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December 5, 2010

The Week In Review And A Look Ahead: Part 3 Of 3

The BMR Portfolio (2nd of 2 Parts)

GoldQuest Mining (GQC, TSX-V)

GoldQuest continues to look very strong technically and fundamentally…GQC gained 3 more cents this past week to close at 34 cents on total CDNX volume of just under 2 million shares…the stock is strongly supported by rising 10-day and 20-day moving averages around 30 cents…all indicators show GQC is quite comfortable at current levels with the next major resistance at 50 cents…at the start of last week we stated there was a good possibility of an imminent breakout to a new 52-week high which is exactly what occurred as GQC moved to 37 cents…GoldQuest’s Gold properties in the Dominican Republic and its zinc-lead-silver deposit in Spain have us very bullish on this company going forward and it’s one of our top picks for 2011…the company, whose largest shareholder is Gold Fields Ltd., is well established in the DR and its property package there is a geologist’s (and an investor’s) dream…they have spent nearly a decade identifying many highly prospective targets, one of them being La Escandalosa (formerly Las Tres Palmas) where an inferred resource of 400,000 ounces of Gold has already been outlined (announced Nov. 16) based on just 25 drill holes at Escandalosa Sur from 2006 through 2010…it’s important to stress the 43-101 was completed on La Escandalosa  at a very early stage and the possibility of a discovery well in excess of a million ounces is possible as this is such an attractive geological target…the deposit is open at depth as well as to both the south and the north toward another discovery of Gold mineralization by the company at Hondo Valle, approximately 1.2 kilometres away…GoldQuest now has all the permits in place for more drilling throughout La Escandalosa and a major program is set to begin…there is strong potential to substantially increase the initial inferred resource estimate for this intriguing deposit…Gold there occurs as a flat-lying stratiform zone at shallow depth with mineralization interpreted to be part of a larger intermediate sulphidation replacement-style system which has now been defined intermittently over a strike length of 2,100 metres…the source of the mineralizing fluids remains unknown at La Escandalosa, leaving open the possibility of the discovery of mineralization in structural feeder zones or perhaps in a porphyry copper-Gold type system…the resumption of drilling at La Escandalosa and fresh results should get the market very excited…GoldQuest has many other targets of considerable merit throughout its large DR land package including Las Animas which has a 43-101 inferred resource of 129,000 ounces of Gold, 2.5 million ounces of silver, 106 million pounds of copper and 130 million pounds of zinc…GQC has more drilling to do there as well…in Spain, Goldquest holds the Toral zinc-lead-silver deposit which has an historical (non-43-101 compliant) resource of 5.4 million tonnes grading 9% zinc, 6% lead and 45 g/t Ag…a 43-101 on Toral is currently being prepared…GoldQuest has also acquired a second polymetallic project in the area (Lago, just a 20-minute drive from Toral), and more details are expected upon approval from the Spanish government of a mineral rights application for the property… GoldQuest is up 74% since we added it to the BMR Portfolio 2 months ago…

Sidon International (SD, TSX-V)

We recently sensed a move was coming in Sidon, based on some interesting technical patterns, and we guessed correctly as the stock jumped 43% this past week to close at 16.5 cents, just shy of its 52-week high of 18 cents…volume on the breakout last week was huge as 23 million shares traded on the CDNX…all of Sidon’s moving averages are in bullish alignment once again with the 50-day SMA reversing to the upside to end a decline that started in late September…the turnaround in Sidon was triggered by the company’s announcement that a 6-hole, 1,500 metre drill program is ready to begin at the company’s Morogoro East Gold Property in east-central Tanzania…these first 6 holes will test the continuation of the vein that the Primary Mining License holders have been mining along the ridge that is between the two placer areas of the prospecting license…we’ve spoken at length with Laurence Stephenson, Sidon’s consulting geologist for Morogoro…Stephenson knows Tanzania like the back of his hand and he’s very bullish on this particular property…he’s now putting the drill rig, the “truth machine” to work, and it’s going to be very interesting to see what may develop here…we’re impressed with how Sidon has slowly but steadily matured as a junior mining company since we introduced it to BMR readers last spring at a nickel…Sidon has had some ups and downs since then but the stock is up 230% in our Portfolio and we have every reason to believe that 2011 will be Sidon’s best year yet…

Seafield Resources (SFF, TSX-V)

Well, it finally happened…at BMR we’ve been pounding the table for a year on the blue sky potential of Seafield’s properties in the Quinchia District of Colombia, and on Friday the stock exploded to an all-time high of 77 cents (the last trade before Thursday’s halt was 23 cents) on the first drill results from Miraflores which included 449 metres grading 1.29 g/t Au in Hole #3…between the CDNX and the Alpha market, Seafield traded an incredible 91 million shares in Friday’s frenzy…profit-taking near the end of the trading session Friday knocked SFF down to a closing price of 57 cents, a jump of 34.5 cents or 153% for the week…Hole #3, which was drilled through the centre of the breccia body, is the best result ever obtained at Miraflores and supports the interpretation in the 43-101 that there appears to be a bonanza zone to the breccia, a high-grade core with an increased abundance of visible Gold and enhanced overall grades…mineralization is contained within two forms in the breccia body at Miraflores – general low-grade disseminations as well as high-grade fault veins which cut the breccia body…Seafield also stated that core logging from several holes shows that the breccia body is more extensive at depth than was inferred from previous drilling…prior to Seafield’s drilling, only 10 holes had ever been drilled at Miraflores (in 2006 and 2007)…Seafield used information from those holes as well as 154 underground samples to produce a 43-101 inferred resource earlier this year of 18.6 million tonnes grading 1.3 g/t Au…at a cut-off grade of 0.50 g/t Au, this represents 976,000 inferred ounces…results are pending on nine additional holes at Miraflores which should give the market plenty to speculate about in the days and weeks ahead…in addition, drilling should be starting soon (if it hasn’t already) at Dos Quebradas which we believe is an even better target than Miraflores which is somewhat limited in its potential size…what will really build Seafield and make it a possible takeover target is if the company can outline several significant deposits throughout its land package, and we believe it has every opportunity to do so…there are some exceptional porphyry targets over a wide area at Dos Quebradas where limited previous drilling by AngloGold produced some very encouraging results such as 39.5 metres grading 1.67 g/t Au (from 230 metres to 269.5 metres depth)…we’ll report some more on Dos Quebradas in the coming days…Chuscal, Seafield’s third major property at Quinchia, is less advanced than Dos Quebradas but also holds a lot of blue sky potential…in exciting situations like Seafield is in, a company usually comes under some pressure for a financing so we do see the possibility of that in the near future for SFF…at what price is anyone’s guess at this point…our other comment is that Seafield, especially now, needs to significantly pick up the pace of exploration at Quinchia…they have a great land package there and hopefully now there will be a much greater sense of urgency to make things happen on the exploration front…that means more personnel and more than just 1 drill rig…Ian Park, Seafield’s Colombian manager, has not been nearly aggressive enough to date in moving this overall project forward…having said that, we love this company and its prospects and we definitely see bigger things ahead for Seafield in 2011…

Excel Gold Mining (EGM, TSX-V)

Excel seems to be following a pattern very similar to Sidon which ran hard to 18 cents and then gradually traded down very close to its 200-day SMA before reversing again to the upside…Excel’s 50-day SMA is still in decline and the turnaround for this stock will come when that reverses…the 200-day SMA is at 11 cents, so the downside risk from here is limited but it may be a little while yet before EGM kicks back into high gear…the good news is that drilling is underway at the company’s Montauban Mining Camp Project, 120 kilometres west of Quebec City…when the drills are turning, anything’s possible…we like Montauban a lot and if anybody can unlock the value of this project, it’s Frank Basa…Excel just recently named Basa as President…the Gold Bullion President and CEO has some cleaning up to do with Excel but he has certainly proven himself with Gold Bullion and we’re confident he’ll turn Excel into a major success though this won’t happen overnight…the company recently finalized a $763,000 flow-through financing to fund its current drill program…drill targets were selected based on information provided by the most extensive historical compilation of geological data (including over 900 drill holes) ever assembled on Montauban which is a former Gold, silver and base metals producer…Excel is down 1.5 cents since we added it to the BMR Portfolio 2 months ago…

Colombian Mines (CMJ, TSX-V)

Colombian was unchanged for the week on light volume at 84 cents…we still see the potential for a near-term technical breakout with CMJ…since mid-September the stock has traded between its 100 and 200-day SMA’s…the 100-day, just below 80 cents, has now started to reverse to the upside…a breakout will be confirmed if and when CMJ closes above 95 cents, an area that has provided stiff resistance…on Nov. 17 the company announced that recent channel sample results have extended high grade Gold-silver-copper mineralization over a much larger width than indicated by historic information at its 9,300-hectare El Dovio project in Colombia…all samples returned significant polymetallic mineralization…6 samples contained Gold in excess of 10 grams per tonne, with individual 2-meter channel samples assaying up to 25.55 grams per tonne Gold, 66.88 grams per tonne silver and 13.5 per cent copper …on October 13 the company reported assay results for 7 more holes at its Yarumalito Property with the best result being a 151 metre section in porphyry from YAR-24 grading 0.64 g/t Au…YAR-14 returned 95.5 metres of 0.70 g/t Au…Yarumalito continues to show promise but these are still early days and much more drilling is required…CMJ is one of the best positioned companies in Colombia with a history in that country and a large package of properties…the stock is up 40% since our introduction of it late last year (it was up as much as 170% at $1.62 in March)…

1 Comment

  1. GoldQuest continues to look very strong technically and fundamentally, i really believe heart and soul. I will share with my friends. Thanks.

    Comment by Robin — December 7, 2010 @ 4:18 am

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