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From Rouyn-Noranda, Quebec, 8:30 am Eastern

Yesterday, we stated the fundamental case for Abcourt Mines Inc. (ABI, TSX-V) which has a promising Gold property just north of Rouyn-Noranda and a silver-zinc deposit near Val d’Or that contains almost 20 million ounces of silver and nearly 300,000 tonnes of zinc (NI-43-101 reserves and resources, all categories).  Both properties are former producers and are currently being drilled to upgrade and expand resources.  The company has $4 million in cash, no debt, significant infrastructure at both sites, and a current market cap of $24 million.  Given the extent of Abcourt’s precious and base metal resources, the current valuation is very modest and provides investors with tremendous leverage to potential higher Gold, silver and zinc prices.  As a result, we have added ABI to the BMR model portfolio at 20 cents.

This morning, John examines a 10-year monthly chart for ABI which gives a very bullish technical picture and really puts things into perspective in terms of how this intriguing situation is rapidly developing.

John: Yesterday, Abcourt Mines (TSX-V) gapped up to 20 cents at the open from Friday’s close at 18.5 cents.  It reached a high of 22 cents before closing at 21.5 cents for a gain of 3 pennies (16.22%) on strong CDNX volume of 3.6 million shares. Yesterday’s trading caused the price to break to the upside out of a 2.5-year horizontal trend channel.  This indeed was a major move.

The purpose of the 10-year monthly chart above is to put into perspective the recent trading with the rather long history of the company and can be useful for future reference.

Looking at the chart we see that in 2001, ABI traded between 5 cents and 10 cents on light volume.  In 2002, interest increased and the stock moved to a high of 18 cents.  But it was not until the first quarter of 2004 that the stock price broke above 18 cents to around 25 cents and then proceeded to creep up until in 2006 it reached a high of nearly $1.40.

After that big move in 2006 (the stock soared 800% over 9 months), a steady decline set in until ABI bottomed out at 9 cents during the third quarter of 2008 in the midst of the market crash.  Since then it has traded in a horizontal trend channel mainly between 9 cents and 18 cents.

Beginning last month, we started seeing a huge (record-setting) volume spike in Abcourt which is ultimately what drew our attention to the stock. These type of volume surges often precede powerful moves.

On the chart I have shown the Fibonacci retracement levels for the decline from the 2006 high to the 2008 low (86, 71 and 57 cents, respectively).  These are resistance levels to any future upward moves in price. In addition I have shown the next two immediate Fibonacci target levels at 24 cents and 33 cents (these are not BMR price targets as we don’t give price targets but theoretical Fibonacci levels based on technical analysis).   Strong support at 18 cents and lower is shown by green horizontal lines.

Looking at the indicators: Both the RSI and the Slow Stochastics are bullish, above 50%, and climbing.

The Chaikin Money Flow (CMF) indicator shows very strong buying pressure during December and January – very bullish.

Outlook: Both the fundamentals and the technicals show that this stock has tremendous potential to move much higher and where we are now appears to be just the beginning.

Note:  The writers hold a position in ABI.

From Rouyn-Noranda, Quebec, 11:20 am Eastern

Gold has traded in a range of $1,365 to $1,377 today…as of 11:20 am Eastern, the yellow metal is unchanged at $1,370…Silver is 28 cents higher at $28.97…the U.S. Dollar Index hit a 6-week high overnight of just above 81.30 but is currently down one-fifth of a point at 80.98…Gold has solid technical support at $1,350 and bears will have a tough time knocking it below that level…the CDNX is down 4 points at 2221…the Venture showed technical strength on Friday and the key today will be a follow through advance…Currie Rose Resources (CUI, TSX-V) came out with encouraging news this morning on several fronts…drilling has intersected near-surface Gold mineralization along a strike length of 300 metres in its first-ever drill program at the Sisu River Property which is part of Currie Rose’s large Mabale Hills Project in northwest Tanzania…while there is certainly no “big hit” yet at Sisu River, which has disappointed the speculators and driven down the share price, there’s clear evidence in the results that CUI is on to something at this property which is why the company has already secured a rig for a major follow-up drill program in the spring…the best result was 11 g/t Au over three metres in hole #13…70% of the shallow 26 holes intersected mineralization and geologist Michael Griffiths stated, “We’re optimistic because other deposits in Tanzania show similar near-surface expressions”…200 kilometres to the southeast, Currie Rose’s Sekenke Project is of major interest as it surrounds and runs in between two past producing high grade mines…in addition, an 8,000 metre drill program is scheduled to commence tomorrow at the company’s Scadding Gold Property near Sudbury…Trueclaim Exploration (TRM, TSX-V) is the operator and has an option to earn a 51% interest in that project…Currie Rose’s working capital has also increased to $2 million through the exercising of warrants…the stock has been volatile today, climbing as high as 39 cents before news came out…some of the speculators and “flippers” obviously sold on the news which is often typical…the stock is currently down 11 cents at 23 cents on nearly 8 million shares…we look at the bigger, longer-term picture which is extremely positive for CUI as the company continues to move forward with a truly outstanding land package in a prolific Gold region of Tanzania…we’re as optimistic as ever regarding Currie Rose and we see strong potential for a breakthrough year for this company, so the kind of sell-off we’re seeing so far this morning presents opportunity in our view..another situation we’re watching closely in Tanzania is Sidon International (SD, TSX-V) which is looking very strong technically recently…SD is currently off half a penny at 20 cents…Abcourt Mines (ABI, TSX-V), with substantial resources in the ground as we detailed in an article last night, is ahead 3.5 pennies this morning at 22 cents on strong volume…Abcourt is a very intriguing situation and we’ll be reporting on it more by tomorrow…Gold Bullion Development (GBB, TSX-V) is unchanged at 79 cents…John’s updated chart over the weekend speaks volumes about the outlook for GBB…Cadillac Mining (CQX, TSX-V) is down 3.5 cents at 37 cents…we’re continuing to research CQX with great interest…we provided some detailed information in our Week In Review feature Saturday…a company we haven’t mentioned in quite a while that was part of the BMR model portfolio until August is catching our attention again – Kent Exploration (KEX, TSX-V)…Kent has strengthened itself financially in recent months and drilling has started again at its Gnaweeda Gold Project in Western Australia…financing has also been completed for spin-off company Archean Star Resources which is expected to be listed on the Venture Exchange in the near future…Kent shareholders at the date of record will receive one Archean Star share for every four shares in Kent…with Kent trading at just 13 cents, the opportunity now with this stock is more attractive than ever…we also very much like Kent’s Alexander River Gold Property in New Zealand which has an historical non-compliant 600,000+ ounces, and the Flagstaff Barite Property which presents good cash flow possibilities for 2011…timing is everything in the markets, and the timing with Kent last year just wasn’t quite right…the timing now appears much better…

From Rouyn-Noranda, Quebec

BMR has already uncovered three gems along the infamous Cadillac Trend – Gold Bullion Development (GBB, TSX-V), Adventure Gold (AGE, TSX-V) and Cadillac Mining (CQX, TSX-V) – and now we have a fourth one that we are pleased to introduce to our readers.

Abcourt Mines Inc. (ABI, TSX-V) has been around for many years and has a history of spectacular moves:  From July, 2005, to April, 2006, for example, the stock rocketed from 15 cents to nearly $1.40.  The company recently grabbed the attention of BMR’s technical analyst when record trading volumes for ABI suddenly emerged last month.  Our visit to Rouyn-Noranda allowed us to dig more into this story and it’s a powerful one indeed.  We wanted to put this opportunity in front of our readers as quickly as possible, so we’re providing just the critical highlights tonight.  We’ll go into more detail in the near future as time allows.  As always, do your own due diligence as we stress in our disclaimer.  Don’t take just our word for it – check ABI out for yourself.

What sets Abcourt apart from many other companies, including most of the ones we normally follow at BMR, are its resources in the ground and its near-term (18-24 months) production potential.  Furthermore, and this is what really gets us excited, the current market capitalization of Abcourt is only $20 million.    Given that we’re in the midst of a long-term “super cycle” for Gold, Silver and base metals, one that should intensify over the coming 12 months, Abcourt looks incredibly interesting.  Despite the modest price increase and a surge in volume recently, we believe the company is still very much “flying under the radar” of most investors who have simply forgotten about ABI or aren’t even aware of this company’s resource assets.

Abcourt has a large silver deposit (19.6 million ounces – 43-101 measured, indicated and inferred reserves and resources) along with nearly 300,000 tonnes of zinc (43-101 measured, indicated and inferred reserves and resources) at its Abcourt-Barvue Property near Val d’Or. ABI placed the property into production in 1985 but mining stopped in 1990 because of falling silver prices and an anticipated drop in the price of zinc.  A total of 2.7 million ounces of silver and 35,000 tonnes of zinc were produced.  Drilling has resumed at the property, fueling speculation Abcourt wants to get this back into production and as quickly as possible.

In addition, Abcourt is developing a significant Gold resource at its Elder-Tagami Project 10 kilometres west-northwest of Rouyn-Noranda.  We visited that property last Thursday.  We were impressed with the infrastructure on site (functional buildings as well as substantial surface and underground equipment with a 2,600-foot shaft and 16 levels).  Below is a picture from the site which also shows President and CEO Renaud Hinse:

ABI closed Friday at 18.5 cents.  It has 110 million shares outstanding, $4 million in cash and no debt.  Nearly 40 million shares have traded on the CDNX since the beginning of December – stock has been moving from weak hands into strong hands, and that kind of volume surge is extremely bullish as we’ve seen in many other cases.  Yes, the company will need to raise significantly more capital to go back into production but by telling its story more effectively and aggressively, as President and CEO Renaud Hinse seems determined to do, we see great potential for this situation.  Drill programs are ongoing at both properties and a steady flow of results early this year could get investors very excited.

Elder-Tagami Project

From 1947 to 1966, the Elder Mine produced 348,000 ounces of Gold.  From 1984 to 1989, the mine was re-opened and a major surface and underground exploration program was conducted.  A total of $23 million was spent on infrastructure and the drilling of over 200 holes.  Since then, three major surface exploration programs have been completed and Abcourt is now conducting a 10,000 metre drill program.  Results are confirming the continuity of good values over good mining widths at the eastern and western ends of the mine and at depth.  Immediately to the north of the 587-hectare Elder Property is the under-explored Tagami Property (329 hectares) where there are six known occurrences of Gold and excellent upside exploration potential.

In July, 2009, a 43-101 report outlined 169,000 ounces of Gold at Elder in the measured and indicated categories as well as 46,000 ounces in the inferred category (using a 3.8 g/t Au cut-off).  Given recent results and continued drilling, we believe it’s reasonable to conclude that Abcourt could double that resource and potentially put Elder back into production by sometime next year as an underground operation at a total capital expenditure of approximately $15 million (as revealed by the company).  At full production this is the type of mine that could produce about 30,000 ounces per year – not a big number but Elder would nonetheless generate decent cash flow.

Abcourt-Barvue Silver-Zinc Property

Silver deposits are rare along the Cadillac Trend which is another reason this company caught our attention.  GENIVAR completed a feasibility study in early 2007 which showed robust economics for this project (mostly open-pit) based on $15 silver and 88 cent zinc (silver of course is now near $30 and zinc is trading around $1.10) at 1,800 tonnes per day.  The pre-production capital expenditure for the project was estimated by GENIVAR at $46 million.

Current drilling by Abcourt is designed to upgrade and augment reserves and resources, and justify an increase in the size of the proposed mill from 650,000 tonnes to one million tonnes per year.  This would reduce the unit mining costs by treating a larger volume of ore annually, further enhancing the economics of the project.

Conclusion

Abcourt is the type of situation that should benefit enormously from higher silver, Gold and zinc prices – there is impressive leverage here.  The 800% move in ABI from the summer of 2005 to the spring of 2006 is a good example of the potential explosiveness of this stock.  Drilling at both major properties will ensure steady news flow.  By articulating its message more effectively, Abcourt has serious potential to develop into a major success story.

Note:  The writer holds a position in ABI.

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 Bullion Development (GBB, TSX-V) opened at 80 cents and got as high as 81 cents before drifting lower and closing at 79 cents, down a penny on relatively light volume of 360,000 shares on the CDNX.     Looking at the 3-month daily chart below, we see that the stock has found strong technical support.

After reaching an all-time high of 93 cents on December 20, GBB has consolidated within a downsloping flag. The price has found support at the Fibonacci level band between 76 cents and 79 cents as indicated by the green dotted lines. It’s also closely supported by the EMA(20) which presently stands at 78.9 cents and a rising 50-day SMA which is currently at 72 cents.   The consolidation within the downsloping flag is validated by the declining average daily volume.  The short-term Fibonacci target levels remain intact at 97 cents and $1.08 (these are not BMR price targets as we don’t give price targets but theoretical Fibonacci levels based on technical analysis).

Looking at the indicators:

The RSI has declined to the 53% level and thus has unwound the previous overbought condition. The RSI trend line has been drawn (orange line) and when broken to the upside will indicate a potentially very bullish price move. At present the 50% level is providing strong support.

The Slow Stochastics %K (black line) is flat at the 44% level and below the %D (red line) at 48%. A previous SS support level is drawn (green horizontal line).

The Chaikin Money Flow (CMF) indicator has declined but maintained a bullish level of buying power during the consolidation.

Outlook:  GBB is simply waiting for news. There has been a consolidation, not a sell-off, thus it has found strong support as described above. This stock provides great potential for patient investors.

Note:  The writer does not currently hold a position in GBB.

The BMR Portfolio (Part 2 of 2)

GoldQuest Mining (GQC, TSX-V)

GoldQuest was down three cents last week, closing Friday a penny above its supporting 50-day moving average (SMA) at 33.5 cents…the company has accelerated 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 two weeks away…this has likely contributed to some weakness in the stock since Christmas (some investors no doubt have been selling existing stock in order to raise cash to exercise their warrants) but having said that, GQC has declined only 4.5 cents since Christmas and trading has been very orderly which demonstrates the underlying strength of this situation…with impressive precious and base metal exposure, along with major new discovery potential, GQC is one of our top picks 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 72% since we added it to the BMR Portfolio near the end of September…

Adventure Gold (AGE, TSX-V)

Adventure Gold fell four cents last week, closing Friday at 47 cents, but the stock is nonetheless looking very healthy from a technical point of view…the rising 50-day moving average (SMA), currently at 46 cents, continues to provide strong support…it also appears the 20-day SMA, which has been in decline recently, could soon swing positive which would be a bullish development…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…a 2,500 metre drill program began in mid-December at AGE’s Pascalis-Colombiere Property in the eastern part of the Val d’Or mining camp…the program 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…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 38%…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 is now about 1,850 metres in depth….this hole is targeting potential zones down plunge and on strike to mineralization at LSG’s 100% owned Timmins Mine Gold deposit where LSG has recently announced intercepts of up to 13.55 g/t Au over 50.8 metres and 61.35 g/t Au over 15 metres…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 received CDNX approval after the market close Friday on its recently completed $15 million financing…with that now out of the way (it took less than a month from the time Seafield announced the financing to receipt of approval from the Exchange which was particularly quick considering the holidays), we expect things will heat up again soon with this stock as more results and news are pending from the company’s Quinchia Project in Colombia…we really like how SFF has traded since December 3 when the company announced a spectacular drill result from its Miraflores Property 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 just $74 million, SFF still has considerable upside potential…the stock closed Friday at 50 cents, a loss of nine cents for the week, but there is strong technical support around current levels and the risk-reward ratio at 50 cents appears to be very appealing…

Colombian Mines (CMJ, TSX-V)

Colombian was off a nickel last week to 87 cents but the stock is underpinned by rising 50-day and 100-day moving averages (SMA) at 88 and 84 cents, respectively…a declining 200-day SMA has so far kept CMJ from breaking out with authority above $1 but we believe that moment is coming – it’s just a matter of time and investors 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…nearly 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, which looks very strong technically at the moment, bucked the overall trend this past week and gained two pennies to close at 20.5 cents…it got as high as 23.5 cents Thursday with volume surging to over six million shares that day…Sidon remains locked in a very strong long-term uptrend…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 where drilling is ongoing…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…on December 7, Sidon reported encouraging visuals from the first hole at Morogoro which was being drilled to intersect the extension of the vein adjacent to the vein workings of artisanal miners…metasedimentary rocks were intersected in the first hole with strong silicification and up to 10 per cent pyrite, arsenopyrite, pyrrhotite and chalcopyrite being observed…all the right ingredients for a potentially good hole…Sidon reported that this hole is well above the artisanal mined vein (estimated to be at between 95 to 100 metres down the hole) and represents a significant envelope of mineralization associated with the contact and the mineralized vein…visuals, of course, can sometimes be deceiving but these are encouraging early indications of the potential of this initial 1,500 metre drill program…the drill bit is the “truth machine” and everyone will be eagerly anticipating results…Sidon is also expected to soon announce some placer testing results from Morogoro…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 16% since we added it to the BMR model portfolio in early October) but seems to have stabilized in the low teens…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…the company continues to drill the Montauban Property which is a former Gold, silver and base metals producer…

The BMR Portfolio (Part 2 of 3)

Gold Bullion Development (GBB, TSX-V)

Gold Bullion pulled back with the CDNX in general this past week but no chart damage has been done and GBB closed Friday in an area of strong support at 79 cents, the September high…regular followers of GBB will know that these pullbacks have always presented favorable buying opportunities, and the RSI(14) has just hit 50 which puts GBB in a very attractive zone for accumulation…the rising 50-day moving average (SMA) at 72 cents provides exceptional support…the GBB chart continues to be a picture of beauty with a slow but consistent rise in the share price since last spring…a couple steps ahead, one back, a couple more ahead, and so on…in this type of technical pattern, at some point an explosion to the upside will usually occur…that moment may not be far off with Gold Bullion as results from the Granada Gold Property start to pour in and drilling covers an even larger area…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…we will have much to report from Granada in the weeks ahead as we’re making two separate visits to Rouyn-Noranda…this first visit is more research-oriented as we’re meeting with geologists and various companies in the immediate area which will also give us an even better handle on the potential of Granada…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…

Cadillac Mining (CQX, TSX-V)

Cadillac Mining has been a star performer since we introduced this intriguing company to BMR readers a month ago, but we have reason to believe the best is yet to come…Cadillac was off a penny for the week at 40.5 cents and reached a multi-year high of 50 cents last Tuesday, the first trading day of 2011…the decline the last three sessions has eased the overbought condition considerably with the Chaikin Money Flow indicator actually rising, a very bullish sign…there are several really interesting and powerful dynamics at work at the moment with Cadillac, the newest one being the large claim position it holds to the south and west of Vantex’s (VAX, TSX-V) Galloway Project…Vantex has more than 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…a little further east, Cadillac holds a 100% interest in seven strategic and valuable claims (164 hectares in total) immediately adjacent to Richmont Mines‘ (RIC, TSX) Wasamac Property where drilling has proceeded with increasing urgency since last May…Wasamac is a former producer and Richmont is making new discoveries there…more drill results and a new resource estimate are expected this month…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, largely untested, hold outstanding potential…another factor driving Cadillac is the fact the company appears to be close to nailing down some important property acquisitions in the Great Basin of the western United States, “elephant country” for Gold…as stated in CQX’s December 30 news release, “management is targeting several acquisitions generated from in-house research, data analysis and prospecting conducted over the past year“…we met with Cadillac President and CEO Victor Erickson prior to our departure to Quebec last week 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 $10 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 has partnered with Visible Gold (VGD, TSX-V) on nearly 7,500 hectares in the Rouyn, Beauchastel and Dasserat townships including the claims beside Vantex’s Galloway Project…Visible Gold intends to be very aggressive in the exploration of these properties and that bodes extremely well for Cadillac which continues to hold a 100% interest in its “Wasa” Property as well as its “Gan” Property, 1.6 kilometres north of Richmont’s Francoeur Mine underground workings…

Currie Rose Resources (CUI, TSX-V)

Currie Rose fell just half a penny for the week after an impressive rebound Friday on the highest volume since December 6…the stock fell as low as 28.5 cents Friday but rallied to finish at the high of the day, 34 cents, on just over two million shares on the CDNX…technically, Currie Rose has formed a bullish downsloping flag with the 38.2% Fibonacci retracement level at 30 cents becoming the price support…that’s also the 50-day moving average (SMA) which continues to rise…the stock has repeatedly bounced off this support area since early December…the Chaikin Money Flow shows increasing buying pressure and other indicators have turned positive…it’s reasonable to assume that news on the exploration front with this company is imminent and that includes results from the Sisu River Gold Property at Mabale Hills where drilling started near the end of October…this was very much “wildcat” drilling but at the very least what we want to see is strong evidence of a promising mineralized structure at this property that would warrant a major follow-up campaign…Currie Rose has really only scratched the surface of its large land package in northwest Tanzania where the Mabale Hills and Sekenke Projects have company-making potential…President and CEO Harold Smith has made it clear that Currie Rose is entering its most active period ever in terms of exploration…given that fact, and the known potential that exists over a total of nearly 600,000 hectares at Mabale Hills and Sekenke, one can’t help but come to the conclusion that the odds of a major discovery this year for CUI are very real which is why we are so bullish on this company…in addition, Currie Rose also holds the Scadding Gold Property near Sudbury, a former producer that is getting another look and yielding some interesting results…Currie Rose has optioned Scadding to Trueclaim Exploration (TRM, TSX-V) which can earn a 51% interest in the project by completing a substantial work commitment…a major drill program is slated to commence at Scadding in the near future…

Richfield Ventures (RVC, TSX-V)

Richfield continues to consolidate after running all the way to $5.10 in late November…RVC fell 54 cents for the week with almost half of that drop coming Friday when it shed 26 cents to close at $4.20…the chart looks very good here as the stock is now resting just a few pennies above its supporting 50-day moving average (SMA) which it has not dropped below since its big move started near the end of July…stock from the September $1.95 financing (7.5 million shares) becomes free trading as of January 18, 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 primary trend remains up with Richfield and there’s every reason to expect more excellent drill results in 2011…RVC is ahead 250% 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 $165 million…all indications are that Blackwater is shaping up to be a major deposit which also contains silver and copper values…

Greencastle Resources (VGN, TSX-V)

Greencastle was off 8.5 cents this past week to 27.5 cents on relatively low volume and has clearly entered oversold territory on the charts…Friday’s close brought it slightly below the 50-day moving average (SMA), so we expect a reaction to that and a quick move back above the 50-day this coming week…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 $12.5 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

It wasn’t quite the week for the CDNX that many were expecting, including us.  However, the week ended on a positive note and provided some great opportunities for savvy bargain hunters.  The trend is your friend and the CDNX remains firmly entrenched in a powerful overall advance that conceivably could take it to new all-time highs this year.  The Index fell 63 points this first week of 2011, a drop of 2.7% which meant it out-performed Gold – a very positive sign as the CDNX is our #1 leading indicator for the precious metals markets (the CDNX hugely out-performed the TSX Gold Index which declined nearly 8% for the week).  Don’t forget, we saw the opposite action last May when the CDNX began to significantly under-perform against Gold and the TSX Gold Index and we ended up seeing a major market correction that finally bottomed in early July.

John’s Thursday night chart shows Fibonacci support at 2203 for the CDNX and even stronger support at 2178.  The current 20-day moving average (SMA) of 2192 is essentially in between these two support levels.  On Friday, the CDNX opened weaker and fell to a low of 2208.  It rallied about 15 points into slightly positive territory, dropped again and successfully tested the daily low, and then rallied strongly at the end of the day to close at its high of the day, 2225.  This was very bullish action and suggests that 2208 may indeed have been an important bottom.  In any event, the downside from current levels is extremely limited in our view.  Look for a resumption of the uptrend next week.

It’s interesting to note that the winning January trading strategy for the CDNX over the past four years (2007 through 2010) has been to do the opposite of the market in the first few days.  On average, the CDNX posted gains the first three trading days each January the last four years.  This was then followed, on average, by a rather steep 12% decline the same month. This year, the CDNX has so far done the opposite.  The market fell the first three days, and we believe a 12% advance is more likely than a 12% correction.

Only once since the CDNX’s run since July of last year has this market fallen below its 20-day SMA – that of course was in November when it fell slightly and very briefly below the 20-day.  What a buying opportunity that was, and John correctly and amazingly called that bottom by just a few points.  The 20-day is the supporting moving average for the CDNX and as long as that continues to rise, as it did with the Nasdaq during its amazing run from the summer of 1999 through early March, 2000, we have nothing to worry about.

Gold took a hit this first week of January, falling nearly 4% to $1,369, but managed to hold above important technical support at $1,350.  The yellow metal rallied from a low of $1,352 Friday when U.S. non-farm payrolls rose less than expected.

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 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.

A couple of interesting tidbits this week concerning Gold:

Saudi Arabia, one of the world’s largest Gold consumers, has started constructing the world’s largest Gold factory (it’s expected to be completed by the end of this year).  The appetite for the yellow metal in the Arab country continues to grow, even with substantially higher prices.  Saudi Arabia, now the world’s 16th largest Gold holder, more than doubled its Gold reserves last year.  In addition, consumer Gold demand grew an estimated 35% last year.

The Reserve Bank of India is allowing seven more banks to import Gold and silver.  The move is set to fullfill the demand of the country’s citizens.  While 23 banks already have the central bank’s permission to import Gold and silver into the country, the recent approval has brought the count to 30.