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The BMR Portfolio (Part 2 of 2)

GoldQuest Mining (GQC, TSX-V)

GoldQuest was unchanged for the week, closing Friday at 38 cents…volume Friday (just 56,000 on the CDNX, nil on ALPHA) was the lowest in several months though the average daily volume for the week on the CDNX was 332,000 with the stock trading between a range of 36 and 41.5 cents…the stock has exceptionally strong technical support in the mid-30’s and we don’t anticipate a drop below that level (at least on a closing basis) through the balance of the year…the next major technical resistance is at 50 cents…with strong precious and base metal exposure, along with major new discovery potential, GQC is one of our top picks for 2011… the company is currently preparing to launch a drill program in the Dominican Republic which should build on its recently released 43-101 inferred resource for its La Escandalosa Project (formerly Las Tres Palmas)…all of GoldQuest’s properties in the Dominican Republic and its zinc-lead-silver deposit in Spain have us very bullish on this situation going forward…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 precious and base metal targets, one of them being La Escandalosa 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 95% since we added it to the BMR Portfolio near the end of September…

Adventure Gold (AGE, TSX-V)

Adventure Gold had a roller coaster ride Friday, dropping as low as 41 cents (the 50-day SMA) before recovering to finish the day at 47.5 cents for a weekly gain of half a penny…technically, AGE continues to look solid and the RSI appears to have bounced off support at 50 on the Index…the stock closed half a cent below its 20-day SMA Friday but the 20-day continues to rise…the company announced Thursday that a drill rig has been mobilized to its Pascalis-Colombiere Property in the eastern part of the Val d’Or mining camp…a 7-hole, 2500-metre program will test the former L.C. Beliveau Mine at depth (below 300 metres) as well as near-surface parallel Gold structures to the west…this is one of several quality projects in AGE’s portfolio…Pascalis-Colombiere is just 1.5 kilometres east of Richmont’s (RIC, TSX) operating Beaufor Gold Mine which has produced over 1 million ounces in its lifetime…it’s safe to assume Richmont will be watching AGE’s drill program with interest…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  Portfolio at 34 cents October 28, so the gain since then is 40%…our interest in Adventure Gold, however, goes far beyond the company’s involvement at Granada, as exciting as that is…they do hold a small but strategic slice of land in the Granada Eastern Extension and also more property west and south of GBB’s Preliminary Block Model area…they’ve already produced some very interesting prospecting results on their land in the west…Adventure Gold has been around only since late 2007 and we are impressed by the company’s solid portfolio of properties (19 in 6 strategic areas in Quebec and Ontario)…also of immediate interest is AGE’s partnership with Lake Shore Gold (LSG, TSX) on the Meunier 144 Property where deep drilling is currently testing the down plunge extension of Gold zones located at the Timmins and Thunder Creek deposits…Lake Shore recently provided an update on this project…the current initial deep drill hole onto the Meunier JV property is continuing and when completed is estimated to provide a deep cut on the projected target area at about a vertical depth of 2,600 metres…this will enable shallower wedge cuts to be considered if significant mineralization is found to be present in this area…the initial deep hole was collared on LSG’s Timmins mine property last August and is now about 1,700 metres in depth….this hole is targeting potential zones down plunge and on strike to mineralization at LSG’s 100% owned Timmins Mine Gold deposit where LSG has recently announced intercepts of up to 13.55 g/t Au over 50.8 metres and 61.35 g/t Au over 15 metres…the Timmins deposit straddles a volcanic/sedimentary/ultramafic contact zone within a folded sequence that plunges 54 degrees to the west-northwest toward the Adventure Gold Meunier JV property…if this deep hole succeeds, AGE could absolutely explode…

Seafield Resources (SFF, TSX-V)

Since announcing a spectacular drill result from its Miraflores Gold Property in Colombia December 2, an incredible 189 million Seafield shares have changed hands on the CDNX over 11 trading sessions (an average of 17 million per session)…that’s almost twice the amount of current outstanding shares, so there has been an amazing turnover of stock during the last couple of weeks which in our view is very bullish…volume is what will push SFF higher…the average closing price over the last 11 sessions is 59 cents…Seafield closed Friday at 56 cents and appears to have found very strong technical support in the low-to-mid-50’s…we really like how this stock has traded since December 3 and the key thing to watch for right now, in our view, is how quickly the company can close its proposed $15 million financing at 50 cents…the quicker this closes, the more bullish is the case for Seafield…results are pending on 9 more holes at Miraflores…given historical results, at least some of these holes should be very good…drilling is also underway at Dos Quebradas, a property we believe gives Seafield its real “blue sky” potential at Quinchia… SFF reported December 8 that the first 3 holes have been completed at Dos Quebradas which is rich in porphyry targets over a wide area…DQ is just a few kilometres northwest of Miraflores…visual reports indicate that these 3 holes have similar styles of mineralization to an historical hole drilled by AngloGold that returned an interval of 39.5 metres grading 1.67 g/t Au…the potential of Dos Quebradas is evident from limited historical drilling and was confirmed by Seafield earlier this year through soil geochemical surveys and magnetic surveys which are crucial to discovering hidden porphyries in areas of very little outcrop…Seafield also released results recently from trenching in 1 location from the southern end of the gold-in-soil anomaly that defines the northern extension of the Dos Quebradas porphyry…1.75 g/t Au was returned over 94 metres…Seafield has an excellent opportunity to develop a multi-million ounce Gold resource at Quinchia…with a current market cap of just $60 million ($77 million if you include the 30 million share financing at 50 cents), SFF still has considerable upside potential…we suggest readers review Friday morning’s chart update from John on Seafield…his near-term Fibonacci target is $1.05…

Colombian Mines (CMJ, TSX-V)

After finally breaking through resistance at 95 cents the previous week and climbing as high as $1.05, CMJ quickly went into reverse this past week and fell as low as 88 cents before closing Friday at 93 cents – an 8-cent weekly loss…this was surprising but doesn’t change our bullish outlook on the company…for most of December the stock has traded above its 200-day SMA (currently at 90 cents) and the 100-day reversed to the upside in late November…we believe it’s only a matter of time before CMJ picks up a strong head of steam…with just 23 million shares outstanding, this could get interesting in a hurry…we like CMJ because it’s an experienced operator in Colombia with a large land position (more than 150,000 hectares) covering many excellent geological targets…its flagship property is Yarumalito, just north of Medoro’s Marmato deposit and of course close to Seafield’s Quinchia Project…drilling continues at Yarumalito…2 months ago the company reported assay results for 7 more holes 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…the company’s El Dovio Property, approximately 100 kilometres southwest of Yarumalito, also has our attention…last month the company announced that recent channel sample results have extended high grade Gold-silver-copper mineralization over a much larger width than indicated by historical information at the 9,300-hectare El Dovio Property…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…CMJ, which reported cash on hand of over $3 million as of July 31, is in good position for a strong 2011…the chart is telling us that positive developments are on the way…CMJ is up 55% since we added it to the BMR Portfolio a year ago…

Sidon International (SD, TSX-V)

Sidon traded between 16.5 and 21.5 cents this past week and closed unchanged for the week at 18.5 cents…technically, the stock has very strong support in the 16 to 18 cent range and the pullback from a recent high of 26.5 cents is of no concern to us…Sidon remains locked in a very strong long-term uptrend…there was some significant news on the Sidon front last week as the company picked up ground (50.5 square kilometres) northeast of Canaco’s (CAN, TSX-V) Magambazi Property, immediately north of Douglas Lake Minerals‘ acquisition which borders Canaco’s property…strategically, this was a smart move on Sidon’s part and helps underpin if not enhance the company’s value…it meant giving up an option, for now at least, to acquire more land adjacent to its Morogoro East Gold Property to the south where drilling is ongoing…given a choice between the 2 properties, Sidon made the right call in our view though the process appeared a little messy to investors…this company has come a long way since last March when we first introduced it to BMR readers at a nickel, and its new web site is just one more indication of how impressively Sidon has developed and matured…we see exciting possibilities for 2011…on December 7 Sidon reported encouraging visuals from the first hole at Morogoro which was being drilled to intersect the extension of the vein adjacent to the vein workings of artisanal miners…metasedimentary rocks were intersected in the first hole with strong silicification and up to 10 per cent pyrite, arsenopyrite, pyrrhotite and chalcopyrite being observed…all the right ingredients for a potentially good hole…Sidon reported that this hole is well above the artisanal mined vein (estimated to be at between 95 to 100 metres down the hole) and represents a significant envelope of mineralization associated with the contact and the mineralized vein…visuals, of course, can sometimes be deceiving but these are encouraging early indications of the potential of this initial 1,500 metre drill program…the drill bit is the “truth machine” and everyone will be eagerly anticipating results…Sidon is also expected to soon announce some placer testing results from Morogoro…

Excel Gold Mining (EGM, TSX-V)

Excel has been our worst performer over the last 2+ months (it’s down 25% since we added it to the BMR Portfolio in early October) with a drop this past week of another 1.5 cents to 12 cents…the stock has technical support between 10 cents (the July low) and 11.5 cents, the 200-day SMA…there are clearly better opportunities in the market right now than Excel…having said that, this is a company with a terrific asset – the Montauban Mining Camp Project, 120 kilometres west of Quebec City…inept management has prevented Excel from unlocking the value of this asset which is why the company’s recruitment of Frank Basa and Jacques F. Monette, another Gold Bullion director, got us so fired up about this situation…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 only when that reverses…the company recently finalized a $763,000 flow-through financing to fund its current drill program at Montauban…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…