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GoldQuest Mining (GQC, TSX-V)

GoldQuest looks as healthy as ever technically and closed the week up a penny at 38 cents…the stock has been strongly supported by its rising 50-day moving average (SMA), currently at 35.5 cents, since its big run began from a dime in early September…in a significant development this past week, GQC’s 20-day SMA reversed to the upside…this also occurred in early September and again in mid-November…on both occasions this marked the start of a powerful uptrend that lasted several weeks…GoldQuest traded as high as 42 cents last Tuesday where there is clearly some resistance…however, given the strong underlying fundamentals of this company and the bullish overall technical trend of the stock, we believe a breakout through that low 40’s resistance will likely happen sooner rather than later…last Monday was the new accelerated deadline for the exercise of warrants from last April’s financing…this likely added close to $2 million to the company’s treasury… GoldQuest recently elevated director Bill Fisher to executive chairman…he has an impressive 30-year track record of accomplishments in the resource sector…most recently, he was former chairman of Aurelian Resources Inc. (taken over by Kinross) and from 2000 to 2008 he was the chief executive officer of GlobeStar Mining Corp. which, during his tenure, developed, financed and built the Dominican Republic’s first copper mine at Cerro de Maimon (it was also taken over)…with impressive precious and base metal exposure, along with major new discovery potential, we’re very excited about GoldQuest’s prospects for this year which is why it’s one of our favorites for 2011…drilling is in progress at the company’s promising La Esandalosa Project in the Dominican Republic and results could build significantly on the recently released 43-101 inferred resource for that project…all of GoldQuest’s properties in the Dominican Republic and its zinc-lead-silver deposit in Spain have us very bullish on GQC 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 (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…Gold at La Escandalosa 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…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 our readers near the end of September…

Greencastle Resources (VGN, TSX-V)

Greencastle has been a source of frustration recently with no news since the end of November…the stock is down 35% for the month of January after closing Friday at 23.5 cents…it has declined seven of the past 11 trading sessions while on the other four days it was unchanged…the good news is that Greencastle has become oversold technically and its market cap has dropped to only $10.5 million…with approximately $6 million in working capital, three Gold properties and monthly cash flow from an oil royalty, it doesn’t take a rocket scientist to figure out that VGN is a steal at current levels…volume has been low on the move down which confirms there’s nothing to be concerned about here…Greencastle will have its day in the sun again soon enough…the long-term chart remains very bullish with rising 100, 200 and 300-day moving averages (SMA) that are in no danger of reversing…it’s also interesting to note that President and CEO Tony Roodenburg, a large shareholder in VGN, has refrained from selling any of his holdings in recent months despite the fact the stock price more than tripled in value on high volume…this is different from past runs in the stock and adds further credence to our view that we haven’t seen the highs in this cycle yet from Greencastle – it’s poised for what we believe could be a massive breakout sometime during the first half of this year…Pinetree Capital has also accumulated more shares in Greencastle, so there’s every reason to be very optimistic regarding this company’s prospects in the days, weeks and months to come…Greencastle is up 68% since we added it back in to the BMR model portfolio three months ago…

Adventure Gold (AGE, TSX-V)

Adventure Gold woke up at the end of the week, climbing two pennies Thursday and another four cents Friday to close at 46 cents, a four-cent gain for the week and the highest closing price in 13 sessions…the 50-day moving average (SMA), which has flattened out at 47 cents, represents resistance…the stock has definitely gained some near-term momentum but will have to clear this hurdle on significant volume to confirm that a bigger move could be in the works here as February unfolds…AGE released significant news January 20…the company got some free drilling on its Granada Eastern Extension Property as it reported that one of Gold Bullion’s holes (#85) was drilled entirely on Adventure Gold land (just inside the boundary) while three other holes (#78, #83 and #98) were collared north of AGE’s property but finished within it…this didn’t surprise us and it’s not an unusual event in the industry…it worked out well for both parties in this case, however – all the core from those holes has been given to AGE who will share results with GBB…this represents at least $100,000 of drilling and all AGE has to do is pick up the assaying costs…given GBB’s “hit ratio” on holes, it’s reasonable to assume that at least one of the holes (or partial holes) on AGE’s property could be of the “stellar” variety…with more results coming from Gold Bullion, we expect Adventure Gold could continue to firm up…they do hold small but strategic parcels of land around Granada (immediately to the south and the west in addition to the east) that could become part of a large open-pit…their claims hold significant potential value and they have drill assay results coming in without even doing their own drilling which they plan to start upon completion of their program at Pascalis-Colombiere…that property in the eastern part of the Val d’Or mining camp is heavily underrated in our view…a 2,500 metre drill program started at Pascalis-Colombiere last month and is testing the former L.C. Beliveau Mine at depth (below 300 metres) as well as near-surface parallel Gold structures to the west…Pascalis-Colombiere is just 1.5 kilometres east of Richmont’s (RIC, TSX) operating Beaufor Gold Mine which has produced over one million ounces in its lifetime…it’s safe to assume Richmont will be watching developments at Pascalis-Colombiere with interest…Adventure Gold’s property has significant upside exploration potential…the geological setting is favorable for the identification of new high-grade Gold bearing veins and structures or bulk-style ore shoots…there are many untested areas and excellent potential at depth…L.C. Beliveau was a very profitable former producer…if AGE can prove up something significant through extensions to this deposit, we see a potential deal with Richmont which would be the natural choice to bring the mine back into production…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 34 cents October 28, so the gain since then is 35%…Adventure Gold has been around only since late 2007 and we are impressed by the company’s solid portfolio of properties (19 in six 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…the current initial deep drill hole onto the Meunier JV property is continuing…when completed it’s estimated the hole will 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 has now likely passed the 2,000 metre mark in depth…if this deep hole succeeds, AGE could absolutely explode…

Sidon International (SD, TSX-V)

Sidon’s roller-coaster ride continues with the ride back up likely underway again…Sidon broke support at 16.5 cents last Monday and then proceeded to drop as low as 13 cents the following day when the CDNX plunged 46 points…these were “nervous nellies” – scared retail investors mostly, fearing the CDNX was about to fall off the cliff and take Sidon with it…this stock has shown clear trading patterns since last spring and has been quite volatile…however the primary trend is up and Sidon has consistently found support at or just above its rising 200-day moving average (SMA)…RSI(14) and Stochastics show a stock ready for a new move to the upside…BMR is looking forward to an interview soon with President and CEO Kamal Alawas – we’ll update investors on the exact timing of that as the week progresses…the first six holes have been completed over a strike length of 900 metres at Sidon’s Morogoro East Gold Property…the company reported zones of disseminated sulphides of pyrite and pyrrhotite as well as some chalcopyrite and arsenopyrite throughout all six holes over intervals of 30 to 70 metres…we caution that visuals are not always reliable but there’s reason to be optimistic that Sidon could be on to something…the company is also trying to develop a placer operation at Morogoro and has also acquired ground near Canaco’s discovery…Sidon remains locked in a very strong long-term uptrend as evidenced by the rising 100 and 200-day SMA’s…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…the company raised over $1 million through the exercise of options and warrants in November and December…

Seafield Resources (SFF, TSX-V)

For the first time since its big move at the beginning of December, Seafield closed below 50 cents last week and below its rising 50-day moving average (SMA)…the stock was off a nickel for the week, closing Friday at 48 cents, but volume on the fall below 50 cents was relatively light…we still view the overall trend since early December as very bullish and we’re expecting a significant turnaround in February…Seafield’s current market cap of approximately $70 million is very attractive as this company continues to work on building a substantial Gold resource at its Quinchia District properties in Colombia…on December 3, SFF announced a spectacular drill result from its Miraflores Property in Colombia and the stock rocketed to 77 cents…results are pending on nine more holes at Miraflores…given historical results, at least some of these holes should be very good…drilling now is taking place at Dos Quebradas, a property we believe gives Seafield its real “blue sky” potential at Quinchia… SFF reported December 8 that the first three holes had 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 three 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 last 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 one 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 its three major properties at Quinchia (Chuscal is the third property)…Seafield has in excess of $15 million in the bank to fund an aggressive program in Colombia…