The BMR Portfolio
Gold Bullion Development (GBB, TSX-V)
It was a relatively quiet week of trading for Gold Bullion which is not at all surprising considering the stock remains in a consolidation phase and a financing is taking place…the stock closed unchanged for the week at 57 cents on total CDNX volume of just over 3 million shares…GBB continues to find tremendous support at its rising 100-day moving average of 55 cents…the stock is looking stronger technically and a reversal in the 20-day moving average appears imminent (likely during the week of October 18 which would probably coincide with the closing of the financing) and would signal the start of a new uptrend…drilling continues in the LONG Bars Zone and we expect the company to outline plans for a large Phase 3 drill program soon after the closing of the financing…we have every expectation that Gold Bullion will deliver even better drill results in the weeks ahead based on the visuals reported over the summer…a lot of assays will be pouring in through the remainder of the year as to date we’ve seen results on only about 15% of what has been drilled in Phase 2…the fact Gold Bullion has increased its financing from $6 million to $8 million underscores the demand for this stock which has been one of the best performing companies on the CDNX this year…we expect that trend to continue into 2011 as drilling intensifies in the LONG Bars Zone and as results confirm the magnitude of this very large mineralized system…Gold Bullion is up 714% since we introduced it to BMR readers last December at just 7 cents…
GoldQuest Mining (GQC, TSX-V)
GoldQuest has been a star performer since we introduced this company to BMR readers just under 20 cents late last month…GoldQuest jumped a whopping 48% last week, moving from 21 cents to a Friday close of 31 cents on total CDNX volume of nearly 6 million shares…what’s driving GoldQuest is a growing realization of the value of the company’s assets in the Dominican Republic and Spain…just over 3 years ago this stock got as high as $1.80 per share for a total market cap of approximately $100 million…the CDNX was around 3000 at the time but GoldQuest also has much more going for it now than it did back in 2007 including a substantial zinc-lead-silver deposit in Spain…late last year GQC acquired a 100% interest in numerous projects in the Dominican Republic which were part of a joint venture the company had with Gold Fields…the major had invested over $6 million in these projects (including 13,000 metres of drilling on seven different properties)…in return, GoldQuest issued 8.6 million shares to Gold Fields along with a 1.25% royalty interest…GoldQuest has been active in the DR (home of one of the world’s largest gold deposits, Pueblo Viejo) for nearly a decade and they have assembled several advanced-staged exploration projects there including Las Tres Palmas (excellent recent drill results) and Las Animas which has a 43-101 indicated and 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 with potential for considerable expansion…the company also now holds the Toral zinc-lead-silver deposit in northwest Spain which is targeted for production and has an historical non-compliant resource estimate of 5.4 million tonnes grading 9% zinc, 6% lead and 45 g/t Ag…a 43-101 is currently being prepared on Toral…the deposit remains open along strike and at depth…Lundin Mining (LUN, TSX) has a back-in right for up to 65% of Toral if it meets certain commitments including the funding of a feasibility study, but the bottom line is that with even 35% GQC has a company-building asset in Toral…GoldQuest has also secured a second polymetallic project a short distance from Toral and with similar characteristics…further details on this will be announced by GoldQuest after full title has been received from the Spanish authorities…technically, GoldQuest has broken out of a 2-year consolidation phase – a very bullish development…we encourage BMR readers to do their due diligence on this one and think “big” with GoldQuest as it has a very real opportunity to become a producer and make a potential major discovery in the DR…
Excel Gold Mining (EGM, TSX-V)
BMR was very pleased to add Excel to its portfolio near the end of last week with the stock sitting at 16 cents…we’ve been watching this company very closely since a volume breakout on the stock in May and June…we visited Excel’s Montauban Mining Camp project last August and completed our due diligence just recently by reviewing hundreds of pages of historical information on Montauban and speaking with a geologist very familiar with the project and the area…we’re currently finalizing a major report on Excel which we’ll be posting in the coming days…in a nutshell, Excel has acquired the former Montauban Mine, approximately 100 kilometers west of Quebec City, and a large land package surrounding it…we’ve stated this many times before – often the best place to find a new mine is near an old mine…Montauban was mined mostly for zinc and lead but also for some Gold and silver in the first half of the 20th century…in the 1980’s, Muscocho mined an area (the North Gold Zone) adjacent to the main sulphide deposit…there is also a South Gold Zone which has received little attention…Montauban is a large structure (approximately 3 kilometres in length) and we are certain there are extensions to this structure…hydrothermal remobilization and sulphide melting appear to have been the most important mechanisms for controlling the distribution of Gold and silver…the reason we’re so bullish on this property, and therefore the company, is that there are not only significant remaining reserves that Excel could rather quickly exploit if it so chooses but we believe there’s an immense amount of untapped potential with Montauban (just like Granada) that previous operators either overlooked or just couldn’t get around to uncovering…for the first time ever, all the historical drill data (some 900 holes) and other important pieces of geological information on Montauban (from the work of several companies) are being compiled into one database…Excel’s geological consultants are completing a Gemcom overview of the underground structures at Montauban in advance of a large drill program expected to start soon and designed to quantify existing reserves and discover new resources…there are also some highly prospective targets outside the former mine area, particularly north of the North Gold Zone…this is an advanced project with enormous exploration upside…the stock was up a penny for the week at 17 cents and has 113.5 million shares outstanding for a total market cap of $19.3 million…Excel is a major turnaround story in the making that the general market hasn’t picked up on yet which is exactly the kind of situation that we love to bring to the attention of our readers for their due diligence…EGM’s chart is extremely bullish and includes a recent reversal in its 300-day moving average after a decline that started nearly 5 years ago…
Richfield Ventures (RVC, TSX-V)
Richfield has been consolidating recently, unwinding a temporarily overbought condition that emerged last month when the stock ran as high as $3.05…RVC was off 5 cents for the week at $2.75 where it has rock solid support at its 20-day rising moving average…if you look at the Richfield chart, you’ll see that it has repeatedly bounced off its 20-day SMA since the 20-day reversed to the upside in early July…Richfield has jumped 129% since we introduced it to BMR readers last December at $1.20 but we believe there’s plenty of upside remaining, especially with Gold above $1,300 an ounce…the company has nearly $20 million in the bank and has a fully winterized camp in place for aggressive continued drilling of its Blackwater Project in central British Columbia…Richfield’s current market cap is approximately $100 million, well below what the potential takeover price for this company could be if it’s able to prove up a resource of several million ounces as seems very probable given the excellent drill results they have delivered to date…we don’t believe President and CEO Peter Bernier is in this to turn Richfield into a producer…we believe Blackwater will ultimately end up in the hands of a major…