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February 23, 2011

BMR Morning Market Musings…

Gold has traded in a range of $1,397 to $1,415 today…as of 8:10 am Pacific, the yellow metal is up $13 an ounce at $1,412…Silver is ahead 63 cents at $33.69 while the U.S. Dollar is down over one-third of a point to 77.36…the greenback has not seen the flight to safety like it has in other periods of geopolitcal unrest which gives the Gold bulls even more encouragement…HSBC stated this morning, “Given the calls for reforms and the growing diversity and complexity of the protests (in the Middle East), a significant geopolitical premium may remain in Gold for this year, and should tensions rise further, this could catapult Gold to new highs”…the CDNX, after a 60-point sell-off yesterday, has stabilized this morning and is currently up 3 points at 2367…the drop yesterday was into a zone of strong technical support, slightly below the 10-day moving average (SMA) but right at the 20-day SMA…one-day drops of that magnitude can rattle the nerves of many investors but as long as the trend continues to be strongly bullish, as it is, a 60-point haircut for the CDNX can open up some really nice buying opportunities…Cadillac Mining (CQX, TSX-V) is off a penny at 34 cents… following Richmont Mines‘ (RIC, TSX) news last week of a major expansion of resources at Wasamac, where Cadillac holds seven strategic claims, there has been steady accumulation of Cadillac which has the potential of accelerating into a stampede of buying once more investors are aware of the situation…our theory is that Richmont will build a plant at Wasamac (production of 100,000  ounces per year is possible based on the resource numbers) which would also serve their nearby Francoeur Mine…Francoeur is going into production around mid-year with the ore being trucked to Richmont’s Camflo Mill at Malartic…there would be considerable cost savings by processing the ore from Francoeur at Wasamac…Richmont currently has three rigs at Wasamac and is proceeding with a new 35,000 metre drill program in order to upgrade and expand current resources of 1.4 million ounces…Desjardins is now calling Wasamac a potential “game-changing asset” for Richmont…our hope is that Cadillac will seize the moment and drill its Wasa claims in order to test for a possible high grade extension at depth of the Wasamac deposit…the structure dips 50 to 55 degrees toward Cadillac’s claims and the deposit is open in different areas at depth…Cadillac also has VMS targets at its property…technically, Cadillac is looking very strong and a reversal to the upside yesterday in the 20-day (SMA) is another bullish sign…at 34 cents, Cadillac’s market cap is only $8.5 million and the company holds more than 7,000 additional hectares along the Cadillac Trend as well as an entire former mining camp (Goldstrike) in Utah near the Nevada border…that’s a major project that Cadillac will be pursuing with vigor…Seafield Resources (SFF, TSX-V) continues to show strength after falling as low as 31 cents on panic selling last week…Seafield is another half penny higher at 46 cents this morning as some sanity returns to that market…a second drill rig at Quinchia is going to be immensely helpful in terms of advancing this project with the focus now on highly prospective porphyry targets at Dos Quebradas and Santa Sofia…GoldQuest Mining (GQC, TSX-V) bounced off its 50-day moving average (SMA) this morning it has done consistently over the last several months…GoldQuest is one of our favorites with a quality pipeline of projects in the Dominican Republic where the company has been exploring for over a decade…initial drill results from Escandalosa are due soon along with a 43-101 resource estimate for the company’s Toral zinc-lead-silver deposit in Spain…GoldQuest is currently unchanged at 41 cents after falling as low as 38.5 cents this morning…Everton Resources (EVR, TSX-V) is also a company we like very much in the DR, and Everton enjoyed a strong day yesterday as it climbed a nickel to 37 cents on volume of over 1 million shares…Everton and its partner Brigus Gold Corp announced last week the start of a deep drilling program at its APV concession contiguous to Barrick and Goldcorp’s massive Pueblo Viejo deposit…Everton is currently up half a penny at 37.5 cents…a move through 40 cents on high volume would constitute a technical breakout…Gold Bullion Development (GBB, TSX-V) is unchanged at 56 cents…there is very strong technical support for GBB in the low-to-mid 50’s, as John has outlined, but the stock may have to trade around current levels for a little while for base-building purposes prior to another potential fresh advance…

26 Comments

  1. Whens the GBB write up jon, I think alot of investors who follow your blog feel you may have changed your attitude towards GBB. Could this be true?

    Comment by jeff — February 23, 2011 @ 8:19 am

  2. I have a bad feeling for the markets in general. Price of oil is going threw the roof plus a possible revolt in Saudi Arabia..ouch.. Yes gold will keep going up but investors trust in the market and the economie will go down, You want my advice… Put a large portion of your portfolio in cash and wait out the storm. I think gold producer are a better choice then juniors for now.

    Comment by Andre — February 23, 2011 @ 8:46 am

  3. Oil prices going up..trouble in the middle east…food inflation picking up…interest rates starting to rise. All very similar to the 1970’s when gold and the juniors had a great bull run. This cash you are expecting to keep you out of trouble is losing value rapidly against precious metals which are tried and trusted stores of value. All paper currencies are in a competitive devaluation mode which is trashing their value. Be careful with this one as no paper currency can hedge you against the storm that’s coming. Precious metals will preserve your savings as they always have done.

    Comment by Patrick — February 23, 2011 @ 9:14 am

  4. No mention of what is SD planning to do? Are they or maybe they just decided not to put out any more PR? Like what is with these people. they don’t answer their emails, which many have sent them, I’ve talked to several investors on this stk., and let me tell u they have alot of unhappy individuals holding large quantities of shrs, including myself, whom are looking to bail afterwards and not reinvest for just that reason of no PR for mths and this non caring attitude towards shr.holders.

    Comment by Nikolay — February 23, 2011 @ 9:16 am

  5. Hi Jeff, as I stated the other day, my faith in Granada is as strong as ever, after last week’s results, so that is simply not true. I was disappointed how the news came out but that’s calling a spade a spade – I’m not the only one who feels that way. But we need to look forward and not behind. Granada is coming together very nicely.

    Comment by Jon - BMR — February 23, 2011 @ 9:16 am

  6. I agree with the remarks regarding Sidon. I am a very frustrated shareholder that is very let down by mamagement. For the progress they initially made the unprofessional manner in how they are giving no updates nor results for such an unreasonable time frame is concerning. This is no way to run a publicly traded company.

    Comment by andrea — February 23, 2011 @ 9:42 am

  7. Thank’s Patrick for your comment regarding Andre’s comment.
    You’ve right “Precious metals will preserve your savings as they always have done” and fear drive a lot of investors.
    André, don’t be emotionnal with investments. Look at the gold trend and a lot of reasons mentions by Jon (low rates, political situation in the world, physical demand in China and Inde …) will rocket the gold price at new record.
    There will always “storms” in the world and the market has always get up generally.

    Comment by Sylvain — February 23, 2011 @ 9:46 am

  8. The management at SD have a questionable history in regards to enhancing shareholder value, even their association wtth Stephenson and how they acquire their properties all have a bad odor, in my opinion.

    Comment by Paul — February 23, 2011 @ 9:51 am

  9. I agree with you patric.

    Comment by Forb — February 23, 2011 @ 10:04 am

  10. Sylvain, Patrick When people get nervous the first thing that drops like a rock is juniors and explorations stocks. Buy gold or a gold index or a gold producer not a exploration stock . Let the storm calm down.

    Comment by Andre — February 23, 2011 @ 10:05 am

  11. Andre, the Venture is holding up extremely well and has massive support from 2300 on up…….we’re seeing a healthy pullback but this is no time to panic or throw good juniors away…the bullish uptrend is still very much intact, and the juniors have actually outperformed the producers in recent months though not today of course…I think we need to keep things in perspective here…

    Comment by Jon - BMR — February 23, 2011 @ 10:17 am

  12. Jon I agree but in the short term massive support is easily broken. With what is going on in the world and if the monsters oil producer Saudi Arabia goes down… There will be a major slow down or a fall in the world economy. Housing market and oil prices kill the markets in 2007.I think now oil and instability will produce a major slowdown in the economy and like we saw in 2007, ventur stock fell more then 50 %.Now I know there is a lot of Born again Christian here so it’s time for you to start praying.

    Comment by Andre — February 23, 2011 @ 10:54 am

  13. Jon,
    Is it a case with impatience on my part or do you find the lack of news from Sidon unusual even for a small cap?

    Comment by andrea — February 23, 2011 @ 1:58 pm

  14. Andre, what,s happened in middle east (politic crisis) has impact on the price oil, I agree. But I don’t think we have to panic. Here my reason:
    Lybie produce about 2% of oil in the world and their production goes to Italia, Germany, Irlande and Austriche. Those countrys will turn to Brent (north) to satisfy their supply if lybie can’t furnish. But thoses tensions will be temporary because Arabie can increase his production to balance the lybie production.

    Comment by Sylvain — February 23, 2011 @ 2:39 pm

  15. No, I don’t think it’s unusual, Andrea – there are many examples from other companies. The stock is holding up well, technically, and continues to trade in a strong area of support. I really do believe they’re trying to build something substantial in Tanzania and that they’re making progress.

    Comment by Jon - BMR — February 23, 2011 @ 3:32 pm

  16. Sylvain mon ami… It’s seams that there is a good chance that the unrest will spread to Saudi Arabia… I know Lybia is only 2 % ..But saudi Arabia…is 20 % . This is why we got to get our Jesus lovers here to start praying for us investors.

    Comment by Andre — February 23, 2011 @ 3:35 pm

  17. I have been following your site for over a year. I had bought into GBB at under .10 and came upon you in some of my research. Since then have kept a core position and traded portions too many times to count, I have made alot of money on this stock and there is no question in my mind of where this stock is going. Those of us who are in at anywhere under $1 will make some serious money, in time. I have followed some of your suggestions and have had mostly positive results. I am a paying member of several other sites and you know what, I am not doing much better with any of them. Winners and losers. Just have a basket with more winners. That comes from research and understanding. You provide some of that.
    I have strong suggestion for you at BMR. Charge for your service. It is time. You have great insight, knowledge and information. You are providing a service that is worth us paying for. Most importantly you will eliminate most of these waste of time “bullboard” comments that, for me anyway, is taking away from the quality site that you run. Want to see these comments go to stockhouse, I think they just cut and paste the same ones anyway. These people are wasting your time and make your quality site look unprofessional.
    I hope that you keep up the good work and do not get discouraged by a few bad apples, and let me know when you want my credit card number!

    Cheers
    Pete

    Comment by Pete — February 23, 2011 @ 4:11 pm

  18. Thanks Jon for your response. I appreciate your time and knowledge. I will sit tight and have faith.

    Andrea

    Comment by andrea — February 23, 2011 @ 4:36 pm

  19. I agree with Pete, well said!

    Comment by GREG H — February 23, 2011 @ 5:10 pm

  20. Pete..extreme comments like yours doesn’t help also. A good website should always accept intelligent comments from the two sides.

    Comment by Andre — February 23, 2011 @ 5:36 pm

  21. People who have the honesty and skills to be good stock researchers deserve their reward, but perhaps BMR are being both wise and innovative and utilising the internet to proper advantage. Bullboards and most ‘comments’ should be avoided like the plague in so far as juniors are concerned, but someone who establishes a web site and manages to create a following through good information is going to engender organic support for the companies they believe in. In this manner their investment will be enhanced honestly and fairly and rewards ensue. Top subscription letters often lose you money – it is a high risk game. So I hope you will build on this model (if this is your model) BMR, but I agree with Pete that the ‘comments’ quite likely eat into your valuable time – and bring emotion in too.
    Much appreciate your work, and your honesty.
    Thank you.

    Comment by Chris — February 23, 2011 @ 5:43 pm

  22. I will not bring up the topic again, but Andre, “intelligent” comments are being swallowed up by the exact opposite far too often. I will follow BMR but Chris is right, most comments should be avoided, so I will do so.

    Have a good night all and may tomorrow bring profits…

    Comment by Pete — February 23, 2011 @ 6:38 pm

  23. “This is why we got to get our Jesus lovers here to start praying for us investors.” Andre that is very far from an intelligent comment.
    It would be breat if you would make intelligent comments, but you dont.

    Comment by Vlad — February 24, 2011 @ 5:58 am

  24. Guys,

    Any comments on GBB, CUI, CQX, GQC, GA and SD. Seems that all stocks are in dark.

    Comment by Eric Benson — February 24, 2011 @ 7:00 am

  25. Andre, speaking as a Jesus lover, I am praying for your soul as a person, not an investor. I will quote Jesus in Matthew 16:26
    For what will it profit a man if he gains the whole world and forfeits his soul? Or what will a man give in exchange for his soul?
    At the end of the day, the rich guys don’t win, they die like the rest of the people, and then what?

    Comment by Ken — February 24, 2011 @ 7:04 am

  26. I am starting to get tired of people saying that the people of Sidon are reluctant to return calls and e-mails !! I have had a return answer to every email I have sent (51) and Kamal has returned every call, but one, because he was going through heart surgery ! From our conversations he has been hiding nothing and the fact that people are getting anxious for results is understandable. If everyone had read the news releases, they were getting the samples READY for shipping to the lab on Jan. 13/2011. 6 weeks ago. After talking to some people at SGS (the labs competition) all samples being processed have been taking longer than the norm. I do believe that if the samples are very good that the regulatory advisors can have these samples re-assayed before releasing the results to the public. Bullmarketrun has been instrumental with my assessment of SD and their tech. annal. of SD is true to form. Technically this stock has been holding up very well and as the influx of future news starts to unfold , I do beleive that this is still just a diamond in the rough !! Thanks for the great job guys and keep up the good work !!

    Comment by mikey — February 24, 2011 @ 7:24 pm

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