It was an incredible and record day yesterday for Seafield Resources (SFF, TSX-V) which traded a whopping 10 million shares and rose 2.5 cents to 22 cents on no news. So what’s happening?
1. New “players”, and likely very powerful ones given yesterday’s volume, have clearly entered the market with Seafield which has very bullish consequences. The last time we saw real evidence of new players was back in December and within a month the stock doubled in price;
2. Technically, Seafield’s recent deep correction has come to an end. The drop to 16 cents frightened a lot of investors but SFF’s chart shows how the stock did not break down from its overall upward long-term trend. Seafield fell slightly below its 200-day moving average (SMA) which continues to rise strongly, and found support just above its 300-day SMA which also continues to rise strongly. We believe there’s a good chance that Seafield today will test its 50 and 100-day SMA’s at 24 cents. The stock’s 10-day SMA has swung positive and a turn in the 20-day SMA is imminent – bullish developments. Seafield hit deeply oversold levels recently based on Stochastics and RSI, so there’s no question in our view that 16 cents was an important low that we’re likely not going to see again with this stock in this current cycle. A re-test of the late February high of 35.5 cents can certainly be expected;
3. Fundamentally, and we’ve said this all along, Seafield has put together an impressive portfolio of properties in the Quinchia District of Colombia. Exploration is ramping up this month with drilling almost ready to begin, we suspect, at Miraflores and/or Dos Quebradas. Miraflores contains a 43-101 inferred resource of 800,000 ounces. Dos Quebradas is an advanced target that holds a lot of blue sky potential. Seafield has other landholdings as well at Quinchia that no doubt we’ll be hearing more about in the near future. The company is represented with strong boots on the ground in Colombia who know the country extremely well and can maneuvre through the system.
It’s not hard to see why there’s a lot of interest in this stock. BMR first brought Seafield to investors’ attention when it was sitting at just six cents last summer. We believe the best is yet to come from this company in the weeks and months to come, especially with Gold at record highs.
