Fears over the crisis in Japan have markets deeply in the red today…the CDNX was warning us last week there was trouble on the horizon, and indeed that is what has occurred…as of 7:50 am Pacific, Gold is off $31 to $1,398 after falling as low as $1,380…Silver has dropped $1.52 to $34.42 while just some modest buying is coming into the U.S. Dollar which is one-fifth of a point higher at 76.58…Japan’s benchmark Nikkei fell more than 14% at one point Tuesday before finishing down over 1,000 points or 10.55%…cash has become King for now and investors are liquidating assets across the board…with civil war in Libya and problems elsewhere in the Middle East, a monumental disaster in Japan and a U.S. Congress that can’t come to an agreement on a budget, President Obama’s Saturday radio address was devoted to Women’s History Month and a call to pass the Paycheck Fairness Act, a proposal meant to address the income gap between men and women…then, the president went golfing at Andrews Air Force Base…today’s version of Jimmy Carter occupying the White House is not helping matters…unrest in Bahrain appears to be worsening which also has the markets on edge…Bahrain’s King imposed a three-month state of emergency today and gave the country’s military chief wide authority to battle a pro-democracy uprising that has threatened the ruling monarchy and drawn in forces from around the Gulf…the CDNX has plummeted 124 points to 2069, so a declining 50-day moving average (SMA) has now set in which confirms this downtrend has not yet run its course….as we stated over the weekend, we are anticipating a drop of at least 23% in the CDNX from its recent high of 2465 which would take it down to 1900, the November low and just above the 200-day and 200-week moving averages…when the CDNX turns, it turns quickly…the good news is that the overall bull market remains intact based on both fundamentals and technicals, so this has to be viewed as a deep correction within an ongoing bull market…fortunes are often born during major corrections such as this…the current situation reminds us a little bit of the action in the markets in August of 2007 when the CDNX plunged 24% over just nine trading sessions…the devastation in Japan and the negative economic impact this will have on that country (and the rest of the world to some extent) over the short term, and the declining markets, will make the Fed more determined to maintain its accommodating monetary policy for an indefinite period and perhaps introduce QE3 later this year…ETF’s are coming to the CDNX soon…Global X Funds plans to roll out its Global X S&P/TSX Venture 30 Canada ETF Thursday in New York (it will start trading sometime during the second quarter)…the Global X ETF will track the new S&P/TSX Venture 30 Index which was announced Monday by Standard & Poor’s…the Index includes the 30 largest stocks on the Venture Exchange by market value that also meet minimum requirements for liquidity…meanwhile, BlackRock Canada has filed a preliminary prospectus to launch its iShares S&P/TSX Venture ETF in Canada soon, an EFT that will track the more diversified S&P/TSX Venture Select Index…while at BMR we focus almost exclusively on the CDNX and precious metals of course, it never hurts to take a quick look at the technical health of the Dow…John submitted a chart last night that shows how the Dow could easily be headed from its current level of 11780 to support at its 200-day SMA of 11,033…Richfield Ventures (RVC, TSX-V) came out with more stellar results this morning from its Blackwater Gold Project in central British Columbia…this stock has performed remarkably well in recent days given the plunge in the markets…Richfield released results from the first four holes of its 2011 30,000 metre drill program and they included 2.70 g/t Au over 145 metres (5 grams over 40 metres) in hole #120 on the east side of Blackwater…RVC is off 26 cents at $6.52…Seafield Resources (SFF, TSX-V) has touched its 300-day SMA at 28 cents this morning…it has fallen only slightly below that level over the past year-and-a-half during only two brief periods in 2010…SFF is currently off 3.5 pennies at 29 cents…we suggest investors take a look at these 300-day SMA’s for areas of strong support on certain stocks…one of our favorite plays to keep a close eye on during this downtrend is Great Panther Silver (GPR, TSX)…a drop to its 100-day SMA of $2.50 would likely present an incredible opportunity as was the case in late January when it touched its 100-day around $1.80…GPR is currently off 26 cents at $3.80…

The following article has been republished with permission, for the benefit of BMR readers, from Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in Gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.

Why I Pray Japan Will Avert
a Bigger Nuclear Disaster

by Martin D. Weiss, Ph.D.

Explosions and meltdowns at nuclear reactors in Japan this past weekend will forever change the world of energy.

Authorities have already scheduled widespread power outages starting today — and they could continue the planned outages for weeks or even months.

But that’s just a metaphor for the sustained global energy shortages that are likely, as the safety and long-term viability of nuclear power comes under more intense scrutiny than at any time in history.

How do we know that’s the likely outcome?

Because prior nuclear disasters, such as Three Mile Island and Chernobyl, had a major long-term impact on nuclear plant construction.

Moreover, those two disasters were ultimately written off to antiquated facilities or poor safety precautions. In contrast, the Japanese nuclear industry prides itself on safety, and the plants struck by the earthquake had far better staff training and equipment, including multiple back-up systems, all of which failed.

Some nuclear experts will counter that newer and safer technologies now exist or can be developed. But given the history of similar promises in the past, those are bound to fall on deaf ears.

The public will now ask …

Is there a fundamental incompatibility between
the potential dangers of nuclear energy and
the unpredictable wrath of Mother Nature?

That question defies any quick answer and could take years to resolve. Until then, further growth in nuclear power production could be drastically reduced, with potentially far-reaching consequences:

• Chronic global energy shortages, especially in countries that were counting on new nuclear energy for a large portion of their electric power.
• Massive, long-term upward pressure on crude oil prices as producers, consumers, and investors upwardly revise their forecasts of fossil fuel demand.
• Vast sums of investor money diverted from nuclear power plant construction to other alternative energy sources, such as wind, solar, and bio-fuels.

Impact on the U.S. Nuclear Industry

In the U.S., no new nuclear power plants have come online since 1974, largely because of the Three Mile Island disaster. And still, nuclear energy accounts for 20 percent of the nation’s electricity supplies.

One new nuclear reactor is due to start production next year, and another 16 reactors are expected by 2020. But some of those could now be delayed, and any new plans could be ditched.

What does all this mean for the immediate future?

Even before the earthquake struck Japan on Friday, the House of Representatives had scheduled hearings on nuclear energy for this week, and Energy Secretary Chu is expected to testify the day after tomorrow.

So you can expect the entire focus of the hearings to shift to the unfolding disaster in Japan, with serious questions raised about its implications.

Again, expect mounting political pressure to delay or cancel construction plans, followed by massive upward pressure on crude oil prices, commodity prices and global inflation.

And all this assumes the situation in Japan gets no worse!

If there’s an even larger catastrophe than what we’ve seen so far, all bets are off: There’s no financial or econometric model in the world that can forecast what the global consequences might be.

But that’s not the only reason I’m praying Japan will avert a bigger nuclear disaster.

The other reason is that our son Anthony — and many of our friends — live in Japan.

When the Big One struck on Friday, Anthony was on the Chuo Line, pulling into the Akihabara station in the center of Tokyo.

Ironically, I didn’t learn about his whereabouts through typical communications. Instead, it was in a Los Angeles Times article that I was reading online shortly after the quake.

In fact, just as I was wondering where Anthony might be, there he was, “talking” to me — and thousands of other LA Times readers — about the train rocking sharply back and forth, dust and small debris falling, people scrambling for the doorways, and aftershocks continuing every few minutes.

Now he’s safe in his apartment on the other side of town, but our concern has shifted to the explosions and meltdowns at the nuclear reactors in Fukushima, 175 miles to the northeast.

It seems that, at each new stage of the unfolding disaster, officials add another new layer of vague promises and reassurances, always seeking to minimize the danger.

Their actions, however, speak louder than any words:

At first, they delay any aggressive steps as long as possible. Then they resort to desperate, last-ditch measures, such as flooding the reactors with salt water, destroying them forever.

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At first, they evacuate only a few thousand residents in the immediate vicinity. Then, they evacuate hundreds of thousands.

They admit “minor meltdowns” are occurring, but fail to define what that means. A standard definition of “meltdown” is temperatures in the reactor core rising higher than 2,000 degrees Celsius, releasing dangerous levels of radiation into the atmosphere. And that’s precisely what has happened at the reactors in Fukushima, Japan. But how they manage to utter the word “meltdown” in the same breath as the word “minor” escapes me.

Prime Minister Naoto Kan declares that Japan is “facing its worst crisis in the 65 years since the end of World War II.” But still, neither he nor anyone in an official capacity seems willing to reveal any meaningful details.

The Japanese people are heroic in their preparedness, calm and stoicism. But government bureaucrats seem almost as concerned about information leaks as they are about radiation leaks.

We are not reassured.

Nor are investors who count on stable commodity prices. Indeed, it seems that …

Nearly every recent crisis or
global trend creates ever scarcer
natural resources and energy!

The unrest in the Middle East, which continues to deepen and spread, threatens the largest reserves of petroleum in the world. (See “Inflation surges! Silver near 31-year highs! Profit opportunities abound!“)

The disaster in Japan, which is far from over, could lead to massive political resistance against nuclear energy and far bigger demand for oil.

Most important, as we’ve stressed here continually, we are witnessing a long-term global shift of wealth and economic growth from the West to the East. Yet it’s in the East where we find the majority of the earth’s population, also driving up the demand for natural resources.

Everywhere, the upward pressure on prices is mounting.

My Recommendations:

1. Keep most of your money safe in the strongest financial institutions you can find. (Stand by for a new Weiss Ratings press release on this subject.)
2. Protect yourself against inflation with a stake in gold, using instruments like GLD.
3. Plus, use any intermediate corrections to buy a stake in the most promising mining companies.

Good luck and God bless!

Martin

Dr. Weiss began his career in 1971 when he founded Weiss Research, dedicated to evaluating the safety of financial institutions and investments for consulting clients.  He is the publisher and contributing editor of the financial newsletter, Safe Money, known for its track record in picking major turns in interest rates, and serves as co-editor for a number of Premium Services. He is also the author of The Ultimate Safe Money Guide and The Ultimate Depression Survival Guide.

Gold is stronger today with safe-haven interest kicking in given the problems in Japan and the Middle East…as of 7:45 am Pacific, the yellow metal is up $6 an ounce at $1,426…Silver is 3 cents higher at $35.93 while the U.S. Dollar is slightly negative at 76.49…the greenback has again failed to attract safe-haven buying interest which is clearly a very bearish sign for the American Dollar…Japan’s benchmark Nikkei closed down 6% today as the world’s third largest economy has taken a major hit with massive devastation in parts of that country following Friday’s incredible earthquake and tsunami…the outlook for the CDNX in our view has turned negative for the immediate future as detailed in last night’s article…the risk of a correction in the magnitude of 20 to 25% from the 2465 high last Monday has increased significantly given technical damage that was inflicted on the market last week…the CDNX has proven to be an extremely reliable leading indicator of the broader markets and what the Index seems to be telling us now is that there is trouble ahead for both the Dow and the TSX…as of 7:45 am Pacific, the CDNX is off 39 points at 2227…a drop below the 100-day moving average (SMA) at the 2200 level would be irrefutable confirmation that a major correction is underway…the good news, this would open up some incredible buying opportunities as the overall CDNX bull market continues…a drop to approximately 1900 could occur which would still leave the overall uptrend completely intact…Richfield Ventures (RVC, TSX) and Sidon International (SD, TSX-V) are strong this morning despite the weakness in the markets…Richfield, which recently released a 43-101 resource estimate for its Blackwater Project in central British Columbia, is up 40 cents to $6.40…the stock hit an all-time high of $6.68 this morning…Sidon, which took a hit last week after releasing disappointing initial assay results from its Morogoro East Property in Tanzania, climbed as high as 7.5 cents and is now up half a penny at 7 cents…Sidon announced this morning it has entered into an option agreement to acquire an 80% interest interest in a property adjacent to Canaco’s (CAN, TSX-V) Handeni Project…the company has also arranged a $2 million financing at 8 cents per share and has also appointed a director of communications, probably not a bad idea…Gold Bullion Development (GBB, TSX-V) is unchanged at 41 cents…GBB’s LONG Bars Zone is just as attractive as Richfield’s Blackwater Project but the two companies’ share prices have gone in opposite directions recently with Richfield now commanding a market cap four times that of Gold Bullion ($275 million vs. $66 million)…elsewhere along the Cadillac Trend, two companies worth watching closely are Visible Gold Mines (VGD, TSX-V) and Cadillac Mining (CQX, TSX-V)…at 40 cents, Visible Gold Mines has a market cap of $19 million but is sitting on nearly $9 million in cash and is rapidly becoming one of the most aggressive Gold exploration and development companies in northwestern Quebec with a focus on the Rouyn-Noranda region…VGD will start drilling at a second project during the last half of the month as it begins a 9,000 metre program at its Cadillac-Lucky Break properties, a partnership with Cadillac Mining….the first four holes of the program will be drilled near Vantex Resources’ (VAX, TSX-V) Moriss Zone, a discovery Vantex made last fall at its Galloway Project west of Rouyn-Noranda…GoldQuest Mining (GQC, TSX-V) is off a penny at 34 cents…any weakness in GQC should be viewed as a gift as this company is developing a quality pipeline of Gold projects in the Dominican Republic and also recently released a 43-101 resource estimate for its promising Toral zinc-lead-silver deposit in Spain…GoldQuest has strong management and all the money it needs to carry out is drill programs this year at Escandalosa, Las Animas and Jengibre in the DR…a 40-hole program started at Escandalosa in December and initial results are expected soon…Abcourt Mines (ABI, TSX-V) is also in good shape as continues drilling at two projects with 43-101 resources and reserves, Elder-Tagami (Gold) near Rouyn-Noranda and Abcourt-Barvue (Silver-Zinc) near Val d’Or…Abcourt is off half a penny this morning at 18 cents…

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. 

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

It was a watershed week in our view for the CDNX which went into quick reverse last Monday morning after gapping up and reaching a new two-and-a-half year high of 2465.  The Index finished 16 points lower Monday at 2424.  The selling then intensified over the next three days with losses of 38, 59 and 87 points.  The market gapped down further first thing Friday, touching its 100-day moving average (SMA) of 2192, before reversing sharply during the day Friday (on lower volume) and closing higher at 2267.  What are we to make of the 173-point, 7% weekly drop?  Was it a short-lived pullback or the beginning of a more severe correction?  We believe the latter is the case within the context, however, of an ongoing bull market.

Over the years the CDNX has proven to be an exceptionally reliable leading indicator of trends in the broader markets and precious metals.  Last July, for example, the CDNX led all markets out of the doldrums which enabled us to make a bold and correct call that the correction was over and a major buying opportunity was at hand with the potential for a massive upside move in the CDNX.  Indeed, the Index climbed 1122 points or 83.5% from its early July low of 1343 to last Monday’s high of 2465.  The action in the CDNX last July also led us to predict that Gold was about to make a major move which indeed it did.

We believe there is a high probability that we are at another turning point in the markets, confirmed to us by last week’s overall bearish action in the CDNX.   Now before everyone goes into a panic, keep in mind that the bull market in junior resource stocks still has a long way to go.  In fact, a healthy correction at this point will give the CDNX the strength and energy it needs to finally blast through stiff resistance and take a run at much higher levels.  The rising 200 and 300-day moving averages, which are in no danger of declining, confirm the impressive “big picture” technical health of the CDNX and the fact that the bull market is entirely intact.

So what is it, specifically, that we find worrisome about the CDNX right now?

1. The market has clearly met powerful resistance between 2438 (the Feb. 22 high) and 2465 (the March 7 high).  This resistance area is very clear to see on John’s multi-year chart below;
2. Exhaustion appears to have set in – the CDNX has climbed 83.5% over the last eight months.  Buying pressure is at a level (“pivot point”) where other pullbacks have started;
3. The CDNX is now significantly under-performing the major markets.  Given the fact the CDNX is such a reliable leading indicator, this suggests to us that the broad markets are about to go into a major reversal which will obviously negatively impact the CDNX.  It’s possible that Gold and commodities in general could also slide.  The CDNX fell 7% last week vs. setbacks of 1% for the Dow, 2.4% for the Nasdaq, 4% for the TSX, and 4% for the TSX Gold Index.  After crushing the Dow in terms of percentage gains during the third and fourth quarters last year (21% to 11% and 34% to 7%), the CDNX is now slightly under-performing the Dow in the first quarter of this year.  That’s a divergence we don’t like, especially with precious metals and commodities as strong as they’ve been recently;
4. The CDNX has fallen below its 50-day moving average (SMA) for the first time since the start of the big run last summer.  In almost all cases over the last decade, with the notable exception of 2009, a drop below the 50-day SMA following a significant uptrend has preceded a major correction;
5. The possibility of a declining 50-day SMA in the CDNX is now an imminent possibility unless this market can quickly move and stay above 2300 where it will now find resistance;
6. The 20-day SMA is accelerating to the downside, putting additional pressure on this market;
7. Too many individual stocks have broken down on the charts;
8. The fact the CDNX would experience a drop like last week and show technical weakness at a time when Gold is hovering around all-time highs is extremely troubling.

Below is a copy of  John’s CDNX monthly chart going back to 2001 that we posted Wednesday, March 9.  Note the resistance band and the high buying pressure at major “pivot points”.

Bulls will point to Friday’s intra-day reversal, the support of the 100-day SMA, and the bullish engulfing candle pattern that formed Thursday and Friday (the engulfing pattern requires confirmation Monday and Tuesday) as evidence we’ve seen the bottom of this mini-correction and the market is ready to roar higher.  That is one interpretation and there’s a chance it could be correct (a chart from John below shows how the bulls will draw encouragement from Friday’s trading).  Another interpretation, one that we believe is more valid given the above eight points, is that Friday’s trading and any additional strength this coming week amounts to nothing more than a “bear trap”.

Friday’s intra-day reversal in the CDNX was not hard to predict as the market was getting into oversold territory and there is strong technical support just below 2200.  There’s a chance the CDNX will try to take a run this coming week at its 50-day SMA at 2320 but this attempt, if it occurs, is likely to fail given the factors cited above.

Corrections in the CDNX of 20 to 30% typically occur every year during a bull market phase.    If one is prepared for such an event and can take full advantage of it, this is how fortunes are made.  A pullback of 23% from the 2465 high would take the CDNX down to 1904, last November’s low, which is also in the vicinity of both the 200-day SMA and the 200-week SMA which will provide rock-solid support.

Fundamental factors could quite possibly create a difficult environment for stocks over the next two to three months.  Continued unrest and uncertainty in the Middle East, rising oil prices, debt problems from Europe to the United States, and now the devastation in parts of Japan from Friday’s massive earthquake and tsunami are all factors that could negatively impact the markets going forward.  Japan is the third largest buyer of U.S. debt after the Federal Reserve and China and is going to have to spend hundreds of billions of dollars rebuilding critical infrastructure.  The country is facing its worst crisis since World War 2.

In Canada there is a growing possibility of a federal election which introduces more uncertainty for Canadian investors.

Gold fell $13 last week to $1,420 while Silver, which has been consistently outperforming Gold in recent weeks, gained 13 cents to $35.90.

The fundamental case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, 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, geopolitical unrest and conflicts (with the volatile Middle East being the focus right now), rising oil prices…the list goes on.  It’s hard to imagine Gold not performing well in this environment.

Despite signs of an improving U.S. economy, the Fed is expected to error on the side of caution and maintain its accommodative monetary policy for an extended period which is bullish for precious metals and commodities in general.  The Fed will want to see payroll gains in excess of 200,000 for at least six to nine months and a significant decline in unemployment before withdrawing its massive monetary support (QW2).  The current U.S. economic expansion is just 20 months old (expansions since WW2 have tended to be at least 60 months) and there are still significant risks to the economy including troubling high levels of debt at every level of government, a housing market that is still weak (one in four mortgages are underwater and prices continue to decline in many areas) and now an increase in oil prices which has the potential of hitting consumers hard.  Interest rate increases in the U.S. appear to be out of the question until at least sometime next year.  Overall, this is the type of environment that’s very supportive of Gold and a speculative commodity-driven market such as the CDNX which is why we see any pullback in the CDNX, minor or major, as merely a correction within a powerful ongoing bull phase. 

We will be posting a very important Part 3 of our Week in Review and A Look Ahead by late this evening Pacific time.  While the overall CDNX bull market remains firmly intact, we will be examining the growing possibility of a correction of at least 20% from the recent 2465 high.

GoldQuest Mining (GQC, TSX-V)

GoldQuest declined 4.5 cents for the week, closing Friday at 35 cents after dropping as low as 29.5 cents during Thursday’s market sell-off…Friday’s trading was encouraging in the sense that we saw a sharp intra-day reversal…the stock gapped down to 31 cents and then strengthened to close at its high of the day, the 100-day moving average (SMA)…we’ll see what sort of follow-through there could be early next week…while the drop below support in the upper 30’s is a concern, the prospects for GQC this year are very bright given the company’s pipeline of quality Gold projects in the Dominican Republic where a mining boom is clearly in full swing…GoldQuest has been conducting a Phase 2 drill program at its promising La Escandalosa Property in the DR since mid-December and initial results are expected soon…based on the success of the last drill program, GoldQuest is getting closer to the centre of the mineralizing system at Escandalosa and we’re expecting results that could ultimately elevate this project to the 1 million+ ounce category…400,000 inferred ounces have already been outlined (43-101) based on just 25 drill holes…approximately 40 holes are being drilled in the current program…Escandalosa is a flat-lying, near-surface deposit where the Gold should be easy to extract…as Chairman Bill Fisher told us in a recent interview, “the economics could be really quite compelling”…proving up a 1 million ounce deposit at Escandalosa could give GoldQuest production of at least 100,000 ounces a year…GQC’s other promising priority projects in the DR are Las Animas and Jengibre which are next in line for drilling after Escandalosa…GoldQuest released a 43-101 resource estimate March 2 on its Toral zinc-lead-silver deposit in Spain…it showed slightly lower grades but much higher overall tonnage than the previous historical non-compliant estimate…as a result, total resources came out 15% higher…resources in the indicated category are 4.04 million tonnes grading 11.8% lead and zinc (5.3% lead, 6.5% zinc) as well as 41 g/t Ag and 0.11% Cu… inferred resources are 4.67 million tonnes grading 9.8% lead and zinc (4.44% lead, 5.4% zinc), 32 g/t Ag and 0.14 Cu…Toral has significant exploration and development upside as a majority of the historical drilling (40,000+ metres) was conducted over one relatively small part of the property…the zone of sulphide mineralization is open along strike to the northwest toward a known lead deposit as well as along strike to the southeast and downdip…the project is also an ideal candidate for a fast-track to production…the deposit is close to a power line, highway and rail line…a large smelter is located just 300 kilometers away by rail…

Greencastle Resources (VGN, TSX-V)

Greencastle fell another 3.5 cents last week, closing Friday at its 200-day rising moving average (SMA) of 20 cents which should provide support…this is a company with a market cap ($9 million) just 50% above its cash value of approximately $6 million…the potential of higher oil prices in the coming months will help bolster Greencastle’s monthly cash flow of $100,000+ as it receives royalties from heavy crude production at Primate in Saskatchewan…Greencastle tripled in value over a six-week period from late October to early December…since the beginning of January, though, the stock has struggled due mostly to impatient investors frustrated with the lack of news…there hasn’t been news from Greencastle since November 30…however, with approximately $6 million in working capital, three Gold properties and monthly cash flow from an oil royalty, it doesn’t take a rocket scientist to figure out that VGN is a bargain at current levels…volume has been light on the move down which confirms there’s nothing to be concerned about here…Greencastle will shine again soon enough…the long-term chart remains very bullish with rising 200 and 300-day SMA’s that are in no danger of reversing…it’s also interesting to note that President and CEO Tony Roodenburg, a large shareholder in VGN, has refrained from selling any of his holdings 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 we haven’t seen the highs in this cycle yet from Greencastle – it’s poised for what we believe could be a massive breakout sometime during the first half of 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 weeks and months to come…Greencastle is up 43% since we added it back in to the BMR model portfolio nearly five  months ago…

Adventure Gold (AGE, TSX-V)

Adventure Gold suffered with the overall market and fell to a low of 57 cents last week, closing Friday at 62 cents for a weekly loss of 12 cents…the stock remains in an overall long-term uptrend with the supporting 100-day moving average (SMA) at 49 cents…the 10-day SMA is now declining for the first time since late January but on a positive note the 20-day is still advancing, at least for now…the company released results recently from the first two holes at its Pascalis Colombiere Gold Property near Val d’Or…both holes were drilled approximately 150 metres west of the former L.C. Beliveau Mine and intersected Gold-bearing structures at various depths which is encouraging…the system is showing strong similarities to the one observed at L.C. Beliveau…hole #13 returned 5.4 g/t Au over 20 metres which included 2.9 metres grading 34.6 g/t Au…hole #14 intersected 7 g/t Au over 4.8 metres…results from seven more holes are pending…six of them were drilled west of the former mine while the other, which may prove to be very important, was drilled at depth to test the geometry of the Gold system below the underground workings…this former mine was a low cost producer and holds excellent potential for extensions laterally and at depth…it’s still early but Adventure Gold appears to be on track with its exploration goals at this property based on these early results…we expect AGE will begin drilling its Granada Extension Property in the near future…last month’s results from Gold Bullion and the latest drill map on the GBB web site reveal exciting new potential over the far western portion of GBB’s Preliminary Block Model which supports Adventure Gold’s geological interpretation that it holds part of the western extension of the LONG Bars Zone…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 82%…Adventure Gold has been around only since late 2007 and we are impressed by the company’s solid portfolio of properties (19 in six 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 still testing the down plunge extension of Gold zones located at the Timmins and Thunder Creek deposits…the current initial deep drill hole onto the Meunier JV property is continuing…when completed it’s estimated the hole will 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…if this deep hole succeeds, AGE could absolutely explode…

Sidon International (SD, TSX-V)

There is no sugar-coating this one…it was a rough week for Sidon as it fell below important support and hit a low of 5.5 cents after drill results came out from Morogoro that fell short of market expectations…deeply oversold by Wednesday, bargain hunters stepped in and the stock closed at 6.5 cents Friday, giving it a market cap of approximately $7 million (down substantially from late last year)…the six shallow holes that were drilled in December did not produce significant results, the best hole showing 3 metres grading 1.7 g/t Au…the company has drilled four deeper holes with results for those still pending…what the initial six holes have given Sidon, however, is a better understanding of the Morogoro geological structure which should help in future drilling…exploration, especially at such an early stage, is never easy and disappointing initial results don’t necessarily mean a property doesn’t hold excellent potential…the company is also trying to develop a placer operation at Morogoro and has also acquired ground near Canaco’s (CAN, TSX-V) discovery, so there is certainly hope here for better days ahead…from a technical standpoint, previous support between 9 and 10 cents will now provide resistance over the short term…

Seafield Resources (SFF, TSX-V)

Seafield was off sharply for the week, declining 7.5 cents to 34 cents, but certainly not for a lack of decent drill results…on Monday the company reported assays from the first three holes completed at Dos Quebradas with hole #2 intersecting a whopping 511 metres grading 0.58 g/t Au…the hole ended in mineralization…hole #1 delivered 269 metres grading 0.37 g/t Au while hole #3 was drilled to define the eastern limit of mineralization and returned no significant results…a total of nine holes have now been drilled at Dos Quebradas with 11 planned for this phase of drilling…last month, the company reported that a second drill rig would start testing the nearby Santa Sofia Property by the end of February…the company has identified a promising porphyry target measuring 1,050 metres in length and 850 metres in width at Santa Sofia…a third target, La Loma, also appears very interesting…the geological case for Seafield’s Quinchia land package is compelling and we’re looking forward to more results from Dos Quebradas and elsewhere…the company has already outlined a 43-101 resource of nearly 800,000 ounces at its Miraflores Property, a number that’s expected to increase following the 12-hole, 4,000 metre program recently completed there…patient investors have an opportunity to do extremely well with this play given the geological merits of Quinchia and the real potential for 5 million+ ounces from several potential deposits…the company is sitting on at least $15 million in cash and has a very modest market cap of just over $51 million…

Gold Bullion Development (GBB, TSX-V)

It was another rough five days for Gold Bullion which fell below important support and closed Friday at 41 cents, a drop of 12 cents for the week…the stock got as low as 37 cents Friday, a level not seen since May of last year…there is a mixture of good and bad news in this story at the moment…on the positive side, a move higher next week seems probable given that technical indicators such as RSI and Stochastics show that GBB is now heavily oversold…from a fundamental standpoint, as our article earlier this week detailed, results from over 80 drill holes clearly demonstrate that the LONG Bars Zone continues to have multi-million ounce potential…mineralization remains open in every direction with six kilometres of untested strike length going east…continuity between the Preliminary Block Model and the Eastern Extension has been established in our view, though much more drilling in the Eastern Extension is still required…at 41 cents, Gold Bullion’s market cap is now only $64 million…this seems incredibly cheap given the 2.4 to 2.6 million ounce potential of just the Preliminary Block Model area as outlined by GBB nearly a year ago…on the negative side, the market is concerned with Gold Bullion’s dwindling cash position ($8 million at the end of December with a burn rate between $1 million and $1.5 million per month) and the fact that in March, 2011, more than nine months after a second drill rig arrived at Granada, there are still just two drill rigs on this property…the LONG Bars Zone is all about massive tonnage and the only way to prove up massive tonnage is through a massive amount of drilling…given the apparent manpower shortage at Granada, the optics of a drill campaign (one rig) at Gold Bullion’s Castle Silver Mine are not good…from a technical perspective, GBB’s chart has gone from a picture of beauty for many months to an ugly duckling over just the last 18 trading sessions since February 15 when the company communicated its message poorly in a news release on fresh drill results…our faith, however, in the Granada Gold Property remains as firm as ever and since we’re in the bull market of a lifetime in Gold, any company that appears to be sitting on A LOT of Gold, especially near-surface and in such an attractive jurisdiction as Quebec, is potentially worth much, much more than $64 million…

Cadillac Mining (CQX, TSX-V)

Cadillac slid in sympathy with the overall market this week, falling 7.5 cents to 25 cents but on low volume of just 528,000 shares on the CDNX…Cadillac remains one of our favorite opportunities for 2011 given the company’s properties in Quebec and Utah, its highly attractive share structure and the abilities and determination of management…at 25 cents, Cadillac’s current market cap is only $5 million which allows for plenty of upside potential…the risk-reward ratio with this one is extremely attractive… Richmont’s (RIC, TSX) success at its Wasamac Property west of Rouyn-Noranda is very bullish for Cadillac which is now preparing an exploration program including diamond drilling for its adjacent 100%-owned “Wasa” claims…Richmont has started a new 35,000 metre drill program of its own to upgrade and further expand resources at the growing Wasamac deposit where the principal structure hosting Gold mineralization plunges north at a dip between 50 and 55 degrees toward Cadillac’s claims…while there’s no guarantee, of course, there’s certainly the possibility that Cadillac’s Wasa claims could host a significant high-grade extension of Richmont’s deposit…this is what Cadillac will be exploring for…in addition they’ll be going after some highly prospective VMS targets on the property…the infamous Horne Creek fault runs right through the Wasa claims and Cadillac discovered a zone last year (by deepening the only hole they’ve ever drilled on the property) that’s interpreted to be a feeder system typical of those seen under VMS systems in the Noranda camp…Cadillac’s Wasa clams have excellent potential and we’re pleased to see they’re going to “seize the moment” and drill for a possible discovery…other CQX ground along the Cadillac Trend is also about to be drilled…Visible Gold is starting a 9,000 metre drill program this month as part of the agreement they worked out with Cadillac in December on over 7,000 hectares of land in the Rouyn-Noranda region…the first four holes of that program will be drilled on ground adjacent to Vantex’s (VAX, TSX-V) Moriss Zone discovery at the Galloway Project west of Wasamac…besides northwestern Quebec, Cadillac has secured an entire former mining camp in Utah near the Nevada border (the “Goldstrike District”) which has Carlin-type potential…Goldstrike produced over 200,000 ounces of Gold and 200,000 ounces of Silver from numerous open pits in the late 1980′s and early 1990′s…the area has never been properly explored and Cadillac is planning a major exploration program for later this year in order to unlock the potential value of Goldstrike…we encourage readers to listen to our informative interview with Cadillac President and CEO Vic Erickson posted March 4…Part 2 of that interview is coming soon…

Abcourt Mines (ABI, TSX-V)

Abcourt held up well this week and finished on a strong note, climbing 1.5 cents Friday on over 1 million shares to close at 18.5 cents…that was a drop of just half a penny for the week…the stock has held above its 100-day moving average (SMA) since the first trading of the year and technical indicators (Stochastics, RSI, volume) turned bullish Friday, suggesting Monday could be strong as well to start the new week…the Gold, silver and zinc assets this company has are much more significant than its current $20 million market cap would lead someone to believe…Abcourt released more positive assay results recently from its ongoing 10,000 metre drill program at its Elder-Tagami Gold Project near Rouyn-Noranda…mineralization continues to expand to the west of the former underground Elder Mine…the Tagami area to the north, meanwhile, has major potential so by later this year we’re expecting a substantial increase in resources at this project…the last 43-101 resource estimate of 216,000 ounces was released in the summer of 2009…the possibility of Abcourt expanding that resource beyond 500,000 ounces certainly exists given the encouraging results to date…the company’s goal is to put Elder back into production by the end of next year…considerable mining infrastructure is already on site…Abcourt released assay results February 15 from six more holes at its Abcourt-Barvue Silver-Zinc Property near Val d’Or, and results continue to be very encouraging…the holes were all drilled 150 to 200 metres from surface and five of them intersected two zones of high-grade silver and zinc…Hole #16 cut 152.26 g/t Ag over 12.7 metres…the heavy accumulation that began in Abcourt in December was no fluke in our view…this is a company with significant assets that could justify a substantially higher valuation…nearly 60 million shares of ABI changed hands on the CDNX in December and January – record volume for this stock, accompanied by a price jump from 14.5 cents…we’ve seen these type of volume surges before and they are always a very positive sign…Abcourt is being accumulated, and our best guess is that some savvy players like the assets in the ground…the 10,000 metre drill program at Abcourt-Barvue continues with the goal of upgrading and augmenting existing 43-101 reserves and resources…the company is also trying to justify an expansion of the proposed mill from 650,000 tonnes to one million tonnes…Abcourt-Barvue is a former producer and one of the best silver assets in the country with nearly 20 million ounces in all-category reserves and resources (plus nearly 300,000 tonnes of zinc)…Abcourt completed a $4 million financing at the end of December…with 110 million shares outstanding, its market cap currently sits at just $20 million…continued drilling success and even higher prices for Gold, silver and zinc would be exciting developments 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)

Currie Rose was off a penny for the week, closing Friday at 16.5 cents and just slightly above its still-rising 200-day moving average…volume Friday of just over 1 million shares was the highest since February 23…Currie Rose continues to build an impressive base after its January drop to a low of 15 cents…the key technical event we’ll be looking for over the next two to four weeks with CUI is a reversal in the stock’s 50-day moving average (SMA) which has been in sharp decline since January and currently sits at 19.5 cents…the 40-day SMA has now flattened out…significant accumulation has been taking place in Currie Rose given the CMF indicator which has shown increased buying pressure since early February…while its Tanzanian properties are the market’s major focus, Currie Rose could benefit over the coming weeks and months from good exploration news from Trueclaim Exploration (TRM, TSX-V) which is currently conducting an 8,000 metre drill program at the Scadding Gold Property near Sudbury…Trueclaim, which released assay results March 4 including 15.78 metres grading 5.36 g/t Au near-surface, is in the process of earning a 51% interest in Scadding by carrying out a $2 million work commitment…Trueclaim can acquire a full 100% interest by completing a mine production plan, paying $2 million to Currie Rose, and giving Currie Rose a 3% net smelter royalty…CUI announced a joint-venture deal January 25 with Australian-based Liontown Resources for Currie’s Jubilee Reef Gold Project in Tanzania…CUI’s focus is on the Sekenke and Mabale Hills Projects, so finding a partner for Jubilee Reef made sense…the deal commits Liontown to at least 5,000 metres of drilling at the property this year which will give Currie Rose a minimum of 23,000 metres of drilling at all of its properties in 2011…while Currie Rose has had its market cap shaved considerably, from a high of nearly $40 million to the current $14.4 million, what hasn’t changed is the quality of this company’s project portfolio which remains as high as it ever was in our view…Currie Rose has nearly $2 million in cash and is starting to gear up for a major drill program beginning later this spring in Tanzania…

Richfield Ventures (RVC, TSX-V)

During a week in which the CDNX dropped 7%, Richfield was actually up a nickel for the week after a 60-cent gain Friday pushed the stock to a closing price of $6.00…that’s just 15 cents below the all-time high RVC reached March 2 when the company released a 43-101 resource estimate for its Blackwater Project in central British Columbia…using a 0.4 g/t Au cut-off grade, the estimated global indicated resource for Blackwater is 1.83 million ounces of Gold (53.46 million tonnes grading 1.06 g/t Au) with an additional 2.34 million ounces in the inferred category (75.45 million tonnes grading 0.96 g/t Au) for a total of 4.17 million ounces…some 20 million ounces of silver are also in the indicated and inferred categories…initial metallurgical testwork has indicated an average of 92-per-cent Gold recovery using conventional whole ore direct cyanidation…the company has also contracted a series of consultants to prepare a Preliminary Economic Assessment (PEA), planned for completion in the fourth quarter of 2011…the study will consider the potential for a large-scale, open-pit mine and ore processing facility…with cash on hand of $17 million, the company has ample reserves to complete a 30,000 metre drill program this year as well as the PEA…given the state of the Gold market and the likelihood of continued exploration success at Blackwater, Richfield’s current market cap of $260 million still gives it considerable upside potential for the balance of 2011… we were very pleased to see that Richfield got a well-deserved buy recommendation recently from GMP Securities which has initiated coverage on RVC with a 12-month target price of $11.10 per share…BMR introduced Richfield to its readers in December, 2009, when the stock was trading at only $1.20…GMP sees the potential for at least five million ounces of Gold at Blackwater which is located in central British Columbia…the primary trend remains up with Richfield and there’s every reason to expect more excellent drill results throughout 2011…we believe the company’s ultimate objective is to find a buyer who can put this deposit into production…if good drill results continue as we expect they will, we’re confident that objective will be met and the takeover price could be significantly higher than the current $6.00 per share…