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John: Silver (continuous contract) opened at $28.26 today, touched a low of $28.21 and then rose to a high of $29.03 before closing at $28.84 for a gain of 45 cents (1.59%).

Looking at the 6-month daily chart we see that yesterday (Monday), Silver tested the strong support level at $28 which held and it closed at $28.39.  At the open today, below Monday’s close, it appeared as if the support level was to be tested again but Silver rallied for a gain of 45 cents on the day. Based on the previous 6-week trading pattern, this is bullish for it further solidifies the important $28 support level (green dotted line). In addition, this support coincides with the Fibonacci 50% retracement level as shown by the blue Fibonacci set.

Since December 6, Silver has been trading in a horizontal trend channel bounded by $28 support and $31 top resistance. This channel has played an important role in completely unwinding the overbought condition of the RSI that arose in November.   The next Fibonacci target level is shown as $34.60 (this is not a BMR price target as we don’t give price targets but a theoretical Fibonacci level based on technical analysis).

Looking at the indicators:

Recently the RSI has formed a bullish “W” formation and has also bounced off a previous RSI support level (thin horizontal orange line).  Today the RSI is at 48% and pointing up – looks very bullish.

The Slow Stochastics has the %K (black line) at 15% and below the %D (red line) at 24% with both pointing down. Expect the %K to turn up and cross above the %D in the near future to complete the bullish “W” formation. This is very bullish because the “W” is low around the 20% level.

The ADX trend indicator has the +DI (green line) at 19 and below the -DI (red line) at 27 with both being entwined since the beginning of 2011.  This  indicates little or no trend direction and consolidation taking place. The ADX (black line), the trend strength indicator, is starting to flatten out at 20 after declining since the start of 2011. This also indicates a consolidating situation.

Outlook: Expect Silver to climb toward the top of the channel and make an attempt at a breakout to challenge the Fibonacci target of $34.60. The ducks appear to be in order.

This picture (from the Utah Bureau of Land Management) shows the Basin Pit (right foreground) and the Hamburg Pit at the past producing Goldstrike Mine in Utah. Cadillac Mining has acquired essentially all of this former mining camp.

Gold is stronger this morning, advancing  $7 an ounce to $1,369 as of 7:05 am Pacific…Silver has jumped 56 cents to $28.88 while the U.S. Dollar Index has weakened to 78.66…strong physical demand for Gold in Asia is underpinning prices…fresh concerns regarding the European sovereign debt issue are also helping Gold today…a report on U.S. housing starts for December is due tomorrow and economists are predicting a decline which is putting pressure on the greenback today…the CDNX is strong, 20 points higher at 2295…since introducing Cadillac Mining (CQX, TSX-V) to our readers about six weeks ago, we have stated repeatedly that this is a company led by a couple of very shrewd operators (Victor Erickson and Andre Audet) who also know their geology…Cadillac announced a very significant acquisition yesterday as it has tied up an entire former mining camp, assembling a large land position in the historic Goldstrike Mining District in southern Utah near the Nevada border…mark our words – this deal has MAJOR upside exploration potential and Cadillac was able to pull it off after many months of hard work (including negotiations with individual landholders) and at minimal cost and no share dilution…as stated in CQX’s news release yesterday, “The property will comprise approximately 3,800 acres, covering all the known hard-rock gold occurrences of the historic Goldstrike district“…what we interpret this to mean is that Cadillac has actually acquired the former Goldstrike Mine area (patented claims in addition to the staking of additional federal claims contiguous with the patented claims – the “surrounding area”) which produced over 200,000 ounces of Gold and 200,000 ounces of silver between 1988 and 1986 from approximately seven million short tons of ore mined from 12 near-surface deposits extending over a roughly four-mile trend…Cadillac will be looking for near-surface extensions to these mined deposits and will also be drilling for higher grade mineralization at depth…there are parallels here to Nevada where some huge deposits have been discovered underneath old heap leach operations….the best place to find Gold is near an old mine, and Cadillac has put itself in an excellent position at Goldstrike…we doubt the area has been properly or fully explored – we have seen that in so many instances including of course in Quebec with Canadian Malartic and Granada among others  – so we expect Cadillac to employ some sophisticated techniques to help unlock what could be the immense hidden potential of Goldstrike…besides all of that, we of course love the name “Goldstrike”…Cadillac also has much going for it in Quebec with strategic claims next to Richmont’s (RIC, TSX-V) Wasamac Property and Vantex’s (VAX, TSX-V) Galloway Project…we’ll have more on both of those exciting situations in the coming days…they are developing rapidly as we discovered during our visit to Rouyn-Noranda…Cadillac Mining has unwound its overbought condition from December and at 36.5 cents is in a zone of solid technical support…Abcourt Mines (ABI, TSX-V), which we introduced to readers just over a week ago, reported very good results yesterday (after the market close) from its Elder-Tagami Project just northwest of Rouyn-Noranda, a property we recently visited…the Elder Mine produced 350,000 ounces of Gold between 1944 and 1964…Abcourt, in its exploration there, has discovered significant extensions to the west, the east and the north…a 43-101 report in July, 2009, gave measured, indicated and inferred resources of just over 200,000 ounces at Elder using a 3.8 g/t Au cut-off…the drilling that Abcourt has done since then, plus the new 10,000 metre program that is just starting, could easily double those resources in our view and also upgrade some of the current resources…Abcourt is focused on bringing this property back into production as an underground operation by as early as sometime next year…a lot of infrastructure is already in place…one of the holes reported yesterday on the western side of Elder was E10-41 which intersected 6.07 g/t Au over 10.9 metres (approximate true width)…Abcourt also has one of the best undeveloped silver assets in the country near Val d’Or (Abcourt-Barvue) and drilling continues there…Abcourt is currently up 2.5 cents at 22 cents…the Vancouver Resource Show is coming up on Sunday and Monday (Jan. 23 and 24) and as a result we expect some companies will be aiming to put out news prior to then, so we suggest our readers be on the lookout for that…Gold Bullion Development (GBB, TSX-V) of course, could be one of them…we have tremendous faith in the Granada Property…the news has consistently been good for over a year now and there’s no reason to believe that’s not going to continue throughout 2011…GBB continues to consolidate in the 70’s and is currently unchanged at 75 cents…Adventure Gold (AGE, TSX-V) is down 1.5 cents at 41.5 cents…technically, AGE is strongly supported by a rising 100-day moving average (SMA) at 37.5 cents…this is a company with a quality portfolio of advanced projects and we suggest readers who have not taken a look yet at AGE do some immediate due diligence…GoldQuest Mining (GQC, TSX-V), another quality opportunity, is off a penny at 37 cents…it’s a very bullish sign in our view that this stock has held up so incredibly well over the last few weeks since the company announced it was accelerating the warrant expiry date from last April’s financing to January 24…GoldQuest is currently drilling its very promising La Escandalosa Project in the Dominican Republic, a mineralization-rich country which is why we also like Everton Resources (EVR, TSX-V)…Everton is drilling aggressively in the DR and we believe their ground (like GoldQuest’s) holds excellent potential for a major discovery…EVR is off half a penny at 32.5 cents, very close to its supporting 100-day moving average (SMA)…

8:00 am Pacific

Gold continues to hold above strong support at $1,350…the yellow metal has traded between $1,356 and $1,366 so far today…as of 8 am Pacific, Gold is off $2 an ounce at $1,360…Silver is down 18 cents at $28.30 while the U.S. Dollar Index is up one-quarter of a point to 79.34…Morgan Stanley has upgraded its 2011 Gold price estimates by 6.5% to $1,400 an ounce and its 2012 estimates by 6.4% to $1,330 an ounce…the broker also lifted its long-term price estimate by 21% to $905 an ounce in constant-dollar terms… “Identified and implied investment has increasingly become the main driver of demand in the gold market,” Morgan Stanley stated…it added that investment demand as a percentage of total demand increased to 31% in 2010, up from 9% in 2002…”We expect this percentage to rise further, to 43.5% in 2012, reflecting the continued growth in physically backed exchange-traded funds and physical bar hoarding”…ahead of his visit to Washington this week, Chinese President Hu Jintao has called the current U.S. dollar-dominated system a “product of the past” and has highlighted moves to turn the yuan into a global currency…a suite of data from Beijing is due Thursday including December inflation and fourth quarter economic growth which may provide clues on how much additional monetary tightening may be required in China over the coming months…the CDNX is steady so far this morning at 2270…Cadillac Mining (CQX, TSX-V) has added a major new project to its portfolio…the company has essentially tied up an entire former mining camp, securing all the known hard-rock Gold occurrences of the historic Goldstrike District in southern Utah…mining last took place there between 1988 and 1996 when 210,000 ounces of Gold and nearly 200,000 ounces of silver were recovered from 6,858,000 short tons of ore taken from 12 near-surface deposits extending over a roughly four-mile long trend…Cadillac President and CEO Victor Erickson stated, “Cadillac’s re-consolidation of the Goldstrike District presents an extraordinary opportunity…by applying recent advances in the understanding of Great Basin deposit models to a camp that was last mined at a time of much lower and declining Gold prices, we are confident that the potential for discovery of economic surface and deep-seated gold mineralization is high”…CQX, which also holds strategic properties along the Cadillac Trend in northwestern Quebec, is currently up two pennies at 38 cents…we’ll have more by tomorrow on Cadillac’s interesting acquisition…Gold Bullion Development (GBB, TSX-V) is off three pennies at 75 cents…the stock continues to trade in an area of strong technical support and staged a nice rebound Friday after dropping as low as 71 cents…GoldQuest Mining (GQC, TSX-V) is up half a penny at 37 cents…GoldQuest’s strength recently has been particularly impressive considering the company recently accelerated the warrant expiry date from a private placement last April…the new expiry date is next Monday, January 24…if all warrants are exercised, GoldQuest will add an additional $2 million to its treasury…the company continues to drill its very promising La Escandalosa Project (formerly Las Tres Palmas) in the Dominican Republic…Seafield Resources (SFF, TSX-V), which is expected to come out with more results in the near future from its Quinchia Project in Colombia, is off a penny at 55 cents…Currie Rose Resources (CUI, TSX-V) has stabilized after last week’s drop and is currently down half a penny at 18 cents…markets are generally quiet this morning, looking for direction…

Welcome to our site, or at least the initial version of it!  BMR has been online for over a year now and strictly through word-of-mouth we have built a large and loyal following.  It helps when your model portfolio is up over 200%!

We’re continuing with our plans to ultimately build a very unique investment and money-management resource site that goes considerably beyond what we have now.    An important component of this site will always be original research on small and undiscovered junior resource companies, mostly in the Gold exploration space, that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity.

We use a combination of fundamental and technical factors in determining the value and potential of a stock.  In terms of fundamentals we look for a company with a superb project supported by strong management.  Management must possess integrity, solid ethics and a determination to succeed and build shareholder value.

At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop. The Bible teaches so much about money and how to handle it and invest it –  there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.  By examining the life of Jesus and reading the Word of God, we can all become fully equipped to be successful investors and handle money wisely in order to make it work for us.  If it’s the other way around –  if you’re a slave to money by being in debt for instance, or if you don’t respect the value of money and spend it foolishly –  you’re in trouble and you’ll never be blessed financially.  We have a God who thinks big – He created the universe – and He wants us to think big  in every area of our lives.  When we handle money from a Biblical perpective (His money that we have been given stewardship of) He will bless our financial decisions and an increase of tenfold or a hundredfold is always possible.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com is completely independent from any companies it covers.  BMR accepts no compensation of any kind from the companies we cover in return for that coverage.   We accept no advertising either.  Our stock coverage is for informational purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company.  We strongly recommend that you consult with a qualified investment adviser, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions.  The stocks we cover, by definition, are highly speculative and potentially very volatile.  Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisors. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.  It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.

Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

John: On Friday, Gold (continuous contract) opened at $1,374, climbed to a high of $1,378 and then fell to a low of $1,355. It closed at $1,359, down $13.80 (1.00%). Of course at BMR we focus intensely on the price of the yellow metal which is also a common element with most of the companies we write about.  We have periodically studied this commodity and its relationships with the CDNX, the TSX Gold Index and the U.S. Dollar.  Today we analyze the history of the Gold price over the last 4 years in terms of technical analysis to look at trends, patterns and examine the direction for the next 6 months. To do this I’ve used a monthly chart which eliminates the daily and weekly noise and presents a clear image of the “Big Golden Picture”.

Looking at the 4-year monthly chart we see that in July, 2007, a 10-month flagpole began which took the price from $650 per ounce to over $1,000.

Then an 8-month corrective phase began which took the price down slightly below the $700 level during the Market Crash, almost a 100% retracement.

In November, 2008, the price recovery began with Gold moving up to $1,000 in 4 months.

Starting in February, 2009, Gold began to form a consolidation pennant which lasted for 6 months.  This tended to put more order into the Gold market and in September, 2009, the price broke to the upside from the pennant and continued to climb until a big move came in November, 2009, and into early December, when Gold hit an all-time high of just over $1,200 per ounce.   This created an overbought situation which in turn caused a retracement.

In February, 2010, we saw the start of the first 6-month cycle. The price bottomed at $1,050 and rose to over $1250 by June, 2010, before retracing to $1,150 in July.

In August, 2010, we saw the start of the second cycle with the high occurring in December, 2010, at the $1,425 level.  Then here in January, the 6th month of the cycle, the price is retracing with a solid support level at $1,300 as shown on the chart.

As can be seen from the chart the trading between February, 2009, and now has formed an upsloping channel. In November and December, 2009, when the price broke above the top of the channel this can be considered as an “outlier” and unimportant in our analysis. I have extended the 4-year chart for another 10 months in order to extrapolate the upsloping channel and be able to estimate the price in June of this year, assuming Gold will continue to move within the channel in a similar 6-month cycle. The predicted high from the extrapolation is $1,650 per ounce while the strong support level at the bottom of the channel for January is $1,300 (green dotted line).

Looking at the indicators:

I have used the RSI(2) which is suitable for extreme situations (highs and lows). The price highs usually occur at the 100% level and the lows around the 30% level. The span between 30% and 100% can be considered a bullish trend and if the span is between 0% and 70% the trend is bearish. The present RSI level is 37% and moving down towards 30%.

The ADX trend indicator is very bullish with the +DI (green line) at 32 and above the -DI (red line) at 17. The ADX trend strength (black line) is strong and climbing at 50, a very bullish orientation.

Outlook: This analysis shows there’s a high probability that Gold will continue to trade in the upsloping channel and will not fall below the $1,300 support level.  A realistic 6-month high appears to be $1,650 per ounce. The primary trend in Gold is very strong.

GoldQuest Mining (GQC, TSX-V)

GoldQuest was up three pennies on improved volume last week, closing Friday at 36.5 cents…the stock has been strongly supported by its rising 50-day moving average (SMA), currently at 33.5 cents, since October…it fell just briefly below the 50-day this month before snapping back…that temporary weakness may have been caused by the company’s acceleration of the warrant expiry date from a private placement last April to January 24…a total of 9,465,400 warrants were still outstanding as of December 24 (each warrant is exercisable to purchase one common share at a price of 20 cents per share), meaning as much as $1.9 million could be added to the company’s treasury by that new expiry date which is just one week away…at this point, so close to the expiry date, any additional selling of the stock in order to exercise warrants should be very minimal…technically, GQC is looking healthy and a turnaround in the 20-day SMA appears to be close at hand (the week of January 24 at the latest perhaps)…with impressive precious and base metal exposure, along with major new discovery potential, we’re very excited about GoldQuest’s prospects for this year which is why it’s one of our favorites for 2011…drilling has commenced at the company’s promising La Esandalosa Project in the Dominican Republic and results could build significantly on the recently released 43-101 inferred resource for that project…all of GoldQuest’s properties in the Dominican Republic and its zinc-lead-silver deposit in Spain have us very bullish on GQC going forward…the company, whose largest shareholder is Gold Fields Ltd., is well established in the DR and its property package there is a geologist’s (and an investor’s) dream…they have spent nearly a decade identifying many highly prospective precious and base metal targets, one of them being La Escandalosa (formerly Las Tres Palmas) where an inferred resource of 400,000 ounces of Gold has already been outlined (announced Nov. 16) based on just 25 drill holes at Escandalosa Sur from 2006 through 2010…it’s important to stress the 43-101 was completed on La Escandalosa  at a very early stage and the possibility of a discovery well in excess of a million ounces is possible as this is such an attractive geological target…the deposit is open at depth as well as to both the south and the north toward another discovery of Gold mineralization by the company at Hondo Valle, approximately 1.2 kilometres away…Gold at La Escandalosa 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…the source of the mineralizing fluids remains unknown at La Escandalosa, leaving open the possibility of the discovery of mineralization in structural feeder zones or perhaps in a porphyry copper-Gold type system…GoldQuest has many other targets of considerable merit throughout its large DR land package including Las Animas which has a 43-101 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…GQC has more drilling to do there as well…in Spain, Goldquest holds the Toral zinc-lead-silver deposit which has an historical (non-43-101 compliant) resource of 5.4 million tonnes grading 9% zinc, 6% lead and 45 g/t Ag…a 43-101 on Toral is currently being prepared…GoldQuest has also acquired a second polymetallic project in the area (Lago, just a 20-minute drive from Toral), and more details are expected upon approval from the Spanish government of a mineral rights application for the property… GoldQuest is up 87% since we added it to our readers near the end of September…

Adventure Gold (AGE, TSX-V)

Adventure Gold fell three more cents last week, closing Friday at 44 cents, but volume was light and the stock remains in a long-term overall uptrend based on technical analysis…while AGE has dropped below its 50-day moving average (SMA), the 50-day continues to rise and the 100-day SMA at 37 cents provides exceptional support…2011 is shaping up to be an active and potential breakthrough year for this young company which intends to be very aggressive on the exploration front…during our recent visit to Rouyn-Noranda we were able to explore in greater detail this company’s projects…as a result we’ll be reporting more on Adventure Gold in the days and weeks ahead as time allows…one of this company’s most underrated assets is its Pascalis-Colombiere Property in the eastern part of the Val d’Or mining camp…a 2,500 metre drill program started there last month and is testing the former L.C. Beliveau Mine at depth (below 300 metres) as well as near-surface parallel Gold structures to the west…Pascalis-Colombiere is just 1.5 kilometres east of Richmont’s (RIC, TSX) operating Beaufor Gold Mine which has produced over one million ounces in its lifetime…it’s safe to assume Richmont will be watching developments at Pascalis-Colombiere with interest…Adventure Gold’s property has significant upside exploration potential…the geological setting is favorable for the identification of new high-grade Gold bearing veins and structures or bulk-style ore shoots…there are many untested areas and excellent potential at depth…L.C. Beliveau was a very profitable former producer…if AGE can prove up something significant through extensions to this deposit, we see a potential deal with Richmont which would be the natural choice to bring the mine back into production…we first mentioned Adventure Gold to our readers in an article September 29, just a couple of days following the company’s announcement that it had acquired land at Granada, when the stock was trading in the low 20′s…we officially added AGE to the BMR model portfolio at 34 cents October 28, so the gain since then is 29%…our interest in Adventure Gold, however, goes far beyond the company’s involvement at Granada, as exciting as that is…they do hold a small but strategic slice of land in the Granada Eastern Extension and also more property west and south of GBB’s Preliminary Block Model area…they’ve already produced some very interesting prospecting results on their land in the west…Adventure Gold has been around only since late 2007 and we are impressed by the company’s solid portfolio of properties (19 in 6 strategic areas in Quebec and Ontario)…also of immediate interest is AGE’s 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…Lake Shore recently provided an update on this project…the current initial deep drill hole onto the Meunier JV property is continuing and when completed is estimated to provide a deep cut on the projected target area at about a vertical depth of 2,600 metres…this will enable shallower wedge cuts to be considered if significant mineralization is found to be present in this area…the initial deep hole was collared on LSG’s Timmins mine property last August and was last reported at around 1,900 metres in depth….the Timmins deposit straddles a volcanic/sedimentary/ultramafic contact zone within a folded sequence that plunges 54 degrees to the west-northwest toward the Adventure Gold Meunier JV property…if this deep hole succeeds, AGE could absolutely explode…

Seafield Resources (SFF, TSX-V)

Seafield firmed up last week on strong volume and closed Friday at 56 cents, a gain of 6 pennies from January 7 when the CDNX approved its $15 million private placement at 50 cents…we really like the way this stock has traded since December 3 when the company announced a spectacular drill result from its Miraflores Property in Colombia and the stock rocketed to 77 cents…results are pending on nine more holes at Miraflores…given historical results, at least some of these holes should be very good…drilling is also underway at Dos Quebradas, a property we believe gives Seafield its real “blue sky” potential at Quinchia… SFF reported December 8 that the first three holes have been completed at Dos Quebradas which is rich in porphyry targets over a wide area…DQ is just a few kilometres northwest of Miraflores…visual reports indicate that these three holes have similar styles of mineralization to an historical hole drilled by AngloGold that returned an interval of 39.5 metres grading 1.67 g/t Au…the potential of Dos Quebradas is evident from limited historical drilling and was confirmed by Seafield last year through soil geochemical surveys and magnetic surveys which are crucial to discovering hidden porphyries in areas of very little outcrop…Seafield also released results recently from trenching in one location from the southern end of the gold-in-soil anomaly that defines the northern extension of the Dos Quebradas porphyry…1.75 g/t Au was returned over 94 metres…Seafield has an excellent opportunity to develop a multi-million ounce Gold resource at its three major properties at Quinchia (Chuscal is the third property)…with a current market cap of $82 million, SFF still has considerable upside potential…the stock seems to refuse to close below the financing price of 50 cents…

Colombian Mines (CMJ, TSX-V)

Colombian remains quiet and closed unchanged for the week at 87 cents…the stock is currently sandwiched in between its rising 50-day moving average (SMA) at 88 cents and its rising 100-day SMA at 85 cents…a declining 200-day SMA has so far kept CMJ from breaking out with authority but investors just need to be patient…we like CMJ because it’s an experienced operator in Colombia with a large land position (more than 150,000 hectares) covering many excellent geological targets…its flagship property is Yarumalito, just north of Medoro’s Marmato deposit and of course close to Seafield’s Quinchia Project…drilling continues at Yarumalito…just over three months ago the company reported assay results for seven more holes 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…the company’s El Dovio Property, approximately 100 kilometres southwest of Yarumalito, also has our attention…in November the company announced that recent channel sample results have extended high grade Gold-silver-copper mineralization over a much larger width than indicated by historical information at the 9,300-hectare El Dovio Property…all samples returned significant polymetallic mineralization…six samples contained Gold in excess of 10 grams per tonne, with individual two-meter channel samples assaying up to 25.55 grams per tonne Gold, 66.88 grams per tonne silver and 13.5 per cent copper…CMJ, which reported cash on hand of over $3 million as of July 31, is in good position for a strong 2011…the chart is telling us that positive developments are on the way…CMJ is up 45% since we added it to the BMR model portfolio just over a year ago…

Sidon International (SD, TSX-V)

Sidon continues to build a nice base in the high teens and closed Friday at 19 cents, a 1.5 cent loss for the week…there was news Thursday which gave more encouraging indications from early drilling at the company’s Morogoro East Gold Property in Tanzania…the first six holes have been completed over a strike length of 900 metres…Sidon reported zones of disseminated sulphides of pyrite and pyrrhotite as well as some chalcopyrite and arsenopyrite throughout all six holes over intervals of 30 to 70 metres…visuals are not always reliable but there’s reason to be optimistic that Sidon could be on to something…the company is also trying to develop a placer operation at Morogoro…Sidon remains locked in a very strong long-term uptrend as evidenced by the rising 50, 100 and 200-day moving averages (SMA)…there was some significant news on the Sidon front in mid-December as the company picked up ground (50.5 square kilometres) northeast of Canaco’s (CAN, TSX-V) Magambazi Property, immediately north of Douglas Lake Minerals‘ acquisition which borders Canaco’s property…strategically, this was a smart move on Sidon’s part and helps underpin if not enhance the company’s value…it meant giving up an option, for now at least, to acquire more land adjacent to its Morogoro East Gold Property to the south…given a choice between the two properties, Sidon made the right call in our view though the process appeared a little messy to investors…this company has come a long way since last March when we first introduced it to BMR readers at a nickel, and its new web site is just one more indication of how impressively Sidon has developed and matured…we see exciting possibilities for 2011…the company raised over $1 million through the exercise of options and warrants in November and December…

Excel Gold Mining (EGM, TSX-V)

Excel has been our worst performer over the last three months (it’s down 25% since we added it to the BMR model portfolio in early October) but seems to have stabilized in the vicinity of its 200-day moving average (SMA)…the stock closed Friday at 12.5 cents, a loss of 1 penny for the week…a recent positive development is that MineralFields has sold the last of its current free trading stock (300,000 shares were dumped at 12 cents December 29) which will relieve some selling pressure…MineralFields still has 10 million or so warrants to purchase additional shares but for now they’re out of the market…while there are probably better near-term opportunities on the CDNX right now than Excel, this is a company with a terrific asset –  the Montauban Mining Camp Project, 120 kilometres west of Quebec City – and patient investors with a medium to long-term outlook have a good chance to do extremely well…Excel seems to be following a technical pattern very similar to Sidon which ran hard to 18 cents and then gradually traded down very close to its 200-day SMA before reversing again to the upside…Excel’s 50-day SMA is still in decline and the turnaround for this stock will come only when that reverses which, looking at the charts, could realistically occur within the next month or so…the company continues to drill the Montauban Property which is a former Gold, silver and base metals producer…

Gold Bullion Development (GBB, TSX-V)

Gold Bullion displayed some technical strength Friday when it suddenly tumbled to 71 cents, an area of very strong support, and then rallied to finish the day (and the week) down just a penny at 78 cents on CDNX volume of just over 1 million shares, the highest volume since January 4…we’ve seen a consistent pattern with GBB since the spring of last year…the occasional spikes in the share price (higher highs each time) have each been followed by pullbacks with higher lows…this time will likely be no different after a 93-cent high December 20…the RSI(14) is now at the 50 level where it has found support since early November and the Chaikin Money Flow (CMF) indicator shows increasing buying pressure…after spending a week in the Rouyn-Noranda area (we’re returning in the near future), we can report that interest in the Granada Gold Property is as intense as ever among the geological crowd we spoke to…everyone is looking forward to more results throughout the year…we remain convinced Granada has strong potential to rival Canadian Malartic in size but of course this will require an enormous amount of additional drilling and investor patience…there are so many potential targets to pursue as the deposit is open in every direction including east (there are at least six kilometres of untested ground to the east) and north (the Yorbeau boundary is at least 1.5 kilometres away)…historical information and prospecting by Adventure Gold (AGE, TSX-V) demonstrate that there are likely extensions west and south as well…there’s also a theory that the many porphyry dykes around the area drilled to date may merge at some point at depth which creates the possibility of a highly mineralized single intrusive mass deep down…uncovering the secrets of Granada won’t be an easy task but it’s sure going to be interesting and potentially extremely rewarding…investors are anxiously awaiting new drill results from the LONG Bars Zone (last results were November 19) but it’s worth reminding readers that it took Seafield Resources (SFF, TSX-V) six months before releasing results from Miraflores that turned out to be spectacular and put the company on the front page of The Northern Miner…what we can discern from the most recent GBB results is that the LONG Bars Zone appears to be widening from north to south which of course is very positive for the geometry of this deposit…it’s our theory that the mineralization GENIVAR is discovering in the northern portion of the Eastern Extension actually begins to the west above the Preliminary Block Model…at this point there’s no question there’s strong new potential for the LONG Bars Zone going north, and Hole #86 (one gram over 84.6 metres near-surface) shows there is also new potential going south…looking at the drill map on the GBB web site, it’s obvious that GENIVAR has drilled a series of holes northwest of #86 toward Pit #2 East in the Preliminary Block Model to confirm if there is a possible extension of the #2 Vein…to the east, of course, it’s all “blue sky” as Gold Bullion has several kilometres of highly prospective strike length still to explore (LONG Bars Zone 2 is nearly two kilometres east of Phase 1 discovery hole #17)…we expect things could really heat up with Gold Bullion once the company and GENIVAR decide to step out into the heart of LONG Bars Zone 2…GBB has increased more than 10-fold since we introduced it to BMR readers just over a year ago…

Cadillac Mining (CQX, TSX-V)

Cadillac fell 3 pennies Friday to 36 cents on general CDNX weakness but volume was light (only 124,000 shares) and the stock’s overbought condition through the month of December has completely unwound (based on RSI and Stochastics) to where it was in late November before its big move began…the stock has built strong support in the mid-30’s where its market capitalization stands at approximately only $9 million…there are three fundamental factors at work with Cadillac at the moment…#1, the company has signaled to the market on more than one occasion that it’s pursuing a property acquisition (or acquisitions) in the Great Basin area of the western United States (precious metals)…reading between the lines of Cadillac’s last couple of news releases, we believe an announcement could be imminent…”Management is targeting several acquisitions generated from in-house research, data analysis, and prospecting conducted over the past year” (Dec. 30 NR)…such language tells us these potential acquisitions are very well thought out and could give Cadillac a company-making project…#2, Richmont Mines‘ (RIC, TSX) Gold Property at Wasamac, where Cadillac holds strategic claims, is rapidly developing into a very significant deposit after at least 20,000 metres of drilling since last May…an exploration update on this former producer in addition to a new resource estimate is expected very soon…what’s particularly interesting is that the principal structure that hosts the Gold mineralization at Wasamac dips northerly toward the seven claims owned by Cadillac…in addition, from the only hole Cadillac has drilled at its Wasa claims, a hole that they deepened last summer, the company discovered a 300-metre thick altered zone that’s interpreted to be a feeder system typical of those seen under VMS systems in the Noranda camp…it’s clear that Cadillac’s Wasa claims hold considerable value and the company has the expertise to unlock that value…#3, Cadillac has partnered with Visible Gold (VGD, TSX-V) on over 7,000 hectares of prospective ground mostly west of Rouyn-Noranda…Visible Gold is the operator and recently raised $5 million…they have stated they are going to be very aggressive in exploring these Cadillac properties…a substantial land position is held immediately to the south and west of Vantex’s (VAX, TSX-V) Galloway Project…Vantex has doubled in value on high volume since December 30 when it announced that Robert McEwen has taken a significant position in the company…McEwen is bullish on Galloway, and you can be sure he’s well aware of Cadillac’s holdings immediately adjacent to that property…drill results are expected soon from eight more holes from the Moriss Zone at Galloway…we recently met with Cadillac President and CEO Victor Erickson and he’s an impressive individual with a very strong industry background and the ability and determination to make some big things happen with this company…at his side is Andre Audet (VP, Exploration) who also has excellent credentials…we’re extremely comfortable with this situation and the company’s market cap is still only $9 million with a highly attractive share structure…insiders are hanging on tightly to their positions despite the significant increase in the share price over the past couple of months…Cadillac is ahead 65% since we introduced it to BMR readers early last month…

Abcourt Mines (ABI, TSX-V)

Abcourt is the newest addition to the BMR model portfolio at 20 cents early last week…the stock got as high as 23 cents and closed Friday at 19 cents for a weekly gain of half a penny…what first caught our attention with Abcourt was a massive increase in volume in December (record volume for this company)…volume is the best indicator of all that something potentially big is in the works for a stock…John, our technical analyst, picked up on this and then we went to work researching the fundamentals to see if they supported an extremely bullish technical scenario…we were astounded with our findings, and on January 10 I spent time with Abcourt President and CEO Renaud Hinse at the company’s Elder-Tagami Gold Project 10 kilometres northwest of Rouyn-Noranda…Elder is a former producer (over 300,000 ounces between 1944 and 1964) while Tagami is immediately to the north where drilling so far has outlined a 400-metre continuous zone of mineralization in a northeast direction at shallow depth averaging 8.9 grams of Gold per tonne over an average thickness of 2.23 metres as stated in the company’s November 4 news release…Abcourt is getting excellent results from both Elder and Tagami and the goal is to put Elder back into production as an underground operation by sometime in 2012…significant infrastructure is already in place…this is the type of underground mine that could produce about 35,000 ounces per year…a 43-101 completed in July, 2009, gave all-category resources for Elder of 215,000 ounces..a doubling of those resources is very possible given the current drilling success…meanwhile, near Val d’Or, Abcourt holds the Abcourt-Barvue Silver-Zinc Property which has substantial 43-101 reserves and resources that could be mostly mined by open-pit…GENIVAR completed a positive feasibility study for Abcourt-Barvue in 2007 and listed proven and probable ore reserves at 6,823,532 tonnes grading 57 g/t Ag and 3.11% zinc…there are also 43-101 measured, indicated and inferred resources with even higher silver grades…the economics for this project are robust based on GENIVAR’s 2007 study at baseline prices of $15 for Silver and 88 cents for zinc…the project’s pre-production capital cost was estimated by GENIVAR to be between $46 million and $60 million…drilling is on-going at Abcourt-Barvue in an effort to upgrade and augment resources and justify an expansion of the proposed mill from 650,000 tonnes per year to 1 million tonnes per day…Abcourt recently raised $4 million…with 110 million shares outstanding, its market cap currently sits at just $21 million…continued drilling success and even higher prices for Gold, silver and zinc would be extremely bullish for this stock which has a history of major moves…from mid-2005 to early 2006, Abcourt rocketed from 15 cents to nearly $1.40…

Currie Rose Resources (CUI, TSX-V)

It was a rough week for Currie Rose which fell 15.5 cents to 18.5 cents following release of drill results from the company’s Sisu River Gold Property in northwest Tanzania…this was a first-pass program that gave enough encouraging signs for Currie Rose to decide to plan a major follow-up drill program in the spring, but speculators were looking for a “glory hole”…they were disappointed and dumped the stock with major support levels broken…as a result, CUI dropped as low as 16.5 cents (where there is strong support) before stabilizing and showing a bit of renewed strength Friday…technically, Currie Rose is in heavily oversold territory and bargain hunters have been stepping up to the plate as demonstrated by the very high volume…mediocre results from one drill program won’t deter our enthusiasm for Currie Rose which holds a very large land package in Tanzania’s prolific Lake Victoria Greenstone Belt…much more drilling starts again in the spring, not just at Sisu River but elsewhere at Mabale Hills and the company’s Sekenke Project as well…we’ve stated repeatedly that Sekenke has huge potential as it surrounds and runs in between two former producing high grade mines…early exploration results are very encouraging for Sekenke…extensive geophysical work will precede the upcoming 5,000 metre Phase 1 drill program…Currie Rose has $2 million in the bank…President and CEO Harold Smith says the company will not do a financing at these lower prices and won’t consider one until later in the year after more drilling…concerns about the company accelerating the warrant expiry date from last summer’s financing are unfounded in our view…that of course could put additional pressure on the stock but the company is simply not in need of that money at this time…a major drill program is underway at Currie Rose’s Scadding Gold Property near Sudbury, Ontario…Trueclaim Exploration (TRM, TSX-V) is absorbing the entire cost of that program as part of its commitment in order to earn a 51% interest in the property…Scadding is a former producer and Trueclaim has been delivering some very good results from that property…

Richfield Ventures (RVC, TSX-V)

Richfield continues to consolidate after running all the way to $5.10 in late November…RVC fell 22 another cents for the week, closing at $3.98…for the first time since last July the stock has fallen below its 50-day moving average (SMA) which now means it may test its 100-day (SMA) just below $3.50…stock from the September $1.95 financing (7.5 million shares) becomes free trading next week which could help produce some additional weakness but we suspect most of those players are long-term holders who see the strong possibility of a much higher share price if the drilling success at Blackwater continues…the company released results on five more holes last Wednesday and 222 metres grading 1.23 g/t Au and 5.5 g/t Ag was intersected in BW-103…this hole was collared near the western edge of the Gold Zone, 157 metres southeast of previously announced BW-71 which returned a whopping 281 metres grading 1.40 g/t Au…a second higher grade zone at depth was also discovered in BW-103 (30 metres grading 2.52 g/t Au and 12.3 g/t Ag. from 332 to 362 metres)…three other holes reported Wednesday (BW-98, BW- 99 and BW-102) returned lower grades and widths and fenced off the western boundary of the Gold zone…exploration drilling in a hole approximately 1500 metres south of the centre of mineralization did not intersect any significant values…results are pending on 13 additional holes…another phase of drilling commences late this month as Richfield continues to define a potential multi-million ounce Gold deposit at Blackwater with silver and copper values as well…the primary trend remains up with Richfield and there’s every reason to expect more excellent drill results in 2011…RVC is ahead 232% since we introduced it to BMR readers just over a year ago at $1.20…we believe the company’s objective is to ultimately find a buyer for its potential multi-million Gold deposit at Blackwater…if good drill results continue, we’re confident that objective will be met and the takeover price could be much higher than the company’s current market cap of approximately $170 million…all indications are that Blackwater is shaping up to be a major deposit…

Greencastle Resources (VGN, TSX-V)

Greencastle firmed up this past week, gaining 3.5 pennies to close at 31 cents…Friday’s close brought it back to its rising 50-day moving average (SMA)…from a technical standpoint, the overall uptrend remains very much intact with Greencastle which we expect will enjoy a strong year as it makes an expected aggressive push with its Gold properties…continued rising prices for heavy crude are favorable as well for VGN…one can sleep well at night holding Greencastle…the company has approximately $6 million in cash, no debt, an oil royalty that brings in over $100,000 each month and was independently valued at over $5 million by an engineering firm a year ago, and three Gold properties with the strong likelihood of an “advanced” fourth project being added to the mix in the near future based on hints in recent news releases…the current market cap is only $14 million…Greencastle is becoming much more active in the Gold exploration space and that means bullish times for this stock in 2011…it’s also interesting to note that President and CEO Tony Roodenburg, a large shareholder in VGN, has refrained from selling any shares in recent months despite the fact the stock price more than tripled in value on high volume…this is different from past runs in the stock and adds further credence to our view that Greencastle is poised for a massive breakout this year…Pinetree Capital has also accumulated more shares in Greencastle, so there’s every reason to be very optimistic regarding this company’s prospects in the days, weeks and months to come…

CDNX and Gold

After declining the first week of January, the CDNX bounced back this past week and climbed 45 points to close at 2271.  It hit a new 2.5-year closing high of 2303 Wednesday before a pullback of a combined 32 points Thursday and Friday.  Interestingly, the CDNX found support at its 10-day moving average (SMA) Friday as it bounced back from an intra-day low of 2256.  Advancing issues also led decliners for the day despite the 18-point drop.

The CDNX’s rising 20-day moving average (SMA), which currently sits at 2233, has provided exceptional support since the big run that started last July.  As long as the 20-day continues to rise, one has to stick with the trend and remain long.  Looking out over the next year, we continue to see a strong probability of the CDNX reaching a new all-time high (3400+) as the masses eventually start pouring in.

The CDNX’s strong out-performance vs. Gold and the TSX Gold Index recently has been quite remarkable.  Gold has dropped about 5% since its December high.  The TSX Gold Index has shed a whopping 15.5% in just over a month while during the same time the CDNX has actually climbed 13.7%.  What are we to make of this?

What we believe the CDNX is telling is that the outlook for Gold over the coming months is very positive as outlined in John’s chart this morning (The Big Golden Picture).   We have found the CDNX to be an extremely reliable indicator in terms of the future direction of Gold prices and commodities in general, so its action recently in the face of some weakness in Gold confirms John’s bullish outlook for the yellow metal over the next six months at least.

The TSX Gold Index appears to be nearing a bottom as shown in the chart below.  You’ll note that RSI(14) levels are very close to the February, 2010, low, and there is also very strong support at the 300-day moving average (SMA, dark blue line) where it has bounced off repeatedly since mid-2009 with the exception of a brief period very early last year when it dropped only 5% below the 300-day (the light blue line is the 200-day SMA).

Gold itself has strong technical support at $1,350.  The possibility of a breach of that support certainly exists but the CDNX, the TSX Gold Index and John’s chart (The Big Golden Picture) clearly show that Gold is near a bottom with $1,300 being a worst-case near-term scenario (if this were to happen, it would be a brief “wash out” move supported by short covering and physical buying).  Whatever you do, don’t panic if this type of event occurs – smart money will be buying.

Gold’s weakness Thursday and Friday was largely brought about by an encouraging forecast of U.S. economic growth for 2011 (3 to 4%) by Federal Reserve Chairman Ben Bernanke.  We doubt, however, that Bernanke is going to relax his accomodating monetary stance anytime soon.  U.S. unemployment remains stubbornly high and American debt problems (not just at the federal level but even more urgently at the state and local levels with analysts predicting up to 100 major U.S. cities and states could go bust in 2011) present a significant threat to economic growth.

Janet Yellen, the Vice Chairman of the Federal Reserve, said the most recent round of Quantitative Easing has created or saved 1.8 million jobs so far and will be responsible for another 1.2 million jobs as the money printing program continues.

With rationale like that, the Fed is going to keep its foot on the gas as long as possible.

The main drivers for Gold remain solidly intact – currency instability, an extended period of negative real interest rates (inflation is greater than the nominal interest rate, even in China and India despite increasing rates there), massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, investment demand, emerging market growth, geopolitcal conflicts, and the list goes on.

Gold was down $7 for the week after a steeper drop of 4% during the first week of January.  Silver continues to hold above important support at $28, closing at $28.48 Friday.