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Gold continues to find support at $1,240…the yellow metal has traded in a range of $1,240 to $1,249 so far today…as of 7:55 am Pacific, it’s off $1 an ounce at $1,246…the CDNX has climbed above 1600…it’s currently at 1609, up a dozen points, closing in on the next resistance level of 1625…this is a powerful looking market…there no doubt will be a pullback at some point but it’s likely to be limited (i.e., 5%) as the CDNX is underpinned by very strong technicals at the moment and a lot of money will be pouring in on dips…Gold Bullion Development (GBB, TSX-V) is off a penny to 63 cents after falling as low as 61 cents this morning…the stock has strong technical support around current levels…this is the 4th day in a row on the downside, so astute followers should be embracing this weakness…the LONG Bars Zone has far too much going for it, based on Gold Bullion’s exploration update and results last Thursday, for GBB to remain under pressure for much longer…18,000 metres and 88 holes have been drilled in Phase 2 (as of last Wednesday) and the company is now using 3 assay labs…there’s lots happening in the LONG Bars Zone with at least 3 major areas of interest in the Eastern Extension plus continued drilling within the Preliminary Block Model where the promising northern half is now getting considerable attention…Canasia Industries, featured in John’s Technically Speaking article this morning, is up a penny to 20 cents…it’s also the 3rd most active trader on the CDNX so far today with volume of over 2 million shares…Canasia is drillings its Clone Gold Property near Stewart, BC, which generated quite a bit of excitement about a year ago…Richfield Ventures (RVC, TSX-V) is up a nickel to $2.35…we may have seen the last of any trading below $2 on this one with the proposed $15 million financing at $1.95…given the potential size of RVC’s Blackwater deposit in central British Columbia, the company’s current market cap of $66 million ($84.6 million if you factor in 7.5 million shares from the financing) still leaves a lot of room on the upside…interest in Colombian plays is starting to heat up again which bodes well for two companies we keep a close eye on, Seafield Resources (SFF, TSX-V) and Colombian Mines (CMJ, TSX-V)… both have quality projects and the right people on the ground in that country to develop them…Seafield is down half a penny to 22.5 cents this morning while Colombian is up a penny to 74 cents…

5:35 am Pacific

Once each week at BMR, our technical analyst highlights a junior resource stock (outside the BMR Portfolio) that shows very favorable chart patterns.  Investors/traders of course should perform their own due diligence, as always, and carefully review fundamental factors as well.  This weekly feature is merely meant to introduce some possible opportunities that readers may wish to investigate.  This morning, John takes a look at Canasia Industries Corporation (CAJ, TSX-V) which is now drilling its Clone Gold Project near Stewart, British Columbia:

John: Today,  “Technically Speaking” takes a look at Canasia Industries Corporation (CAJ, TSX-V) which in March of this year announced it had received the first set of grades from the processing of its 10 tonne bulk sample sent in from the Clone Gold Prospect in the Stewart Gold District of BC. The results from this portion averaged 152.34 grams (or 3.87 ounces) per tonne gold.  The Clone Gold Prospect recently returned grades including 12.8 metres of 44.75 g/t  including 4.87 metres of 76.8 g/t (announced October 22, 2009).   Then, in late August, a more aggressive follow-up drill program was announced and a drill rig for the Clone Prospect was moved to the property. On Sept. 2 the company announced the drilling had started.

This morning, Canasia reported that it has been informed by the operator that the first 4 holes have been completed at Clone.  Visible gold was encountered in all 4 holes which have all been sent out for assaying.

The Clone Gold Prospect is Canasia’s flagship property and this drilling on the Clone will be the first since last year’s program that returned the grades mentioned above. Canasia has a diversified portfolio of 7 prospects including the Clone.   On Friday CAJ traded in a narrow range of 18 to 19 cents, closing at 19 cents on CDNX volume of 2 million shares.  Canasia’s shares traded up to 41 cents last year on more than 250 million shares which correlated with last season’s Clone drill program.

Looking at the 1-year weekly chart we see that CAJ has climbed from a closing low of 8 cents in June to its close on Friday at 19 cents. This climb has been orderly and formed an upsloping channel (blue line is resistance and the green line is  support). The weekly SMA(10) provides strong support and is pointing up.   There are 2 sets of Fibonacci levels shown. The right hand set shows the Seed Wave was from 8 cents to 16 cents and projects the next target to be 21 cents.   The left hand set shows that after the 21 cent target has been reached, the following target will be 29 cents.   The closing high for 2009 was 33 cents (horizontal blue line), thus the 29 cent Fibonacci target and the 33 cent high form a resistance band as shown.   The average weekly volume has been increasing since early July when this upsloping channel started. This is very bullish.

Looking at the indicators:

The RSI is in the overbought region at 78%, but this is of no concern. Remember the weekly RSI for GBB was continuously in the O/B for 4 months during its move  in an upsloping channel. There is still room for price movement before the RSI reaches an extreme level. If the price remains in the channel the RSI(7) will not reach an extreme level.

The ADX trend indicator has the +DI (green line) rising and above the declining -DI (red line).  The ADX (black line), the trend strength indicator, is low at 24 and climbing. This is a very bullish orientation.

The Chaikin Money Flow (CMF) has been in the green since the beginning of July and shows the buying pressure is increasing. At present it is at 0.38 which is very bullish.

Outlook: CAJ is moving up steadily. With the drill program in progress, and volume and buying pressure both increasing, this stock has a good opportunity for a strong move.

The BMR Portfolio (Part 3 of 3, GBB was covered separately in Part 2)

Sidon International (SD, TSX-V)

Sidon closed Friday at 12 cents, a 1.5 cent loss for the week, but technically the stock is looking extremely healthy and is forming a beautiful base around its 50-day rising moving average where it’s currently sitting…volume dropped off a bit this past week which shows that the recent selling has largely exhausted itself…investors now wait for Sidon to close its proposed $1.2 million financing at 10 cents and then the “reigns” are off, so to speak, and Sidon can aggressively move forward with exploration at Morogoro East in Tanzania…looking at the chart, it’s not hard to tell that Sidon’s best days are coming…

Richfield Ventures (RVC, TSX-V)

Richfield hit a new all-time high last week and closed the week at $2.30 for a gain of another 10 cents…like Sidon, Richfield is trying to close a financing but a much larger one – nearly $15 million at $1.95…Richfield’s Blackwater Project in central British Columbia is developing very nicely and showing all the signs of becoming a major gold deposit with silver and copper credits as well…technically, the stock is currently in overbought territory based on RSI and Stochastic indicators…an unwinding or cleansing of that overbought condition in the very near future would be a healthy development from a technical standpoint…downside risk, however, appears limited with the financing price acting as a floor for the stock…

Seafield Resources (SFF, TSX-V)

Colombian plays are heating up again as investor interest is returning to this prolific gold region…this renewed appetite for companies exploring in Colombia should bode extremely well for Seafield which has a very strategic land position of nearly 70 square kilometres in the Quinchia District, just south of Medoro’s (MRS, TSX-V) 10 million ounce Marmato Deposit and adjacent to some other plays that are drawing attention…Seafield had a strong week, gaining 3.5 cents to close at a resistance level of 23 cents…Seafield may need a little more time to seriously bust loose as it is at an RSI level where it has consistently retreated from in the past…however, the stock’s 6-month slide is over and the final few months of the year should prove very interesting…initial drill results from Miraflores are expected this month and drilling should also commence soon at another excellent target, Dos Quebradas…

Colombian Mines (CMJ, TSX-V)

Colombian had an interesting week…the stock surged higher early in the week on technical buying as it finally got above its 50-day SMA…it shot as high as 95 cents intraday last Tuesday, just above significant resistance at 90 cents, and closed at 85 cents that day…it re-tested 95 cents Wednesday, closing at 89 cents Wednesday and then 85 cents again Thursday…on Friday, CMJ opened at 83 cents and then got hammered on some Anonymous sell orders all the way down to 68 cents…it closed Friday at 73 cents, down 2 cents on the week, and just above its 50-day SMA which is now acting as new support…the selling on Friday could not have been related to fundamental factors and could have just been someone looking to raise some cash in a hurry…it doesn’t take much selling or buying to move the tight CMJ market quite significantly…technically, the stock is looking fine…like Seafield, we see CMJ being a very strong performer through the rest of the year with interest in the Colombian plays heating up again…CMJ has a huge land position in Colombia and some really outstanding properties in that package including Yarumalito…

North Arrow Minerals (NAR, TSX-V)

Investors are still waiting to hear if North Arrow has received a drill permit for Lac de Gras and if in fact they will proceed with drilling there in the near future…we are very disappointed with how this stock has performed (or not performed) over the last 5 months since we added it to the BMR Portfolio…drilling at Lac de Gras was supposed to have started by now, so there is no sugar-coating this issue – we are not happy and the company has not looked good in terms of delivering on its exploration plans…having said that, we’re not quite ready to throw this one overboard as we want to see what the rest of September brings…North Arrow has additional assets besides Lac de Gras and we’re reasonably hopeful that Gren Thomas, who passionately told us he wants to do something with this company, will deliver one way or the other…from a technical standpoint the stock is trading at a strong area of support but it desperately needs a story and volume as it is drifting aimlessly right now…

“Watch List”

Excel Gold Mining (EGM, TSX-V)

Now here’s a stock with a story and volume…Excel surged to a new 52-week high this past week of 19 cents on total CDNX volume of over 2 million shares…as we’ve pointed out before, Excel has a phenomenal looking chart and very bullish volume patterns…it closed the week unchanged at 17.5 cents…we’ve visited Excel’s Montauban Mining Camp Project, 120 kilometres west of Quebec City, and the potential of the company’s 130 square kilometre land package is indeed impressive…Montauban itself is a former producer – near-surface gold, silver and base metals – and has historical reserves, which Excel is trying to quantify, as well as untapped potential at the former mine and adjacent areas…the property has excellent access and important nearby infrastructure…at the moment the company is compiling all historical information related to the former mine, including some 900 drill holes, for a 3-D Gemcom cut overview which should prove to be very valuable in guiding future exploration and a potential re-start of mine operations…there is strong local support for the project…significantly, the company seems to be attracting new blood (Frank Basa’s private company Grupo Moje was part of a large stock option grant announced June 25 which first got us interested in Excel)…Excel has had some management issues over the years but we believe they’re getting those sorted out as they now appear to be on the right track…we like this situation a lot as a potential major turnaround with a quality project…

We called it a “sell on news”.  John, BMR’s technical analyst, calls it a “soak-up” – investors eagerly but patiently gobbled up Gold Bullion shares Friday as stock moved from weak hands into strong hands.  GBB remains very healthy technically, underpinned by strong support as John explains below.  As a new week begins, all of Gold Bullion’s major moving averages are in bullish alignment.  The fundamentals are also strong with GBB demonstrating that LONG Bars Zone drilling is successfully expanding the Eastern Extension as well as currently targeting the under-explored and highly prospective northern half of the Preliminary Block Model:

John: Friday was a day of investor reaction for GBB after the long awaited news release.  To some investors the news was disappointing but to many others it confirmed their belief (and BMR’s) that Granada will become another major gold deposit in northwestern Quebec.

The stock started trading at 67 cents, rose to 68 cents and then drifted down to a low of 60 cents before closing at 64 cents on a total volume (CDNX and Alpha) of 5.7 million shares. No, this was not a “sell-off “.  It was a “soak-up”.  All day long investors eagerly but patiently waited to gobble up stock from any weak hands.  At the end of the day on the CDNX there were 324 lots on the bid at 63 cents and just 41 on the offer at 65 cents.   Remember, there are a hundred reasons to sell but only one to buy.

The last GBB chart we presented was for Sept. 3,  a weekly chart that showed a cup without a handle.  This week we show that same cup on a daily chart but this time it has grown a handle.   Looking at the 3-month daily chart above, we see the cup drawn in mauve lines and the handle in down-sloping blue lines.  On Monday, Tuesday and Wednesday GBB gradually climbed to a new 52-week high of 79 cents which made the right hand side of the cup higher than the left hand side.  This is unusual and it indicated the strength of the bulls.

Wednesday also saw the start of the formation of the handle with Thursday’s and Friday’s red candles taking the handle down to a low of 60 cents.  The handle is a type of consolidation that occurs when a stock gets overbought  and must unwind.  The right hand side of the cup started at 50 cents on Aug 19 and as stated climbed to 79 cents.   The Fibonacci levels (green horizontal bars) show that during this past week the stock has declined as low as the 38.2% level. With the buying strength shown last week I do not expect it to trade lower than 60 cents for this pattern to remain intact.    The two horizontal blue lines are resistance levels at 71 cents and 79 cents, previous highs.   The main support is provided by the Fibonacci 38.2% level and the SMA(20) which is also pointing up.

Looking at the indicators:

The RSI has fallen below the overbought region to 52% and also shows that a divergence occurred with price as shown on the chart.  This gave forewarning that the handle would form.  The support level is at 40% (horizontal orange line).  The higher than normal trading volume in the last few days shows a “changing of the guard” so to speak of some stock.  This is healthy and should not cause concern with the stock at these levels.

The Slow Stochastics has fallen below the overbought area and is still dropping, so expect more consolidation at least for the early part of next week.

The Chaikin Money Flow (CMF) was green all of last week, even during the formation of the handle.  This shows the strength of the buying pressure.

Outlook: The chart and the indicators show that we can expect more consolidation in the handle during next week until the overbought condition has been completely or largely unwound.  Of course, in the midst of a major drill program, there’s always the possibilty of a pleasant surprise, so we can’t rule out the possibility of more volatility – in this case with an upward bias given the clues we received in Thursday’s news release.    The stated support levels should hold.  This is just another step in the process of Gold Bullion developing a major deposit at Granada.

The BMR Portfolio (Week In Review Part 2 of 3)

Gold Bullion Development (GBB, TSX-V)

It was a hugely interesting week for Gold Bullion as the company first announced it had launched a Baseline Environmental Study for the Granada Gold Property, then two days later (Thursday after the close) it gave a detailed exploration update on the LONG Bars Zone in addition to some new drill results.  Between the CDNX and the Alpha Market, GBB traded 5.7 million shares Friday and closed the week at a support level of 64 cents, a loss of 3 cents on the week.

Technically the stock continues to look very strong.  The knee-jerk “sell-on-news” reaction Friday by some investors took the stock to an intraday low of 60 cents, just above its rising 20-day SMA, before bargain hunters stepped in and stock moved from weak hands into strong hands.  An important technical development this past week was a confirmed reversal in GBB’s 50-day moving average (now rising at 56 cents).  This bodes well moving forward.

Fundamentally, Gold Bullion’s 20,000 metre Phase 2 drill program, which is now drawing to a close, has revealed some highly significant geological information.  In fact, the very definition of the Granada deposit has evolved substantially as Gold Bullion stated in its news release:   “Granada is a sediment-hosted, structurally controlled vein-type deposit (quartz veins, veinlets, stockworks, breccias) that has been intruded by a series of syenite feldspar porphyry sills and dykes mineralized with finely disseminated pyrite and/or arsenopyrite.”  This is a different and expanded definition from earlier and, combined with additional information, it’s not hard to draw the conclusion that Granada is now starting to show the characteristics of a porphyry-style deposit which has major implications for potential tonnage.  Gold Bullion has a high grade starter pit at Granada but this deposit, we believe, is going to be all about volume – and lots of it.

The release also stated:   “The fact that feldspar porphyry is hosting gold is an interesting development historically for Granada as a 2006 Technical Report on the Property stated that all economic mineralization at Granada was related to quartz veining.”

Additional drill results were released – some hit and some didn’t – but all the signs are very encouraging here.  It appears that none of the holes with the best “visuals” have been reported yet.  Why that is we don’t know, but it seems the drillers didn’t start hitting the really good stuff in the Eastern Extension until July (drilling started in the East in early June).  So those holes are in the assay pipeline and investors need to be prepared for that – the chances of some spectacular results out of the East in the very near future clearly exist.

GENIVAR has reported very encouraging showings east, north and south of Phase 1 discovery hole #17.  What we find really interesting – and it was buried near the end of GBB’s news release – was that the most southern hole in the Eastern Extension – #86 – appears to have been a successful 250-metre step-out to the east-southeast from the Preliminary Block Model and Vein #2.  Strong alteration zones in #86 as well as visible gold at two different depths – in a quartz vein and also in porphyry.  This is a major development as now it’s not just areas east and north of the Preliminary Block Model that hold excellent potential, but the south has possibly really opened up as well.  This is a bit of a surprise and it’s going to be a lot of fun to watch.  A core photo of #86 on the Gold Bullion web site shows really nice mineralization including visible gold in porphyry.  This hole could be absolutely stellar.

GR-10-53 (inside the Preliminary Block Model) is Gold Bullion’s best drill result so far at Granada.  Three things we love about this hole – near-surface (3.5 to 114 metres), nice grade (1.34 g/t Au over 110.5 metres), and it was drilled perpendicular to Vein #2 (believed to closely approximate true width).

We also see that things are developing over the northern half of the Preliminary Block Model.  In fact, as incredible as this may seem, it appears the knuckleheads who previously worked on this property and extracted some gold also dumped massive amounts of waste material right on top of an orebody (Gold Bullion of course had part of this “waste” material sampled and got a grade of 1.75 g/t Au).  GENIVAR confirms that “large porphyry intrusions cover much of the northern part of the waste pile.  Northeasterly trending fault structures are also interpreted to run through the waste pile.”

Rock from the 34,000 metre waste pile is being removed, allowing for drilling of targets in this promising area.  Also, just east of the waste pile in the northeastern quarter of the Preliminary Block Model, hole #47 intersected 28 metres grading 1.68 g/t Au.  A total of 14 other holes have been drilled in this section and assays are pending.

The very important Cadillac Fault runs through the northern portion of Granada, going down approximately one kilometre deep, and many secondary faults (“spatially related” to the Cadillac Fault) throughout the Granada Property have become features of major interest for GENIVAR.  The theory, it seems, is that some high grade gold has formed in areas close to these northeasterly trending faults.

The Preliminary Block Model is holding up extremely well and despite the 500 or so historical holes drilled within this area, a good part of it (the northern half east of Pit #1) has received only limited historical attention.  It has also not been tested at depth.   Willoughby’s 1994 report on Granada suggests major potential at depth:  “A large circular feature interpreted from air photos encloses most of the Granada Mine Property and suggests an intrusive stock at depth, perhaps the feeder for the numerous sills and dykes mapped at surface.”

“Infill drilling” is taking place within the Preliminary Block Model but there also appears to be a lot of exploratory drilling right now and “drilling for structure” as Frank Basa calls it.  This is all necessary, of course, to develop a major resource (2.4 to 2.6 million potential non-compliant ounces have already been outlined for the Preliminary Block Model).  What’s important to keep in mind is that Gold Bullion’s 2007 large bulk sample has given us the best indication of the grade we can expect within this defined area – better than 1 g/t Au.

All in all, it was a superb week in our view for Gold Bullion.  The stock hit a new 52-week high and is very strongly supported around current levels.  Everyone’s understanding of Granada, geologically, has improved significantly.  The potential of the LONG Bars Zone becoming the next major gold deposit in northwestern Quebec is very real and undeniable, especially after what we know now.

CDNX and Gold

The CDNX continued to power higher this past week, jumping 31 points from the previous Friday to close at 1597.  The Index has posted 4 consecutive weekly gains (19 trading sessions) and is up 140 points or 9.6% during that time.  There have been 8 straight sessions of very strong volume.  And over the past 2 months since the early July low of 1343, the CDNX has climbed 19%.  Is an imminent pullback in store?  The potential for that certainly exists (the CDNX could first go even a little higher, however, to test resistanace at 1625) but it’s important to point out that any correction from current levels right now would only be mild and highly unlikely to exceed 5%.  There are two areas of strong technical support – 1550 (right around the 10-day SMA and a strong previous support level) and there’s also massive support just above 1500 at the 20 and 200-day SMA’s of 1515.  A pullback to either of these two zones would be a very nice early Christmas gift because we strongly believe the CDNX could really start to explode by late September or early October and hit a new 52-week high before the end of the year.  That belief is based on a wide range of technical and fundamental factors that we’ve outlined previously.  It appears we’re in the beginning stages of a potentially tremendous run that could stretch into the first several months of next year.  The bullish action in the CDNX confirms to us that Gold will reach new all-time highs in the near future, though at present Gold seems to have stalled somewhat and is having difficulty getting through stiff resistance in the $1,260’s.  The latest COT report also suggests there are some bullish extremes in Gold at the moment.  So, as John pointed out in his article yesterday, the chances of a pullback in Gold have increased but like with the CDNX, we’re not expecting any kind of major correction – just a mild pullback if there is one.  Gold should have no problem holding support at $1,200 and in fact the chart shows very strong support around $1,220.  So the downside from yesterday’s close of $1,247 appears quite limited.

Gold has traded within a range of $1,237 and $1,251 today…as of 7:35 am Pacific, the yellow metal has recovered from its lows of the day and is currently up $2 per ounce at $1,246…BMR’s technical analyst sees the potential for a slight pullback in Gold over the immediate term but of course the primary trend is still very bullish…day-to-day moves can be hard to predict…there is strong technical support around $1,220 and again just above $1,200…the CDNX is climbing higher again, which is a positive sign for Gold…the Venture is up 8 points to 1590…the typical “sell on news” has hit Gold Bullion a little bit, which opens up a tremendous opportunity for those who can understand from yesterday’s news that Gold Bullion is indeed closing in on something very big at Granada…many very good looking holes are yet to come in and GBB is hitting the right structures and finding mineralization not just in quartz veins but within porphyry as well which opens up a lot of possibilities…GR-10-53, one of 5 Preliminary Block Model holes released yesterday, was stellar by any measure as it returned 68.3 metres grading 2.16 g/t Au within a wider interval of 100.5 metres grading 1.34 g/t Au…the hole was drilled perpendicular to Vein #2 and is believed to closely approximate true width…GR-10-47 (1.68 g/t Au over 28 metres) opens up interesting possibilities in the northeast quadrant of the Block Model, and large porphyry intrusions cover a good portion of the waste pile with some northeasterly trending faults running right through that area…the Eastern Extension continues to grow and some potentially spectacular holes, based on visuals, are in the assay pipeline…the pullback in GBB this morning is a huge opportunity because this company in our view is well on its way to defining a major near-surface deposit with multi-million ounce potential written all over it…we’ve only seen the tip of the iceberg so far…GBB is down a nickel to 65 cents on over 2 million shares…it’s off its low of the day at 60 cents as bargain hunters are stepping in…Richfield Ventures is quiet so far this morning, down a penny at $2.26…RVC is in the process of closing a nearly $15 million financing at $1.95…Richfield’s Blackwater Project is shaping up very nicely and the company’s market cap is sitting at just $65 million or so which gives it plenty of upside potential if a deposit of at least 3 million ounces is outlined which seems very probable given the results to date…Sidon International (SD, TSX-V), also attempting to close a financing, is off half a penny to 12 cents…this stock has tremendous technical support between 10 and 12 cents…Seafield Resources (SFF, TSX-V) had a big day yesterday, jumping 3.5 cents to 23.5 cents on nearly 2 million shares…it’s quieter so far this morning but holding at 23.5 cents…the fundamentals and technicals are in place for Seafield to march higher…

Yesterday’s major news from Gold Bullion Development (GBB, TSX-V) confirmed in our view that the company has indeed made a very significant exploration breakthrough in the LONG Bars Zone of the Granada Gold Property.  Major deposits aren’t found overnight – they often take a lot of time and hard work with some hits and misses along the way, but the progress Gold Bullion has made over just the last four months has been impressive to say the least.  Drill, drill, drill is Frank Basa’s strategy and it’s working.  The end game here is huge.  Absolutely huge.  The multi-million ounce potential of the LONG Bars Zone is more real today than ever, and we’ll explain why based on yesterday’s news.

As GR-10-53 further demonstrated yesterday (a stellar hole with 68.3 metres of 2.16 g/t Au within a wider envelope of 110.5 metres of 1.34 g/t Au, believed to closely approximate true width), Granada does have a potential higher grade, near-surface  “starter pit” within the Preliminary Block Model.  The best results are yet to come from the Eastern Extension which now essentially covers the same surface area as the Block Model and where there are great showings in all directions – east, north and even south now –  those assays are pending and Gold Bullion has contracted a third lab (ALS Chemex in Val d’Or) to “expedite delivery of additional drill results”.  Drilling in the Eastern Extension did not start until June and it appears GENIVAR did not begin to hit all the really good stuff out there until July, so assays on a lot of potentially very good holes are in the pipeline.  Just one of those (there are many) is GR-10-86 which, based on visuals, appears to have found an extension to the high grade #2 Vein on a 250-metre step-out east-southeast of the Block Model.  Large alteration zones in GR-10-86 with visible gold observed in porphyry and in a quartz vein at two different depths.

We’re excited with yesterday’s news because as we were hoping, Gold Bullion has given us important new geological details on the LONG Bars Zone that help immensely in terms of better understanding  just how big this deposit could become. It’s interesting to note that “GENIVAR”, Gold Bullion’s geological consultant, was mentioned no less than 8 times in yesterday’s news release (yes, it’s important to pay attention to the seemingly little details).   “Gold Bullion” was mentioned 9 times.  Our interpretation of this change is that GENIVAR has stepped up to the plate in a major way here for one simple reason:  They see that something perhaps very big has started to unfold at Granada.  No doubt they had to give their blessing to yesterday’s news, every single word.    They are very respected and error on the side of caution.  You can take what they say to the bank.  Their involvement with this project and their excitement with it speaks volumes.

The style of mineralization has changed at Granada from how it was described in the spring and historically.  Mineralization is no longer related to just quartz veining.  “Granada is a sediment-hosted, structurally controlled vein-type deposit (quartz veins, veinlets, stockworks, breccias) that has been intruded by a series of syenite feldspar porphyry sills and dykes mineralized with finely disseminated pyrite and/or arsenopyrite.”  We know that visible gold and disseminated sulphides are showing up in the porphyry, the significance of which will become more clear as additional assays roll in.

Granada, or at least a portion of it, is showing the characteristics of a porphyry-style deposit – this is potentially highly significant but whether there is a porphyry deposit at Granada still requires confirmation.    Below is some information directly from the Geological Survey of Canada regarding the nature of porphyry deposits:

• “Porphyry deposits are large, low to medium grade deposits (grades ranging from 0.2 to 2.0 g/t Au) in which primary (hypogene) ore minerals are dominantly structurally controlled and which are spatially and genetically related to felsic to intermediate porphyritic intrusions.  They are distinguished by other granite-related deposits such as skarns and mantos by their large size and structural control, mainly stockworks, veins, vein sets, fractures and breccias.  Porphyry deposits typically contain hundreds of millions of tonnes of ore, though they range in size from tens of millions to billions of tonnes.”

• “A close temporal and genetic relationship between magmatic activity and hydrothermal mineralization in porphyry deposits is indicated by the presence of intermineral intrusions and breccias that were emplaced between or during periods of mineralization.”

• “The mineralogy of porphyry deposits is highly varied, although pyrite is typically the dominant sulphide mineral, reflecting the fact that these deposits are huge sulphur anomolies.”

• “Hydrothermal alteration is extensive and typically zoned on a deposit scale as well as around individual veins and fractures.”

With mineralization at Granada no longer restricted to just quartz veining, tonnage possibilities for the LONG Bars Zone are dramatic.  This is going to be about volume.   We know they’ve already got a “high grade” starter pit which is important.   The grade near-surface in some areas elsewhere, even if it’s only half a gram per tonne in some instances, is mineable.  There are a lot of very profitable mines that are low cost (as this one should be) and operating very effectively on grades of even half a gram (or less) per tonne, and not just with gold at $1,250 an ounce.  Investors have to understand that.  That’s why when we see results like 182 metres of 0.44 g/t Au (GR-10-47), 249.6 metres of 0.32 g/t Au (GR-10-42) and 158.2 metres of 0.31 g/t Au (GR-10-35), we are encouraged – nice intersections of mineable grade, and the numbers are going to get a lot better than that – this is still very early.   Keep in mind, too, that the mined grade at Granada has always come out better than the assay grades (the so-called “upgrading effect” which is common in the Abitibi and elsewhere).  At a minimum you can likely add at least 35% to those above grades and probably more as Basa has already explained (and proven with the large bulk sample).  What Gold Bullion should probably consider doing, and we don’t understand why they’re not,  is some larger diameter RC drilling (they’re doing NQ drilling at the moment) in certain areas of the LONG Bars Zone, especially for infill  purposes.  This will give a better representative grade.  NQ drilling gives geologists a much better understanding of alteration and structure, however, and that’s critical especially at this stage of the game.

The Preliminary Block Model (2.4 to 2.6 million potential non-compliant ounces) is holding up very well as shown by GR-10-53, GR-10-47, GR-10-41 and GR-10-33.  The northern half of the Block Model is looking really interesting – large porphyry intrusions cover a good portion of the waste pile (which has yet to be drilled) and northeasterly trending faults are running right through it.  The “northeastern” section of the Block Model, where limited historical drilling has taken place, is showing excellent promise as demonstrated by the first result from there – GR-10-47 intercepted 1.68 g/t Au over 28 metres.  A total of 14 assays are pending from this particular area.

Mineralization remains open in all directions at Granada.  And northeasterly trending faults are believed to be excellent hosts for higher grade mineralization.

As BMR readers know, we have followed this story intensely from the beginning and first alerted our readers to the potential of Gold Bullion’s Granada Gold Property last December when the stock was sitting at just seven cents.  We’ve been to the property three times – our boots have been on the ground in the LONG Bars Zone.  We haven’t seen anything yet that has discouraged us.  In fact, after yesterday’s news, we believe in this more than ever.  This has all the potential of being a massive deposit in the making and we believe in Basa and his team’s abilities to make it happen.