BullMarketRun.ca

(Originally posted July 29.  Canadian markets are closed Monday due to a holiday.  BMR postings resume Tuesday morning.)

It was a wild week on the markets.  In fact, the Dow put in its worst weekly performance, a 4.2% loss, since June 2010.  For the month of July, the Dow was off 2.2%, the Nasdaq declined just over one-half of 1%, the TSX dropped 2.7%, but…the star performer for July was the TSX Venture Exchange (CDNX) which enjoyed its second-best month of the year, climbing 3.9% or 75 points to 1979. That also slightly beat the TSX Gold Index which moved up 3% this month.

While the Venture certainly got a boost from Gold’s sharp increase in July, there’s no way this speculative market would have performed the way it did this month if some sort of disaster was looming for the broader markets and the financial world as a whole.  The CDNX is an incredibly accurate leading indicator.  Speculative money is the first to flee on any hint of major trouble ahead, so what this market seems to be saying is that we can all enjoy our weekend (Canadians have a long weekend with Monday being a holiday) as the United States will somehow manage to avoid economic “Armageddon” next week.

Bullish action in the Copper market is also problematic for the bears and fear mongers.

The CDNX ended a long correction June 28, jumped 199 points or nearly 11% in just 18 sessions, and today completed a 50% retracement of that advance.  Very normal technical behavior in the early stages of a powerful new uptrend which we maintain the CDNX is in.

John updates the CDNX chart below:

Visible Gold Mines (VGD, TSX-V)

Visible Gold Mines (VGD, TSX-V) enjoyed another solid week, climbing as high as 37.5 cents and closing at 33.5 cents Friday, down 1.5 pennies for the week but up 49% for the month – VGD’s best monthly performance of the year…the stock found strong support at previous resistance of 32 cents where the 10-day moving average (SMA) now sits and continues to rise…VGD’s 20 and 50-day moving averages are also advancing, the first time this year all three of these SMA’s have been in bullish alignment…this sets up an interesting scenario for August…technically, there’s no question VGD is in a new uptrend which could easily gather fresh momentum in the days and weeks ahead with higher trading volumes (necessary to push through resistance around 40 cents) as the news flow begins with Joutel and intensifies with the Lucky Break Project…VGD has a first-rate land package in northwest Quebec (over 20,000 hectares, west and north of Rouyn-Noranda) and investors are beginning to see things start to come together for the company on the exploration front…VGD is in the midst of a 40,000 metre drill program and we’re intrigued by the July 21 news release that stated three drill rigs were on the newly-named “Wasa Creek” Property which is part of the company’s Lucky Break Project optioned from Cadillac Mining (CQX, TSX-V) last December…Wasa Creek adjoins the southwestern part of Richmont Mines‘ (RIC, TSX) Wasamac Property…the property is south of the north-dipping Wasa Shear which is responsible for Richmont’s significant and growing Wasamac deposit but it’s just north of the prolific Cadillac Fault that also runs through the area…geologically, therefore, the chances of a discovery are very real…the fact that VGD has put three rigs at Wasa Creek suggests they may have been encouraged by core visuals but nothing to that effect was stated in the news release…the company also announced July 21 that its Joutel Project, a joint venture with Agnico-Eagle Mines (AEM, TSX), has an eastern extension with a 6-kilometre strike length that exhibits similar lithologies to the previously mined Telbel, Eagle and Eagle West deposits at Joutel…VGD has identified several promising drill targets and a drill program is expected to start there in August…we added VGD to the BMR model portfolio a few months ago when it was trading around 40 cents in part because of the quality of this company’s projects, its aggressive approach to exploration, and the team of people it has on the ground and in the front office…the company’s senior geologist is Robert Sansfacon who’s a genius at understanding structure…he honed his skills for many years in the exploration division of Lac Minerals and was involved in the discovery of Osisko’s (OSK, TSX) Canadian Malartic deposit, now the largest Gold mine in the country…Sansfacon is determined to make a discovery for VGD and if anyone can, it’s him…he sees great potential with the company’s projects along a 2o+ kilometre stretch of the Cadillac Break west of Rouyn-Noranda, where drilling continues, but he’s particularly anxious to start drilling Joutel which is 150 kilometres north of Rouyn-Noranda…a geologist from another company we spoke to recently called this a “fabulous” project…Joutel is a significant former producer that Agnico-Eagle mined from three zones between 1974 and 1993…the operation was closed prematurely as AEM turned its attention to its huge LaRonde Mine…the theory is that there are additional potential undiscovered deposits on this 500+ claim land package, and the area VGD will be targeting initially is the eastern portion of Joutel which has not been fully explored and has similar geological signatures to the previously mined deposits to the west…Joutel is a geologist’s dream with a great story…”When we picked up all the Joutel boxes and maps from the Agnico-Eagle exploration offices, it took us two pick-up trucks for all the data,” VGD President and CEO Martin Dallaire told us in a recent interview…”We were flooded with data but we love it because we have the capacity to analyze all of it and bring some fresh ideas to the project…the trend is very large and there’s a lot of potential for many new mines in the area”…Dallaire, an engineer and entrepreneur from Rouyn-Noranda, understands the mining industry and what an exploration company needs to do to succeed and build shareholder value…he’s fluently bilingual, presents himself extremely well and knows how to run a business and make money…he thinks big but is focused…he has also recruited some key people including Sansfacon…in short, Dallaire has put something together you don’t often see in the junior speculative market – a powerful dynamic of business, geological and marketing expertise with a strategic plan to rapidly build value…the company’s niche and sole geological focus is northwestern Quebec where it has acquired several promising land packages, mostly west and north of Rouyn-Noranda…on Thursday, the company released a very positive NI-43-101 report on its Stadacona-East Property to support the initial inferred resource estimate of 163,000 ounces announced last April…more drilling is about to begin at Stadacona-East… Dallaire is taking an aggressive approach to exploration and he’s targeting under-explored areas and past producing mines where major new extensions are possible…armed with over $5 million in working capital, Visible Gold Mines is well positioned to make things happen in northwest Quebec…

Cadillac Mining (CQX, TSX-V)

It was a quiet week for Cadillac until Friday when a 100,000 share sell order was dumped into the market and the stock quickly fell to a dime…it recovered slightly to close the day at 11.5 cents, a loss of 3 pennies for the week…there is considerable resistance in the 15 to 16-cent area as recent trading has demonstrated…this continues to be a company with tremendous potential given its property packages and tight share structure but we don’t see a game plan yet from Cadillac management for building shareholder value and moving CQX forward in an effective and sustainable manner – when we do, we’ll let our readers know it’s time to pile back in…we are frustrated but remain patient for now because the possibilities with CQX are still incredible, especially considering the current market cap which is just $2.9 million…not often does a company get the kind of opportunity that Cadillac was handed (and still has)…CQX holds a 100% interest in a very strategic piece of property that adjoins Richmont’s Wasamac deposit, 15 kilometres west of Rouyn-Noranda…the principal Gold structure hosting mineralization at Wasamac dips northerly onto the seven claims held by Cadillac…Richmont started drilling Wasamac a year ago and steadily ramped up its drilling due to excellent results…in February of this year, Richmont reported a nearly five-fold increase in all-category 43-101 resources (from 285,000 to 1.4 million ounces) at Wasamac…as a result RIC has been one of the best performing Gold stocks on the TSX this year…BMR brought the Wasamac situation to the attention of its readers in December…investors got excited about the story and the potential of Cadillac’s “Wasa” claims…the stock ran to 50 cents by early January and the market was clearly eager to see Cadillac pursue this project as quickly as possible…management’s delay in doing so has been frustrating and has led to a substantial drop in CQX’s share value…the company is also cash poor and needs to raise some money…we give CQX credit for securing an excellent project (Goldstrike) in Utah on fabulous terms but several million dollars is going to be required to tackle Goldstrike in the right way…the best solution in our view is for Cadillac to cut a deal with another company for exploration at Wasamac and the natural partner for that appears to be Visible Gold Mines (VGD, TSX-V) which last December entered into a JV with CQX on its other Rouyn-Noranda area properties…VGD has all the money and expertise necessary to unlock the value of Cadillac’s Wasa claims…Cadillac could let others do the heavy lifting at Wasa and then focus its energies on developing the Goldstrike Project…talk is cheap – the onus right now is on Cadillac to show investors that it can “walk the walk” and make things happen, however they decide to proceed…

Abcourt Mines (ABI, TSX-V)

Abcourt hovered between 11.5 and 13.5 cents last week, closing at 11.5 cents for a weekly loss of a penny…volume picked up Tuesday (1.5 million shares) and Wednesday (1 million shares)…ABI has been looking a little healthier technically lately but still faces stiff overhead resistance with the 100-day moving average (SMA) at 14.5 cents and the 200-day SMA at 15.5…both SMA’s are declining…if you’re bullish on Silver and Zinc prices, however, which we are, you have to love this play as the current market cap ($17 million) really doesn’t take into account the value of the company’s Abcourt-Barvue Silver-Zinc deposit…ABI is ripe for a takeover given the value of its assets and management’s apparent inability to unlock that value which is why we still view this company with considerable interest…ABI’s decline from a 52-week high of 25.5 cents in late March was brought on by the closing of a financing (35 million units at 18 cents), a sharp drop in Silver, overall CDNX weakness, and selling by MineralFields Group…the company released more results from Abcourt-Barvue June 13 including 20 metres grading 108.33 g/t Ag and 1.49% Zn  in hole #31…drill results to date should significantly upgrade and increase all-category reserves and resources, most of which can be mined by open-pit…four years ago, GENIVAR produced a very positive feasibility report for the project which showed robust economics…more drilling will take place at the property later this year…the rig was just recently moved to the Vendome Property (Gold, Silver, Copper, Zinc) approximately 13 kilometres south of Abcourt-Barvue…more results came out July 5 from the company’s Elder-Tagami Gold Property near Rouyn-Noranda including 8.50 metres grading 3.71 g/t Au…that was from the Tagami area to the north which has untapped potential including some higher grades…the latest NI-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 (look what Richmont has done at Wasamac)…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…while the stock price is now slightly below that level, the record volume in ABI since late last year (take a look at a 10-year chart) is still a very bullish sign…Abcourt has been under significant accumulation and our best guess is that some savvy players like the assets in the ground…continued drilling success and 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…

Greencastle Resources (VGN, TSX-V)

Greencastle certainly firmed up a bit in July, closing at 20 cents for a 3-cent gain for the month…for the week the stock was off half a penny…bids have increased and there seems to be an anticipation of something coming down the pipe in the near future…a breakout above the still-rising 200-day moving average (SMA) at 23.5 cents is what we’re watching for to confirm that a new uptrend is indeed underway…as far as the fundamentals go, our gut feeling is that something is cooking here – President and CEO Tony Roodenburg has been quiet for too long…with the correction over in the CDNX and a new phase in the bull market having just started, Roodenburg likely won’t waste too much time getting Greencastle back on track…the company released its Q1 financials June 9 which show working capital of 16.4 cents per share ($7.5 million)…oil royalties have declined significantly – just $212,000 for the first three months of 2011 vs. $355,000 over the same period a year ago which underscores the need for VGN to make some major changes as Primate just isn’t the cash cow it used to be…the fact Roodenburg is no longer at the helm of Seafield Resources (SFF, TSX-V) is a positive development in our view for Greencastle…Roodenburg had been trying to ease his way out of Seafield since 2009 without much success until a couple of months ago…he’s now able to focus almost exclusively on Greencastle which has been a favorite project of his for many years…we suspect he’s going to take a serious look at spinning out the oil assets or the Gold assets into a separate company…something needs to happen here to move VGN forward and boost shareholder value, but we’re confident Roodenburg will do it – sooner or later…Greencastle’s market cap of $9 million means the stock is now trading just 3.5 cents above its cash value…history shows that whenever VGN is near cash value, a terrific buying opportunity has opened up though investors must be patient…Greencastle tripled 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…patience is definitely required with VGN or one shouldn’t invest in it…over the years the successful strategy with Greencastle has been to accumulate on weakness when the stock is near cash value and then sell into strength when something develops…with $7.5 million in working capital, three Gold properties (including land near the Blackwater Project and a couple of very good Nevada properties) and monthly (albeit declining) cash flow from an oil royalty, it doesn’t take a rocket scientist to figure out that Greencastle does offer excellent value at current levels…the long-term chart remains encouraging with rising 200 and 300-day SMA’s that are in no danger of reversing at the moment (the 200-day could start declining however if something doesn’t develop by the end of August)…it’s also important to note that Roodenburg, a large shareholder in VGN, refrained from selling any of his holdings during the late 2010 run-up in the share price…this is different from past bullish 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 last half of this year…Pinetree Capital also accumulated more shares in Greencastle late last year, so there’s every reason to be very optimistic regarding this company’s prospects…Greencastle is up 43% since we added it back in to the BMR model portfolio last October…

Sidon International (SD, TSX-V)

Still nothing new to report here…we’re all entitled to have one dog in our portfolio and Sidon is that dog for us at the moment, though it did increase five-fold for us last year and still holds potential…things remain very quiet on the Sidon front with the stock down half a penny last week at 3.5 cents…the company hasn’t been able to recover yet from its fall in March, one day after the CDNX correction began, on poor drill results from its Morogoro East Gold Property in Tanzania…there has been no news from the company since March 14 – they effectively “sat out” the correction in the CDNX – when it announced a proposed private placement at 8 cents and an option to acquire an 80% interest in a 50-square kilometre property adjacent to Canaco’s (CAN, TSX-V) Handeni discovery in Tanzania…the 6 shallow holes drilled in December at Morogoro East failed to produce significant results, the best hole showing 3 metres grading 1.7 g/t Au…the company has drilled 4 deeper holes with results for those still pending…what the initial 6 holes have given Sidon, however, is a better understanding of the Morogoro geological structure which would aid in any future drilling…exploration, especially at such an early stage, is never easy and disappointing early results don’t necessarily mean a property doesn’t hold excellent potential…the company is also trying to develop a placer operation at Morogoro…there is certainly the possibility of better days ahead for Sidon but the lack of news is not encouraging…the climb back up won’t be easy and the company potentially may have to look at a consolidation of its capital…Sidon ran as high as 26.5 cents last winter but is now off a penny-and-a-half since we introduced it to BMR readers just over a year ago at a nickel…the company currently has approximately 140 million shares outstanding for a market cap of $4.9 million…

Gold Bullion Development (GBB, TSX-V)

GBB was off a penny-and-a-half for the week, closing at 38 cents…we suggest readers review John’s GBB chart that was posted as part of yesterday’s Morning Musings…another “cup with handle” pattern appears to be forming (the previous two failed, so maybe the third time might be lucky)…RSI and Stochastics support this view – RSI(14) appears to have found support and the Slow Stochastic oscillator is now trending higher after likely bottoming out…for nearly five months now GBB has traded in a range from slightly below its rising 500-day moving average (SMA) to slightly above its rising 300-day SMA…at some point that pattern will change based on fundamental factors – drill results or the NI-43-101 resource estimate…the only news last week out of GBB was that the company has applied to the Venture Exchange to lower the exercise price of a total of nearly 8 million share purchase warrants to 58 cents (7.4 million from last October’s financing were priced at 75 cents)…these warrants expire October 27, 2011, so we’re certain the GBB game plan is to have the 43-101 out before the end of the summer in hopes of getting those warrants exercised which would bring another $5 million or so into the treasury…a move through the mid-50’s would constitute a major technical breakout for the stock…GBB’s latest drill results were released July 13…there was nothing spectacular in those results but hole #165, collared approximately 50 metres northeast of hole #108, offered encouragement with regard to the very promising northern portion of the Eastern Extension…#165 returned 141.5 metres grading 0.31 g/t Au (from 155 to 296.50 metres) with no high-grade spikes, showing an apparent consistency of mineralization…it included a 20.5-metre section grading 1.2 g/t Au…assays have yet to be reported on 8 more important holes drilled in this general area (168, 178, 183, 241, 243, 246, 254, 257) according to GBB’s most recent drill map…along with additional results, GBB’s 43-101 resource estimate is going to be critical along with the Castle spin-off and potential discoveries in LONG Bars Zone 2…infill drilling is GBB’s focus at the moment with drill hole spacing tightening (which could help to improve grade) in preparation for a resource calculation…the company’s current market cap of $63.3  million puts a value of just $21 an ounce on Gold in the ground at Granada if one were to assume the 43-101 will outline approximately 3 million ounces in the measured, indicated and inferred categories…that’s just a hypothetical number on our part at the moment but whatever number GENIVAR comes up with, we believe it should exceed the 2.4 to 2.6 million ounce conceptual figure that Gold Bullion gave in April of last year…based on all the drill results to date, this appears to be shaping up as a half-gram deposit with a higher grade starter pit and massive volume…it’s all about volume at Granada which is why the drills have to keep turning and why we want to see more than just two rigs in the LONG Bars Zone which has such incredible potential…the company provided an update on its Castle Silver Mine Project June 8…the 6,000 metre Phase 1 drill program is nearing completion and a strong new vein structure was intersected at the first IP target…a 43-101 technical report on the property has also been released…assay results from the 10 holes drilled so far are still pending…GBB plans to spin-off this asset into a separate publicly traded entity…GBB is up 443% since we introduced it to BMR readers in late December, 2009…

Currie Rose Resources (CUI, TSX-V)

Currie Rose managed to weather last week’s market storm pretty good…the stock hit a two-month high Tuesday when it traded at 21.5 cents before finishing the week at 19 cents, a loss of just a penny from the previous Friday…this is a very healthy technical situation…all of CUI’s major moving averages are now rising (10, 20, 50, 100, 200 and 300-day SMA’s)…a breakout through resistance in the low 20’s appears to be just a matter of when, not if, given the technical indicators and developments on the ground in Tanzania…the Currie Rose drill continues to turn at Mabale Hills, so a summer of interesting action in CUI is likely…three properties are being drilled at Mabale (Mwamazengo, Dhahabu and Sisu River) before the rig shifts to the flagship Sekenke Project about 200 kilometres to the southeast…CUI‘s first-ever drill program at Sisu River late last year gave reason for encouragement but this time around the plan is to push the holes a little deeper (150 metres or more) in hopes of cutting wider intersections and higher grade…reading between the lines of the July 5 news release, it’s possible the geologists liked what they saw in the first 3 holes as 506 samples were delivered to a nearby lab for assaying and drilling continued…after more holes are completed at Sisu River, the rig will test targets at Dhahabu and Mwamaznego…geochemical analysis has outlined a continuous anomaly over a few hundred metres that runs parallel to the west of a previously reported discovery at Mwamazengo where drill results included notable high-grade intercepts such as 34 metres grading 3.60 grams per tonne gold, 12 metres grading 9.11 g/t Au, 63 metres grading 2.59 g/t Au and 31 metres grading 5.97 g/t Au…we’re most excited, however, about the Sekenke Project which has “blue sky” written all over it…Sekenke is why we decided to start following CUI when it was trading around a dime last fall…results from satellite imagery provide additional evidence that Sekenke is a highly intriguing geological target and part of the same northwest trending structure that hosts Canaco’s (CAN, TSX-V) Handeni Project…satellite imagery has also shown that the structures at Sekenke are coincident with a strong alteration envelope…what’s unique about this project is that it surrounds and runs in between two former high grade Gold mines including Tanzania’s original producer…this greatly increases the chances of a discovery as it’s unlikely the former mines were fully exploited or explored as techniques a century ago in this industry obviously weren’t what they are today…CUI has a terrific chance to hit it big at Sekenke and we also wouldn’t be surprised if the company takes a shot at acquiring the former Sekenke Mine…that’s speculation on our part but it makes sense from a strategic point of view…pre-drilling exploration work continues at Sekenke to pinpoint the best targets…while its Tanzanian properties are the market’s major focus, Currie Rose could also benefit over the summer from continued good exploration news out of Trueclaim Exploration (TRM, TSX-V) which is currently conducting an 8,000 metre drill program at the Scadding Gold Property near Sudbury…Trueclaim, which continues to release decent assay results, has earned a 51% interest in Scadding and can acquire a full 100% interest by completing a feasibility study, paying $2 million to Currie Rose, and giving Currie Rose a 3% net smelter royalty…TRM announced last Tuesday that it has intersected a previously unknown area of Gold mineralization at Scadding with hole #48 assaying 5 metres grading 4.54 g/t Au (from 98 to 103 metres, assumed to be true width)…about 25 metres below that interval was a 10.25-metre section grading 1.37 g/t Au…TRM has drilled the North Zone, the South Zone and the Currie Rose Zone with promising results (the Central Zone, which could get really interesting, has yet to be drilled)…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 by more than half, from a high of nearly $40 million late last year to the current $17 million, what hasn’t changed is the quality of this company’s project portfolio which remains as high as ever…Currie Rose has all the cash it needs ($2 million) to complete an initial major round of drilling (10,000 metres) in Tanzania this summer, so there will not be any dilution of the stock at current levels as confirmed by President and CEO Harold Smith…

Adventure Gold (AGE, TSX-V)

Adventure Gold remains one of our favorites this summer with several exciting projects on the go…our theory is that there’s a very good chance at least one of those projects will “hit” and our prediction is that it will be the Pascalis-Colombiere Gold Property near Val d’Or…AGE was off another penny last week to 52 cents with volume more than doubling from the previous week to 500,000 shares (all exchanges)…the stock touched a low of 49 cents Thursday before rebounding…AGE is slightly below its rising 200-day moving average (SMA) but that also occurred briefly in May and June as well…the Slow Stochastic oscillator is now rebounding after hitting its lowest point since 2009…we recently spoke with President and CEO Marco Gagnon and we’re continuing to perform some additional research on AGE in advance of some postings in the near future…Gagnon is a sharp operator who knows how to maximize every dollar spent…he also has the strong backing of Montreal investment firm Windermere Capital which holds just under 20% of AGE as disclosed January 21…the company has five active key projects, two of which are in the hands of joint venture partners Lake Shore Gold (LSG, TSX) and Agnico-Eagle Mines (AEM, TSX)…AGE is currently conducting a 5,000 metre Phase 2 program at its very promising Pascalis-Colombiere Property near Val d’Or…at the end of May the company reported highly encouraging drill results from this former producer including 4.8 g/t Au over 33.1 metres in hole #20 (plus lower grade halos over significant widths)…the Phase 2 program is designed to further define the Gold system, leading to a resource calculation which is already being worked on…Pascalis-Colombiere encompasses the past producing L.C. Beliveau Mine (Richmont’s Beaufor Mine is nearby)…we found a comment from Gagnon in AGE’s June 2 news release quite interesting…“Following positive drill results and the permitting process, an open-pit or an underground operation could be producing in the near future”…we believe Richmont Mines (RIC, TSX) may have interest in this project…earlier this year we met with AGE’s Jules Riopel, VP Exploration, regarding the company’s strong portfolio of properties…he was very keen at that time on Pascalis-Colombiere and given the drill results, his bullishness on this property appears to have been justified…the former L.C. Beliveau Mine was a very profitable operation between 1989 and 1993, producing nearly 170,000 ounces of Gold for Cambior…we believe a lot of Gold was overlooked in that area…in addition, the geometry of the deposit is such that mining costs should be relatively low…considerable infrastructure is also in place…meanwhile, Agnico-Eagle has completed its 4,000 metre drill program at AGE’s Dubuisson Property near Val d’or…Dubuisson is contiguous to the Goldex Mine Property and also straddles a 5-kilometre segment of the prolific Cadillac-Larder Lake Gold break…also of immediate interest is AGE’s partnership with Lake Shore Gold 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 and had reached a core length of 2500 metres as of mid-June with another 500 metres to go…if a discovery is made, AGE will instantly explode higher…AGE has completed an 8-hole Phase 1 program at the Lapaska Property near Val D’Or…results released July 21 for the remaining 6 holes at Lapaska were very mediocre compared to the first 2 holes (MZO-TSX-V has an option to earn up to a 70% interest in the property) but Lapaska still holds good potential…the Granada Extension Property will be worked on later this year…AGE’s latest financials, released June 29, show the company with $3.3 million in working capital as of April 30, a $300,000 improvement in working capital over the quarter ending January 31…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 just 34 cents October 28…Adventure Gold has been around only since late 2007…AGE is clearly a keeper for the long haul and we wouldn’t be surprised to see a major breakout in this play over the summer…

GoldQuest Mining (GQX, TSX-V)

GoldQuest gained a penny last week, closing at 19.5 cents, exactly at the 50-day moving average (SMA) which has flattened out…the 200-day moving average (SMA), currently at 29 cents, has now started to decline but the 300-day (SMA) at 25 cents continues to rise…support for the stock has proven to be very strong in the high teens…there’s no question in our view that GQC presents a great opportunity for patient and long-term investors…Chairman Bill Fisher has been buying GQC stock on the open market, his latest purchase being 20,000 shares July 12…he has bought nearly 250,000 shares over the past couple of months between 18 and 20.5 cents according to insider trading reports…GQC’s prospects remain solid as the company has an outstanding portfolio of projects in the Dominican Republic and Spain…the substantial drop in the share price from a high of 48.5 cents in early February was due to general market weakness and selling from speculators whose expectations may have been too high regarding initial drill results from the company’s La Escandalosa Project in the Dominican Republic…in addition, the company has stopped all drilling in the DR for the time being in order to conduct extensive IP surveys over Escandalosa and other properties…overall assay results from Escandalosa were decent though far from spectacular…the final set of assays for 7 holes came out May 16…the best intersection from Escandalosa Sur, where an initial 43-101 inferred resource of 400,000 ounces was outlined last fall, was 20 meters grading 1.32 g/t Au…results from this area overall (21 holes) were somewhat disappointing though more drilling is required and will take place later this year…however, the company drilled 3 holes at the Hondo Valle target 1.6 kilometres to the north (outside the resource area) and all 3 intersected significant mineralization including 29 metres grading 2.18 g/t Au in hole #65…that’s the thickest and highest grade mineralized section drilled to date at Hondo Valle…the theory is that mineralization trends north from Escandalosa Sur to Hondo Valle…GoldQuest has been carrying out a 16-square kilometre IP survey and magnetic ground geophysical survey from 2 kilometres north of Hondo Valle to 2.2 kilometres south of Escandalosa Sur…GQC will use the data to pinpoint key targets for an additional 3,000 metres of drilling…GoldQuest also has other promising projects in the DR (in particular, Loma Oculta – formerly Las Animas – where an exploration program aimed at identifying new drill targets is now underway) in addition to its lead-zinc-silver deposit in Spain…GoldQuest’s potential has not diminished whatsoever yet the share price has dropped by about 60% from its early February high…the company 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…meanwhile, GQC has been granted the Lago exploration concession, as reported last July 19, which is only a 30-minute drive northeast of Toral…the Lago property is the first permit granted of three applications by GoldQuest…securing an exploration concession for Lago, where mineralization is similar to that of Toral, is another important step for GoldQuest in building its assets in that region…a comprehensive mapping, geochemical sampling and ground geophysical program will be initiated at Lago to define both infill drilling and new targets that may warrant drilling in the vicinity of the known hydrothermal lead and zinc mineralization that remains open along strike and at depth…GQC is unchanged since we added it to the BMR model portfolio last fall…

Seafield Resources (SFF, TSX-V)

Seafield dropped as low as 22 cents last week, where it has excellent support, before bouncing back to close Friday at 27 cents for a loss of just a penny for the week…insiders are putting their money where their mouths are…President and CEO Cesar Lopez bought another 400,000 shares Friday, according to insider trading reports, while another director scooped up 100,000 shares…selling came into the SFF market Monday when the company announced drill results from Dos Quebradas which were disappointing, though we caution it’s still early in the game for that property…Seafield is currently drilling a promising area at Dos Quebradas approximately 250 metres wide (east to west) and more than 300 metres long (north to south)…the zone is open at depth and is interpreted to plunge to the north…meanwhile, Seafield has added a second drill rig at Miraflores in order to expedite a Phase 2 program there which is designed to better define the shape of the orebody, increase the resource confidence and extend mineralization…a total of 10 holes or 6,200 metres is expected to be completed by November (the rock is hard at Miraflores, so the drilling is slow which is why a second rig has been added)…the company announced July 5 that it has hired SRK Consulting for a preliminary economic assessment or scoping level study on Miraflores for completion by the first quarter of next year…SRK will evaluate the potential positive economics of developing an open-pit and underground operation at the property…it will also provide recommendations to advance the project to prefeasibility…Seafield released an updated 43-101 resource estimate for Miraflores May 26…the project has gone from an inferred resource of 776,000 ounces (at a cut-off grade of 0.5 g/t Au) to a measured and indicated resource of 1.2 million ounces and an inferred resource of 354,000 ounces (at a cut-off grade of 0.3 g/t Au)…there was big news out of Seafield May 9 with a change in management which has to be considered a bullish development…Lopez, who has a strong background in South American exploration management and development, is the company’s new President and CEO…he replaced Tony Roodenburg who remains a director…since taking control, Lopez has purchased over a million shares on the open market…Tom Henricksen, meanwhile, has taken over as Vice-President, Exploration, from James Pirie who also has stayed on as a director…Henricksen has over 35 years of mineral exploration experience and has spent the last 15 years on projects in South America…Seafield exploded from the low 20′s to an all-time high of 77 cents in just one day last December but then proceeded to give up all of those gains…the company’s Quinchia land package in Colombia has a great deal of untapped potential and Seafield is also sitting on nearly $20 million in cash…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…we have confidence the new management group will unlock value by bringing fresh insight and new energy to this play along with a more aggressive exploration approach…Seafield has gained 350% since we made it the first company in the BMR model portfolio in the summer of 2009…its current market cap is $45 million, just slightly more than twice the company’s current cash value…

TSX Venture Exchange and Gold

After gaining almost 11% over just 18 trading sessions, the CDNX got the excuse it needed last week for a pullback as the Index fell in sympathy with the broad market sell-off that materialized over growing fears the United States may default on its debt and/or lose its AAA credit rating.  Usually the highly speculative market (the CDNX) is the one that gets clobbered the most when fear starts to grip investors, but in this case the CDNX actually held up extremely well.  For the week, it was off 3.9% which was slightly better than the Dow’s performance (down 4.2%).  The Nasdaq was off 3.6%, the TSX fell 4% while the TSX Gold Index declined 5.3% despite Gold’s climb to a new record high.

Even more encouraging, the CDNX was the best-performing market for the month of July as it posted a gain of 3.9%.  Even on Friday, going into an uncertain weekend with the U.S. Congress seemingly at an impasse over debt ceiling negotiations, the CDNX strengthened toward the end of the trading session and closed at 1979 after dropping as low as 1963 (Fibonacci support) earlier in the day.

The CDNX ended a long correction June 28, jumped 199 points or nearly 11% in just 18 sessions, and Friday completed a 50% retracement of that advance – very normal technical behavior in the early stages of a powerful new uptrend which we maintain the CDNX is in.

So where to from here?  The big challenge in the month of August for the CDNX is to blast through the 2050 – 2100 resistance area on a sharp increase in volume.  That’s what we’re expecting, based on John’s most recent charts.  This will confirm the bulls are clearly back in control and will set the stage for another strong move to the upside in September which traditionally is a strong month for Gold stocks. A tsunami of exploration news is expected through August and September which could really light a fire under this market.

Gold

With markets focused on the U.S. debt ceiling debate, as well as the continuing debt saga in the euro zone, Gold surged to a new record high of $1,634 before closing Friday at $1,627, a gain of $27 for the week (higher Gold prices didn’t help the likes of Barrick, Goldcorp and others, however.  Barrick, the world’s largest Gold producer, raised its capital expenditure estimates for two of its main mines while Goldcorp cut its production guidance for the year to between 2.5 and 2.55 million ounces due to production problems at three mines).

Where Gold goes from here next week is anyone’s guess – much will depend of course on what happens in the U.S. Congress between now and the August 2 “deadline” for raising the U.S. debt ceiling.  Many observers, however, feel the Treasury Department has some “wiggle room”, that it has enough cash flow and that the Fed can sell bonds so that the deadline can actually stretch out to mid-August if Congress and the White House can’t sort something out by Tuesday.  Volatility is likely in the Gold market.  One can’t rule out a jump of $50 or more next week or a drop back below $1,600.

Investors should stay focused on the “big picture” which remains very bullish long-term for Gold.  As Frank Holmes so effectively illustrates at www.usfunds.com, Gold is being driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, is having a huge impact on Gold.  September is also the beginning of the gift-giving season for the yellow metal which drives up demand.  It’s really now becoming just a question of when, not if, Gold hits $2,000 an ounce. Ultimately, $3,000 or more is very possible.

Gold’s upsloping trend channel is a picture of beauty.  Gold hasn’t hit resistance yet in this channel but there’s also ample room for it to be knocked down a bit, if only temporarily.  John’s interesting updated chart:

The fundamental case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies and governments in general, an environment of historically low interest rates and negative real interest rates (inflation is greater than the nominal interest rate even in parts of the world where rates are increasing), 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, and inflation concerns…the list goes on.  It’s hard to imagine Gold not performing well in this environment.  The Middle East is being turned on its head and that could ultimately have major positive consequences for Gold.

Silver was down 17 cents for the week, closing at $39.90.  Copper was up 7 cents at $4.45 a pound, Crude Oil fell $4.17 a barrel to $95.70 while the U.S. Dollar Index was weak again and dropped a half point to 73.74.

Welcome to our site, or at least the initial version of it!  BMR has been online for nearly two years and strictly through word-of-mouth we have built a 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.  While we focus a lot on the Gold market and trends in the global economy, and of course the technical health of the TSX Venture Exchange (CDNX), 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.  However, investors must understand that these are still highly speculative situations and entail considerable risk, volatility and unpredictability.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. Always perform your own due diligence and please read our disclaimer at the bottom.

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

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

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

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

While we focus almost exclusively on Gold stocks and some other resource plays at BMR, there is the occasional exception when a company in the technology space grabs our attention and imagination – perhaps just from a technical analysis point of view.  That was the case back in May when we first started taking a look at iSign Media Solutions (ISD, TSX-V) which was one of the volume leaders at the time on the CDNX.

Here’s what we wrote May 24 when ISD closed at 50 cents:

“iSign Media has developed interactive mobile advertising/marketing solutions with patent-pending technology and seems to have captured the imagination of many investors.  We caution the stock has been volatile and of course the play is highly speculative but the company is beginning to show evidence of significant revenue potential.  Quite often in situations like this, the stock price will get far ahead of what’s actually happening on the ground at the moment (markets always look to the future).  With a current market cap of $24 million, that probably hasn’t happened yet with ISD.  Expect this stock to trade a lot based on technicals, “blue sky” potential and momentum.  We love entrepreneurial success stories, so we do hope ISD hits it big and investors make a fortune (of course many investors could also lose a fortune, so be careful).”

ISD ran as high as 66 cents by early June but technical momentum eventually broke down and the stock is now sitting at just 28 cents.  Volume recently has been very low, relative to what it was in April, May and June.  Despite the drop in the share price, ISD‘s 200-day moving average (SMA) continues to rise which suggests a long-term uptrend is still intact.  John sees other encouraging technical signs at the moment including evidence of strong support in the high 20’s.  We certainly haven’t given up on ISD – in fact, both John and Jon continue to hold their personal positions which were acquired at higher prices.  This is still a highly speculative situation which could go boom or bust but ISD‘s business model is interesting and certainly has potential.  John updates the chart below after ISD closed at 28 cents Friday:

It was a wild week on the markets.  In fact, the Dow put in its worst weekly performance, a 4.2% loss, since June 2010.  For the month of July, the Dow was off 2.2%, the Nasdaq declined just over one-half of 1%, the TSX dropped 2.7%, but…the star performer for July was the TSX Venture Exchange (CDNX) which enjoyed its second-best month of the year, climbing 3.9% or 75 points to 1979. That also slightly beat the TSX Gold Index which moved up 3% this month.

While the Venture certainly got a boost from Gold’s sharp increase in July, there’s no way this speculative market would have performed the way it did this month if some sort of disaster was looming for the broader markets and the financial world as a whole.  The CDNX is an incredibly accurate leading indicator.  Speculative money is the first to flee on any hint of major trouble ahead, so what this market seems to be saying is that we can all enjoy our weekend (Canadians have a long weekend with Monday being a holiday) as the United States will somehow manage to avoid economic “Armageddon” next week.

Bullish action in the Copper market is also problematic for the bears and fear mongers.

The CDNX ended a long correction June 28, jumped 199 points or nearly 11% in just 18 sessions, and today completed a 50% retracement of that advance.  Very normal technical behavior in the early stages of a powerful new uptrend which we maintain the CDNX is in.

John updates the CDNX chart below:

Gold surged to a record new high this morning following weaker-than-expected U.S. growth numbers for the second quarter…the continued impasse in Congress over the debt ceiling/debt reduction issue is also helping the yellow metal…as of 8:50 am Pacific, Gold is up $10 an ounce at $1,627 after reaching a high of $1,634…Silver has climbed 30 cents to $40.03…Copper is off 2 cents at $4.42…Crude Oil is down $1.27 at $96.17 while the U.S. Dollar Index has dropped one-third of a point to 73.83…U.S. consumer sentiment fell in July to its lowest point in more than two years (since March, 2009) as anxieties over stagnant wages and rising unemployment deepened, according to the Thomson Reuters/University of Michigan survey released this morning (if you recall, that was also a great time to be investing in the market)…meanwhile, the U.S. economy grew less than expected in the second quarter as consumer spending barely rose…growth in gross domestic product – a measure of all goods and services produced within U.S. borders – rose at a 1.3% annual rate in Q2 (below the consensus estimate of 1.8%) according to the Commerce Department…first quarter growth, meanwhile, was revised sharply down to a 0.4% pace from 1.9%…how that number could have been off so much forces one to be skeptical of any numbers coming out of the Commerce Department…in addition, 2010 fourth quarter growth was revised down to 2.3% from 3.1%, indicating that the U.S. economy had already started slowing before the high gasoline prices and supply chain disruptions from Japan hit…but it gets worse…data released today shows the 2007-2009 recession was much more severe than prior measures had found with economic output declining a cumulative 5.1% instead of 4.1%…yes, unfortunately, the Commerce Department is about as accurate as California preacher Harold Camping who probably would have had more people believing him, perhaps even Nancy Pelosi, if he had selected August 2 as his date for the “end of the world”…”What we’re trying to do is save the world from the Republican budget,” Pelosi told a Washington Post reporter the other day…”We’re trying to save life on this planet as we know it“…nothing that comes out of the mouth of Pelosi surprises us anymore…our advice to our readers at the moment is not to cave in to fear and throw stocks overboard based on emotion and given the circus that’s going on in Washington right now…the big picture for the second half of the year continues to look very positive and the Venture Exchange, despite a significant drop this week, has enjoyed a good month overall and has actually out-performed the major markets…the CDNX is a very accurate leading indicator – its performance this month gives us a lot of confidence entering the final five months of the year…in addition, Copper – also an extremely accurate leading indicator of the health of the global economy – has been performing exceedingly well…the U.S. will sort out its mess and people’s worst fears, including Nancy Pelosi’s, will not be realized…the CDNX has dropped through its 10 and 20-day moving averages but the 20-day SMA is still rising…there is exceptional support around 1930 (the July 12 reversal point) which is also just above the rising 300-day SMA…doesn’t mean this market will necessarily fall another 40 points but 1930 is an area where there is additional very strong technical support…John also sees Fibonacci support at 1962 and 1939 – so those are two other very valid support levels…the CDNX is currently off 15 points at 1969 but appears to be stabilizing and potentially could have a strong finish today…we’ll see what happens – volatility is high right now with political dynamics at play…let’s look at some individual situations…we haven’t mentioned Gold Bullion Development (GBB, TSX-V) in our Morning Musings for a while, so below is an updated chart from John which shows an interesting picture…

From a fundamental perspective, GBB’s 43-101 on the LONG Bars Zone can’t come soon enough…it should give the market much more confidence in what is coming together there and the potential for a multi-million ounce deposit…yes, it’s low grade, but the project has many strengths from its location to near-surface mineralization to anticipated high recoveries…GBB is currently off 2 pennies at 37.5 cents…elsewhere in northwest Quebec, we’re expecting a very active month of August for Visible Gold Mines (VGD, TSX-V) as it begins drilling its Joutel Project and as work continues on its Lucky Break Project on claims near Richmont’s (RIC, TSX) Wasamac deposit…VGD is up over 40% in the month of July and it’s looking much stronger technically with rising 10, 20 and 50-day moving averages for the first time this year…given the extent of drilling this company is doing, and the quality of its geological team, the Law of Averages is such that it’s likely only a matter of time before VGD makes a significant discovery which is why it remains one of our favorite exploration plays in northwest Quebec…VGD is currently up half a penny at 32.5 cents…we’re also keenly interested in Adventure Gold’s (AGE, TSX-V) Pascalis-Colombiere Gold Property near Val d’Or…Phase 2 drilling continues at this property and a resource estimate is in the works that we believe could take the market by surprise given drill results to date…Pascalis-Colombiere has major infrastructure advantages and is a potential low-cost producer given the geometry of the deposit that AGE is outlining…we’ve been doing well with some of our pics in the Yukon lately, in particular Pacific Ridge Exploration (PEX, TSX-V) and Golden Predator (GPD, TSX)…PEX is up a nickel to 66 cents and the company has announced that Bruce Youngman has joined its board of directors…from 2008 to 2010, Youngman was President and Chief Operating Officer of Canplats Resources Corp. during which time the 4-million-ounce Camino Rojo deposit in Mexico was outlined and the company was acquired by Goldcorp Inc. (G, TSX) for $300-million…GPD’s Brewery Creek Project is proceeding well after more drill results this week…GPD has pulled back 9 cents this morning to $1.27…other favorites in the Yukon that have great potential in our view, besides Atac Resources (ATC, TSX-V),  include Silver Quest Resources (SQI, TSX-V), Ethos Capital (ECC, TSX-V), and Northern Tiger (NTR, TSX-V)…a “sleeper” for those who like lower-priced plays is Dawson Gold (DYU, TSX-V) which is trading at just a dime…don’t email us a month from now and complain that we don’t bring potential great opportunities to this space…long-term investors who are bullish on Gold should certainly keep an eye on Spanish Mountain Gold (SPA, TSX-V) which reported some impressive long intersections this week…SPA is developing a low-grade deposit in central British Columbia that is believed to be economical with Gold at $1,100 an ounce based on the results of a PEA (Preliminary Economic Assessment) late last year…SPA has been conducting infill drilling within the Main and North zones at Spanish Mountain with results confirming continuity of potentially economic mineralization in areas presently classified as inferred resources…assays released this week from the Main zone included 321.5 metres of 0.65 g/t Au, 284.5 metres of 0.50 g/t Au, 276.5 metres of 0.37 g/t Au, 293.5 metres of 0.30 g/t Au, 249 metres of 0.39 g/t Au, and 240.3 metres of 0.37 g/t Au…results from the North zone included 123 metres of 0.91 g/t Au, 84.5 metres of 0.52 g/t Au, and 147.5 metres of 0.32 g/t Au…the company is working on an updated resource calculation as a precursor to the commencement of a prefeasibility study for the project…SPA is currently off a penny at 60 cents for a market cap of $100 million…