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Gold has been volatile today…as of 8:50 am Pacific, the yellow metal is up $2 an ounce at $1,395 after dropping as low as $1,382…it was above $1,400 overnight…Silver is up 37 cents to $27.32 while the U.S. Dollar is firmer, up one-quarter of a point to 77.79…it faces resistance around 78 on the Index…the CDNX, which went into a sharp mid-day reversal yesterday, fell as low as 1982 this morning but is now strengthening which is a positive sign in light of Gold’s action…the CDNX is currently off 10 points at 1995… it nearly touched its 10-day moving average this morning where it has consistently found very strong support throughout its surge over the past few months…Gold Bullion Development (GBB, TSX-V) got as high as 64 cents this morning but has pulled back to support with softness in the markets…GBB is currently at 61 cents, off 1 penny…the case for the potential of the LONG Bars Zone Eastern Extension was strengthened considerably yesterday with the news on Hole #55, collared 88 metres northwest of Phase 1 Discovery Hole #17…the discovery of significant mineralization elsewhere in the Eastern Extension  is what we’re expecting based on historical information and the visuals GBB provided on numerous holes during Phase 2 drilling…Adventure Gold (AGE, TSX-V) came out with news from its Granada property package this morning which we’ll examine in more detail later today, but at first glance AGE’s information further builds the case for new extensions to the LONG Bars Zone…AGE is ahead half a penny at 43 cents…Currie Rose Resources (CUI, TSX-V) is off half a penny to 22 cents…any weakness at this point in CUI should be viewed as an early Christmas gift as drilling continues at Sisu River…CUI is determined to get very aggressive in exploring its large and highly prospective land package in northwest Tanzania, and initial drill results from Sisu River can’t be too far off…Excel Gold Mining (EGM, TSX-V) held its AGM yesterday and has named Frank Basa as its new President…this is what we were hoping for and that decision puts EGM on the right path moving forward…its Montauban Mining Camp Project is first-rate and if anyone can unlock the value of it and make this company fly, it’s Basa…Excel is quiet this morning at 14.5 cents, down half a penny…drilling starts at Montauban next week…

10:00 pm Pacific

Frank Basa, Gold Bullion Development (GBB, TSX-V) President and CEO, is a hydrometallurgical engineer who knows how to effectively extract and mine Gold.  And how to find it, too.  Which is why GBB is so well positioned to take full advantage of the incredible bull market in Gold and junior mining stocks that is likely to accelerate in the coming months.  A company such as Gold Bullion with $10 million in cash, an advanced property with a growing deposit and the strong potential for major new discoveries, is going to be a leader in this bull market that is about to enter, in our view, an explosive new phase.

Today’s news from Gold Bullion was an important fresh step in the direction of Basa’s ultimate goal, a multi-million ounce near-surface open-pit deposit at the Granada Gold Property.  The LONG Bars Zone geological structure extends to the east of Phase 1 Discovery Hole #17, as confirmed by GENIVAR in a GBB July news release, and now it also extends to the north as demonstrated by today’s stellar results from Phase 2 Hole #55 (these results were actually even significantly better than #17).  To the south, several hundred metres from #55, a potential new discovery is on the horizon in Hole #86 given the very encouraging visuals reported on #86 a couple of months ago.  This Eastern Extension (500 metres north-south, 500 metres west-east), it’s important to remember, is outside the Preliminary Block Model where Gold Bullion has already outlined a potential 2.4 to 2.6 million ounces (non-compliant) based on historical drilling, underground workings, bulk sampling, and Phase 1 drilling.

Gold Bullion is aggressively drilling the LONG Bars Zone (a Phase 3 50,000 metre program is now underway) and that’s the secret to riches for GBB shareholders.  Granada is going to be all about volume – potential massive tonnage over a very wide area with LONG Bars Zone “2” (still to be explored) starting nearly 2,000 metres east of #55.

Hole #55 returned the highest grades to date in the Eastern Extension including 4.05 g/t Au over 40.5 metres (from a shallow 86.6 to 127.1 metres).  The 153-metre section from 86.6 to 239.5 metres grading 1.36 g/t Au is even more impressive than the 123.5 metre interval of 1.07 g/t Au in #17 that started all the excitement at Granada last March.

Hole #17, it has been proven now, was not a one-hole wonder in the Eastern Extension.  A lot more #17’s,  we believe, are on the way.  And keep this in mind:  BMR has made three site visits to the LONG Bars Zone over the last eight months.  We know the ground well.  We’ve done exhaustive research.  We’ve spoken to geologists.  We identified this company when it was trading at just 7 cents last December and predicted a strong chance of a major discovery.  This is the time to be really excited about just how big this could develop in the coming months.

A few things are very important to note about today’s results which also included four holes of lesser interest south and southeast of #55 and #17.  First, Gold Bullion is still drilling for “structure” throughout the Eastern Extension and even in the Preliminary Block Model.  GENIVAR, for example, is trying to get a better handle on the location of faults and their orientation.  The NQ drilling, with a small diameter core, gives GENIVAR’S geologists a good understanding of rock alteration which is critical but such a small core size will often miss some of the particle Gold and therefore understate the Gold content in the assays.  That’s why Gold Bullion’s bulk sample in 2007 was so important, and why they’ll probably have to do another one or some different type of drilling to quantify grade.  At the moment GBB is still drilling for structure.  When they get serious about drilling for grade, look out.

In terms of Hole #55, the 356.6 metre intersection of 0.60 g/t Au is outstanding.  The vertical depth on the hole was 175 metres, nicely within the 200 metres Gold Bullion is looking at for an open-pit operation.

Can a grade such as 0.60 g/t Au be mined profitably?  Absolutely.  One of many examples of that is Kinross’ very successful Fort Knox open-pit mine near Fairbanks, Alaska, where Gold equivalent production last year was 263,000 ounces at a cost of $546 an ounce.  At the beginning of this year Fort Knox had proven and probable reserves of 3.7 million ounces at an average grade of 0.45 g/t Au.

At BMR, our faith in the Granada Gold Property is unshakeable.  Today’s news from Gold Bullion was delivered in a very matter-of-fact way with a strong degree of confidence.  GBB is right on track and uniquely positioned to ride the huge Gold Mania Wave that we see coming.

Below is an excerpt from a BMR article last August on GBB – we believe it’s timely for readers to examine one more time:

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The Cadillac Fault, a regional structure that traverses through the northern edge of Gold Bullion’s claims, has indeed been the driving force, geologically, at Granada.  The Fault runs one kilometre deep and is spatially related to numerous multi-million ounce deposits including of course Osisko’s massive Canadian Malartic Deposit 65 kilometres to the east.  I’m not a geologist, but I’ve studied Granada intensely beginning more than a month before BMR first introduced Gold Bullion to its readers when the stock was sitting at just 7 cents last December.  I’ve spoken to numerous geologists regarding Granada and the “Cadillac Trend” in general.  Gold Bullion is searching for gold in one of the most highly prospective areas there is anywhere.

There is no denying that the LONG Bars Zone has the potential to develop into a multi-million ounce open-pit deposit.   Much deeper down, given the nature of the Cadillac Trend, this property also has potential as a high grade underground operation.  We’ve stated this before and it’s worth stating again – the best place to find a new mine is often near an old mine.  Granada produced 50,000 ounces of gold in the 1930’s and 80 years later Gold Bullion’s fresh approach to this former mine, and the nearly 5,000 hectare land package surrounding it, is starting to pay big dividends.

North of the Cadillac Fault, where one sees much more VMS-style mineralization, are volcanic rocks.  Sedimentary rocks are found south of the Fault where there tends to be considerably more faulting, increasing the chances of Gold mineralization (many secondary faults have developed from the Cadillac Fault).  Based on historical information and what has been reported so far by Gold Bullion, there is intense faulting and alteration throughout Granada.  One of the keys for GENIVAR, in our view, is identifying the location, dip and depth of these faults and chances are they have had success in doing that based on the highly encouraging news Gold Bullion issued July 13 and July 29.

Infill drilling continues within the Preliminary Block Model where Gold Bullion outlined a potential non-compliant 2.4 to 2.6 million ounces in late April.  Holes 33 and 41, released July 29, show the Block Model is on track but tighter spacing and much more drilling are still ahead.  Additional potential exists at depth.    Keep in mind, also, that this and other areas at Granada are renowned for particle Gold that in many cases won’t show up in drill results but will be processed in the mining procedure – the so-called “upgrading” effect that has certainly been seen elsewhere.  That’s why Gold Bullion’s large 2007 bulk sample (grading 1.62 g/t Au) was so important.

East of the Preliminary Block Model is where things get really interesting as this huge area has blue sky potential written all over it.  Historically, the Granada Eastern Extension has been under-explored but there is enough information – historical and current – to suggest there could be widespread, near-surface mineralization in this area through, in part at least, quartz veining and Gold that is carried in disseminated sulphides in feldspar porphyry.  A very large low grade “halo” effect could also exist here – in terms of its total mineralized surface area, the Eastern Extension could eventually dwarf the size of the current Preliminary Block Model.  If a lot of nice intersections of around a gram or better start coming in from the east, it will be “mission accomplished” for Phase 2.  And it wouldn’t be surprising to see a few spectacular holes based on the visuals.

As Gold Bullion reported July 29, “Each and every hole (north, south, east and west of GR-10-17)” has intersected “significant zones of altered feldspar porphyry (favorable for Gold mineralization) with quartz veining. Visible Gold has also been observed in many of these holes.

Gold Bullion appears to be encountering much more altered feldspar porphyry in the Eastern Extension.  Upcoming drill results from the east and extensive analysis by GENIVAR should give us a better understanding of what is really going on in this part of the LONG Bars Zone.  An interesting observation is made on page 88 of Willoughby’s 1994 report (“Geology, Structure and Gold Mineralization on the Granada Extension Property”) that we obtained through the Quebec Ministry of Mines a couple of months ago.  “Sulphides (mainly pyrite) are abundant in porphyry on East Granada, in the area of the Aukeko Shaft.”  Are they abundant in porphyry elsewhere as well?

Willoughby made numerous important observations regarding Granada in general in his 1994 report:

“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.”

“The role of major northeasterly fault structures in the localization of high-grade zones as steeply dipping, northeast plunging ore bodies is considered significant.”

“The area of shearing and alteration covering the gold veins/structures on the Granada Mine Property (what Gold Bullion is currently drilling) comprise a relatively distinct zone measuring some 450 metres wide and 2 km long.  Previously designated the Mine Sequence…regional consideration and 1994 mapping results show the zone continues both east and west, attaining truly regional dimension.”

“The ongoing mapping and drilling of the Granada Mine and Granada Extension properties indicate an 8 km long zone of shearing, deformation and gold mineralization along the southern part of the Granada Segment, and in conjunction with other mineralization features apparent within the segment, is considered to be a regional feature.”

Oh, and we certainly shouldn’t forget about Big Bert in LONG Bars Zone 2.  As exciting as our visit was today, the golden highway hasn’t quite been completed out to that area yet so unfortunately we weren’t able to pay a visit.  Of course we’re referring to the Bert Vein near the old Aukeko shaft.  The average assay of three bulk samples (reported in 1938 by Hosking, according to Willoughby’s report) was 7 ounces Au per tonne.  Gold Bullion plans to visit Big Bert later this year as exploration moves further east at Granada.

With a strong team on the ground as we saw today at Granada, working a highly prospective and big project, there’s no question Gold Bullion Development has a golden opportunity on its hands.

John: Today, Gold (continuous contract) opened at $1,409, climbed to a high of $1,424 and then sold off to a low of $1,383 before closing at $1,393 for a drop of $16.    Those who study the fundamentals said the reasons for the drop in Gold included the strengthening of the U.S. Dollar against the Euro and Yen as yields (at a 5-year high) on 30-year treasury bonds bolstered demand for the currency from risk-averse investors. “We’ve seen the Dollar benefit from risk-off,” said Andrew Busch, a currency strategist at the Bank of Montreal in Chicago. “That treasury auction was weak. Banks are selling off and the U.S. Dollar is strengthening.”   Let us now examine the price of Gold from a Technical Analysis viewpoint:

Looking at the 6-month daily chart we see that Gold climbed in an almost straight line at a 45 degree angle from a low of $1,160 in the last week of July to $1,390 around the middle of October.   Then it corrected down to $1,320 before starting to climb again and reached a new high today of $1,424. The trading pattern since mid-October is an upsloping trend channel bounded by a top blue upsloping resistance line and a green upsloping support trendline. Also identified is a narrow horizontal support channel between $1,383 and $1,390.

Of particular significance is the divergence between the RSI and the Gold price (mauve converging lines). This alone signifies near-term weakness, thus the pullback in the Gold price today should not have been a surprise. We can also see that the high price today is about the same distance above the SMA(50) as the price was in mid-October.   These dates are noted by the 2 thin blue vertical lines. Thus, when the Gold price gets too far away from the supporting SMA (approximately $100) it is unsustainable.   The bottom support trendline of the channel (green) has had several “hits” (tested several times), thus it can be considered strong long-term support. The SMA(50) also provides strong long-term support as it is moving in parallel with the trendline.

Looking at the indicators:

The RSI, as noted above, has a divergence with the Gold price. It is not overbought, therefore there is no pressure to unwind. The trendline on the RSI (orange) should be monitored to see when the RSI breaks to the upside as this could indicate a bullish reversal.

The Slow Stochastics is overbought and has just had the %K (black line) cross down over the %D (red line). This could cause some pressure to unwind.   The ADX trend indicator has the +DI (green line) above the -DI (red line) and climbing with the ADX (black line) trend strength indicator at 24 and turning up. This is in bullish orientation with a strengthening uptrend.

Outlook: We could see further near-term weakening in the Gold price but nothing to threaten a breakout to the downside. I expect Gold will continue to trade within the upsloping channel for the intermediate term.

Gold continues to move gradually higher as it starts to get comfortable trading over $1,400…as of 9:00 am Pacific, the yellow metal is trading at $1,419, a gain of $9 for the day…Silver continues to outperform Gold and has jumped 82 cents to $28.58…the U.S. Dollar Index is essentially unchanged at 77.25…the CDNX surge continues with the Venture Exchange climbing 17 more points to 2059…this is indeed the mother of all bull markets…Gold Bullion Development (GBB, TSX-V) delivered an absolutely stellar result this morning from the LONG Bars Zone Eastern Extension, the type of hole that goes a long way toward making an open-pit mine…Hole #55, collared 88 metres northwest of Phase 1 Discovery Hole #17, returned a terrific near-surface result – the total intersection was  a whopping 356.60 metres grading 0.60 g/t Au…within that, there was a 153-metre interval grading 1.36 g/t Au, a 116-metre section grading 1.69 g/t Au, and a 40.5-metre intersection of 4.05 g/t Au…the hole was drilled at an angle of 65 degrees to a vertical depth of 175 metres (possibly very close to true thickness), entirely within the depth parameters GBB is looking at for a potential open-pit operation…we know from the company’s September news release that there are holes around #55 that had very good visuals and have not yet been reported – that’s also the case with other holes throughout the Eastern Extension and the Preliminary Block Model…in a very unusual development, BMR contacted GBB President and CEO Frank Basa a short time ago and Basa declined (politely) our request for an interview today…he said he was extremely pleased with the results and is eagerly anticipating more assays this month…he stated he would like to do an interview next week, and did not elaborate further…we can only conclude, based on Basa’s refusal to do an interview today when he has such good news to tell, that he’s holding some aces in his hand (or expects to) and will lay those down on the table in the very near future…the final 8 weeks of the year are likely going to be incredibly interesting for GBB…a total of 147 holes are yet to be reported…the potential for a multi-million ounce near-surface Gold deposit at Granada is more possible than ever…as of 9:00 am Pacific, GBB is up 7 cents to 66 cents on CDNX volume of nearly 2 million shares…we’ll be reporting more on this morning’s news from GBB by market open tomorrow…other companies in the BMR Portfolio are strong today as well as the CDNX and Gold move higher…GoldQuest Mining (GQC, TSX-V) is up 2 pennies to 30 cents…with a terrific portfolio of Gold properties in the Dominican Republic, including Las Tres Palmas which holds major potential, GQC has a great chance to be one of the leaders over the coming months in this rip-roaring bull market…3-and-a-half years ago it climbed as high as $1.80, for a market cap of about $100 million, on less than what it has now…in addition to a very established presence in the DR, GQC holds the Toral Zinc-Lead-Silver Deposit in northwest Spain…a 43-101 resource estimate is due soon on Toral…the historical non-compliant estimate is 5.4 million tonnes grading 9% zinc, 6% lead, and 45 g/t Ag…Currie Rose Resources (CUI, TSX-V) is up a penny at 24 cents on volume of over 1.5 million shares…this company is now just starting to get the attention it deserves given its very attractive and large land package in northwest Tanzania…we feel the same way about Currie Rose as we did about Gold Bullion last December…there are powerful geological arguments for potential major discoveries at CUI’s Mabale Hills and Sekenke Projects…we also remain very upbeat regarding Sidon International (SD, TSX-V)…we haven’t written much about Sidon recently as the company has been very quiet on the news front and seems to be holding its cards close to its chest…investors need to be patient here to see what may come down the pipe in the coming weeks…Sidon’s Morogoro East Property has the potential to surprise a lot of people…Sidon is currently up half a penny at 10 cents…

With the Gold Bullion news this morning, BMR will be posting its regular Morning Musings a little later than usual at 10 am Pacific in order to allow us time to review this morning’s news and attempt to contact GBB President and CEO Frank Basa…

7:45 am Pacific

Gold Bullion Development (GBB, TSX-V) was halted shortly after the open this morning with news coming out just moments ago, at 7:30 am Pacific.  We are currently reviewing the release and hoping to contact Frank Basa for an interview as soon as possible.

Gold Bullion has made a major breakthrough in the LONG Bars Zone Eastern Extension with Hole #55, collared 88 metres northwest of Phase 1 Discovery Hole #17, intersecting 1.69 g/t Au over 116 metres (between 86.64 and 202.50 metres).

Hole #55 is the best yet in the Eastern Extension and even much better than #17 which returned 123.5 metres grading 1.07 g/t Au.

What we’re most impressed about is the huge intersection of mineable grade that GBB has come up with here – 356.60 metres grading 0.60 g/t Au.  The hole was drilled at a 65 degree angle to a vertical depth of 175 metres, so there’s a good chance this is very close to true width.  That’s the type of intersection that makes a mine.

Keep in mind, as well, that with the “upgrading” effect at Granada, the true grade of this hole is likely at least 30% higher (some would argue considerably more) – that’s based on GBB’s bulk sample and historical records from Granada.

GBB still has, by our calculation, 147 more holes to report – folks, this is going to get a lot more interesting very quickly.  More later this morning.

Gold has been a little soft this morning but it’s holding up extremely well with the U.S. Dollar much stronger…as of 8:00 am Pacific, the yellow metal is now off just $1 at $1,393…Silver is up 5 pennies to $26.81 while the U.S. Dollar Index has surged two-thirds of a point to 77.08…G-20 leaders meet in South Korea Thursday and Friday and currencies will no doubt be at the top of the agenda…Wolfgang Schäuble, Germany’s finance minister, has raised the temperature prior to the meeting by describing the U.S. economic model as being in “deep crisis” and criticizing the Fed’s decision to pump an extra $6 billion into financial markets…”It is not consistent when the Americans accuse the Chinese of exchange rate manipulation and then steer the dollar exchange rate artificially lower with the help of their (central bank’s) printing press”, Shauble stated…nice to see there’s harmony in the G-20 family…meanwhile, Helicopter Ben, who’s going to make us all rich on our Gold stocks and just about every possible commodity we could invest in, had these words after last Wednesday’s introduction of QE “2”:  “I have rejected any notion that we are going to raise inflation to a supra-normal level“…the Fed Chairman is trying vigorously to create a more inflationary environment but assures everyone that inflation won’t rise to a “supra-normal” level…someone should ask him how long it takes to bring a large ocean freighter to a complete stop after the engines have actually been turned off…sugar’s 5% surge in just one day last week is an omen of things to come on the inflation front and the CDNX is confirming that…the red-hot Venture Exchange is up 5 more points in early trading to 2014…the CDNX, the TSX, and the TSX Gold Index are all up while the Dow and the Nasdaq are down slightly which demonstrates the interest in commodities right now…Gold Bullion Development (GBB, TSX-V) is off 1 penny at 58 cents…exploration news from Granada has been positive all year long and we see no reason why that’s about to change now…GBB has stated it will be providing an update on Granada in the near future and it was pointed out to us this morning there is a new statement on GBB’s updated web site:  “The company, which just recently completed an $8 million financing, has stepped up its exploration efforts as it believes the LONG Bars Zone is highly prospective for significant new discoveries within both the growing Eastern Extension and the Preliminary Block Model.  A steady flow of assay results from the Phase 2 program is expected through the final 2 months of the year“…everyone should fasten their seat belts because we remain as bullish as ever on the Granada Property and the potential of it to host a multi-million ounce Gold deposit…Currie Rose Resources (CUI, TSX-V), which reminds us in some ways of Gold Bullion when we first looked at GBB a year ago, is up a penny to 20.5 cents this morning…CUI has a large land package in northwestern Tanzania that we are very excited about and we encourage investors to listen to the interview we uploaded to our site Saturday with CUI President and CEO Harold Smith…Excel Mining (EGM, TSX-V) has announced this morning that the drills start turning at its Montauban Mining Camp Project starting next Monday…it seems they’ve increased the drill program from the orginally announced 4,000 metres to 5,500 metres…Montauban is a former Gold, silver and base metals producer and the project does offer very strong exploration upside…the company is holding its AGM tomorrow and we’re hoping to see Frank Basa take on a bigger role with the company…EGM is currently down 1 cents to 13.5 cents…GoldQuest Mining (GQC, TSX-V) is up 1.5 cents to 27.5 cents and looking very strong on the charts…

John: Adventure Gold (AGE, TSX-V) is an aggressive 3-year old junior exploration company with a strong portfolio of properties in Quebec and Ontario.  It has a very bullish chart and is trading in all-time high territory around 40 cents (AGE was added to the BMR Portfolio October 28 at 34 cents).  On Friday, Adventure Gold opened at 39.5 cents, rose to a high of 40.5 cents and then closed at 38.5 cents to remain unchanged on CDNX volume of 393,000 shares.  The 6-month daily chart below is an update from that presented on October 27, a date noted by the vertical thin blue line:

The breakout to the upside from the bullish downsloping flag occurred on October 25 and continued for 5 days to reach a new high of 43 cents on October 29.  Since then there has been a 5-day consolidation, forming a pennant which in this case is a bullish continuation pattern.  A pennant can have 2 outcomes:  (1) the stock continues the consolidation and forms a flag or (2) it stages a breakout. Because this is part of an upside move the breakout probability is to the upside.

Strong support is shown at the 31 cent level (horizontal green line).  Except for November 3 the volume has been decreasing since October 28, validating the consolidation of the pennant.  The high volume on November 3 was due to a large share cross (which in itself can be a bullish sign) and not regular trading.

Looking at the indicators:

The RSI is flat at 63%  – plenty of room to move up without being overbought –  bullish.

The Chaikin Money Flow indicator (CMF) shows a high degree of buying pressure over the last 3 trading days and also shows an increase each successive day. Of particular note is that this occurred during a consolidation period with relatively low trading volumes. The CMF level for Friday was 0.401. – very bullish.

The ADX trend indicator has the +DI (green line) above the -DI (red line) at 34 and 12, respectively, and the ADX (black line) trend strength indicator is high and flat at 45.  This is a very bullish orientation.

Outlook: The strength of the trend and the increased buying pressure point to a near-term breakout to the upside from the pennant.