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John: On Friday, Gold Bullion Development (GBB, TSX-V) opened at 53 cents, touched a low of 52 cents, climbed to 54 cents and then closed unchanged for the day at 53 cents on CDNX volume of 954,000 shares.  We’ve seen the same range this morning through the first three-and-a-half hours of trading (as of 9:50 am Pacific).

Looking at the 6-month daily chart we see that after the sell-off on February 15, GBB has had 9 volatile sessions followed by 3 sessions of narrow trading between 52 cents and 54 cents.  Trading stability has returned. Another important observation is that trading is below both the SMA(50) and SMA(100) moving averages, thus they are now lines of resistance for future upside moves. The SMA(50) is pointing down and there’s also a band of resistance (2 horizontal blue lines) between 69 cents and 77 cents.   There is proven strong support (horizontal green line) at the 52 cent level.  The SMA(300), not shown here, is at 50 cents.

At the moment trading is confined to the narrow channel because there are investors just waiting to absorb the selling between 52 and 54 cents. They are investors rather than traders because I doubt if this will move significantly to the upside in the immediate future. Thus, for the near-term, GBB is expected to continue to form a horizontal trend channel and a base for future moves to the upside.

Look at the left hand side of the chart.   There we see that a downtrend occurred in September.  After the 2-day reversal on Sept. 20 and 21, a month-long channel was formed which was a solid base for the surge in November and December.  I believe we can expect a similar scenario here. How long it will be before the next breakout to the upside, there is no way to tell. However, given that Gold Bullion’s LONG Bars Zone continues to deliver good results and still shows multi-million ounce potential, more excitement with this play is highly likely.  The downside risk from current levels appears to be very limited.

Looking at the indicators:

The RSI(5) is recovering from the shock of the sell-off and is now at the 37% level, out of the oversold zone.

The Slow Stochastics(SS) is still heavily oversold and probably will stay that way for a while. One of the first bullish signs to watch for would be the %K (black line) breaking above the 20% level.

The Chaikin Money Flow (CMF) indicator is at -0.167, showing the selling pressure continues.

Outlook: I expect trading to remain within a horizontal trend channel for at least the near future as shown. This will be the base for potential upside moves later on.

Note:  The writer does not hold a position in Gold Bullion Development.

Gold has pulled back modestly after hitting a new all-time high this morning of $1,446…as of 8:20 am Pacific, the yellow metal is up $1 an ounce at $1,434…Silver climbed to a new 31-year high and is currently 60 cents higher at $36.27…crude oil is firmer again today, up over $1 a barrel to $105.58, as fighting intensifies in Libya…the U.S. Dollar Index is essentially unchanged at 76.37…Canadian provinces occupy three of the top four rankings for mining exploration and investment in the latest version of the Fraser Institute’s Survey of Mining Companies…Alberta is ranked first followed by Nevada and Saskatchewan…Quebec, which once held the top ranking for three consecutive years, has fallen to fourth from third…the CDNX gapped up this morning to 2461 but is shedding some of those early gains…the Index is currently just 9 points higher at 2449…a decisive move on strong volume through 2450 this week would be a bullish sign from a technical standpoint…Seafield Resources (SFF, TSX-V) has released results from the first three holes of its Dos Quebradas drill program at Quinchia in Colombia…hole #2 intersected an impressive 511 metres of 0.58 g/t Au, very comparable to Batero’s (BAT, TSX-V) ninth hole that returned 0.70 g/t Au over a 460-metre core length…Seafield’s second hole terminated in mineralization and included an interval of 200 metres grading 0.98 g/t Au…hole #1 at Dos Quebradas returned 269 metres grading 0.37 g/t Au while the third hole, drilled to define the eastern limit of the mineralization, showed no significant results…a total of nine holes in the 11-hole program have been completed…this is an excellent start for Seafield at Dos Quebradas…the company is rebuilding momentum and more intersections like hole #2 will demonstrate that Dos Quebradas does indeed have multi-million ounce potential…Seafield is currently off a penny at 40.5 cents…Richmont Mines (RIC, TSX), which we’ve been mentioning often at BMR due to its growing Wasamac deposit west of Rouyn-Noranda, is up another 29 cents this morning to $6.30 , its highest price in eight years…the Wasamac deposit plunges to the north toward the “Wasa” claims held by Cadillac Mining (CQX, TSX-V) which is currently preparing a drill program for that strategic land package…there are also some highly prospective VMS targets on those claims…Cadillac is off 1.5 cents at 31 cents this morning…Trueclaim Exploration (TRM, TSX-V) is making significant progress at its Scadding Gold Property near Sudbury as demonstrated by Friday’s initial drill results which included a near-surface intersection of 15.78 metres grading 5.36 g/t Au…the company believes it has connected the South Zone with the Central Zone where historical mining operations took place…there are three other zones at Scadding…this is definitely an exploration story to watch closely as we believe Trueclaim is gaining a much better understanding of the Scadding geological model and even better results could emerge as the 8,000 metre drill program continues…the stock is currently off a penny to 18 cents, its rising 100-day moving average (SMA)…very strong technical support exists between 16 and 18 cents, so the downside risk on TRM at current levels appears very limited…Gold Bullion Development (GBB, TSX-V) is unchanged at 53 cents…John has prepared a new chart for GBB which we’ll be posting shortly…

Trueclaim Exploration (TRM, TSX-V) is making significant progress at its Scadding Gold Property near Sudbury.  Results released during the day Friday show the company is beginning to “connect the dots” at the former producing Scadding Mine.

One of the South Zone holes released Friday returned an impressive 5.36 g/t Au over 15.78 metres.  Tonight, Trueclaim President John Carter (from the PDAC show in Toronto) discusses the significance of Friday’s results in an exclusive interview with BMR.  Click on the link below to listen to the 17-minute discussion:

BMR March 6 Interview With John Carter (TRM)

Trueclaim closed Friday at 19 cents on its highest volume (1.4 million shares) in nearly two months.

Note:  The writer and interviewer does not currently hold a position in Trueclaim Exploration.  Please read our disclaimer.  Trueclaim Exploration paid no fee or compensation of any sort for this interview in accordance with BMR policy. 

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

GoldQuest Mining (GQC, TSX-V)

GoldQuest closed Friday at 39.5 cents for a weekly loss of 3.5 cents…despite the recent weakness, however, the stock is still in an area of strong support as was very evident Wednesday when GQC quickly rebounded after falling to a low of 36 cents…what’s going to drive this stock higher over the coming weeks and months, in our view, is 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 for the past two-and-a-half months 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 last week 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…core from Escandalosa will be on display at the PDAC Core Shack in Toronto Tuesday and Wednesday…

Greencastle Resources (VGN, TSX-V)

Greencastle was unchanged for the week at 23.5 cents on relatively light volume…the stock continues to trade between its rising 200-day moving average (SMA) at 20 cents and its rising 100-day SMA at 26 cents…this is likely to continue until news arrives…rising oil prices will help Greencastle’s monthly cash flow 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 in the low 20′s…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 days, weeks and months to come…Greencastle is up 68% since we added it back in to the BMR model portfolio nearly five  months ago…

Adventure Gold (AGE, TSX-V)

Adventure Gold continues to look strong and was up another nickel last week to 74 cents…the company released results Thursday 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 118%…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)

Sidon traded in a tight range again last week, between 12 and 13 cents, and closed down a penny for the week at 12 cents on relatively light volume…the stock has gradually pulled back after a big day February 16 when it rose to 16.5 cents on over 7 million CDNX shares…investors are anxiously waiting for drill results from Morogoro East where drilling started in early December…that’s not an unusual delay so we’re not concerned at this point…the stock has shown clear trading patterns since the spring of last year and has been quite volatile…however, the primary trend remains up and Sidon has consistently found support right around its 200-day SMA where it’s trading now…the company reported zones of disseminated sulphides of pyrite and pyrrhotite as well as some chalcopyrite and arsenopyrite over intervals of 30 to 70 metres throughout the first six holes it drilled at MEG…we caution that visuals are not always reliable but there’s reason to be optimistic that Sidon could be on to something…the company is also trying to develop a placer operation at Morogoro and has also acquired ground near Canaco’s (CAN, TSX-V) discovery…this company has come a long way over the past year but we’re hoping to see more progress in the very near future…the chart continues to hold up but the big turnaround may not come until the 50-day moving average (SMA) swings positive again as it did at the beginning of December…

Seafield Resources (SFF, TSX-V)

Seafield was off 2 pennies for the week at 41.5 cents but that’s still a 35% increase over the low of 31 cents February 14…panic selling occurred that day following an unfavorable article on Seafield’s Colombian Country Manager Ian Park…that was an unfortunate attack and some nervous investors were unnecessarily hurt…those who have done their homework and know the underlying value of Seafield jumped in at the height of the fear February 14-15 and picked up some cheap stock…for the moment Seafield has some obvious technical resistance in the upper 40′s near the declining 50-day moving average (SMA) but we believe that will eventually be overcome as more drill results start to flow out of Quinchia…what excites us most about Seafield is its Dos Quebradas Property as well as the adjoining Santa Sofia and La Loma targets…drilling continues at Dos Quebradas while a second rig has been brought in to commence drilling at Santa Sofia…the geological case for Seafield’s Quinchia land package is compelling and we’re looking forward to initial results from Dos Quebradas…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 there…the company is sitting on at least $15 million in cash and has a very modest market cap of just over $60 million…

Gold Bullion Development (GBB, TSX-V)

Gold Bullion finished a rough month of February on a positive note Monday when the stock closed up a penny at 57 cents, building on some momentum that was generated the previous trading day (Friday) when there was a bullish intra-day reversal from a low of 51 cents to a close at the day’s high of 56 cents…weakness returned to GBB Tuesday, however, when the company issued a detailed news release on drilling at its Castle Silver Mine near Gowganda…we like the Castle project, and conducting a small exploration program there at the moment has merit, but the market wants to see that Gold Bullion is keeping its eyes squarely on the ball which is Granada…the “optics”, therefore, from Tuesday’s news regarding Castle weren’t positive which is why the stock weakened again and closed down 3 pennies for the day at 54 cents…strategically in our view it would be wise for Gold Bullion to say nothing regarding Castle until drill results are available and focus its entire news flow instead on Granada…the stock closed Friday at 53 cents for a weekly loss of 3 pennies…technically, GBB is resting in an area of strong support with the rising 300-day moving average (SMA) at exactly 50 cents…John is working on a chart update which we hope to post sometime tomorrow…we’re also in the process of completing an article on Granada which shows many positives from the latest results…this company has come an incredibly long way since it started drilling Granada 15 months ago and credit for that has to go to President and CEO Frank Basa who has shown vision and tenacity…the potential of the LONG Bars Zone continues to be immense…the challenge for Gold Bullion now is to build up its personnel and infrastructure on the ground at Granada, accelerate its exploration efforts and generate fresh momentum…

Cadillac Mining (CQX, TSX-V)

Cadillac traded in a range of 29 to 35 cents last week and closed Friday at 32.5 cents for a weekly loss of just half a penny…the stock seems to be building a strong base just above the 30-cent mark which is very positive from a technical standpoint…CQX is definitely one of our favorites for 2011…the current market cap of only $8.1 million allows for plenty of upside potential, so the risk-reward ratio here is extremely attractive…Richmont’s (RIC, TSX-V) success at its Wasamac Property 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 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 Friday night…

Abcourt Mines (ABI, TSX-V)

Abcourt continues to trade in a consolidation channel as John detailed in today’s updated ABI chart (previous post)…the stock was unchanged for the week at 19 cents, half a penny above its rising and supporting 50-day moving average (SMA)…the company released more positive assay results last week 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 $21 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 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 in the coming few weeks with CUI is a reversal in the 50-day moving average (SMA) which has been in a sharp decline since January and currently sits at about 21 cents in a zone of technical resistance…the stock closed Friday at 17.5 cents, a loss of a penny for the week…significant accumulation has been taking place in Currie Rose given the CMF indicator which has shown increased buying pressure since early February…RSI and Stochastics indicators are looking positive as well…Currie Rose should benefit from the good exploration news coming from Trueclaim Exploration which is currently conducting an 8,000 metre drill program at the Scadding Gold Property near Ontario…Trueclaim, which released assay results Friday 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 $15 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…

Richfield Ventures (RVC, TSX-V)

Richfield broke out to a new all-time high last week ($6.15) as a 43-101 resource estimate was released for the Blackwater Project…using a 0.4 g/t Au cut-off grade, the estimated global indicated resource 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 $5.95 per share…Richfield gained 65 cents last week…

John: On Friday, Abcourt Mines (ABI, TSX-V) opened at 20.5 cents, its high, then dropped and closed at its low of 19 cents. It lost 1.5 cents on the day (-7.32%) on CDNX volume of 423,000 shares. For the week it was even on volume of 1.8 million shares.

Looking at the 2-year, 4-month weekly chart, we see that in October and November, 2009, ABI topped out.  Over a 7-month period the stock then declined from the high of 22 cents to an intra-week low of 7 cents.   In July, 2010, a bullish reversal started and ABI climbed to a high of 18.5 cents at the end of October.  Then it proceeded to retrace to a low of 10.5 cents in December.  Within a week it reversed again to the upside and in 4 weeks ABI climbed to an intra-week high of 23 cents.   Then for the next 7 weeks until now there has been consolidation between a low of 15.5 cents and a high of 22 cents.   Effectively, by using weekly closing levels only, we can consider this a horizontal trend channel between 16 cents (green support horizontal line) and 20 cents (blue resistance horizontal line).  This consolidation is validated by the gradual declining volume.

There are two blue Fibonacci sets shown. The right hand one has a seed wave between 9 cents (0%) and 18 cents (100%) showing a target of 23 cents.   Note that this was the high on January 11, so this initial Fibonacci target was reached. The left hand set shows the next target is at the 32 cent level (we caution that this is not a BMR price target as we don’t give price targets but a potential and theoretical Fibonacci level based on technical analysis). The 23 cent level is a previous high, thus it will be a resistance level to future upward moves after a breakout above 20 cents.   There is strong support at the channel at 16 cents.   

Looking at the indicators:

The RSI is flat at 59% and waiting for a breakout from the channel – bullish.

The Chaikin Money Flow (CMF) indicator at -0.006 shows the buying and selling pressures are about even. This is to be expected during a consolidation.

The ADX trend indicator has the +DI (green line) at 26 above the -DI (red line) at 15. The ADX (black line) trend strength indicator is at 22 and slowly rising. This indicator shows the long-term trend is bullish.

Outlook: ABI is trading in a consolidation channel and appears to be waiting for news before a possible breakout to the upside.

Note:  The writer holds a position in Abourt Mines.

CDNX and Gold

It was a strong week for the CDNX which climbed 64 points to close at more than a two-and-a-half-year high of 2440.  Friday’s 29-point gain was impressive as the market closed slightly above the February 22 intra-day high of 2438 (after reaching 2438 early that trading day, the market reacted and promptly gave up as much as 72 points during the same session to signal a short-term reversal).  A decisive move through 2450 next week on strong volume would be a very bullish development.  Technical indicators (RSI, Stochastics, CMF) suggest we should see such a move.  John’s next Fibonacci target is 2790.

It was particularly encouraging to see the CDNX reach its highest level since mid-2008 at a time when Gold has made a new all-time high.  As our most reliable leading indicator of the precious metals markets, what the CDNX is telling us now is that Gold’s strength will continue.  If the CDNX were going in the opposite direction of Gold at the moment, that would be a warning sign.  The CDNX also continues to perform well relative to the TSX Gold Index.

Gold enjoyed another strong week, hitting a new all-time high of just over $1,440 before closing Friday at $1,433 for a weekly gain of $23.  Silver rocketed higher and hit a new 31-year high, closing Friday at $35.67.

Unrest in North Africa and the Middle East continues to underpin precious metal prices while the benchmark North American crude, West Texas Intermediate, added $2.51 Friday to close above $104 a barrel for the first time since September, 2008. Rising oil prices have traditionally been bullish for Gold.

Libyan troops loyal to Muammar Gaddafi launched counter-offensives on three rebel-held towns today as the popular uprising escalated into open warfare.  The resilience of Gaddafi’s forces in the face of the widespread insurrection and their ability to counter-attack will increase fears that Libya is heading for a protracted civil war rather than the swift revolutions seen in Tunisia and Egypt.

White House Chief of Staff William Daley said today the Obama administration was considering tapping into the U.S. strategic oil reserve as a way to help ease soaring oil prices.

The thing is, though, that the days of cheap oil are likely over, a view stated Tuesday by the International Energy Agency’s chief economist Fatih Birol.  The oil market supply/demand fundamentals started tightening before the turmoil in the Middle East began.  The big question is, will oil prices remain within a range that the global economy can adjust to and handle, or will we in fact see another oil price “shock” down the road due to unexpected events?

The fundamental case for Gold remains so 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 (February’s gain reported Friday was 192,000) 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, and now a surge 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.