CDNX and Gold
The CDNX rebounded with all markets this past week and finished at 1593, a 44-point gain for the week or 2.8%…the Venture’s weekly gain matched that of the TSX while the Dow lagged behind at 2.3%…the Nasdaq jumped 5.3% while the TSX Gold Index, which continues to outperform the CDNX this month, was ahead 6% with Gold reaching a new all-time high of $1,250…the CDNX lost 33 points Thursday and Friday but the drop doesn’t concern us as it was on low volume and the market was correcting somewhat after a powerful move Monday through Wednesday…the Index jumped nearly 100 points after the Friday, May 7, low of 1537 which we believe was the bottom of a very short correction…consolidation around 1600 this coming week, or a move through last week’s high of 1633, would be extremely positive for this market as it rebuilds from a sharp 9% pullback over just six trading days…Gold’s move to a new record high was no surprise after Monday’s announcement of the $1 trillion EU-IMF bailout plan…the sovereign debt crisis has become a currency crisis and Gold is rising even in the face of a stronger U.S. Dollar…when the world finally comes to the conclusion that the United States is nearly as much of a fiscal basket case as the PIGS (Portugal, Ireland, Greece and Spain), the Day of Reckoning will arrive for the U.S. Dollar and it too will sink like the Titanic and Gold will be on its way to $2,000 an ounce…Obama will do everything he can to keep things looking rosy in the U.S. through the November congressional elections but the Americans could very easily face a major debt crisis of their own by 2011…
The BMR Portfolio
Gold Bullion Development (GBB, TSX-V)
We stated this on Friday and it’s worth repeating – Gold Bullion has been so incredibly resilient over the past couple of weeks that we can’t help but conclude a major new breakout is imminent…hard evidence of that came from massive new buying from Jordan Capital this past week…Jordan was “first on the scene” with Gold Bullion last December under 10 cents and their appetite for this stock continues to grow…Gold Bullion closed the week at 38 cents, a 2-cent jump, and the stock’s support in the mid-30’s was extremely encouraging…as the market gets more and more comfortable with the idea of a multi-million ounce bulk tonnage, open-pit gold deposit at Granada, this stock can be expected to reach much higher levels especially with Gold performing so well…
Richfield Ventures (RVC, TSX-V)
BMR interviewed Richfield President and CEO Peter Bernier this weekend and the first part of that interview was posted this morning on our web site…a major new gold camp appears to be forming at Richfield’s Blackwater Project, 150 kilometres south of Prince George, BC, in the Nechako Plateau…like with Gold Bullion’s Granada Property, the possibility of a 5 million+ ounce gold deposit at Blackwater is very real and Richfield is now on its third hole in a 25,000 metre drill program…BMR added Richfield to its portfolio last December at $1.20…the stock roared to a 52-week high of $2.25 last month but has pulled back into a strong zone of support between $1.50 and $1.70 where it is considered a very attractive speculative buy…Blackwater also contains silver and despite some rather incredible intersections so far, including over 350 metres of 1.25 g/t Au in BW-59, Bernier believes the best is yet to come as drilling moves further south and geologists search for some rich feeder systems at depth…mineralization starts near the surface at Blackwater and the mineralized zone currently measures 800 metres by 500-600 metres…back-of-the-envelope calculations suggest Blackwater could contain anywhere from 4 to 8 million ounces…with a current market cap of just $44 million, it’s obvious Richfield holds some very serious blue sky potential…the stock completed a significant intra-day reversal Friday to close the week at $1.62…
Sidon International (SD, TSX-V)
BMR is expecting big things out of Sidon in the near future as the company continues to make progress on its option to acquire an 80% interest in the high grade Morogoro East Gold Property in Tanzania…Sidon has completed its recently announced $750,000 financing – it was apparently over-subscribed – and is now waiting for Exchange approval on that… Morogoro will give Sidon a new focus and the best project it has ever had…the stock has excellent liquidity and closed Friday at 7 cents, an increase of half a penny for the week…
Seafield Resources (SFF, TSX-V)
This was a watershed week for Seafield which on Thursday traded a whopping 10 million shares, shattering the previous single day volume record for this stock of just over 3 million shares…Seafield ended a deep correction and Thursday’s volume suggests important new players are now in this market…the stock gained 3.5 cents on the week to 20.5 cents…its 10-day moving average (SMA) has turned positive and its 20-day SMA should do the same in the near future…clearly, Seafield bottomed out at 16 cents May 6…fundamentally, exploration is ramping up considerably this month at the company’s gold properties in Colombia…now is a good time to get positioned in Seafield as we expect this stock to enjoy a strong summer…
Kent Exploration (KEX, TSX-V)
All’s quiet at the moment on the Kent front but that’s expected to change very soon…the stock was up 1.5 cents on the week to 19 cents but on light volume…we do expect to hear news this coming week regarding the spin-off of its Gnaweeda Gold Project into Archean Star Resources…Kent shareholders will receive 1 share of Archean Star for every 4 shares of Kent they hold…what’s interesting is that drill results from the Turnberry Prospect at Gnaweeda are imminent…Kent drilled a series of holes there in March…Turnberry is an advanced staged property and some very good assay results from there are quite possible…it’s in the northern section of Gnaweeda, less than 10 miles to the southwest of Doray Minerals’ Andy Well Property which has produced some recent spectacular results…Kent also drilled 3 holes at its Bunarra Bore Zone in the southern part of Gnaweeda…Kent has posted some interesting looking drill core from the first hole at Bunarra on the Archean Star web site (www.ArcheanStar.com)…
North Arrow Minerals (NAR, TSX-V)
North Arrow has been under accumulation for 2 months now and for good reason…the possibility of Gren Thomas and Dr. Chris Jennings (founders of the rich Diavik deposit) making another huge diamond discovery at Lac de Gras with North Arrow is very conceivable…using his proprietary technology, Jennings has identified 70 high priority kimberlite targets on North Arrow’s landholdings which are on trend with Diavik and comprise 100,000 acres…North Arrow is also currently drilling its Beaverdam Lithium Project in North Carolina…NAR closed Friday at 20 cents, a loss of 1 penny for the week, but interest has definitely picked up in this play and higher prices we believe are just around the corner…
Colombian Mines (CMJ, TSX-V)
Colombian firmed up nicely this past week but on low volume…the stock jumped 20 cents to $1.10…CMJ fell as low as 87 cents during the market pullback and then rebounded, demonstrating the importance of watching for major support levels and buying into weakness…early results from CMJ’s Yarumalito Gold Property are very encouraging…the company also announced the optioning of 2 of its properties this past week, one of them to Yamana Gold…CMJ has a deep and valuable portfolio of grass roots projects in Colombia and we view the stock as a solid long term hold…
Greencastle Resources (VGN, TSX)
Greencastle continues to be the only weak link in the BMR Portfolio…the stock closed Friday at 13 cents, a half penny increase over the previous week…volume has really dropped off in Greencastle…the stock is clearly a very good buy at current levels (it’s trading essentially at cash value) but determining when VGN is going to wake up out of its slumber is impossible to say…the company has valuable assets in oil and gold and a very strong balance sheet with approximately $5 million in cash…
