CDNX
The Venture Exchange continues to work its way higher, posting a 10-point gain this past week to 1,568 on strong volume. This leaves the CDNX just 60 points shy of its 52-week high of 1,629 January 11. The Index is also now up 9.7% since February 5 when it corrected to a 2010 low of 1,429. It seems reasonable to suggest that the CDNX will at least attempt to break out to a new 52-week high by the end of this month, so more immediate upside is likely. At this time, though, we’d be inclined to sell into a move past 1,600 toward 1,629, lock in profits, and wait for a pullback. The first attempt at a new high can often fall short with the market then consolidating before the advance resumes. Ultimately, we see the Venture reaching at least 1,950 this year and possibly even 2,350 before a major correction sets in. The strength of the CDNX this past week was especially encouraging given the weakness in gold. The CDNX is the most reliable leading indicator we’ve come across in terms of telling us where gold and commodities in general are headed, short term and long term. The signal we’ve been getting the last few months from the CDNX is very bullish in this regard.
Gold had a volatile week and closed Friday at $1,101.50, just above key support. That’s also gold’s rising 30-day moving average, so $1,100 is clearly an important level and there’s every reason to assume gold will hold at or above that mark for both technical and fundamental reasons.
The BullMarketRun Portfolio
Gold Bullion Development (GBB, TSX-V)
It was another exciting week for Gold Bullion Development which hit a new three-year high of 27.5 cents last Monday…since then it has cooled off slightly and closed Friday at 24 cents, up half a penny for the week on heavy volume of 11.6 million shares…as already mentioned in our postings on Friday, BullMarketRun is flying to Rouyn-Noranda Monday morning for a Granada Gold Property site visit…we’ll be sending back reports throughout the week…it’s our belief Gold Bullion is potentially sitting on a massive bulk tonnage, open-pit deposit near surface…on Thursday, the company announced it has more than doubled its Granada landholdings to nearly 5,000 hectares, 70 times what it originally started with at Granada in 2006…there were other even more important statements in that release including the fact that GENIVAR, Gold Bullion’s geological consultant, has completed a preliminary block resource model for Granada based on 26,000 metres of historical drilling…data from Gold Bullion’s recently completed 3,000 metre program will be integrated into that block model…the fundamental factors driving this stock are powerful indeed…a major discovery seems imminent with a “very large” drill program expected to commence sometime this spring at Granada…clearly, this is a stock to accumulate on any weakness…
Seafield Resources (SFF, TSX-V)
Seafield had a disappointing week, down half a penny to 28 cents after announcing near the end of the market close March 5 that it has concluded its Colombian gold property deals with privately held Caribbean Copper and Gold Corporation…the major participants in this market, including the likes of M Partners, CIBC and Octagon, are holding strong, however, and M Partners was on the bid for 500,000 shares at 26 cents Friday…we believe it’s only a matter of time before the ball gets rolling in a huge way with Seafield…the weakness we’ve seen this month so far is likely the result of some selling of the 12.5 cent private placement stock from last October, and the exercising of 16 cent warrants – something we warned about near the end of February…this should likely soon run its course…
Kent Exploration (KEX, TSX-V)
Volume has picked up considerably on this stock over the past couple of weeks…Kent closed at 19 cents Friday, unchanged on the week…the company has started drilling its Gnaweeda Gold Project in Australia, a joint venture with Teck, and Kent also announced after the close on Friday that the proposed Archean Star Resources spin-off will be voted on by shareholders April 30…Kent shareholders will receive approximately one share in Archean Star for every four Kent shares held…that’s a nice little “dividend”, and what’s also interesting is that the proposed financing for Archean Star is at 25 cents…this and other factors (drilling at Gnaweeda and Alexander River in the near future, as well as expected barite production out of Flagstaff) provide the ingredients for a potentially major move in the Kent share price…this is a very well-run company with a portfolio of high quality projects…we’re expecting big things out of Kent and we’re confident it will deliver…
Greencastle Resources (VGN, TSX-V)
Greencastle is in oversold “quiet mode” again…the stock was unchanged on the week at 16 cents on light volume…trading just above its cash value, Greencastle is an extremely attractive long-term investment…we’re still waiting for additional news with regard to a couple of wells in the Cabri-Boggy Lake area of southwestern Saskatchewan that Greencastle drilled and cased in January…
Richfield Ventures (RVC, TSX-V)
Richfield keeps charging ahead and closed Friday at $1.87, a 17-cent increase for the week…investors are clearly in accumulation mode, as we had predicted, in advance of a 25,000 metre drill program that will commence next month at the company’s very promising Blackwater Project in the Interior of British Columbia…Blackwater has great potential as a world class bulk tonnage deposit…technically, the stock is significantly overbought (based on Stochastics and RSI) and in need of a pullback…there is major resistance just below $2.00 and very strong support around $1.50 near the 20-day moving average…for those interested in acquiring Richfield for the first time, we recommend waiting for a pullback to at least $1.60…
Colombian Mines Corporation (CMJ, TSX-V)
Colombian Mines is mobilizing a second drill to its Yarmualito Property in Colombia which is the kind of news the market always likes to hear…CMJ, which is in the midst of completing a private placement at 95 cents, ran as high as $1.42 last week before closing Friday at $1.15…that was a 9-cent improvement from the previous week…with a large package of high quality Colombian properties, and a very bullish stock chart, CMJ has very significant blue sky potential and a lot of legs to go much higher…
