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10:25 am Pacific

There is no question, the fundamentals for Gold are exceptionally bullish as we’ve been stating consistently since BMR was launched two years ago.   At the moment, Europe’s debt woes appear to be worsening and economic numbers that have come out since late July clearly show that growth is slowing to a crawl in both the United States and Europe.  Whether the developed markets are about to slip into another recession, however, is a hotly debated issue (below is a link to an excellent article regarding that matter by Gavyn Davies in today’s Financial Times – we suggest readers check it out).

As we prepare for our visit to northwest Quebec beginning the week of September 12, and during that visit, we will likely be sending out some special BMR eAlerts.  We have also added a regular new eAlert feature at the beginning of each trading week.

We are also in the process of updating our list.  If you wish to be included in the BMR eAlert system, which sends out important and timely market information that’s not always posted on our site (or before it’s posted on our site), simply click on the “Contact Us” button you see in the top right hand corner of this page, type in “Alert” in the subject line, give us your first name, and hit the send button.  We send out only occasional eAlerts but when we do, they are significant.  Your email address is not given out to any other party.

Again, use the “Contact Us” button you see in the top right hand corner of this page or send us an email at:  [email protected]

IMPORTANT:  If you are already an eAlert subscriber, or if you’re about to become one, please ensure you add “[email protected]” to your email contact list.

Welcome to our site, or at least the initial version of it!  BMR has been online for 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 very much 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.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

Visible Gold Mines (VGD, TSX-V)

Visible Gold Mines has momentum right now and we expect that to continue, especially with the Wasamac area west of Rouyn-Noranda garnering more attention as a very important new Gold story along the Cadillac Trend…Richmont Mines (RIC, TSX) released more stellar results from its growing Wasamac deposit last Tuesday including 7.28 g/t Au over 31.4 metres (true width) in the Main Zone…that helped propel Richmont to a new all-time high of more than $11 per share while buyers stepped up to the plate with VGD, lifting it as high as 39.5 cents Wednesday on one of its best volume days ever (1.1 million shares)…the stock pulled back to support in the mid-30’s and closed Friday at 35.5 cents for a gain of 1 penny for the week…Wasamac keeps looking better all the time and Richmont has once again expanded its drill program there with five rigs currently on the property…what’s highly significant for Visible Gold Mines is that much of the area around Wasamac (15 kilometres west of Rouyn-Noranda) has been under-explored…VGD controls a dominant land position there and is also the most aggressive driller besides Richmont…in addition, VGD has some early results to prove it’s not drilling into cow pasture…VGD hit several zones of significant Gold mineralization on its very first hole at Wasa Creek (LBWC-11-3) as announced August 11…8 other holes were completed as of mid-August and assays are pending on all of those…what impresses us the most about LBWC-11-03 is that it was essentially a “blind hole” – this property has been virtually ignored in terms of any previous exploration and on the very first hole, VGD hits Gold…of particular curiosity is the 16.4-metre section that shows the same style of mineralization as the Wasamac deposit – close co-existence of Gold and pyrite disseminated in an altered shear zone…it’s still very early in the game for VGD at Wasa Creek but at least now they have a trail of mineralization to follow, and that’s important…the market has plenty to speculate about with a lot more assays coming…you have to like the fact the prolific Cadillac Fault runs right under the middle of the 650-hectare Wasa Creek Property…as well, VGD geologists believe they may have discovered some sort of connection between the Wasa Shear and the Cadillac Fault at Wasa East with that property right in between those two Gold-bearing systems…given developments at Wasa Creek and Wasa East, along with the Joutel Project of course, news flow should be strong with VGD and some drama could quickly build…at the moment VGD has to be considered the most exciting play in the BMR “stable”…a 7,500-metre, Phase 1 drill program at Joutel should be starting soon…we love this property because three former Gold mines (one open-pit, two underground) and two former copper mines are within the immediate vicinity of where VGD will be drilling, just a few kilometres to the northwest and the southwest, respectively…it’s hard to imagine there aren’t more deposits in the area, ones that simply weren’t discovered in the 70′s, 80′s and 90′s…and we can’t think of a better geologist to find one or more new deposits there than Robert Sansfacon whose re-interpretation of Canadian Malartic helped Osisko (OSK, TSX) nail down a 10 million+ ounce monster…Sansfacon is challenging some previous geological assumptions concerning Joutel and he’s applying a new model, taking a structural approach rather than a stratigraphic one as Agnico-Eagle (AEM, TSX) did previously…two-thirds of the Phase 1 drilling will test the extension of a northwest-southeast mineralized structural pattern that based on geophysical surveys appears to strike directly southeast of Agnico-Eagle’s past-producing Telbel, Eagle and Eagle West mines for two kilometres and may extend farther to the former village of Joutel and beyond…the Joutel mines gave birth to Agnico-Eagle, and the major would love nothing more than to see this old mining camp come back to life…if anyone can make that happen, it’s Sansfacon who’s highly regarded in Quebec mining circles…technically, VGD has a very bullish chart pattern and John will be updating the VGD chart for us by Tuesday morning…Visible Gold Mines has $6 million in working capital and is being driven by some exploration stories that appear to have serious “legs”…think big, everyone, because this one could turn out to be VERY big…

Cadillac Mining (CQX, TSX-V)

Cadillac enjoyed a positive week, thanks to the Richmont news, gaining 4 pennies or 40% to close at 14 cents…volume jumped to 632,000 shares last from 227,000 shares the week before…Wasamac is hot and Cadillac must seize the opportunity now…with a market cap of just $3.8 million, CQX certainly offers major upside potential simply given its current deal with VGD which allows CQX to retain a 40% interest in Wasa Creek, Wasa East and the entire Lucky Break/Cadillac Break Projects…what could really cause CQX to explode, however, is if it’s able to put its 100%-owned seven Wasa claims adjoining the northern portion of Richmont’s Wasamac Property into play, either by raising cash and exploring it themselves or finding a joint-venture partner…that’s what CQX has to do for the benefit of its shareholders…the company had a glorious opportunity to raise cash and build shareholder value earlier this year because of Wasamac and failed to do so…now they have another opportunity…second chances don’t come often in life but Cadillac management has been blessed with one in this instance, and hopefully they take advantage of it…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 explore Goldstrike in the right way…the best solution in our view is for Cadillac to cut a deal with another company for exploration of its Wasa claims and the natural partner for that appears to be VGD which has all the money and expertise necessary to unlock the value of those claims and create excitement in the market…Cadillac could let others do all the heavy lifting at and around Wasamac and then focus its energies on developing the Goldstrike Project…Victor Erickson and Audre Audet are smart mining people and have done an admirable job protecting the company’s tight share structure…this is not their own private company, however, and they owe it to their shareholders, for whom they serve, to build value and not let the company treasury run dry…

Abcourt Mines (ABI, TSX-V)

Patience continues to be the name of the game here and will be for a while yet…Abcourt was up half a penny last week at 11 cents…ABI faces stiff overhead resistance with a declining 100-day moving average (SMA) at 12.5 cents and a declining 200-day SMA at 14.5 cents…if you’re bullish on Silver and zinc prices, however, which we are, you have to love this play as the current market cap ($16.4 million) really doesn’t take into account the value of the company’s Abcourt-Barvue Silver-Zinc deposit near Val d’Or…ABI is ripe for an eventual takeover given the value of its assets and management’s obvious inability to unlock that value which is why we still view this company with considerable interest…we love the assets…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 August 2 including 2.1 metres grading 422.35 g/t Ag…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 this year…the rig was temporarily moved to the Vendome Property (Gold, Silver, Copper, Zinc) approximately 13 kilometres south of Abcourt-Barvue where 4 holes were drilled to confirm historical data…results were announced August 9 and included 33 metres grading 1.69 g/t Au…more results were released 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 fell 2 pennies last week to close at 15.5 cents (market cap is now below cash value) on very light volume…the declining 100 and 200-day moving averages (SMA) at 19 and 23 cents, respectively, will provide stiff technical resistance until news or a dramatic change in the markets alter the dynamics…the company released its June 30th financials Thursday which show working capital of $7.3 million or 16 cents per share…our gut feeling is that something is cooking here…President and CEO Tony Roodenburg has been quiet for too long, but knowing the conservative Roodenburg he may wait until the markets regain momentum before he launches into anything in a major way…the fact Roodenburg is no longer at the helm of Seafield Resources (SFF, TSX-V) is a positive development in our view for Greencastle…he had been trying to ease his way out of Seafield since 2009 without much success until a few 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 and we’re confident Roodenburg will do it, sooner or later…Greencastle’s market cap of $7 million means the stock is now trading half a penny below its working capital…history shows that whenever VGN is trading right around its working capital, a great 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 strong working capital, three Gold properties (including land near the Blackwater Project and a couple of very good Nevada properties) and monthly (albeit very modest) 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 strong support zones and a still-rising 300-day SMA…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 runs in the stock and adds further credence to our view that we haven’t seen the highs in this cycle yet from Greencastle…the stock is up 11% since we added it back in to the BMR model portfolio last October…

Sidon International (SD, TSX-V)

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…there was finally some news from Sidon last week but not the news investors were hoping for as the company announced it will be late in filing its year-end (April 30) financials…the same thing happened earlier this year with a related company, Kokanee Exploration (KOK, TSX), and the matter was resolved and Kokanee is back on track with some apparent new players…Sidon 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…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 apparently drilled some deeper holes but investors haven’t seen results yet…what the initial 6 holes have given Sidon, however, is a better understanding of the Morogoro geological structure which could 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 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 lack of good 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 or even a new group to come in and take things over…Sidon ran as high as 26.5 cents last winter but is now off 2.5 pennies since we introduced it to BMR readers in the spring of last year at a nickel…it fell another penny last week to close at a new 52-week low of 2.5 cents…the company currently has 137 million shares outstanding for a market cap of $3.4 million…

Gold Bullion Development (GBB, TSX-V)

Nothing new to report this week…GBB continues to be stuck in a trading range between the mid-30′s and 40 cents, just below its still-declining 100-day moving average (SMA)…it closed unchanged for the week at 37.5 cents…while the stock continues to face some stiff technical headwinds, the fundamentals look good, especially with Gold trading where it is…GBB has a very valuable asset – Gold in the ground and close to surface at Granada…just how much of it remains to be seen but we’re optimistic as a 43-101 resource estimate from GENIVAR draws closer…one important point is very certain in this current equity and Gold environment…many producers, big, medium and small, are sitting on large piles of cash and are looking to add ounces to their production profiles…any junior with an advanced property like GBB possesses, and a 43-101 resource to back it up, could be the target of a potential takeover…merger and takeover activity and property acquisitions in this sector are likely going to increase substantially in the months ahead…GBB has received approval from the TSX 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…having those warrants exercised would bring another $5 million or so into the GBB treasury, so a resource estimate by sometime in September would be timely…a move through the mid-50′s would also constitute a major technical breakout for the stock but that’s going to require a strong 43-101…GBB’s last drill results were released July 13…there was nothing spectacular in those numbers 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 $62.5 million which 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…this property continues to offer incredible potential…the company provided an update on its Castle Silver Mine Project on Thursday…a total of 12 holes were completed in Phase 1 drilling…while GBB chose not to release all the assay results, they did report that the best Silver intersection was 189 ounces per tonne (6,476 g/t Ag) over 3.09 metres which included a half-metre super high-grade section of 1,194 ounces or 40,944 g/t Ag (hole CA11-08)…the company also stated that numerous strong calcite veins and vein systems were drilled, and many of these were independent of the existing mine workings…more exploration work of course is planned and much will be required in order to advance Castle…GBB plans to spin-off this asset into a separate publicly traded entity…GBB is up 436% since we introduced it to BMR readers in late December, 2009…

Currie Rose Resources (CUI, TSX-V)

Currie Rose enjoyed its third consecutive weekly advance, gaining half a penny to close Friday at 18.5 cents…volume Thursday (459,000 shares on all Canadian exchanges) was the highest since July 26…CUI has declined only once over the last 9 trading sessions and with assay results pending from Mabale Hills, the hope is that CUI could soon stage a breakout through resistance in the low 20’s…Currie Rose reported August 24 that 20 RC holes have been completed at Mabale Hills (16 at Sisu River, 4 at Dhahabu) while drilling has shifted to the Sekenke Project approximately 200 kilometres to the southeast…what we found especially encouraging about the news is the fact that disseminated sulphides were intersected in all 16 holes at Sisu River, unlike Phase 1 drilling there last winter…the initial stage of drilling at Sisu River gave the company some important geological clues and it’s quite possible that assay results will turn out much better this time around…each of the 4 holes at Dhahabu also intersected disseminated sulphides…drilling has yet to commence at Mwamazengo…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 also 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…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 has been 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 July 26 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 Rose’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…it was announced last Wednesday that Liontown has now started drilling at Jubilee…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 $16.5 million, what hasn’t changed is the quality of this company’s project portfolio which remains as high as ever…Currie Rose‘s June 30th financials (6 months) were released Thursday and the company has all the cash it needs (nearly $2 million as of June 30) to complete an initial major round of drilling (10,000 metres) in Tanzania this summer…

Adventure Gold (AGE, TSX-V)

AGE is looking very good from a fundamental perspective and also from a technical analysis point of view…we’ll be posting an updated AGE chart from John tomorrow (Monday) that is quite bullish…Adventure Gold is one of our favorites with several exciting projects on the go…our contention is that there’s a strong chance at least one of those projects will “hit”…Pascalis-Colombiere is our pick…the stock closed up a nickel last week at 51 cents with Wednesday’s volume of 240,000 shares the highest in nearly three months…we recently spoke with President and CEO Marco Gagnon and and we’ll be doing some extensive coverage of AGE during our upcoming visit to northwest Quebec…we’re hoping to see initial Phase 2 results from Pascalis-Colombiere prior to our visit …Gagnon is a sharp operator who knows how to maximize every dollar the company spends…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 started a 5,000 metre Phase 2 program in late May at its very promising Pascalis-Colombiere Property near Val d’Or…on May 31 the company reported more highly encouraging Phase 1 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 was 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) could be very interested in this project as they are looking for an acquisition, preferably in the general area of their Camflo Mill…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 last year, 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 this month as results begin to flow in from Pascalis-Colombiere and Dubuisson…

GoldQuest Mining (GQX, TSX-V)

GoldQuest emerged out of very oversold conditions to close at 16.5 cents Friday, a gain of 2 pennies for the week…this is a company with strong management and a superb portfolio of properties in the Dominican Republic and Spain, so a $17 million market cap – down from about $50 million earlier this year- makes GQC look exceptionally attractive for long-term investors…the 200-day moving average (SMA), currently at 28.5 cents, is now in decline but the 300-day (SMA) at 25 cents continues to rise albeit very slightly…support for the stock has been very strong in the upper teens, so a drop below that area recently brought out some additional sellers who made the classic mistake of panicking and dumping stock…there’s no question in our view that GQC presents a great opportunity for patient 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…On August 24 the company provided an update on its exploration activities, though no timeline was specified for the re-commencement of drilling in the DR…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 stopped all drilling in the DR during the spring in order to complete extensive ground geophysical (IP) surveys over Escandalosa and magnetic surveys over 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…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 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 70% 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 down 3 pennies since we added it to the BMR model portfolio last fall at 19.5 cents…

Seafield Resources (SFF, TSX-V)

Seafield’s new President and CEO Carlos Lopez continues to put the building blocks together with this company…we’re impressed with his actions over the last few months as he has strengthened Seafield in several ways…he has also put his money where his mouth is, buying significant amounts of stock in the open market…Seafield gained a penny last week to close at 26 cents…the stock has bounced up and down between the low 20′s and the low-to-mid-30′s the past few months…liquidity is certainly there for traders to play the rather predictable swings this stock has been experiencing…the company’s June 30th financials were released August 26, showing SFF with $18 million in cash…Seafield announced last week that it has opened its new office in Medellin…this followed the news August 11 that Giovanny Ortiz, the former exploration manager of the Angostura Project, has been appointed General Manager of the company’s operations in Colombia…heavy selling came into the SFF market July 25 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)…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 in a very strong cash position…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 333%% since we made it the first company in the BMR model portfolio two years ago…its current market cap is $43.4 million, just a little more than twice the company’s cash value…

TSX Venture Exchange and Gold

On August 26 we wrote, “Wakey wakey, everyone, the CDNX is starting to stir”.  Indeed, the Venture Exchange showed some new vigor last week as it gained 58 points or 3.3% to close at 1810.  A 7-session winning streak was snapped Friday when the Index slipped a miniscule 2 points as the Dow took a beating, falling 253 points on a very poor U.S. jobs report.  Volume on the CDNX was modestly higher last week and should pick up again next week following the unofficial end of summer and the Labour Day long weekend when many traders and investors re-focus on the market.

John’s near-term Fibonacci level of 1931 for the CDNX is still valid.  That’s not an official target, just a theoretical level based on technical analysis – it’s an area where the CDNX appears to be headed during this reversal pattern that just recently kicked in.  And John’s Fibonacci levels have generally been very accurate.

The major markets are volatile at the moment and so is Gold.  What potentially could really help the CDNX in the coming week is positive exploration news from numerous companies.  Many exploration programs have been in full swing since late spring/early summer and it’s normal that a tsunami of drill results hits the market beginning in September.  Some companies are reluctant to put out news in the “dog days” of August and wait until after Labour Day to feed a hungry market. Everyone needs to keep a close eye on news releases beginning first thing Tuesday morning.

Gold

Gold has done something it has probably never done before – on back-to-back Fridays it jumped exactly $58 and $59, respectively.  The yellow metal has been on a roller coaster ride recently which included a run to a new all-time high of just over $1,900 an ounce followed immediately by the largest absolute fall in more than three decades and then another powerful move back up to $1,884 where it closed Friday.  We see significantly higher prices for Gold later in the year but for now, unless it proves us wrong, Gold is still in the midst of a short-term consolidation phase as John reiterates in the chart below.  We’ll go into more detail on this chart tomorrow, but you’ll notice that Gold is currently very close to an outer resistance channel line.  The RSI(14) shows that Gold is very overbought.  In addition, the current gradient also appears to be unsustainable.  Gold however does have strong support at and near the inner resistance channel line.  So for the immediate future, we don’t believe this is the time for Gold to make its next big run to $2,000 and beyond.  We’re convinced that moment is coming, likely during the fourth quarter of this year, but right now the current overbought technical condition needs to at least partially unwind.

For the week, Gold was up $55 an ounce.  Silver climbed $1.75 to $43.25, Copper gained 3 more pennies (encouraging) to $4.12, Crude Oil advanced $1.38 despite Friday’s drop of $2.48 a barrel, while the U.S. Dollar Index strengthened by three-quarters of a point to 74.71.

The “Big Picture” View Of 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.

The fundamental case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders 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.

What’s also driving Gold is the weakness of the United States, brought on in no small part by one of the most ineffectual Presidents the nation has ever been saddled with.  America has lost its way and the recent S&P downgrade is both a real and a symbolic reflection of that.  Since the summer of 2009, the U.S. economy has produced a net total of just two million jobs while federal spending has gone through the roof.  Throughout its incredible history, the United States has demonstrated an amazing resiliency and the ability to bounce back from major economic, social and political troubles.  It will do so again but this will take time and a real Commander-in-Chief in the White House by November, 2012.  By then Gold will have climbed another 50% or more.

Gold has powered higher this morning on a weak U.S. jobs report…as of 8:45 am Pacific, the yellow metal is up $49 an ounce at $1,875…Silver is up $1.51 to $43.01, Copper is off 3 pennies at $4.12, Crude Oil has declined $2.60 a barrel to $86.33 while the U.S. Dollar Index is up slightly at 74.65…the U.S. economy created no jobs and the unemployment rate held at a stubbornly high 9.1% in August, fueling concerns that the country is heading for another recession…most economists had been expecting the report to show a net of 75,000 jobs created, still an unusually low number in a recovery phase…in a way it’s surprising there was not a net loss of jobs for the month…payrolls have actually declined the last four times the stock market has dropped by 10% in the four weeks preceding the release of the non-farm jobs report, a trend that dates back to 1997…going back to the 1960’s, the unemployment report has shown a loss of jobs 9 times out of 13 when the monthly report has been preceded by a significant 4-week market drop…today’s weak jobs report puts pressure on the Fed to act later this month (sure thing now we believe which is driving Gold higher) while the market’s focus will also be on a jobs-focused speech to Congress by President Obama next Thursday…unfortunately, Obama has never demonstrated a real understanding or appreciation of wealth creation or the proper kind of fiscal and regulatory environment a government needs to create in order to allow the private sector to do what it does best – generate jobs and wealth…whether he can morph into a Ronald Reagan within a week is highly questionable…the Obama Presidency is quickly turning into a disaster…the August report from the University of Michigan/Reuters Consumer Sentiment Survey captured what is wrong in America right now…asked for examples of recent news that explained most people’s pessimistic view of the U.S. economy, 25% provided spontaneous negative responses about government, a record in the 50-year history of the survey, exceeding the last record which occurred in 2010 when the health care act was passed…when asked to rate the Administration’s economic policies, 57% gave the Administration a negative rating, a record high, exceeding the worst ratings given to any past President…only 5% had a positive view of Administration policies…

The Dow is showing triple-digit losses today but the TSX and CDNX are faring better, thanks in part to the sharp rise in Gold prices…the CDNX is flat at 1811 while the TSX Gold Index is up 12 points to 434 as of 8:45 am Pacific…it’s closing in on an all-time high…we’ve stated this before – investors really need to have exposure to the producers right now in addition to the best quality juniors with strong cash positions and advanced projects…two of our favorites among the producers continue to surge higher…Richmont Mines (RIC, TSX) is currently up 7 cents to $10.84 (it got as high as $11.35 this morning) while New Gold Inc. (NGD, TSX) has gained 11 cents to $13.24…for leverage, we suggest investors take a look at the Kinross “D” warrants (K.WT.D, TSX) which are trading around $3.20 this morning…Kinross‘ production profile is looking very strong…we envision a wave of mergers, takeovers and property acquisitions in the months ahead in this industry and that is positive for the most successful and aggressive exploration companies…Gold Canyon Resources (GCU, TSX-V) is just one of those…it appears their Springpole Project 100 kilometres northeast of the Red Lake Mining Camp holds at least five million ounces of Gold – that’s the view of Fraser Mackenzie’s mining analyst…GCU came out with fresh results the other day that included 286 metres grading 1.03 g/t Au, confirming the northeast dip of the Portage Zone…we haven’t updated the GCU chart for a while now, so below is John’s analysis with GCU up another 8 pennies this morning to $3.14…

We’re expecting a big month for Visible Gold Mines (VGD, TSX-V) which has been as high as 37.5 cents today on the CDNX…it’s currently off half a penny at 36 cents…we’ve never seen VGD trade as many shares on the Frankfurt Exchange as it did today – volume was nearly 150,000 on Frankfurt as it gained a penny…VGD’s average daily volume on Frankfurt is about 20,000 shares…if European investors are starting to step in on this play, watch out…developments with Richmont’s Wasamac deposit (7.28 g/t Au over 31.4 metres of true width in the Main Zone as announced Tuesday by RIC) are not only bullish for VGD, which is the most active company in the area, but they also convince us that Cadillac Mining’s (CQX, TSX-V) strategic claims adjoining part of the northern boundary of the deposit are going to come into play sooner rather than later…Cadillac is poised to win as the principal structure hosting the Wasamac deposit dips northerly toward their 100% owned 7 strategic Wasa claims…very limited exploration on those claims has yielded encouraging results and there appears to be two separate geological environments – Gold and VMS…Cadillac’s best strategy in our view is to joint-venture the property with a company that can dedicate considerable resources to it…at 14.5 cents, CQX’s market cap is only $3.7 million…they are short on cash at the moment but CQX has a highly attractive share structure and a great property at Wasa that they can leverage to their advantage…we’re expecting news soon out of Adventure Gold (AGE, TSX-V) regarding both its Pascalis-Colombiere Gold Property and the Dubuisson venture with Agnico-Eagle (AEM, TSX)…we’re particularly bullish on Pascalis as results have been impressive so far and a 43-101 resource estimate is in progress…on the Yukon front, Kaminak Gold is up another 3 pennies to $4.40…Golden Predator (GPD, TSX) is trading just above its rising 50 and 100-day moving averages at $1.14 (up 2 cents)…Pacific Ridge Exploration (PEX, TSX-V) is trading at a strong support area as well, 48 cents…it’s an extremely quiet news day of course, due to the upcoming long weekend, but we expect a flurry of company news releases next week and a tsunami of exploration results through the balance of September which potentially could give some real spark to the CDNX – especially with Gold acting as it is…

Gold has traded in a range of $1,814 to $1,832 today…as of 9:15 am Pacific, the yellow metal is up $3 an ounce at $1,827…Silver is up 21 cents at $41.72, Copper is off a nickel to $4.14, Crude Oil has gained 16 cents to $88.97 while the U.S. Dollar Index is up one-quarter of a point to 74.43…we’re now into September which traditionally is a strong month for Gold and Gold equities…the CDNX is currently flat at 1811 while the TSX Gold Index is now up 3 points at 422 after falling as low as 416…

Plenty of economic data for investors to chew on this morning, and some of it is better than expected…

The pace of growth in the U.S. manufacturing sector fell to a crawl in August but fared better than economists had forecast, according to an industry report released this morning…the Institute for Supply Management said its index of national factory activity edged down to 50.6 from 50.9 the month before but the reading significantly topped expectations of 48.5 (Reuters poll of economists) which would have signaled a contraction…the ISM index was part of a slew of economic data that came out this morning…the U.S. Labor Department reported that weekly jobless claims fell 12,000 to a seasonally adjusted 409,000 last week, the first decline in three weeks…applications have fallen from an eight-month high of 478,000 in April…still, they typically need to drop below 375,000 to signal sustainable job growth…they haven’t been at that level since February…meanwhile, U.S. productivity declined at an annual rate of 0.7% in the April-June period, a bigger drop than the 0.3% decline reported a month ago…labor costs rose at an annual rate of 3.3%,  faster than the 2.4 percent increase originally reported…

A slowdown in China’s manufacturing sector has stabilized despite being squeezed by Beijing’s anti-inflationary measures and a decline in demand from some of the largest buyers of Chinese goods….strong domestic demand helped Chinese manufacturing growth record a marginal increase in August, despite a sharp fall in export demand…the official Purchasing Managers’ Index climbed 0.2 points to 50.9 in August after falling for four consecutive months, while a separate measure compiled by HSBC and Markit Economics stood at 49.9, up from 49.3 in July…a figure above 50 denotes expansion, while a reading below that level points to contraction…it remains to be seen if August’s recovery can be sustained, however, as manufacturing activities usually bounce back after the traditionally quiet month of July…

Euro zone manufacturing activity contracted for the first time in almost two years in August due to a sharp downturn in output and new orders, the Markit Eurozone Manufacturing Purchasing Managers Index showed today…the PMI, which gauges changes in activity levels across thousands of euro zone manufacturers, fell to 49.0 in August from 50.4 in July…the August figure was revised down from a preliminary 49.7…a reading below 50 indicates a contraction…even German factories, which have supported the continent’s growth rates in recent years, were hit, and France’s manufacturing sector contracted for the first time since July, 2009…data released today also showed that manufacturing activity contracted in August in South Korea and Taiwan, while growth fell to a three-month low in Japan…Deutsche Bank, however, remains optimistic…”In our view the likely outcome is that the global economy slows rather than falls back into recession…the risks are numerous, however, and a lot of data are released over the next week,” Deutsche Bank strategists wrote…

The CDNX is relatively quiet on this first day of September but activity should certainly pick up by Tuesday, immediately following the Labour Day holiday…as of 9:15 am Pacific, the Index as we stated earlier is flat at 1,811…Visible Gold Mines (VGD, TSX-V), which enjoyed one of its highest volume days ever yesterday as interest in the Wasamac area intensifies, has backed off to 34.5 cents after jumping as high as 39.5 cents yesterday…from a technical perspective, the reaction near 40 cents was not surprising and another test of that area should come very soon with solid support in the mid-30’s where there was previous resistance…with working capital of $6 million, two stellar major projects (Wasamac area and Joutel), a 43-101 resource at Stadacona-East and one of Quebec’s finest geologists in Robert Sansfacon, VGD is poised for success…a 10% pullback from yesterday’s high of 39.5 cents has to be considered an attractive opportunity…VGD has performed extremely well relative to the overall market the last two months and there’s no reason to believe that trend won’t continue in September…as readers know, we’ve been very bullish on Richmont Mines‘ (RIC, TSX) Wasamac Property (and RIC itself) and of course the company reported more stellar Wasamac assay results Tuesday and has expanded the drill program another 10,000 metres…we believe the results have increased the likelihood that Cadillac Mining’s (CQX, TSX-V) 7 strategic claims (100% owned) that adjoin part of the northern boundary of the south-dipping Wasamac structure are going to come into play in the very near future…there are two separate geological environments on CQX‘s small but strategic property – Gold and VMS…at 14 cents, CQX’s market cap is just $3.5 million…we haven’t updated the CQX chart in quite a while, so below is John’s take on the stock’s technical condition and possible direction…

As of 9:15 am Pacific, CQX is up a penny at 14 cents on light volume…some selling came into Currie Rose Resources (CUI, TSX-V) this morning, knocking it as low as 17 cents but we believe that was entirely technical in nature…the stock has gone 7 consecutive sessions without a down day (5 up and 2 unchanged) and sometimes after a streak like that a trader or investor decides it’s time to unload some paper…that’s definitely short-term thinking as Currie Rose has plenty on the go this month with drilling underway at Sekenke and initial assays pending from Sisu River and Dhahabu at the Mabale Hills Project…CUI made it clear in a recent news release that each and every hole at Sisu River and Dhahabu intersected disseminated sulphide mineralization, so the visuals were better than those from last winter’s Phase 1 drilling…Adventure Gold (AGE, TSX-V) has been looking stronger of late with yesterday’s Venture volume of 234,000 the highest since mid-June…we’re expecting news from two of the company’s main projects in the near future – Pascalis-Colombiere and Dubuisson…with regard to Pascalis, this is a property that keeps looking better each time AGE releases news…we’ll be focusing a lot on Pascalis during our upcoming trip to northwest Quebec…AGE is currently unchanged at 50 cents…