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The BMR Portfolio (2nd of 2 Parts)

GoldQuest Mining (GQC, TSX-V)

GoldQuest fell 2.5 cents for the week, closing Friday at its 20-day moving average of 26 cents, though the company came out with some very good news regarding its Las Tres Palmas Project in the Dominican Republic…a 43-101 inferred resource estimate for the La Escandalosa Zone shows 406,000 ounces with nearly 5 million tonnes grading 2.60 g/t Au…La Escandalosa  is open both to the south and to the north toward another discovery of Gold mineralization by the company at Hondo Valle, approximately 1.2 kilometres north of La Escandalosa…the inferred resource estimate was done early in the exploration stage for this property as only 25 holes have been drilled at the La Escandalosa Zone between 1996 and 2000…GoldQuest now has all the permits in place for more drilling throughout the Las Tres Palmas Project, and it appears a drill campaign will be in full swing there by January…the potential to substantially increase the initial inferred resource estimate for La Escandalosa clearly exists…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…GoldQuest has been exploring in the DR for a decade and has assembled a tremendous portfolio of properties including Las Animas where 129,000 ounces of Gold, 2.5 million ounces of silver, 106 pounds of copper and 130 million pounds of zinc have been outlined (43-101 inferred resource)…GoldQuest also holds the Toral Silver-Lead-Zinc Project in northwest Spain…a 43-101 is currently being prepared for Toral…we see tremendous possibilities for GoldQuest in 2011 as it continues to advance its many properties…

Sidon International (SD, TSX-V)

Things are starting to look good once again for Sidon which dropped in half from a 52-week high of 18 cents in early August…the company came out with some exploration news last week from its Morogoro East Gold Property in east-central Tanzania, showing encouraging sampling results as well as good potential for its placer deposit…the company has also hired IR which is often a tell-tale sign that activity is about to ramp up…Sidon also announced that its new web site should be ready by the end of next month…Sidon continues to trade within its 100 and 200-day SMA’s, and the first sign that a major new move is underway will be a reversal in its 50-day SMA which is likely to occur anytime within the next month…we remain very bullish on the prospects for Sidon which technically has bottomed around current levels…the stock was up half a cent this past week to 10.5 cents…

Seafield Resources (SFF, TSX-V)

Seafield is a bit of a mystery at the moment with little exploration news and a slowly declining stock price…SFF was off 2 cents for the week at 18 cents, and we’re still waiting for drill results from Miraflores and an overall update on immediate exploration activities and plans for Quinchia…fundamentally, the company has an excellent property package in Colombia but unfortunately it has failed – so far at least – to take full advantage of the opportunity it has had…blame for that falls squarely on the shoulders of Seafield Colombian manager Ian Park who has disappointed us, especially after expectations he built with his conference call with investors in July…we’re certainly not prepared to give up on Seafield, however, as we see strong value with its Quinchia properties and little downside risk at current levels…the stock has tripled in value from when we first introduced it to BMR readers in the summer of last year but has under-performed through much of 2010…

Excel Gold Mining (EGM, TSX-V)

Excel has started drilling at its Montauban Mining Camp Project, 120 kilometres west of Quebec City…we like Montauban a lot and if anybody can unlock the value of this project, it’s Frank Basa…Excel just recently named Basa as President…the Gold Bullion President and CEO has some cleaning up to do with Excel but he has certainly proven himself with Gold Bullion and we’re confident he’ll turn Excel into a major success though this won’t happen overnight…Excel closed at 14 cents Friday, a loss of 1.5 cents for the week…the company recently finalized a $763,000 flow-through financing and a substantial drill program is now underway 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…Excel is down 2 cents since we added it to the BMR Portfolio early last month…

Colombian Mines (CMJ, TSX-V)

Activity picked up in Colombian last week with volume improving significantly and the stock hitting a weekly high of 92 cents (its 200-day moving average)…CMJ closed Friday at 83 cents, a 3-cent gain for the week…last Wednesday the company announced that recent channel sample results have extended high grade Gold-silver-copper mineralization over a much larger width than indicated by historic information at its 9,300-hectare El Dovio project in Colombia…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…for the past 2 months the stock has traded in a tight range between its 100-day SMA and its 200-day SMA…the 100-day is now beginning to reverse to the upside…our expectation, based on technical and fundamental factors, is that CMJ will overcome resistance at 95 cents and head north in the near future…traders should be watching this one closely for if and when CMJ gets through 95 cents, its move will likely accelerate rapidly just based on technical factors…on October 13 the company reported assay results for 7 more holes at its Yarumalito Property 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…CMJ is one of the best positioned companies in Colombia with a history in that country and a large package of properties…the stock is up 38% since our introduction of it late last year (it was up as much as 170% at $1.62 in March)…

The BMR Portfolio (1st of 2 parts)

Gold Bullion Development (GBB, TSX-V)

It was a week of major developments for Gold Bullion with outstanding metallurgical results released for Granada Monday followed by new and highly encouraging assay results Friday…the stock was up 5% for the week at 63 cents with the highest weekly CDNX volume (7.4 million shares) in nearly 2 months…metallurgical recoveries in excess of 93% for grades below a gram are highly significant and strongly suggest Granada will be successful as a very large volume deposit if that’s what the LONG Bars Zone turns out to be…all signs are pointing to that…the assay results released Friday prove that the potential of the Eastern Extension is not only to the east, but also to the north and the south…Hole #108, collared 110 metres northwest of Phase 1 Discovery Hole #17 and 150 metres northeast of the Preliminary Block Model (2.4 to 2.6 million potential ounces, non 43-101 compliant), intersected 142 metres grading 0.70 g/t Au within a wider interval of 280 metres grading 0.38 g/t Au…this hole was collared 30 metres north of Hole #55 which returned a whopping 360 metres of 0.60 g/t Au (including 99 metres grading 1.85 g/t Au)…these are impressive intersections and they demonstrate that GENIVAR is defining a growing structure in the Eastern Extension…grades can be expected to improve once the drill pattern tightens, but even 0.50 is a very mineable grade that Gold Bullion could make a lot of money on…small diameter NQ drilling is being carried out to allow GENIVAR to get a better understanding of structure throughout the LONG Bars Zone…this type of drilling gives geologists a really good look at the alteration in the rock, among other things, although in a deposit of this nature (lots of free Gold and finely disseminated Gold) small diameter core drilling is likely going to understate the Gold content as Gold Bullion’s large bulk sample proved…GBB is waiting for drill results from 11 more holes drilled north, northeast and northwest of #17, many of which had strong visuals…the mineralization encountered in the northern portion of the Eastern Extension suggests to us that the Preliminary Block Model, very much untested to the north, has a lot of potential to expand in this direction…this has major tonnage implications for Granada…meanwhile, Gold Bullion has made a significant discovery of mineralization in the far south of the Eastern Extension as Hole #86 returned 1.00 g/t Au over a near-surface interval of 84.6 metres…this gives the south new potential…Hole #86 was collared nearly 200 metres southeast of the Preliminary Block Model…last week’s news – the metallurgical numbers and confirmation of a new north-south dynamic in the LONG Bars Zone – is game-changing and significantly broadens the picture at Granada…going east, GBB has several kilometres of highly prospective ground including LONG Bars Zone 2 which starts about 1.5 kilometres east of Hole #17…some spectacular numbers could come from that area, based on historical information, but there are clearly exciting new possibilities going north and south within the Preliminary Block Model and the Eastern Extension…Gold Bullion and GENIVAR are dealing with a different type of deposit than what Osisko (OSK, TSX) has at Canadian Malartic 65 kilometres to the east, but at the end of the day Granada could turn out to be even bigger…

Adventure Gold (AGE, TSX-V)

We first mentioned Adventure Gold to our readers in an article September 29 when the stock was trading in the low 20′s and just a couple of days after the company announced it had acquired land at Granada…we officially added it to the BMR Portfolio at 34 cents October 28…AGE closed Friday at 42.5 cents, up half a cent for the week…this stock has a terrific looking chart with very strong support at the rising 20-day SMA of 40 cents…AGE has much going for it, not the least of which is its small but strategic land position at Granada…Gold Bullion has drilled some Eastern Extension holes very close to AGE’s property (within metres in a few cases) which is also right on strike with Hole #86 (approximately 200 metres to the west)…on November 10 AGE reported initial prospecting and mapping results from work carried out over its small land package at Granada, showing numerous Gold-bearing zones (in the western and southwestern lateral extensions of the LONG Bars Zone) associated with porphyritic intrusions and/or quartz veins with disseminated sulphides in strongly altered and locally well-deformed sediments…AGE plans to start drilling by early next year…Adventure Gold has been around only since late 2007 and we are impressed by the company’s strong portfolio of properties (19 in 6 strategic areas in Quebec and Ontario) including its recently announced partnership with Agnico-Eagle (AEM, TSX) at Dubuisson…it also has a 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…AGE’s foray into Granada provides some potential “sizzle”, especially if Gold Bullion continues to deliver stellar results from the Eastern Extension…Adventure Gold has approximately $2 million in cash and nearly $3.5 million in cash and stock (includes 15,000 shares of Agnico-Eagle)…we’ve spoken with Marco Gagnon, AGE’s President and CEO…he has strong credentials and a clear vision for this company…he has also assembled a powerful geological team…this is a determined and aggressive group…

Currie Rose Resources (CUI, TSX-V)

Currie Rose, which was added to the BMR Portfolio at 16 cents in late October, has completed the first half of its Phase 1, 3,000 metre RC drill program at the Sisu River Gold Property which forms part of its very promising Mabale Hills Project in northwest Tanzania…14 holes totaling nearly 1,500 metres were completed through last Tuesday at Sisu River, and initial assay results are pending…Currie Rose is using a lab in the local area, a short distance from Mabale Hills, and they’ve been able to get assay results very quickly in the past…drilling at Sisu River started nearly a month ago and the company also reported last week that “good source rocks have been intersected beneath the ‘mbuga’ clays‘…we can’t help but think a discovery is in the making here, perhaps similar to what occurred at Mwamazengo just 8 kilometres or so to the southeast in 2005…the drill program at Sisu River is focusing on an area that has returned excellent sampling results and where artisanal miners made a discovery in the fall of last year…the quartz porphyry target at Sisu River is hosted within felsic volcanic rocks, generally considered to be favorable hosts for Gold in greenstone belts around the world…Currie Rose last week also gave more details on its Sekenke Gold Project which is 200 kilometres southeast of Mabale Hills…we are extremely bullish on this major land package as it runs in between and surrounds two former producing high grade mines…the company has already identified a large structure (12 km by 800 metres) within a shear zone on the margins of a large granite intrusion that hosts numerous vertical quartz reefs of the same type that developed at the nearby former mines…Currie Rose is ready to initiate significant pre-drilling work (high resolution satellite imagery, geophysics, etc.) at Sekenke in order to prioritize drill targets for the spring…Currie Rose has a very impressive chart with the stock underpinned by rock solid technical support around 20 cents…CUI closed the week at 22.5 cents, down half a penny…it has consolidated nicely recently and appears close to starting a new uptrend that could test the next major level of resistance in the low 30’s…

Greencastle Resources (VGN, TSX-V)

Greencastle was off half a penny for the week at 24 cents with volume declining to 640,000 shares from about 1.5 million the week before…the stock’s overbought condition is unwinding with strong technical support in the low 20’s…in clockwork-like fashion, Greencastle has experienced 3 powerful moves (very sharp spikes) over the last 7 years (late 2003, early 2006 and mid-2008)…2006 was more intense than 2003, and 2008 was stronger than 2006…we’re certain that a very powerful fourth move is now underway, driven by Greencastle’s recent shift in corporate strategy to get much more active in the Gold exploration space…volume has picked up dramatically in VGN since late October, which is what one would expect in the early stages of a major move…Greencastle has working capital of $6 million, regular monthly oil royalty revenue of at least $125,000, and 2 very promising Gold properties in Nevada to go along with its new acquisition near Richfield’s Blackwater Project…VGN has a current market cap of only $11 million is already up 71% since we added it to the BMR Portfolio a month ago…

Richfield Ventures (RVC, TSX-V)

Richfield finished the week on a strong note, climbing 7 cents Thursday and 12 cents Friday to close the week up a nickel at $3.24…the stock has very strong new technical support at the $3 level…there is no question Richfield is developing a potential world class deposit at its Blackwater Project in central British Columbia which is why BMR jumped all over this story last December when the stock was trading at only $1.20…we interviewed company President and CEO Peter Bernier last spring and we’re extremely impressed with how he has managed this project…Bernier’s strategy, we believe, is to drill, drill, drill and fetch the highest takeover price possible for the company after proving up (hopefully) a multi-million ounce Gold deposit which will have copper and silver components as well…in this rip-roaring bull market, a potential takeover price for RVC could be in the hundreds of millions or who-knows-what depending on future drill results and just how high Gold goes…the dynamics with Richfield are exciting…the company has consistently returned long intersections of mineable grade…4 more holes were reported November 2 (all drilled vertically) including BW-87 which returned 115 metres grading 2.59 g/t Au…it looks like it’ll be a cold and snowy winter in British Columbia, but Richfield has a fully winterized camp and should be able to drill with at least 2 rigs without any interruptions throughout the winter…

CDNX and Gold

The CDNX had a volatile but very encouraging week as it headed sharply lower Monday and Tuesday but successfully tested the bottom end of the support band BMR had identified at 1900.  The Index fell as low as 1902 Tuesday, dropping as much as 80 points intra-day, before regaining 21 points by the close to finish Tuesday at 1923.  The Index then enjoyed gains of 31, 34 and 8 points Wednesday, Thursday and Friday, respectively, to end the week at 1996 for a weekly loss of only 11 points.

The action in the CDNX this past week clearly demonstrated the incredible underlying strength of this market.  The total minor correction from the high of 2070 November 9 to the intra-day low last Tuesday of 1902 (6 sessions) was 168 points or 8%.  This was extremely helpful in terms of unwinding the overbought condition and has paved the way for a new 52-week high in the near future.  The 8% drop also almost exactly matched Gold’s decline over a 5-session period, and the fact the CDNX (a very reliable leading indicator) rallied strongly on Wednesday in the face of continued softness in Gold that day was a sign that Gold had likely reached its low as well.  We only have to be concerned when the CDNX is under-performing Gold, a situation that developed in early May this year and led to a 20% correction in the Index by early July.

Gold rallied strongly Thursday and held its ground Friday to close the week at $1,354.  Gold suffered its second straight weekly decline, dropping $15 after falling $25 the week before.  A number of factors contributed to Gold’s weakness and a sell-off in commodities across the board including a firmer U.S. Dollar and fears of more monetary tightening in China.  Gold has very strong technical support at $1,320 (it came within about $10 of that level this past week) and the kind of pullback we’ve just seen in Gold ($100 over 5 sessions) is what is required from time to time within a strong bull market to shake the tree and re-fuel for a move to new highs.  The U.S. Dollar is in overbought territory and the Dollar Index (currently at 78.47) faces major resistance in the 79-80 area.  Regardless, going into 2011, it’s quite possible Gold will go higher no matter what the U.S. Dollar does.  The Gold-U.S. Dollar relationship is not always an inverse one as we saw earlier this year.

Gold has recovered somewhat after dropping as low as $1,340 on news of more monetary tightening in China…as of 9:40 am Pacific, the yellow metal is down $2 an ounce to $1,351…Silver is unchanged at $26.99 while the U.S. Dollar is up slightly to 78.64…the CDNX was weak out of the gate this morning, likely due to some profit taking after strong moves Wednesday and Thursday, but it’s firming up mid-day and is now up a point at 1989…the action in the CDNX this week clearly demonstrates that Gold’s next big move is higher, not lower…Gold Bullion Development (GBB, TSX-V) came out with stellar news this morning regarding its LONG Bars Zone Eastern Extension…in what we would describe as a typical knee-jerk and foolish sell-on-news mentality, some traders/investors obviously hit the sell button without even fully reading the news from GBB or absorbing it…we will be getting into much more detail over the coming days with regard to what we now see developing in the LONG Bars Zone, but the case for a potential multi-million ounce deposit continues to build in a major way…we all know the potential of the Eastern Extension going further east, but what Gold Bullion is now beginning to prove through assay results is that the Eastern Extension also likely has a powerful north-south dynamic…it appears that mineralization extends significantly to the north, northeast and northwest of Phase 1 Discovery Hole #17 based on results from Hole #55 and Hole #108 and visuals of other holes in that area for which assay results are pending…this also suggests to us that Gold Bullion’s 2.4 to 2.6 million ounce Preliminary Block Model area (potential non-compliant ounces) may extend significantly to the north…this is something the market just hasn’t picked up yet from this morning’s news – the overall northward extension of mineralization…if mineralization extends north of the Eastern Extension, then it also in all probability extends north of the Block Model…those who have been following the story will also know that Gold Bullion has also been recently finding good grades and intersections over a substantial portion of the northern half of the Block Model, and at fairly shallow depths…the other big news this morning was Hole #86…this is the 2nd most southerly hole drilled in the Eastern Extension and produced a solid grade of 1.00 g/t Au over 84.6 metres near-surface…this is very comparable to Hole #17 which is approximately 350 metres to the north…Hole #86 was collared 180 metres southeast of the Preliminary Block Model which means there could be an extension to Vein #2…in any event, the discovery of significant near-surface mineralization in the south is a major development in the LONG Bars Zone and indicates there is further potential in that direction…the scale of the LONG Bars Zone is indeed becoming even bigger, as Basa commented in the news release…GBB is currently off  a nickel at 63 cents on over 2 million shares…stock is moving from weak hands into strong hands and we suspect GBB may have a very good week next week as investors take a couple of days to absorb the news…the latest drill results from Granada are also good news for Adventure Gold (AGE, TSX-V) whose property is right on strike with hole #86, less than 200 metres away…AGE has a small but strategic position in the Eastern Extension plus additional land west of the Block Model and further south…Granada is going to heat up…elsewhere on this busy morning, Currie Rose Resources (CUI, TSX-V) is unchanged at 22.5 cents…we’ve been following this company closely since it was trading at a dime and it continues to look very strong technically and fundamentally…GoldQuest Mining (GQC, TSX-V) continues to hold up nicely as it builds a strong base  in the mid-to-upper 20’s…it’s currently off half a penny to 27.5 cents…drilling should be in full swing at GQC’s Dominican properties by January and we just love the potential for this company next year…we strongly suggest investors familarize themselves with GQC and do some proper due diligence on it…

Gold Bullion Development (GBB, TSX-V) has just released an update and additional assay results from the Granada Gold Property, showing Granada is not only extending to the east but to the north and south as well.

Hole #86, the second most southerly hole drilled yet by Gold Bullion in the LONG Bars Zone, has returned 1.00 g/t Au over 84.6 metres within a near-surface interval of 127.5 metres (4.5 metres to 132 metres) grading 0.76 g/t Au.  This confirms the visuals on this hole by GENIVAR and is highly significant as it could mean an extension to the #2 Vein within the Preliminary Block Model to the northwest.  This also confirms historical reports that mineralization does extend to the south at Granada, and at very shallow depths which are ideal for an open-pit mining scenario.

In addition, Gold Bullion has drilled a hole 30 metres north of recently reported hole #55 that has returned an interval of 141.7 metres grading 0.70 g/t Au.  The company reports that assays have yet to be received on 11 of 15 Phase 2 holes drilled in the area north, northeast and northwest of Phase 1 Discovery Hole #17 with current drilling focusing on expanding the continuity of the feldspar porphyry and quartz veining.

The fact that Gold Bullion is hitting nice intersections in the northern portion of the Eastern Extension suggests that the Preliminary Block Model could expand significantly to the north as well which has huge implications for tonnage and ounces.

We’re continuing to analyze the results but overall, there’s no question this deposit is building out in a very interesting and significant way.

Gold is beginning to recover after a sharp pullback that began last week…the yellow metal is up $13 an ounce to $1,349 as of 7:10 am Pacific…it got as high as $1,360 earlier this morning…Silver has climbed 79 cents to $26.44 while the U.S. Dollar is softening, down one-quarter of a point to 78.71…the action in the CDNX suggests Gold’s correction may indeed have been a very short one…the Venture gained 31 points yesterday and is up sharply again this morning after bouncing off very strong support near 1900 Tuesday…the CDNX is currently at 1983, up 29 points…the CDNX experienced an 8% pullback, in line with Gold’s drop, and we hope many of our readers were able to take advantage of Tuesday’s buying opportunities as the Index fell within 2 points of the strong support level John identified at 1900…Gold Bullion Development (GBB, TSX-V) has broken through resistance at 65 cents and is up 2 more pennies this morning at 67 cents…more assay results are expected from the LONG Bars Zone by tomorrow as indicated by the company in its Monday news release…at BMR we firmly believe the next GBB could be Currie Rose Resources (CUI, TSX-V) which is aggressively exploring its promising land package in Tanzania…CUI is up half a penny to 22.5 cents after news late in the day yesterday…the company gave an exploration update on its Tanzanian properties and stated “good source rocks have been intersected” in drilling at Sisu River, 8 km northeast of a previous discovery Currie Rose made…14 holes have been drilled to date at Sisu River and initial assay results are pending…the geological arguments are very strong for a potential major discovery at Currie Rose’s Mabale Hills and Sekenke Gold Projects which are located in the highly prospective Lake Victoria Greenstone Belt of northwestern Tanzania…technically, the stock looks extremely attractive and is threatening to break above a downsloping flag as John pointed out in his article this morning…Currie Rose has been an overlooked company in Tanzania and has built strong relationships in that country since it started exploring there in 2005…its pipeline of projects offer huge exploration upside…if you’re looking for a beaten-down stock that’s oversold and out of favor right now with investors, keep your eyes on Noront Resources (NOT, TSX-V)…NOT is unchanged at $1.02 this morning…Noront is seriously under-performing given its assets at McFauld’s, but the stock does have a history of sudden and sharp turnarounds…in this commodities bull market, Noront will eventually sizzle again and perhaps sooner rather than later…the risk-reward ratio at current levels is highly attractive…

6:15 am Pacific

John: Yesterday, Currie Rose (CUI, TSX-V) opened at 20.5 cents, drifted down to a low of 20 cents, rose to a high of 22.5 cents before closing at 22 cents for an increase of half a penny on CDNX volume of 755,000 shares.  This stock continues to show very bullish tendencies as illustrated by the chart below:

We see from this 2-month daily chart that CUI broke to the upside from a small horizontal channel on October 21 at 13 cents, and climbed steadily over the next 13 sessions to reach a 52-week high of 24.5 cents.   Over the last 7 sessions it has consolidated and formed a bullish downsloping flag. We see strong support at the 20.5 cent level and a strong support band between the 61.8% Fibonacci level at 19 cents and the support at 20.5 cents.   Also providing strong close bullish support is the EMA(20) moving average which is at 19.6 cents and pointing up. The probability of any downside is very slim.

The set of Fibonacci levels (green) shows the next target level is at 32 cents (this is not a BMR price target as we don’t give price targets but a theoretical near-term Fibonacci level as a guide for investors based on technical analysis).   Since the consolidation began the volume has been relatively low, but yesterday the volume was higher than in the 2 previous sessions.

Looking at the Indicators:

The RSI is at the 60% level and pointing up. It has unwound its previous overbought condition – this is looking very bullish.

The ADX trend indicator has the +DI (green line) in decline due to the consolidation but still relatively high at the 30 level. It is above the -DI (red line) which is low and flat at 9. This is a very bullish orientation because there is little chance of the -DI crossing up over the +DI to reverse the trend. The ADX (black line) trend strength indicator is very high at 61 and flat showing a strong consistent uptrend –  very bullish.

The Chaikin Money Flow (CMF) is in the green (bullish) and showing the buying pressure is increasing each day – very bullish.

Outlook: Technically, Currie Rose remains in a very bullish state which supports the strong underlying fundamentals with this company as BMR has outlined.    CUI has been trading in consolidation recently with very strong support. We could see a breakout to the upside very soon.   Watch for a breakout above the blue line of the downsloping flag.

Currie Rose Resources‘ (CUI, TSX-V) Mabale Hills Project is located in the heart of the renowned Lake Victoria Greenstone Belt in northwest Tanzania, surrounded by some major mines and deposits including AngloGold‘s multi-million ounce Geita open-pit operation.  There’s no denying the geological potential of Mabale Hills which is why Currie Rose’s current drill program at Sisu River has us so excited – the chance of a significant discovery is very real.  And news could come almost any day.

Currie Rose announced, toward the end of today’s trading session, that 14 holes and nearly 1500 metres of drilling have been completed to date at Sisu River, 8 kilometres northeast of the company’s Mwamazengo discovery.  “Good source rocks have been intersected beneath the ‘mbuga’ clays and assays from initial holes are pending.”  The assay lab Currie Rose is using is less than an hour’s drive from Mabale Hills, so initial results could come very quickly – drilling started over 3 weeks ago and CUI has delivered results within a month before.

Currie Rose got really fired up over Sisu River after a discovery at the property by artisanal miners in the fall of last year.   The company’s geologist, who has a long and very successful track record in Tanzania, collected random grab samples from the discovery area and got grades as high as 89 g/t Au.  The current Phase 1 reverse circulation drill program is focused on an area (150 m x 30 m) that was extensively prospected near-surface by these local miners, and drilling will test the extent of Gold mineralization to depths between 100 and 125 metres.  The Sisu River target is hosted within felsic volcanic rocks, considered to be highly prospective for Gold mineralization in greenstone belts.

Currie Rose’s very first hole at Mwamazengo in 2005 intersected 32 metres near-surface (4 metres to 36 metres) grading 3.70 g/t Au – more stellar results followed that.  Will we see a repeat of that success at Sisu River?  Anything’s possible – the geological environment is ideal.

We expect Sisu River and Mwamazengo to generate a lot of excitement in the year ahead.  But those two properties are just part of the Currie Rose equation.  The company is soon starting a large amount of pre-drilling work at its massive Sekenke Gold Project, approximately 200 kilometres southeast of Mabale Hills.  This land package runs in between and surrounds two former producing mines from the first half of the 1900’s – Sekenke and Kirondatal.  As Osisko, Gold Bullion and many others have found out, the best place to find a new mine is near an old mine – the Sekenke Project has incredible potential as Currie Rose outlined in its news release today:

“Recent exploration by Currie Rose has identified a highly prospective structure (12 km x 800 m) within a shear zone on the margins of a large granite intrusion that hosts numerous quartz reefs of the same type that developed at the nearby former mines.”

The quartz reef structure that Currie Rose has discovered is actually significantly larger than those which were outlined at the former high grade mines.

“The potential of the identified quartz reefs in the shear zone (extending from the former Sekenke mine) to host high grade gold is indicated by the encouraging assays returned for rock chip samples and also by the fact that highly anomalous gold grades were obtained from streams that drain the target structure.  The coarse grained gold that is currently panned from the streams by artisanal miners is assumed to have been derived from the nearby shear zone (probably from the quartz reefs hosted within it).”

We first brought Currie Rose to the attention of BMR readers when it was trading at a dime in September.  We added it to the BMR Portfolio in late October at 16 cents.

Currie Rose has a terrific chance to become the next Gold Bullion Development (GBB, TSX-V) in the BMR Portfolio.  We made the right call with GBB in December of last year, with the company making a very significant discovery at Granada, and we believe Currie Rose could be on the verge of doing the same at Sisu River and elsewhere on its large land holdings in Tanzania. CUI is getting aggressive and that’s great news for long-time shareholders who have been waiting for this day when the company turned things up a few notches to unlock the value of its East African Gold assets.

Harold Smith has been President of this company for nearly 20 years and people are saying he has a fire in his belly right now that they’ve never seen before.  His quote in today’s Currie Rose release was very telling:

“We’re extremely excited with the opportunities we have in front of us with our projects in the mining-friendly jurisdiction of Tanzania,” stated Smith.  “We have a strong team on the ground there who know the country extremely well.  We intend to take full advantage of this positive environment for gold and advance our Tanzanian projects with more vigor than ever going forward and throughout 2011.”

You can tell we see something very special in Currie Rose.  But don’t just take our word for it.  As always, do your own due diligence and understand the risks involved with all speculative plays such as this.  We like to look at the risk-reward ratio.  At current levels (the stock closed at 22 cents today), the upside potential in our view far outweighs the downside risk – especially given the very bullish outlook for Gold and junior exploration companies in general.

(As a matter of disclosure, this writer holds a position in Currie Rose – 270,000 shares).