Just recently, John showed us “textbook” chart patterns for Richmont Mines (RIC, TSX) that allowed some of our readers to jump in on that producer at a very favorable entry point. Richmont climbed as high as $9.72 last week and is expected to provide an exploration update on its growing Wasamac deposit any day now.
The company most active in the immediate vicinity of the increasingly important Wasamac play is Visible Gold Mines (VGD, TSX-V) which is aggressively drilling its Wasa Creek optioned property with two rigs. Assays from the very first hole that VGD drilled, announced August 11, were highly encouraging and results are pending for eight of nine holes completed as of a week ago.
VGD is also displaying “textbook” chart patterns as John shows below. Note how the stock is in an ascending triangle and that RSI(14) is in a supporting position. The stock has been gaining momentum ever since the 50-day moving average (SMA), not shown here, reversed to the upside last month. For the last 7 sessions VGD has traded above its 100-day SMA which has flattened out and is currently sitting at 30 cents.
Note: Both John and Jon continue to hold positions in Visible Gold Mines (Terry does not hold a position).
With one hour to go, all indicators point to a positive open this morning. R !
Comment by Bert — August 22, 2011 @ 4:29 am
BMR – Does CQX provide greater leverage to Wasa Creek than VGD at current valuations?
Comment by Andrew M — August 22, 2011 @ 6:47 am
Good question, Andrew…there are different dynamics at play and if CQX makes something happen with their 7 claims that straddle the northern portion of the Wasamac deposit, it should really start to fly…however, at the moment, I think the market perceives VGD as a safer bet…more liquidity in VGD…$6 million working capital vs. $200,000 for CQX…60% of Wasa Creek and Wasa East vs. 40% for CQX…plus Joutel of course, and a 43-101 resource at Stadacona…
Comment by Jon - BMR — August 22, 2011 @ 7:29 am
Thanks Jon – So maybe there’s a strategy of buying VGD or holding VGD for now until its fairly valued and then selling to buy CQX if it doesn’t move in the same direction for that same time period.
Comment by Andrew M — August 22, 2011 @ 9:00 am
Mathematically, CQX has much more leverage than VGD for Wasa Creek and Wasa East.
There is more volume with VGD simply like Jon mentioned, there is not much liquidity with CQX compared to VGD. Also, VGD is more visible to investors/traders because it is doing the work and promoting. Plus, VGD has another catalyst which is Joutel.
My view on the CQX claims (100%) that is north to Wasamac is as follows. As CQX indicated, it will not drill it citing risks related to unclear seismic (due to power lines), and depth (800m +). CQX will wait for Richmont’s results as Richmont drills closer to the CQX claims.
Here is the reward and risk. If Richmont continues to find mineralization, one can speculate that CQX can be taken out by Richmont or CQX can option (possibly to VGD) to drill. If there is no or poor mineralization, then watch out.
With CQX’s Arizona property, it is likely to find a JV partner to do the funding and work. It stated that it likes its share structure.
Comment by Bruce — August 22, 2011 @ 12:51 pm
Because i am a shareholder of CQX/VGD, i feel i can offer an opinion. No doubt VGD is the leader,
leaving CQX in it’s wake. All one has to do is read parts of BMR’s last comments’ & i quote:-
Our hope that something will happen soon.
Must seize the opportunity.
Lowest close price of the year.
The company has had a glorious opportunity to raise case but failed to do so.
I rest my case your Honour ! R !
Comment by Bert — August 22, 2011 @ 1:23 pm