranda…Richmont has been one of the best performing Gold stocks on the TSX this year but has yet to garner a wide following – we believe that will change as more investors and institutions take notice of the incredibly strong fundamentals with this situation…earnings drive share prices and Richmont, which expects to produce at least 80,000 ounces of Gold this year and more than 100,000 ounces in 2012 with its Francoeur Mine kicking into gear, is rapidly becoming an earnings machine…Richmont reported earnings of 28 cents per share for the first quarter, though about 10 cents of that can be attributed to the sale of a property…still, 18 cents per share from its mining operations is an impressive number and the company’s Island Gold Mine was a big driver of that with lower costs and higher grades…Richmont sold 19,234 ounces of Gold in Q1 at an average price of $1,389 per ounce…they will fetch more than that per ounce in Q2…conservatively, one would have to think this company is on pace to make at least 20 cents per share in Q2…it’s not hard to see that this is going to be a stellar year for Richmont and the stock right now could be trading at just 10 times the company’s potential earnings for this year…Richmont was sitting on nearly $50 million in cash at the end of the first quarter with no debt and no hedging contracts…the company continues to aggressively drill its Wasamac Property where a 43-101 all-category resource of 1.4 million ounces has been outlined – expect that figure to grow…Wasamac is a future 100,000 ounce per-year producer…Richmont has laid out a strategy to eventually produce 200,000+ ounces per year, with at least a 30% increase in production next year…it’s hard not to love this story, and the chart is phenomenal as John outlines below…
John’s Fibonacci target for Richmont, by the way, is $12.62 per share (that’s not a BMR price target, just a theoretical Fibionacci target level based on technical analysis)…even at $12 a share, though, Richmont would be trading at maybe only 15 to 20 times its projected 2011 earnings…as of 8:15 am Pacific, RIC is up another 28 cents per share at $8.09…the TSX Venture Exchange is up 9 points at 2036 as it continues to show signs of a major reversal…the strength in Canaco (CAN, TSX-V) the last few days is another clue, in our view, that this market is about to head higher and that 1957 last week was the bottom of a 20.6% correction that lasted 51 trading days…Canaco, which dropped as low as $3.25 May 17 when the Index touched 1957, is up another 31 cents this morning to $4.45…we’re looking at numerous other situations at the moment which we’ll be reporting on once we’re more comfortable the reversal in the CDNX we speculated about last weekend is indeed underway as it appears to be…
Dear BMR.
Good evaluation…….How about all penny stocks…..Today no any news?
Comment by Eric Benson — May 25, 2011 @ 7:34 am
How about ABI? Dewatering + more drill results adding to their 43-101?
Comment by Jason — May 25, 2011 @ 7:57 am
Thanks, Eric….we’ll focus on those tomorrow…looks like the market reversal is indeed underway…
Comment by Jon - BMR — May 25, 2011 @ 8:27 am
ABI is certainly due for a near-term bounce at the very least…excellent value play, at these levels especially, given the resources they are developing at both properties…
Comment by Jon - BMR — May 25, 2011 @ 8:29 am
Yet more insider sells on ABI when they release good news? Something fishy no?
Comment by Hugh — May 25, 2011 @ 8:43 am
WOW!! VGN is up 1/2 a penny to .18 cents!! This after many days of inactivity, and yes, i know it was a long weekend. Now that Rottenburg has left SFF, the go up 30% and now that he can ” focus all his attention on his baby, VGN ” I see he’s doing a great job!! LOL. When you state the 1 must be patient with VGN,you didn’t mention that you’d have to be patient for YEARS as Rottenburg has NO PLANS, other than lifting his lazy butt out of bed every now and then to collect his pay.Where are ALL the results of the PROMISES that Rottenburg made? Spin outs, acquisitions blah blah blah… Is McKay still working with VGN?? Or havey done the smart thing and moved on? They are getting paid $ 5000 per month for what? I haven’t heard a whisper of anything they have done since getting hired.It is almost SUMMER and NO news regarding the Nechako if they plan to drill or not, NO announcement of ANY acquisitions, just SILENCE!!
Comment by john — May 25, 2011 @ 8:53 am
Hopefully Richmonts success will serve as a wake up call for MR Vic Erickson and his team mates in Wasamac neighbour CQX! I wish BMR should have mentioned RIC instead of CQX as the next big thing in Cadillac area. “First we gave you GBB and now we give you CQX…” Only myself to blame for being as lazy as the board of CQX, not doing my DD.
My hope is that GBB will deliver a 43-101 that the market forces will approve and send the SP north of 70cent. In order to repair some of the damage that CQX has caused to my portifolio. GBB talks about 6 new drills after the release of the 43-101, that sounds like music to my ears 🙂
Comment by Stefan — May 25, 2011 @ 10:18 am
ABI –Mr Dueck has sold a lot of ABI and the Hense family has historically dumped shares . Inwentash has a large position but is holding . Goldman Sacs also recommended Zinc yesterday which fits well for ABI .Dewatering and drilling plus i believe they are going to re-do the 41-101 . Can’t see why it will not be a good ride up to reasonable value .
Comment by Frank Speaker — May 25, 2011 @ 10:30 am
I must say, that I am very excited about the latest drill results released by v.ABI. It looks like the resource continues to grow rapidly (as if 20 million ounces of silver wasn’t enough….) In my opinion, a fair market value for v.ABI should be in the neighbourhood of $1.00 per share. Last time I checked, there is a GROWING worldwide SHORTAGE of silver, and VERY FEW companies have the resource base to help meet that shortfall. Simple supply and demand economics. Unfortunately, the stock market doesn’t always reflect reality. My advice is, if you own this stock (like I do), now is the time to buy more. If you do not own it, you might want to have a look and see for yourself if you would agree that there is some serious potential here. Good luck to all!
Comment by Steven — May 25, 2011 @ 11:05 am
Steven, you would think with this GREAT news that was released by ABI today that the stock would be taking off, but it is NOT! perhaps ABI management has taken a page from the Rottenburg book of managing…LOL There are TOO MANY INSIDERS selling ABI, makes me wonder.
Comment by john — May 25, 2011 @ 11:19 am
HANDS DOWN on ABI…..this is by far one of the BEST BMR picks in the stock market portfolio they have on the go right now! 25 million dollar of infastructure already in place to mine their 20,000,000 ounces and growing 43-101 verified silver deposit…not to mention the gold! I think the runup in 2005-06 of 1.40 per share from .15 is about to happen all over again and more than likely be topped this go around…ESPECIALLY with commodities in GREAT demand nowadays! EASY 10 bagger here!
Comment by Keith — May 25, 2011 @ 11:23 am
GBB will show some rebounce soon…. should be close to 50 cents range. SD has some heavy buys at 4 cents but it is quite unlikely to see a 2 million share dump. The reversal is coming soon… less than a month…. it should go back to 6 – 7 cents level.
Comment by Theodore — May 25, 2011 @ 4:06 pm
Hi BMR,
Can someone confirm the 6 new drill rigs on GBB’s property after the 43-101. Didn’t see this on the GBB site. This would be very welcome news.
Comment by Paul — May 25, 2011 @ 6:35 pm
ABI – Mr. Dwek – nuf said.
Comment by david — May 25, 2011 @ 8:03 pm
SD only has one chance left before it is COMPLETELY finished…and that is if Canaco hits something major right next door…other than that it is DEAD!!! GBB on the other hand is still in the making….43-101 coming out this summer…one to watch for sure! As for ABI…..people better start paying a little more attention now instead of chasing it as it does another run like 2006 to $1.40…..agree with some of the other comments here…this one is about to take off…just have to beat out the market manipulators who are controlling the share price at the moment….but it is a MAJOR when it comes to jr mining companies…others DREAM of having one fifth of what ABI has achieved! And Mr. Hinse has shown a considereable amount of direction he wishes to take the company in the past few news releases! Exciting times ahead!
Comment by Arron — May 25, 2011 @ 8:15 pm
Many companies DREAM of attaining ABI 43-101 status….we believe this is the “perfect storm”!!!!
Comment by Browning House Inc. — May 25, 2011 @ 8:39 pm
That’s the dream I’ve been having the last number of months. Where did you hear this?
Comment by Jon - BMR — May 25, 2011 @ 10:59 pm
Hi Jon
Apparently, someone on the Stockhouse BB had spoken with Roger and the additional drills were mentioned.
A total of 6 drills after the 43-101, which I read from a poster, would be a welcome signal of confidence
for GBB. Time will tell!!
Comment by Bob — May 26, 2011 @ 2:56 am
Thanks, Bob….you’re right, only time will tell…..that was GBB’s original plan, to get as many as 6 rigs on the property. To do that, of course, you need an immense amount of ground support – geologists, technicians, etc………I can’t imagine GBB getting that kind of ground support from GENIVAR, but from elsewhere that’s certainly possible with GENIVAR obviously still playing a role……the money is the easy part…..then comes securing the rigs but the toughest part is finding and keeping the quality people…….I’ve said all along they need to drill the LONG Bars Zone like Swiss cheese……that’s easier said than done but obviously possible………let’s cross our fingers and hope they succeed….regardless, GBB is a steal right now….
Comment by Jon - BMR — May 26, 2011 @ 4:01 am