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February 6, 2012

BMR Morning Market Musings…

Gold has traded between $1,712 and $1,736 so far today following Friday’s $32 drop…as of 5:15 am Pacific, the yellow metal is off $11 an ounce at $1,715…Silver is 32 cents weaker at $33.35…Copper is off a nickel at $3.84…Crude Oil is down $1.04 to $96.80 while the U.S. Dollar Index has strengthened over one-third of a point to 79.43…

Stock index futures suggest a modestly lower open to begin the new week…a better than expected U.S. employment report drove stocks higher Friday as optimism grew that the labor market in the U.S. is on a steady path to recovery, but lack of progress on another bailout package in Greece is weighing on investor sentiment this morning…Greece appears to be moving closer to a disorderly default – the country’s political leadership is inept and cannot be trusted – as early as next month but the market has largely priced that in anyway…

More than 65 S&P 500 companies report earnings this week and there is another session of Congressional testimony tomorrow from Fed Chairman Ben Bernanke who appears before the Senate Budget Committee…

The Dow roared to a 3.5-year, pre-recession high last week while the Nasdaq hit its bestr level since 2000…the Dow is now up 20% from its October low while the TSX Venture Exchange has climbed 27% during that time…

The Venture closed Friday at 1665 in an area of short-term resistance as John’s charts showed Saturday…the primary trend is undeniably bullish, so any minor pullbacks are likely to be temporary and should be embraced as a buying opportunity in our view…the Index could easily take a run to 1800 or higher by the end of March…

Gold’s Weakness Likely Short-Lived

Gold’s drop on Friday was actually healthy from a technical standpoint (daily RSI, for example, was overbought) and support should hold at $1,675 or better as John’s chart outlines below…Gold’s weekly RSI is only at 56% and has plenty of room to move higher…

Company Charts, Rainbow Update

John has charts on four companies this morning – Scorpio Mining (SPM, TSX), Encanto Potash Corp. (EPO, TSX-V), Levon Resources (LVN, TSX-V) and iSign Media Solutions (ISD, TSX-V)…

EPO looks poised for a move higher this week, based on technical factors,  as do Rainbow Resources (RBW, TSX-V) and Adventure Gold (AGE, TSX-V)…we contacted Rainbow President David Johnston over the weekend and he confirmed the following to BMR:  “We are successfully closing our private placement, as per our January 25 news release, and we look forward to announcing that this week.  With these funds in place through this strategic financing, we will be moving forward quickly and aggressively with our plan to build this company in the Gold and Silver sector“…it’s great to see a young company on a path to success…we expect strong news flow out of RBW in the weeks ahead and we’re particularly looking forward to the upcoming report from the company’s geological consultant on RBW’s West Kootenay land package…

Encanto, which owns the Muskowekwan potash project in Saskatchewan, announced a major new land addition last week and the stock responded favorably on strong volume…momentum traders may have fun with EPO this week as John shows in the chart below…

Note: John, Jon and Terry do not hold positions in EPO.

As regular readers know, we’re very bullish on Silver and one of the most promising companies in that space is Scorpio Mining (SPM, TSX), a Silver and base metal producer in Mexico…SPM has a great-looking long-term chart which shows another breakout is likely in the near future…

Note: John, Jon and Terry do not hold positions in SPM.

Levon Resources (LVN, TSX-V) has a quality project in Mexico (porphyry silver, Gold, zinc and lead) but technically the stock isn’t quite ready yet to begin a bullish new phase…now, however, is probably a good time for patient investors to consider accumulating LVN on any weakness – especially if it moves closer to the very strong symmetrical triangle support around 80 cents…

Note: John, Jon and Terry do not hold positions in LVN.

We have been following iSign Media Solutions (ISD, TSX-V) with some intrigue since the spring of last year…the stock can be quite volatile and traders have to be careful…we’ve always liked the long-term prospects for ISD, however, as its technology allows advertisers and brands a new way to deliver engaging, rich-media messages with a strong response rate which could be much more affordable than traditional marketing messaging…ISD had a nice run last week – it could continue to move higher this week but keep in mind the strong resistance in the mid-60’s…eventually ISD should overcome that resistance but not right now…

Note: John, Jon and Terry do not hold positions in ISD.

22 Comments

  1. Bert – News in part

    Sunridge (SGC)

    Sunridge Gold Corp (SGC:TSXV) – News Alert

    Sunridge Gold Announces New Larger Resource for the Emba Derho Copper, Zinc, Gold Deposit, Asmara Project, Eritrea

    Sunridge Gold Corp. (TSX VENTURE:SGC)(OTCQX:SGCNF) is pleased to announce that it has received a new independent resource estimate which shows a significant increase in size for the Emba Derho volcanogenic massive sulphide (VMS) deposit on the Company’s 100% owned Asmara Project, Eritrea. This new resource was completed by Snowden Mining Industry Consultants Inc. (“Snowden”) as part of its ongoing prefeasibility study on the Asmara North Deposits which include Emba Derho, the Adi Nefas zinc-gold-copper VMS deposit and the Gupo gold deposit. The prefeasibility study is being conducted by Snowden and GBM Minerals Engineering Consultants Ltd. and is scheduled for completion in April 2012.

    Highlights:

    — Measured and Indicated resources are 70.0 million tonnes. In addition
    there are 15 million tonnes in the Inferred category.
    — Copper-rich zone: 49.8 million tonnes at an average grade of 0.83%
    copper and 0.93% zinc.
    — Zinc-rich zone: 16.8 million tonnes at an average grade of 2.80% zinc
    and 0.31 g/t gold.
    — Total contained metals in the Measured and Indicated categories are
    estimated as:
    — 1.00 billion pounds of copper.
    — 2.1 billion pounds of zinc.
    — 506,000 ounces of gold.
    — 18.6 million ounces of silver.

    Comment by Bert — February 6, 2012 @ 5:22 am

  2. BMR, do you still hold a position in cev.v?
    Cheers

    Comment by Moosey — February 6, 2012 @ 5:30 am

  3. John & Jon, thank you for these charts, its great to have the diversity. Levon is on my watch list along with ISD and EPO so those were particularly appropriate for me this morning. I’ll be watching RBW and AGE closely this week.

    Comment by Andrew — February 6, 2012 @ 5:56 am

  4. PG says this in part about SGC

    Sunridge management tells me that much of the increase in size is in the central body of the Emba Derho deposit and will add greatly to the minable reserves once the Prefeasibility Study is complete. Very important to take away from this report is how much bigger and better this resource has become. Sunridge is picking up momentum and they still have a solid news flow ahead, which I expect can have a significant re-rating of the share price. Normally I sell half of any personal holdings that doubled but I’ve said this stock was very undervalued at even after a double it remains quite cheap.

    Technically speaking, the stock has broken out both from a classic cup formation and above key moving averages. There’s no reason to think it can’t now work towards its highs on the chart.

    Comment by Bert — February 6, 2012 @ 6:27 am

  5. Thanks for the Encanto potash chart. $16 million in the bank plus an upcoming update to their 43-101 should provide good fundamentals.
    “Encanto released a NI 43-101 Resource Report confirming grades and favourable potash resource calculations. A positive Preliminary Economic Assessment (PEA) report prepared by Wardrop was released in August which highlights the favourable development of a solution mine. After a small two-hole drilling campaign now underway (September 2011), a new and updated 43-101 compliant resource calculation is scheduled to be released to the market.”

    Comment by Alexandre — February 6, 2012 @ 7:45 am

  6. Mr Johnston, RBW – “We are successfully closing our private placement, as per our January 25 news release, and we look forward to announcing that this week.

    Bert – We are close to having all the .09 RBW shares traded out at around
    0.20… Try to get a position before the news, because it is clear that
    they have plans after.. Elementary Mr. Watson, that’s how the game is played… Another typical example, is VGN, the so called officials load up with options &
    we, the lowly shareholders, wait for them to play their game. They can’t lose,
    if the price don’t go up, they don’t exercise, where-as we buy & then the gamble begins.. The uneven playing field don’t discourage me enough to quit, instead i will continue to try to get inside their heads. R !

    Comment by Bert — February 6, 2012 @ 9:23 am

  7. Very wise advice, Bert….get inside their heads!

    Comment by Jon - BMR — February 6, 2012 @ 10:04 am

  8. Jon

    Now that you are there, did you sell CEV. Not that it matters,
    we buy & we sell, but there are now two of your followers, who
    are inquiring. If you sold, it certainly don’t take away my feeling
    that i have picked another possible winner. Good luck with RBW. Someone
    has to keep the food on the table for Terry (joking).

    Comment by Bert — February 6, 2012 @ 10:13 am

  9. Correction

    From my feeling that i have picked, etc.

    Comment by Bert — February 6, 2012 @ 10:14 am

  10. Greece

    Greece continues to be a problem, thus the commodity prices are sour
    today. Cut the life line & let it go, say me. How can a country prosper,
    if it’s residents are reluctant to pay their taxes. The one positive
    thing is, the markets seem to be ignoring Greece more & more, as each day
    passes. If what is happening today with Greece, happened a month ago, the
    Dow et al would be down 300 points or more. I agree with those words, as
    spoken by someone on CNBC.

    Comment by Bert — February 6, 2012 @ 11:41 am

  11. Hi My reason for selling cev this time is that it is my understanding that there are a few drill holes results to come but the main drilling will not start until sometime in march therefore cev (an excellent stock) should remain in a range of .90 to 1.oo I consider cev to be a winner but that there is still time. Should hum inmay,june etc. Of course i can, and often are, completly wrong. On the other hand rbw is a very interesting situation. its share position means that all posiyive info coming out could have very positive affects. Also, being new to the public plus other analysts ready to give it a boost means, to me, that one must buy and hold and try and trade carefully. Its going to be interesting. richard

    Comment by richard — February 6, 2012 @ 11:46 am

  12. BMR

    Have you guys taken a look at NES Newstrike Capital lately? Would love to see a chart on that one.

    Thanks Greg

    Comment by GREG — February 6, 2012 @ 1:55 pm

  13. RBW

    It appears the time may be near. All indicators have turned up, including the price,
    closing at it’s high for the day. Richard said he sold CEV & bought RBW, which may be
    a good move, but i have to see all CEV news first, before i sell, that is if i sell
    then. I have put a great deal of work checking out CEV & i can’t allow my d.d. to be
    for nothing. Although drilling won’t start until April, the company has not gone into
    hibernation. Back to RBW, i am expecting a move up in RBW, but let’s face it, they have
    to bring forward news & more news, in order to get noticed in this market… I want to be
    wrong because i do have shares, adding to my 15K as we moved along, so wouldn’t i love
    to be wrong at a price of 0.50. Good luck !

    Comment by Bert — February 6, 2012 @ 1:56 pm

  14. I nearly sold CEV this morning – I’ll consider it again tomorrow. I bought the stock when gold was in a decline and we had a bear market. It’s a good stock but not a performer this year, so far. There have been many stocks making good gains and CEV has just been ticking over. ZNR has, for months, been a better iron ore stock to hold – at least it can be traded regularly for good gains.

    Comment by Andrew — February 6, 2012 @ 6:16 pm

  15. CEV sells off on news too! 🙂

    Comment by Andrew — February 6, 2012 @ 6:17 pm

  16. Andrew

    My buddy Andrew, i hate to contradict you on a public forum, but this is one time
    that a chart tells the real story. Since the latter part of September, 2011, ZNR
    managed just once to close at 0.13, the remaining time it traded at .08, .09 & 10
    cents, today it closed at 0.15., not one to make good gains on. Didn’t you mention
    just recently that you were gifted with patience, ha.. I made over 50 thousand on
    ATC last year & that reminded me that on occasions, one must be patient, otherwise
    i would not have prospered, but even then, i sold too early.. At least you told me
    you were thinking about selling & still might sell, thanks for that. The only reason
    i would like to know if anyone is holding one of my stocks, is to try to be of
    assistance. The positive thing about ZNR is it’s cheap, but it is up there somewhere.
    Good night & good luck. R !

    Comment by bert — February 6, 2012 @ 6:54 pm

  17. Correction

    4th line should have read ”not one to have made good gains on ”.

    Comment by bert — February 6, 2012 @ 6:58 pm

  18. RBW closed nicely at the high today, expecting to hear about the closing of the Private Placement any time now and looking forward to a nice run up tomorrow and beyond 🙂

    Comment by Ed — February 6, 2012 @ 7:24 pm

  19. No problem with being contradicted, Bert – debate can be healthy and its a way to learn. I was just attempting to reason why I think I may sell CEV. Last year I watched gold reached a record high but the juniors didn’t follow. I don’t want to miss the boat this year which has started extremely well for many stocks. I picked ZNR just because it was an iron ore play and I’ve watched it for a long time and it only needs a half cent to penny gain for a quick and regular flip and they add up! 🙂 I don’t think I said I was gifted with patience? Maybe I did, I would have been being light hearted. Then again, I have been patient with AGE! 🙂 Anyway, congratulations with ATC!

    Comment by Andrew — February 7, 2012 @ 5:05 am

  20. Talk of the devil:
    Cap-Ex Drill Results Indicate “Northwest Zone” Open to the North, South and West

    It better not sell off! 🙂

    Comment by Andrew — February 7, 2012 @ 5:15 am

  21. Andrew

    Good morning ! After having had my say on ZNR, i will suggest that
    it may take off today/tomorrow, who knows’? but my last post was
    about past trading & during the last 6 months, it showed very little
    movement.. As for CEV, no doubt you are aware that it is also a coal
    play & should not be influenced by gold, instead by the overall market
    or news. Whatever you do, you think it’s the best move & that’s what
    counts. It’s like owning 5K shares of a stock, feeling someone with
    10K is luckier, but it’s the way the game is played & quite possible
    the person with the lesser shares, makes the most profit.
    RBW – I now have 26K shares, not as many as i have had in the past, in
    different stocks, but we are in a different market today & i feel, it
    may not be that easy to get rid of a lot of shares, as in the good old
    days. You know Andrew, i talk too much, enough said. R !

    Comment by Bert — February 7, 2012 @ 5:25 am

  22. Drilling news out on CEV, also granting of options at 0.99.. A good
    sign, now that they have looked after themselves, they may think of
    looking after us…. R !

    Comment by Bert — February 7, 2012 @ 5:29 am

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