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Markets are recovering this morning after yesterday’s major sell-off and some knee-jerk immediate selling at the opening bell today…Gold has hovered between $1,404 and $1,420 so far today…as of 8:20 am Pacific, the yellow metal is up $3 an ounce at $1,414…Silver is off 16 cents to $35.12 while the U.S. Dollar Index has declined nearly one-quarter of a point to 77.00…markets don’t like uncertainty and the devastating earthquake in Japan this morning is just one more factor to throw into the mix…our thoughts and prayers are with the people of Japan this morning and in other areas impacted by tsunamis…the earthquake forced port closings and shutdowns of oil refineries and metal plants in the world’s third-biggest economy today, rattling commodity and energy markets as participants weighed how quickly activity could return to normal…China’s inflation and industrial production exceeded forecasts in February…consumer prices rose at an annual 4.9% pace in February while producer prices climbed 7.2%, the most since September, 2008…inflationary pressures have been building throughout Asia…South Korea, Thailand and Vietnam have all increased interest rates this week…further monetary tightening can be expected in China but continued negative real interest rates and economic growth in China are bullish for Gold…U.S. economic data was mixed this morning…the University of Michigan reading on consumer sentiment fell to 68.2 in March, from a revised 77.5 in February, which was weaker than expected…the CDNX, which yesterday fell below its 50-day moving average (SMA) for the first time since its huge run started last summer, is holding support at 2200, another critical area…if 2200 is breached, there is a band of support between 2100 and 2150…technically, what we’re looking for with the CDNX is a “hammer”  reversal…it’s very possible we could see that today as the market gapped down to 2198, fell as low as 2192, and is now back above 2200 at 2226 for a loss of only 14 points…bargain hunters are jumping in…given the oversold conditions, there is clearly the potential for a bounce to the upside but this could be a “bear trap” so traders and investors should be careful…while the overall CDNX bull market remains firmly intact, the possibility of a 20%+ correction from the 2465 high cannot be ruled out which would wipe away about half the gains since July…this would be a very normal and healthy pullback within the context of an ongoing bull market and would present some incredible buying opportunities…Gold Bullion Development (GBB, TSX-V) is down another 3 pennies to 38 cents…while the fundamentals of Granada have not changed – the multi-million ounce potential of the LONG Bars Zone is still very much intact – the market’s perception of the play has changed due in part to some perceived strategic errors on the part of GBB…the fact there are still just two drill rigs on the property since late last spring is a disappointment for the market which is also concerned about GBB’s dwindling cash position (approximately $6 million at the moment)…having said that, this is still a company sitting on potentially a lot of Gold…a company that has executed a flawless game plan is Richfield Ventures (RVC, TSX-V) which has pulled back just modestly from its all-time high of $6.15…Richfield is sitting on $17 million in cash and has already outlined 4 million ounces (total 43-101 indicated and inferred) at its Blackwater deposit in central British Columbia…RVC is currently up 15 cents at $5.55…an emerging up-and-comer we really like along the Cadillac Trend is Visible Gold Mines (VGD, TSX-V) which currently has about $9 million in the bank and is taking a very aggressive but focused approach to its exploration…VGD is actually unchanged for the week at 40 cents as it has held up extremely well during this market turmoil…the market sell-off has taken GoldQuest (GQC, TSX-V) down to the low 30’s…GQC is one of our favorites for 2011 with an outstanding pipeline of projects in the DR as well as a total of three deposits with 43-101 resource estimates…the company continues to be busy drilling in the DR and initial results from its flagship Escandalosa Property are expected soon…GQC is currently off 2 cents at 32.5 cents after a market sell-order hit GQC at the opening bell this morning, driving it down to 31 cents – fear makes people do foolish things…Currie Rose Resources (CUI, TSX-V), which is gearing up for more drilling starting this spring in Tanzania, is off a penny at 15.5 cents…this is where CUI has tremendous technical support as demonstrated in January…Currie Rose’s Scadding Gold Property near Sudbury may also start to enter into the valuation equation for the company…CUI has optioned that property to Trueclaim Exploration (TRM, TSX-V) which has been getting some very encouraging drill results…

Markets sold off across the board this morning but have started to stabilize…as of 9:30 am Pacific, Gold is down $24 an ounce to $1,407…Silver is off $1.25 to $34.88…even crude oil is down today…the Dow is off 175 points, the TSX has declined 224 points while the CDNX has broken key support and is off 91 points to 2235…the CDNX has broken important patterns in place since last summer, suggesting that the sell-off in the markets this morning is likely not a single-day event…in general, the trend has temporarily reversed in our view…there will be bounces to the upside and a level that could hold for now at least on the CDNX is 2200…the action we’re seeing in the CDNX at the moment looks very similar to that which occurred around this same time in 2005 when, in the midst of an overall uptrend, the Index pulled back approximately 20%…we have two CDNX charts this morning that will hopefully put everything into perspective…the first chart below is a weekly chart going back to 2000 and is self-explanatory…

John’s second chart is also quite revealing and shows how the CDNX’s 1100-point run since last July seems to have exhausted itself…a correction is expected to lay the groundwork for an expected major new upside move that should take the Index to at least the Fibonacci 2790 level that John has previously targeted for the CDNX…

Is there a possibility that today could in fact be the climax of a sell-off?…while that is possible, clearly the risks have increased…the important thing to keep in mind here is that what we are now seeing is a correction within the context of an ongoing CDNX bull market – this is not the end of the bull market, just another pullback within it – similar perhaps to what occurred through May, June and early July last year…throwing good quality stocks overboard right now in a panic is not a wise strategy, and hopefully investors will have built up cash positions in order to take advantage of some of the opportunities that will arise…if 2005 is any guide, this market should roar back strongly by late spring/early summer, and before then we’ll also see some good trading opportunities…the 2008 meltdown was a gift for many investors who were able to pick up stocks at fire sale prices…last summer’s correction was also a gift…this pullback will be no different in that respect, though a 2008 meltdown is simply not in the cards because of the overall positive technical health of the CDNX…this correction appears to have been triggered by concerns over the situation in Libya which continues to worsen, and the belief that the rise in oil prices is indeed not temporary and could force a slowdown in the global economy…if the United Nations imposes a “no-fly” zone over Libya, this essentially means war as critical military infrastructure on the ground will have to be taken out…so the situation there could get even uglier in the days ahead…markets do have a tendency to over-react, but that’s just the nature of the beast…the significant decline in copper prices in recent days suggests traders are expecting a slowdown in the global economy…another interesting note is that the “bond king” PIMCO fund is in the process of dumping all of its U.S. government debt…geopolitical issues, worldwide debt issues, and the possibility of an economic slowdown due in part to rising oil prices will likely pressure markets over the next two or three months – at least that’s the message the market seems to be sending this morning… we’ll look at individual issues in some detail tomorrow…this sell-off has already opened up some potential opportunities…GoldQuest (GQC, TSX-V) fell as low as 29.5 cents this morning but has since recovered to 34.5 cents…Cadillac Mining (CQX, TSX-V) fell to 22 cents for a market cap of only $5.5 million…Gold Bullion Development (GBB, TSX-V) dropped to 40 cents while Greencastle Resources got as low as 19.5 cents ($9 million market cap, $6 million in cash) even though rising oil prices will have a positive impact on this company’s monthly cash flow…Visible Gold Mines (VGD, TSX-V) has $9 million in cash and is quickly becoming one of the most aggressive Gold exploration and development companies along the Cadillac Trend…it’s trading at 40 cents this morning for a market cap of only $19 million…these are all quality companies that will recover strongly in the not-too-distant future, and there are others of course that we follow that will become more attractive than ever…

7:25 am Pacific

Markets have turned violently lower this morning and the CDNX has broken important support at both its 50-day moving average (SMA) and the 2300 level, suggesting that the broad market sell-off this morning is likely the beginning of a substantial correction…the good news is that the overall long-term bull market for the CDNX remains completely intact, even if the Index were to drop as low as its 200-day moving average (SMA) at 1860, so some incredible buying opportunities will likely emerge out of this sell-off…the next major support level for the CDNX is 2200…we’ll have more in our Morning Musings which will be posted at approximately 9:30 am Pacific today…

Gold has traded in a range of $1,422 to $1,437 so far today…as of 9:15 am Pacific, the yellow metal is essentially unchanged at $1,428 an ounce…Silver is 18 cents lower at $35.90 while the U.S. Dollar Index is off one-tenth of a point to 76.74…clearly there are worries in the markets over turmoil in the Middle East which has the potential of spreading into Saudi Arabia…crude oil prices however are holding steady today…the CDNX is showing more weakness, down 44 points at 2341, but this minor pullback that started Monday is likely close to running its course as John’s chart this morning outlined…the CDNX has now retreated into an area of very strong support – the downside from here now appears to be limited based on previous patterns and the support of the rising 50-day moving average (SMA) only about 15 points below current levels…the CDNX has not dropped below its 50-day SMA since the huge run started last summer…Gold Bullion Development (GBB, TSX-V) is off 2.5 cents at 45.5 cents…yesterday’s intra-day low of 43 cents may have been an important bottom…as our two articles pointed out yesterday, Gold Bullion’s fundamentals are solid as the company is clearly sitting on a significant and growing deposit at Granada…we’re in the bull market of a lifetime with Gold and any company that has what GBB has is in an enviable position…Adventure Gold (AGE, TSX-V) is down a penny at 63 cents…there are many areas in the LONG Bars Zone that are showing promise, not the least of which is the far western part of the Preliminary Block Model…mineralization extends outside the Block Model to the west and southwest and onto ground held by AGE…we expect Adventure Gold will be drilling its Granada Extension Property in the near future…AGE also holds a small but strategic slice of land in the LONG Bars Zone Eastern Extension…Sidon International (SD, TSX-V) took a hit yesterday after initial drilling results from its Morogoro East Gold Property in Tanzania fell short of market expectations…Sidon fell to 7 cents yesterday and is off another half penny this morning to 6.5 cents, giving it a market cap of approximately $7 million…the stock has become very oversold technically, not unlike the situation we saw with Currie Rose in January…results from four deeper holes Sidon has drilled at Morogoro are still pending…the property continues to have merit…in the exploration business, many companies have gone on to make significant discoveries after poor or lackluster early assay results…the company is also working on a placer operation at Morogoro and has property near Canaco’s (CAN, TSX-V) discovery as well…so it is not all doom and gloom for Sidon…near-term resistance for the stock will be around 9 to 10 cents, an area of previous strong support…Seafield Resources (SFF, TSX-V)  is weak this morning, currently down 2.5 pennies to 34 cents…the fact that Colombia’s mining minister, Carlos Rodado Noriega, stated that Greystar Resources’ (GSL, TSX) environmental study on the Angostura Gold project is not acceptable has temporarily scared some investors away from Colombian plays…the mining sector, though, is an important part of Colombian’s economy and the government there is generally regarded as pro-business…what this does underscore, though, is how difficult it can be these days to put a Gold mine into production…this is actually another bullish factor for the price of Gold as world mine supply is flat while demand for Gold is strong…despite the market weakness since Monday, Visible Gold Mines (VGD, TSX-V) has been a strong performer and is up for the week so far…volume on the stock has also increased…the 20-day moving average (SMA) has swung positive, so something appears to be in the works here…this is a company worth keeping a close eye on as it’s sitting on approximately $9 million in cash and has plans to become a Gold exploration and development leader along the Cadillac Trend in the Rouyn-Noranda region of northwestern Quebec…VGD is currently off 2.5 cents at 42 cents after closing at 44.5 cents yesterday on over a million shares…the company has one drill program in progress (Silidor) and is about to commence drilling on another property which it holds through an exploration partnership with Cadillac Mining (CQX, TSX-V)…

John: At BMR we consider the CDNX to be our “engine”.  It has been in a long-term uptrend since the end of 2008 and that uptrend continues.  Minor pullbacks, like we’re seeing now, have proven to be excellent buying opportunities.  Our objective with this technical analysis is to determine what the Index is doing now and what we can expect in the near future.   Yesterday the CDNX opened at 2423 and fell throughout the day to close near its low at 2386. It was down 38 points (-1.57%) on a normal volume day.  As of 7:05 am Pacific today, the CDNX is off 15 more points at 2371.

Looking at the 3-month daily chart, we see that over the 3-month period the Index has climbed steadily but with several corrective phases. The SMA(50) moving average, which provides tremendous technical support, is almost a straight upsloping line indicating steady average growth and the EMA(20) indicates the low points of the corrective phases. Note there are just 2 cases where a daily close has occurred below the moving average and both times it has reversed the following day. Monday was a down day and so was yesterday with the close almost sitting on the EMA(20). If today is a down day, as it appears it could be, the Index will close below the moving average.

There are two divergencies shown between the RSI and the Index. The first was from January 1 to Jan. 19 followed by a 4-session down move. The second was from February 18 to March 7 followed by yesterday’s down trading.  Thus, if we are to have a repeat of the previous divergence response we may have a few more down sessions.  The bullish overall uptrend remains intact.

Looking at the indicators:

The RSI is at 54% and pointing down. The horizontal orange line represents a previous support level at 45%. Thus there is room for the RSI to fall further before reaching support.

The Slow Stochastics (SS) has the %K (black line) at 70%, pointing down and below the %D (red line) at 77% and flat.  A high crossover occurred in the last 2 days as shown by the thin vertical blue line. Similar high crossovers occurred on Jan. 19 and Feb. 18 and were followed by 5 and 4 sessions respectively before the %K reversed.  The low crossovers are indicated on the chart. Thus the SS indicator shows the probability of a few more down days before we get another low crossover.

The Chaikin Money Flow (CMF) shows the buying pressure is low at the moment.  I expect it to remain low until the SS produces a low crossover.

Outlook:  The chart patterns and indicators all point to a few days of potential weakness before the CDNX resumes its upward climb. Based on previous patterns we should see a reversal to the upside within a few trading days.

Gold Bullion certainly suffered some chart damage February 15 when the stock sold off into the 50’s.  Some technical selling took over again late yesterday and early today when GBB fell below 50 cents and traded all the way down to a low of 43 cents.  However, those who are focused on the fundamentals went bargain-hunting today and Gold Bullion recovered to close at 48 cents in a turnaround that may even inspire some of the technicians who have been bearish lately.

The bottom line is this:  Gold Bullion is sitting on a significant near-surface Gold deposit in one of the best areas in the world for exploration and mining.   Just how big that deposit is (and could yet become) will be better known later this year after more drilling, more results, and an initial 43-101 resource estimate.  Gold Bullion’s current market cap is $76 million.  Richfield Ventures (RVC, TSX-V), which just recently released a 43-101 resource estimate for its Blackwater open-pit deposit in central British Columbia, has a current market cap of $254 million with 1.83 million ounces of Gold in the indicated category and 2.34 million ounces in the inferred category.  A LONG Bars Zone with four million or more ounces is certainly within the realm of possibility.  Mineralization appears to be over a wider area at Granada though Blackwater’s grades are generally higher.  Granada is in a better jurisdiction and potential mining costs should be low.  Investors who are focused on the fundamentals are seeing real value with GBB at the moment which is why buyers stepped up to the plate today when the stock hit levels not seen in eight months.

Below we highlight what we consider to be the top 24 holes so far from Granada – a dozen from the Eastern Extension and a dozen from the Preliminary Block Model.  These results show continuity between the two areas.  Assay results have been received on only about one-third of all the Phase 2 and Phase 3 holes drilled to date.

Note:  We’ve added these tables to the article that was posted this morning.  The writer holds a position in Gold Bullion Development.

Gold is trying to bounce back after some profit-taking this morning which took the yellow metal to a low of $1,422.50…as of 8:45 am Pacific, Gold is off just $3 an ounce at $1,428…Silver is essentially unchanged at $35.88 while the U.S. Dollar has gained one-quarter of a point to 76.78…Chinese Gold demand is on the increase…it has exceeded 200 tonnes in the first two months of this year…just a couple of months ago, China reported its Gold imports for the first ten months of 2010 totaled 209 tonnes…if the 2011 pace were to continue, China would purchase what would total close to half of this year’s world mine production…the world’s biggest commodities trader, Glencore International, is bullish on the outlook for the asset class, expecting last year’s buoyant trends based on growth in emerging nations such as China to persist this year…the CDNX, which hit a new two-and-a-half-year high of 2465 yesterday before retreating, is down another 29 points this morning to 2395…this pullback, however, is consistent with others we’ve seen in recent months, so we see no reason for alarm…the rising 10 and 20-day moving averages (SMA’s) are resting just below 2400 while the supporting 50-day SMA is at 2325…there is plenty of technical support…these occasional minor pullbacks in the CDNX have consistently presented good buying opportunities…successful investors will buy into weakness when the overall trend is up…a case in point this morning is Gold Bullion Development (GBB, TSX-V) which closed below support at 50 cents yesterday with weakness carrying over into today…the stock dropped as low as 43 cents this morning in trading that was reminiscent of early July last year when the stock also became heavily oversold and touched a low of 43.5 cents before recovering…within two months GBB climbed to a new 52-week high of 79 cents…as our report outlined this morning, the fundamentals of Granada are completely intact and a major Gold deposit is in the works…in addition, a very promising area in the Eastern Extension (Aukeko) is being drill-tested soon which has the potential of taking this project to a whole new level…GBB is currently at 46 cents which gives the company a market cap of only $73 million…we say “only” because if Gold Bullion is able to prove up several million ounces in the LONG Bars Zone, which seems very possible given results to date and so much ground that has yet to be drilled, this stock will be at much higher levels…yes, we’d like to see the company ramp up exploration at Granada but a substantial Phase 3 drill program (50,000 metres) is in progress with results on many holes still to come in…we expect Adventure Gold (AGE, TSX-V) to start drilling its Granada Extension Property soon which can only be positive for the Granada play as a whole…AGE is currently off 2 pennies at 67 cents, right near its rising 10-day SMA which has provided impressive support since the beginning of February…strength is building in Visible Gold Mines (VGD, TSX-V) which is up another 2 pennies this morning at 42.5 cents…VGD is taking a very aggressive approach to exploration along the Cadillac Trend…the company is sitting on approximately $9 million in working capital and is about to commence a drill program at a second property, immediately adjacent to Vantex’s (VAX, TSX-V) Galloway Project and its Moriss Zone Discovery…VGD only has 48 million shares outstanding and the chart is looking much more favorable after the stock recently appeared to bottom out in the mid-30’s…we suggest investors do their DD…Visible Gold Mines could emerge as a major player on the Gold exploration and development scene in northwestern Quebec…Manitou Gold (MTU, TSX-V), which got as high as $1.13 last week on a spectacular drill result, has pulled back into the 60’s where there seems to be strong technical support…MTU fell as low as 62 cents this morning but has since recovered to 66 cents, a loss of 2 pennies for the day…

Gold Bullion Development’s (GBB, TSX-V) latest results from the LONG Bars Zone of the Granada Gold Property near Rouyn-Noranda in northwestern Quebec continue to demonstrate a fascinating and growing mineralized system.  About 15 months ago, Gold Bullion started drilling at Granada and soon after made an important discovery northeast of Pit #2 where much of the historical production took place at the property.    Since that initial 2,500-metre Phase 1 program, more than 40,000 additional metres of drilling has occurred at Granada and continues around-the-clock.  Results from over 80 holes clearly show the undeniable potential of this property to develop into a major open-pit operation in one of the best jurisdictions in the world for mining and exploration.  Less than an hour’s drive from Granada down the “Golden Highway” is Osisko’s (OSK, TSX) massive Canadian Malartic discovery, the largest Gold deposit in Canada which is on the fast track to production.   The “Cadillac Trend”, as it’s called, is one of the hottest addresses in the entire world for Gold exploration and there’s every indication things are going to heat up in this area even more in the year ahead, especially with the yellow metal at record high prices.  Granada is in the heart of the action.

Mineralization, often very close to surface, is open in all directions at Granada with six kilometres of highly prospective ground yet to cover going east.  BMR’s faith in this property remains as firm as ever since we first uncovered this story when Gold Bullion was trading at just 7 cents.   We have made three separate site visits to the LONG Bars Zone over the past year and each time we have found the vastness and potential of this project to be breathtaking.   The point of this article is not to rehash Gold Bullion’s February 15 news release but instead highlight a few results that may have been overlooked by investors and make some general observations about this large project.

Eastern Extension

Much more drilling is required in the Eastern Extension but results are definitely beginning to show important continuity between this area and the Preliminary Block Model immediately to the west where a non-43-101 compliant 2.4 to 2.6 million potential ounces was outlined in April of last year.

One hole that was not specifically highlighted February 15 that we find very interesting is #79 which was collared just a few metres inside the Preliminary Block Model and was drilled toward the east-southeast, across the “boundary” into the newly-named “Trail Sector” which is really the beginning of the Eastern Extension.  No narrow high-grade intervals were reported for #79, so our assumption is that this hole featured really nice Gold distribution.  Overall, the hole returned 223.50 metres grading 0.67 g/t Au which included a 64.50 metre interval of 1.36 g/t Au.  That’s an impressive result showing thickness and very mineable grade.

Our expectation is that the Eastern Extension will continue to expand northward and southward and of course to the east where so much blue sky potential remains.  In the north, assay results by our calculation are still pending on seven additional holes (106, 165, 168, 171, 173, 178 and 179) over several sections north and east of #55 which delivered a whopping 356.60 metres grading 0.60 g/t Au as reported November 9, 2010.  Only one hole (#60) was from this general area in the latest release and it returned a respectable 52.04 metres grading 0.57 g/t Au.  Gold Bullion’s claims extend for at least 1.5 kilometres to the north.

The southern half of the Eastern Extension continues to deliver promising results.  Hole #145, 190 metres southwest of #17 and along the same section it appears as #17, #14 and #18 north to south, intersected 45.86 metres grading 0.82 g/t Au.  Some 50 metres to the northwest, hole #153 hit high-grade right near the surface (54.98 g/t Au from 3.90 to 4.90 metres) and averaged 0.62 g/t Au over 135.10 metres.

Another hole we like deeper to the south is #70 which was collared about 30 metres outside the Preliminary Block Model (100 metres southwest of #153) in order to test a possible extension of Vein #2.  From 39.40 to 71 metres, #70 returned 1.20 g/t Au with mineralization appearing to be quite consistent throughout the length of the hole.

A series of Phase 2 and Phase 3 holes (14 in total according to the latest map on the GBB web site) have so far been drilled below the boundary of the Preliminary Block Model in the far south of the Eastern Extension in the vicinity of Hole #86 where significant near-surface mineralization was discovered last fall.  Assay results are pending for 10 of these holes – three new ones (87, 131 and 134) were reported February 15 while #64 was released previously.    Hole #87, drilled 120 metres northeast of #86, encountered high-grade mineralization near-surface (23.49 g/t Au from 18 to 18.75 metres).  Holes #131 and #134 intersected a new structure, according to GENIVAR, with #134 returning an interval of 56.90 metres grading 0.56 g/t Au.  Intense alteration has been observed in this area (the far south) of the Eastern Extension, as reported by Gold Bullion last fall, and it’s important to note that the Timiskaming sediments (most favorable for Gold mineralization) continue for about another 200 metres to the south of #86.

We are extremely encouraged that Gold Bullion is moving a drill sometime this month to test the promising Aukeko target which is nearly two kilometres east of Phase 1 discovery hole #17.  A discovery at Aukeko, followed by a proven link between the current LONG Bars Zone and LONG Bars Zone #2 (the Aukeko area) as Gold Bullion has called it, would be a huge development for this project.

The discovery of high-grade mineralization at depth in Hole #113 (162.75 g/t Au from 232.50 to 233.59 metres) is very interesting and warrants follow-up drilling to test that new structure encountered between 212.87 and 252.92 metres depth (40.05 metres grading 4.93 g/t Au).

Preliminary Block Model

Infill, definition and exploratory drilling continue throughout the Preliminary Block Model where multiple new vein structures and near-surface mineralization have been outlined over the past year.  Historical mining (underground) and previous exploration at Granada were mostly focused on the extreme southern portion of this area (Pits #2 East #2 West).  Gold Bullion’s drilling over the past year along with historical results and recent prospecting by Adventure Gold (AGE, TSX-V) have confirmed to us that mineralization extends beyond the Preliminary Block Model not just to the east but in every other direction as well – north, south, west and at depth.

A hole like #141, collared about 220 metres from the northern edge of Pit #2 and just a few metres inside the northern boundary of the Preliminary Block Model, undoubtedly showed the kind of structure that GENIVAR and Gold Bullion are excited to see.  The hole hit some high-grade near-surface (39.9 g/t Au from 40 to 41.5 metres) but must have included numerous other sections of mineralization in order to produce such a long intersection (276 metres) grading 0.52 g/t Au.

Gold Bullion’s drill map shows that a series of holes have been completed over a wide area north of #141 in order, we assume, to test the north-dipping Preliminary Block Model structure at depth and follow the potential east-west continuity of feldspar porphyry and quartz veining discovered in the far north of the adjacent Eastern Extension.  Assay results are still pending for all of these holes with the exception of two that were also reported February 15.  Hole #118, collared 140 metres east-northeast of #141, returned a 165-metre interval grading 0.41 g/t Au while Hole #142 intersected 85 metres of 0.44 g/t Au.  Holes #141, #118, and #142 aren’t eye-popping numbers for the market and were likely glossed over by most investors but these holes demonstrate thickness and structure – exactly what the geologists want to see at this stage of the game.  This is what helps lead to a mine.

Hole #117, collared 120 metres southeast of #141, cut several high-grade sections including 2.4 metres of 22.5 g/t Au starting just 4.6 metres down hole.  These intervals, combined with lower grade sections, averaged 0.74 g/t Au over 198 metres – another impressive result.

A total of 16 new holes were drilled into the Vein #2 sector with results extending the vein down dip between 100 and 200 metres.  It’s very encouraging, as Gold Bullion’s news release reported, that numerous smaller parallel veins have been intersected in the hanging wall of Vein #2 and that all of these veins appear to be related to an altered feldspar porphyry.

There are very interesting developments over the western portion of the Preliminary Block Model.

Results from several Phase 2 and 3 holes (#169, #172, #175 and #176) drilled up to 40 metres northwest of the waste pile provide additional evidence of an eastern extension of historical Pit #1 West.  Hole #169, for example, returned a 64.50 metre interval grading 1.03 g/t Au.

Gold Bullion’s property boundary extends nearly 600 metres west of Pit #1.  Follow-up drilling west of Pit #1 was recommended in a 2006 Technical Report on Granada given several encouraging historical drill intercepts.  In addition, prospecting by Adventure Gold has resulted in the discovery of numerous Gold-bearing zones associated with porphyritic intrusions and/or quartz veins with disseminated sulphides in strongly altered and locally well-deformed sediments up to one kilometre west and southwest of Pit #1 as reported by Adventure Gold November 10, 2010.  The LONG Bars Zone really begins west of Pit #1 in our view.

Southwest Activity

The latest drill map clearly shows that GENIVAR has recently been busy drilling holes in the southwestern portion of the Preliminary Block Model (Vein 2A on the map).  Some 20 holes have been drilled south of Pit #1 and west of Pit #2 West, all within about 100 metres or less of Phase 1 Hole #13 which returned a 27.75-metre section grading 1.27 g/t Au.

Three holes (#225, #227 and #228) have also been drilled east-southeast of Hole #167 which appears to have hit a new mineralized structure south of Vein #1 as it cut an interval of 35.60 metres grading 0.92 g/t Au.  This may partially explain GENIVAR’s apparent growing interest in this part of the Block Model.

It’s important to keep in mind as well that Phase 1 Hole #21, collared 50 metres outside the western boundary of the Block Model, intersected 65.5 metres grading 0.72 g/t Au (from 3.5 to 69 metres) including 20 metres of 2.20 g/t Au.

Another result released February 15 from the western portion of the Block Model that we find interesting and important is Hole #126 , about 40 metres northwest of Pit #2 West.  It returned an interval of 55.95 metres grading 1.01 g/t Au within a total core length of 88 metres grading 0.68 g/t Au.  It appears to show continuity of Vein #2.

General Observations

The process of trying to prove up a multi-million ounce Gold deposit, as Gold Bullion is attempting to do, is never easy.  It takes time, patience, hard work and some good luck along the way.  What Gold Bullion has accomplished since it started drilling just 15 months ago is impressive to say the least – the company has clearly demonstrated that Granada could develop into the next major open-pit deposit along the Cadillac Trend.  The LONG Bars Zone discovery would not have been possible without the vision and tenacity of Frank Basa and the technical expertise of GENIVAR’s Nicole Rioux, the project’s senior geologist, and members of her team who are working tirelessly to pull this all together.  Nicole is known for her ability to uncover an ore body – she is a very capable General but she could probably use more soldiers on the ground.

What we hope to see moving forward, besides continued good results which we’re confident Granada will deliver, is a ratcheting up of the exploration program.  That is absolutely critical in our view in order to give Gold Bullion fresh momentum, new discoveries and a significantly higher market valuation.  The model investors are looking at here is a low-grade, massive tonnage system (even at a grade of 0.50 g/t Au, as we’ve stated before, the economics could be very robust as other mines in North America have shown).  Massive tonnage in this case is going to require massive drilling.  Gold Bullion has a HUGE amount of highly prospective ground it has yet to explore, in addition to more infill and definition drilling that’s required throughout the Block Model and the adjacent Eastern Extension.  This is probably stating the obvious but at some point a major beefing up of personnel and infrastructure are required at Granada in order for this project to realize its full potential which could very well be many millions of ounces.  The addition of one or two more drill rigs in the near future would be immensely beneficial.

We are greatly encouraged by the results to date.  Geologists we have spoken to, independent from this project, like how it’s coming together.  The Eastern Extension covers a greater area now than the Preliminary Block Model (and we all know the ounce potential of the Block Model).  So it’s not hard to do the math here.  Granada is big and getting bigger.  Many long intersections of mineable grade have already been reported.  “The thickness is there,” as one geologist told us the other day.  Keep in mind also that Granada, not unlike some other deposits in the Abitibi, has particle gold that in many cases won’t show up in drill results but will be processed in the mining procedure – the so-called “upgrading” effect.  That’s why Gold Bullion’s large 2007 bulk sample (grading 1.62 g/t Au) was so important.  NQ drilling alone, which is all we’ve seen so far, won’t be sufficient to quantify the grade at Granada.

The intense faulting and alteration throughout Granada, extending out to LONG Bars Zone 2, are very positive indicators of Gold mineralization.  Many secondary faults have developed from the Cadillac Fault which traverses through the northern portion of the property (north of the Cadillac Fault, where one sees much more VMS-style mineralization, are volcanic rocks.  Sedimentary rocks are found south of the Fault where there tends to be considerably more faulting, increasing the chances of Gold mineralization).  One of the keys for GENIVAR is to identify the location and orientation of these faults, and it seems they’re having success in doing that.

Initial metallurgical testing completed by Gold Bullion last year showed very high recovery rates (in excess of 90%) which is consistent with historical information we’ve seen on the property.

Gold Bullion has significantly added to its overall land position around Granada.  With approximately 11,000 hectares, it’s now the dominant landholder in an exciting new area of the Cadillac Trend.  We expect Adventure Gold to start drilling shortly and that can only be positive for this play.

Later today at BMR, we’ll be highlighting what we consider to be the top two dozen holes drilled to date at Granada.  They are undeniably good.

Granada’s future is as golden as ever.  We look forward to continued results and following the development of this property as closely as possible.  No matter what, the market will always get the hiccups from time to time but we encourage investors to keep focused on the fundamentals because Gold Bullion Development keeps showing that Granada has the goods.  LONG Bars Zone + Gold Bull Market Of A Lifetime is a powerful combination.

Note:  The writer holds a position in Gold Bullion Development.