Gold Bullion Development (GBB, TSX-V)
GBB was off a penny-and-a-half for the week, closing at 38 cents…we suggest readers review John’s GBB chart that was posted as part of yesterday’s Morning Musings…another “cup with handle” pattern appears to be forming (the previous two failed, so maybe the third time might be lucky)…RSI and Stochastics support this view – RSI(14) appears to have found support and the Slow Stochastic oscillator is now trending higher after likely bottoming out…for nearly five months now GBB has traded in a range from slightly below its rising 500-day moving average (SMA) to slightly above its rising 300-day SMA…at some point that pattern will change based on fundamental factors – drill results or the NI-43-101 resource estimate…the only news last week out of GBB was that the company has applied to the Venture Exchange to lower the exercise price of a total of nearly 8 million share purchase warrants to 58 cents (7.4 million from last October’s financing were priced at 75 cents)…these warrants expire October 27, 2011, so we’re certain the GBB game plan is to have the 43-101 out before the end of the summer in hopes of getting those warrants exercised which would bring another $5 million or so into the treasury…a move through the mid-50’s would constitute a major technical breakout for the stock…GBB’s latest drill results were released July 13…there was nothing spectacular in those results but hole #165, collared approximately 50 metres northeast of hole #108, offered encouragement with regard to the very promising northern portion of the Eastern Extension…#165 returned 141.5 metres grading 0.31 g/t Au (from 155 to 296.50 metres) with no high-grade spikes, showing an apparent consistency of mineralization…it included a 20.5-metre section grading 1.2 g/t Au…assays have yet to be reported on 8 more important holes drilled in this general area (168, 178, 183, 241, 243, 246, 254, 257) according to GBB’s most recent drill map…along with additional results, GBB’s 43-101 resource estimate is going to be critical along with the Castle spin-off and potential discoveries in LONG Bars Zone 2…infill drilling is GBB’s focus at the moment with drill hole spacing tightening (which could help to improve grade) in preparation for a resource calculation…the company’s current market cap of $63.3 million puts a value of just $21 an ounce on Gold in the ground at Granada if one were to assume the 43-101 will outline approximately 3 million ounces in the measured, indicated and inferred categories…that’s just a hypothetical number on our part at the moment but whatever number GENIVAR comes up with, we believe it should exceed the 2.4 to 2.6 million ounce conceptual figure that Gold Bullion gave in April of last year…based on all the drill results to date, this appears to be shaping up as a half-gram deposit with a higher grade starter pit and massive volume…it’s all about volume at Granada which is why the drills have to keep turning and why we want to see more than just two rigs in the LONG Bars Zone which has such incredible potential…the company provided an update on its Castle Silver Mine Project June 8…the 6,000 metre Phase 1 drill program is nearing completion and a strong new vein structure was intersected at the first IP target…a 43-101 technical report on the property has also been released…assay results from the 10 holes drilled so far are still pending…GBB plans to spin-off this asset into a separate publicly traded entity…GBB is up 443% since we introduced it to BMR readers in late December, 2009…
Currie Rose Resources (CUI, TSX-V)
Currie Rose managed to weather last week’s market storm pretty good…the stock hit a two-month high Tuesday when it traded at 21.5 cents before finishing the week at 19 cents, a loss of just a penny from the previous Friday…this is a very healthy technical situation…all of CUI’s major moving averages are now rising (10, 20, 50, 100, 200 and 300-day SMA’s)…a breakout through resistance in the low 20’s appears to be just a matter of when, not if, given the technical indicators and developments on the ground in Tanzania…the Currie Rose drill continues to turn at Mabale Hills, so a summer of interesting action in CUI is likely…three properties are being drilled at Mabale (Mwamazengo, Dhahabu and Sisu River) before the rig shifts to the flagship Sekenke Project about 200 kilometres to the southeast…CUI‘s first-ever drill program at Sisu River late last year gave reason for encouragement but this time around the plan is to push the holes a little deeper (150 metres or more) in hopes of cutting wider intersections and higher grade…reading between the lines of the July 5 news release, it’s possible the geologists liked what they saw in the first 3 holes as 506 samples were delivered to a nearby lab for assaying and drilling continued…after more holes are completed at Sisu River, the rig will test targets at Dhahabu and Mwamaznego…geochemical analysis has outlined a continuous anomaly over a few hundred metres that runs parallel to the west of a previously reported discovery at Mwamazengo where drill results included notable high-grade intercepts such as 34 metres grading 3.60 grams per tonne gold, 12 metres grading 9.11 g/t Au, 63 metres grading 2.59 g/t Au and 31 metres grading 5.97 g/t Au…we’re most excited, however, about the Sekenke Project which has “blue sky” written all over it…Sekenke is why we decided to start following CUI when it was trading around a dime last fall…results from satellite imagery provide additional evidence that Sekenke is a highly intriguing geological target and part of the same northwest trending structure that hosts Canaco’s (CAN, TSX-V) Handeni Project…satellite imagery has also shown that the structures at Sekenke are coincident with a strong alteration envelope…what’s unique about this project is that it surrounds and runs in between two former high grade Gold mines including Tanzania’s original producer…this greatly increases the chances of a discovery as it’s unlikely the former mines were fully exploited or explored as techniques a century ago in this industry obviously weren’t what they are today…CUI has a terrific chance to hit it big at Sekenke and we also wouldn’t be surprised if the company takes a shot at acquiring the former Sekenke Mine…that’s speculation on our part but it makes sense from a strategic point of view…pre-drilling exploration work continues at Sekenke to pinpoint the best targets…while its Tanzanian properties are the market’s major focus, Currie Rose could also benefit over the summer from continued good exploration news out of Trueclaim Exploration (TRM, TSX-V) which is currently conducting an 8,000 metre drill program at the Scadding Gold Property near Sudbury…Trueclaim, which continues to release decent assay results, has earned a 51% interest in Scadding and can acquire a full 100% interest by completing a feasibility study, paying $2 million to Currie Rose, and giving Currie Rose a 3% net smelter royalty…TRM announced last Tuesday that it has intersected a previously unknown area of Gold mineralization at Scadding with hole #48 assaying 5 metres grading 4.54 g/t Au (from 98 to 103 metres, assumed to be true width)…about 25 metres below that interval was a 10.25-metre section grading 1.37 g/t Au…TRM has drilled the North Zone, the South Zone and the Currie Rose Zone with promising results (the Central Zone, which could get really interesting, has yet to be drilled)…CUI announced a joint-venture deal January 25 with Australian-based Liontown Resources for Currie’s Jubilee Reef Gold Project in Tanzania…CUI’s focus is on the Sekenke and Mabale Hills Projects, so finding a partner for Jubilee Reef made sense…the deal commits Liontown to at least 5,000 metres of drilling at the property this year which will give Currie Rose a minimum of 23,000 metres of drilling at all of its properties in 2011…while Currie Rose has had its market cap shaved by more than half, from a high of nearly $40 million late last year to the current $17 million, what hasn’t changed is the quality of this company’s project portfolio which remains as high as ever…Currie Rose has all the cash it needs ($2 million) to complete an initial major round of drilling (10,000 metres) in Tanzania this summer, so there will not be any dilution of the stock at current levels as confirmed by President and CEO Harold Smith…
Adventure Gold (AGE, TSX-V)
Adventure Gold remains one of our favorites this summer with several exciting projects on the go…our theory is that there’s a very good chance at least one of those projects will “hit” and our prediction is that it will be the Pascalis-Colombiere Gold Property near Val d’Or…AGE was off another penny last week to 52 cents with volume more than doubling from the previous week to 500,000 shares (all exchanges)…the stock touched a low of 49 cents Thursday before rebounding…AGE is slightly below its rising 200-day moving average (SMA) but that also occurred briefly in May and June as well…the Slow Stochastic oscillator is now rebounding after hitting its lowest point since 2009…we recently spoke with President and CEO Marco Gagnon and we’re continuing to perform some additional research on AGE in advance of some postings in the near future…Gagnon is a sharp operator who knows how to maximize every dollar spent…he also has the strong backing of Montreal investment firm Windermere Capital which holds just under 20% of AGE as disclosed January 21…the company has five active key projects, two of which are in the hands of joint venture partners Lake Shore Gold (LSG, TSX) and Agnico-Eagle Mines (AEM, TSX)…AGE is currently conducting a 5,000 metre Phase 2 program at its very promising Pascalis-Colombiere Property near Val d’Or…at the end of May the company reported highly encouraging drill results from this former producer including 4.8 g/t Au over 33.1 metres in hole #20 (plus lower grade halos over significant widths)…the Phase 2 program is designed to further define the Gold system, leading to a resource calculation which is already being worked on…Pascalis-Colombiere encompasses the past producing L.C. Beliveau Mine (Richmont’s Beaufor Mine is nearby)…we found a comment from Gagnon in AGE’s June 2 news release quite interesting…“Following positive drill results and the permitting process, an open-pit or an underground operation could be producing in the near future”…we believe Richmont Mines (RIC, TSX) may have interest in this project…earlier this year we met with AGE’s Jules Riopel, VP Exploration, regarding the company’s strong portfolio of properties…he was very keen at that time on Pascalis-Colombiere and given the drill results, his bullishness on this property appears to have been justified…the former L.C. Beliveau Mine was a very profitable operation between 1989 and 1993, producing nearly 170,000 ounces of Gold for Cambior…we believe a lot of Gold was overlooked in that area…in addition, the geometry of the deposit is such that mining costs should be relatively low…considerable infrastructure is also in place…meanwhile, Agnico-Eagle has completed its 4,000 metre drill program at AGE’s Dubuisson Property near Val d’or…Dubuisson is contiguous to the Goldex Mine Property and also straddles a 5-kilometre segment of the prolific Cadillac-Larder Lake Gold break…also of immediate interest is AGE’s partnership with Lake Shore Gold on the Meunier 144 Property where deep drilling is still testing the down-plunge extension of Gold zones located at the Timmins and Thunder Creek deposits…the current initial deep drill hole onto the Meunier JV property is continuing and had reached a core length of 2500 metres as of mid-June with another 500 metres to go…if a discovery is made, AGE will instantly explode higher…AGE has completed an 8-hole Phase 1 program at the Lapaska Property near Val D’Or…results released July 21 for the remaining 6 holes at Lapaska were very mediocre compared to the first 2 holes (MZO-TSX-V has an option to earn up to a 70% interest in the property) but Lapaska still holds good potential…the Granada Extension Property will be worked on later this year…AGE’s latest financials, released June 29, show the company with $3.3 million in working capital as of April 30, a $300,000 improvement in working capital over the quarter ending January 31…we first mentioned Adventure Gold to our readers in an article September 29, just a couple of days following the company’s announcement that it had acquired land at Granada, when the stock was trading in the low 20′s…we officially added AGE to the BMR model portfolio at just 34 cents October 28…Adventure Gold has been around only since late 2007…AGE is clearly a keeper for the long haul and we wouldn’t be surprised to see a major breakout in this play over the summer…
GoldQuest Mining (GQX, TSX-V)
GoldQuest gained a penny last week, closing at 19.5 cents, exactly at the 50-day moving average (SMA) which has flattened out…the 200-day moving average (SMA), currently at 29 cents, has now started to decline but the 300-day (SMA) at 25 cents continues to rise…support for the stock has proven to be very strong in the high teens…there’s no question in our view that GQC presents a great opportunity for patient and long-term investors…Chairman Bill Fisher has been buying GQC stock on the open market, his latest purchase being 20,000 shares July 12…he has bought nearly 250,000 shares over the past couple of months between 18 and 20.5 cents according to insider trading reports…GQC’s prospects remain solid as the company has an outstanding portfolio of projects in the Dominican Republic and Spain…the substantial drop in the share price from a high of 48.5 cents in early February was due to general market weakness and selling from speculators whose expectations may have been too high regarding initial drill results from the company’s La Escandalosa Project in the Dominican Republic…in addition, the company has stopped all drilling in the DR for the time being in order to conduct extensive IP surveys over Escandalosa and other properties…overall assay results from Escandalosa were decent though far from spectacular…the final set of assays for 7 holes came out May 16…the best intersection from Escandalosa Sur, where an initial 43-101 inferred resource of 400,000 ounces was outlined last fall, was 20 meters grading 1.32 g/t Au…results from this area overall (21 holes) were somewhat disappointing though more drilling is required and will take place later this year…however, the company drilled 3 holes at the Hondo Valle target 1.6 kilometres to the north (outside the resource area) and all 3 intersected significant mineralization including 29 metres grading 2.18 g/t Au in hole #65…that’s the thickest and highest grade mineralized section drilled to date at Hondo Valle…the theory is that mineralization trends north from Escandalosa Sur to Hondo Valle…GoldQuest has been carrying out a 16-square kilometre IP survey and magnetic ground geophysical survey from 2 kilometres north of Hondo Valle to 2.2 kilometres south of Escandalosa Sur…GQC will use the data to pinpoint key targets for an additional 3,000 metres of drilling…GoldQuest also has other promising projects in the DR (in particular, Loma Oculta – formerly Las Animas – where an exploration program aimed at identifying new drill targets is now underway) in addition to its lead-zinc-silver deposit in Spain…GoldQuest’s potential has not diminished whatsoever yet the share price has dropped by about 60% from its early February high…the company released a 43-101 resource estimate March 2 on its Toral zinc-lead-Silver deposit in Spain…it showed slightly lower grades but much higher overall tonnage than the previous historical non-compliant estimate…as a result, total resources came out 15% higher…resources in the indicated category are 4.04 million tonnes grading 11.8% lead and zinc (5.3% lead, 6.5% zinc) as well as 41 g/t Ag and 0.11% Cu… inferred resources are 4.67 million tonnes grading 9.8% lead and zinc (4.44% lead, 5.4% zinc), 32 g/t Ag and 0.14 Cu…Toral has significant exploration and development upside as a majority of the historical drilling (40,000+ metres) was conducted over one relatively small part of the property…the zone of sulphide mineralization is open along strike to the northwest toward a known lead deposit as well as along strike to the southeast and downdip…the project is also an ideal candidate for a fast-track to production…the deposit is close to a power line, highway and rail line…a large smelter is located just 300 kilometers away by rail…meanwhile, GQC has been granted the Lago exploration concession, as reported last July 19, which is only a 30-minute drive northeast of Toral…the Lago property is the first permit granted of three applications by GoldQuest…securing an exploration concession for Lago, where mineralization is similar to that of Toral, is another important step for GoldQuest in building its assets in that region…a comprehensive mapping, geochemical sampling and ground geophysical program will be initiated at Lago to define both infill drilling and new targets that may warrant drilling in the vicinity of the known hydrothermal lead and zinc mineralization that remains open along strike and at depth…GQC is unchanged since we added it to the BMR model portfolio last fall…
Seafield Resources (SFF, TSX-V)
Seafield dropped as low as 22 cents last week, where it has excellent support, before bouncing back to close Friday at 27 cents for a loss of just a penny for the week…insiders are putting their money where their mouths are…President and CEO Cesar Lopez bought another 400,000 shares Friday, according to insider trading reports, while another director scooped up 100,000 shares…selling came into the SFF market Monday when the company announced drill results from Dos Quebradas which were disappointing, though we caution it’s still early in the game for that property…Seafield is currently drilling a promising area at Dos Quebradas approximately 250 metres wide (east to west) and more than 300 metres long (north to south)…the zone is open at depth and is interpreted to plunge to the north…meanwhile, Seafield has added a second drill rig at Miraflores in order to expedite a Phase 2 program there which is designed to better define the shape of the orebody, increase the resource confidence and extend mineralization…a total of 10 holes or 6,200 metres is expected to be completed by November (the rock is hard at Miraflores, so the drilling is slow which is why a second rig has been added)…the company announced July 5 that it has hired SRK Consulting for a preliminary economic assessment or scoping level study on Miraflores for completion by the first quarter of next year…SRK will evaluate the potential positive economics of developing an open-pit and underground operation at the property…it will also provide recommendations to advance the project to prefeasibility…Seafield released an updated 43-101 resource estimate for Miraflores May 26…the project has gone from an inferred resource of 776,000 ounces (at a cut-off grade of 0.5 g/t Au) to a measured and indicated resource of 1.2 million ounces and an inferred resource of 354,000 ounces (at a cut-off grade of 0.3 g/t Au)…there was big news out of Seafield May 9 with a change in management which has to be considered a bullish development…Lopez, who has a strong background in South American exploration management and development, is the company’s new President and CEO…he replaced Tony Roodenburg who remains a director…since taking control, Lopez has purchased over a million shares on the open market…Tom Henricksen, meanwhile, has taken over as Vice-President, Exploration, from James Pirie who also has stayed on as a director…Henricksen has over 35 years of mineral exploration experience and has spent the last 15 years on projects in South America…Seafield exploded from the low 20′s to an all-time high of 77 cents in just one day last December but then proceeded to give up all of those gains…the company’s Quinchia land package in Colombia has a great deal of untapped potential and Seafield is also sitting on nearly $20 million in cash…patient investors have an opportunity to do extremely well with this play given the geological merits of Quinchia and the real potential for 5 million+ ounces from several potential deposits…we have confidence the new management group will unlock value by bringing fresh insight and new energy to this play along with a more aggressive exploration approach…Seafield has gained 350% since we made it the first company in the BMR model portfolio in the summer of 2009…its current market cap is $45 million, just slightly more than twice the company’s current cash value…
