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Gold is firmer today on euro zone debt concerns…as of 7:50 am Pacific, the yellow metal is up $23 an ounce at $1,648…Silver is 52 cents higher at $30.49…Crude Oil is off another $1.38 to $77.82…Copper has fallen 9 cents to $3.05 while the U.S. Dollar Index is up one-quarter of a point (bad sign) at 79.17…Copper is now at a 14-month low, trading at levels not seen since July, 2010…the action in Copper is critical in terms of gauging the overall health of the global economy, and additional weakness in Copper can be expected over the near-term according to John’s chart…

Silver has recovered nicely since trading as low as $26 last Monday…John’s chart, however, shows that Silver is likely to test its long-term trendline at $25 this month…

The CDNX is down another 22 points at 1445…yes, this market is oversold based on RSI but one must keep in mind that such an oversold state could persist for several months – the opposite of what occurred in late 2010 and early 2011 when the Index stayed extremely overbought for an extended period…what is really troubling is that it appears to be inevitable that the CDNX’s 300 and 500-day moving averages (SMA) are going to reverse to the downside sometime this quarter which will push this market even lower…the CDNX is an extremely reliable leading indicator of the broader markets and the global economy as a whole, so a fourth quarter that could even be worse than the 23% third quarter drop suggests there could soon be blood and panic in the streets…of course that’s when fortunes are born, so those with cash should remain patient and wait for what could be some incredible opportunities in the equity markets…

Default is looking increasingly inevitable in Greece with the announcement over the weekend that the country won’t be able to meet its 2011 deficit target…one of the biggest problems in Greece (and elsewhere) of course is an “entitlement culture” that has made people think they need government in order to survive…the reality is that debt, at both personal and government levels, puts individuals and countries in a state of bondage…governments are run by people and they will always have a tendency or a desire to spend more than they take in, and the only answer to that is to keep government limited and constrained…the bigger government becomes, the more it spends, and the more it spends the bigger it becomes…it’s a vicious circle…

Governments around the world (even in so-called “safe” jurisdictions like Ontario and Quebec) remain grave threats to investors’ capital and pocketbooks…another excellent case in point is now Brazil where the government is preparing to vote on three new mining bills by mid-October…under consideration will be bills that could double royalties, change the way royalties are calculated (naturally not in favor of the mining companies) and a special participation tax based on profits…why is it the left always complains about “corporate greed” and never mentions government greed (and stupidity)?…

Quebec is considering controversial changes to its mining and exploration laws, while in Ontario it appears the NDP could make a strong enough showing in Thursday’s provincial election to thwart the Liberals or Progressive Conservatives of a majority and acquire what would essentially be a “veto” over economic and environmental policies…Andrea Horwath’s socialist NDP in Ontario couldn’t run a lemonade stand, so the fact that party could be in a position to significantly influence policymaking at a time of global economic turmoil is like putting a drunk at the wheel of a car on a busy freeway…that wouldn’t be the first time that’s happened in Ontario politics and the damage Bob Rae’s NDP did was profound…hopefully, over the next few days, Ontario voters will look beyond the deceiving charming smile of Horwath and realize she’s the worst choice of three poor choices overall…

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 undiscovered junior exploration companies or small producers, 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.  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 suffered with the overall market again last week and closed Friday at 25 cents, a loss of a penny-and-a-half for the week…the stock has declined in 6 out of the last 8 sessions and the 50-day moving average (SMA) has reversed to the downside and will now provide resistance in the low 30’s…the recent technical damage the stock has endured is unfortunate given the many positive developments on the ground for this company in northwest Quebec…investors in our view likely read too much into selling of more than 300,000 shares by Pinetree Capital’s (PNP, TSX) Sheldon Inwentash, but that’s what started the nosedive the week of September 19 which stopped the stock’s momentum and rattled some nerves…the overall market’s plunge then accelerated the selling along with a weakening of VGD’s technicals…as everyone knows, and has been painfully reminded, junior exploration stocks can be extremely volatile and aren’t for the faint of heart…but the rewards can be big…VGD is no exception- there are risks with this but the company is well positioned for success at two major projects…its Wasamac-area land package is in the heart of a promising new mining camp that is beginning to emerge west of Rouyn-Noranda…what’s highly significant for Visible Gold Mines is that much of the area around Wasamac has been under-explored and has obvious potential for additional deposits…VGD controls a large 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 Gold mineralization on its very first hole at Wasa Creek (LBWC-11-3) as announced August 11…12 other holes (some with quite encouraging visuals) were completed in Phase 1 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 the right geological structures appear to exist and the company has made rapid progress with this project in just three months…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…a 7,500-metre, Phase 1 drill program at Joutel has started and a second drill rig has been added…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…Visible Gold Mines has $4 million in working capital and is being driven by some exploration stories that appear to have serious “legs”…given this company’s aggressiveness and the quality of its geological team, all the ingredients are there to make VGD the next potential big play in northwest Quebec…with a current market cap of $12 million, the risk-reward ratio is certainly attractive for long-term investors…

Cadillac Mining (CQX, TSX-V)

With a market cap of just $2.4 million, CQX certainly offers strong 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 continues to hurt the company, however, is its poor cash position ($265,000 as of May 31) which it unfortunately has not addressed so far this year – and cash is king in this market right now…the company had a glorious opportunity to raise cash and build shareholder value earlier this year because of Wasamac (CQX also holds a 100% interest in 7 claims that adjoin the northern boundary of Richmont’s Wasamac deposit) and failed to do so…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…Victor Erickson and Andre Audet are smart mining people and have done an admirable job protecting the company’s tight share structure…where they have made mistakes, though, is in the market as they have not shown the ability to seize opportunities that have come their way…CQX came out with news September 12 that it intends to conduct a Phase 1 drill program at Goldstrike (contingent on financing) starting in November…

Abcourt Mines (ABI, TSX-V)

Patience continues to be the name of the game here and will be for quite a while yet…Abcourt was down another penny last week to 8 cents and touched a new 52-week low of 6.5 cents…ABI faces very stiff overhead resistance with a declining 100-day moving average (SMA) at 11.5 cents and a falling 200-day SMA at 14.5 cents…if you’re bullish on long-term Silver and zinc prices, however, which we are, you have to love this play as the current market cap ($13.4 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 is expected to take place at the property during the fourth quarter…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 in a better market…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 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)

All remains quiet on the Greencastle front…the stock was down a penny-and-a-half last week at 13 cents (it fell as low as 12.5 cents)…the declining 20 and 50-day moving averages (SMA) at 14.5 and 16.5 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 August 25 which show working capital of $7.3 million or 16 cents per share…President and CEO Tony Roodenburg has been quiet for too long, but knowing the conservative Roodenburg he will likely wait until the markets reverse 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 several 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 $6 million means the stock is now trading essentially at cash value…history shows that whenever VGN is trading at cash value, 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, like now, and then sell into strength when something develops (sometimes a year or more later)…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 for long-term investors at current levels…the stock is flat 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…there was finally some news from Sidon recently but not the news investors were hoping for as the company announced it will be late in filing its year-end (April 30th) 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 or bear market 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 will almost certainly 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 3 pennies since we introduced it to BMR readers in the spring of last year at a nickel…it closed unchanged at 2 cents last week…the company currently has 137 million shares outstanding for a market cap of $2.7 million…

Gold Bullion Development (GBB, TSX-V)

Gold Bullion managed to hold its ground last week despite a 5% drop in the CDNX…GBB fell as low as 26 cents but finished the week at 29.5 cents, up half a penny…investors continue to wait for the much-anticipated initial 43-101 compliant resource estimate for the LONG Bars Zone at the same time as the stock faces stiff technical headwinds…the 100-day moving average, for example, which supported GBB from late 2009 through early this year, is now resistance which the stock has not yet been able to overcome (it currently sits at 39 cents)…the rising 1,000-day SMA at 25 cents must now hold as support…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 resource estimate 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’s latest drill results, released September 14, continue to show wide intersections of low but mineable grade…half of the 28 holes had intercepts of 100 metres or more grading between 0.31 g/t Au and 0.50 g/t Au…the northern part of the Eastern Extension continues to show excellent potential and tonnage is adding up in that area…so, overall, we continue to like how the LONG Bars Zone is coming together but GBB has frustrated investors by not producing a 43-101 earlier as promised…companies are rewarded when they exceed the market’s expectations and are punished when they don’t fulfill them which is a major reason GBB has been struggling of late…the Castle spin-off is nice in a way but it also reminds investors that resources have been diverted from the company’s core project (Granada) over the last nine months to a property that may or may not prove to be a winner…GBB’s current market cap of $48 million puts a value of just $16 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 big volume…it’s all about volume at Granada which is why the drills have to keep turning and why we’ve been stating all year that more than just two rigs are needed in the LONG Bars Zone…this property continues to offer great potential but massive drilling is necessary…GBB is up 321% since we introduced it to BMR readers in late December, 2009…

Currie Rose Resources (CUI, TSX-V)

Currie Rose could not hold important support at 14 cents last week and dropped as low as 11 cents Friday, albeit on light volume, before closing the week off a penny at 13 cents…with assay results pending from Mabale Hills, the hope is that CUI could deliver some impressive numbers after reporting encouraging visuals…the company stated 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…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 August 24 that Liontown has now started drilling at Jubilee…Trueclaim Exploration (TRM, TSX-V) has completed a Phase 2 drill program at the Scadding Propery…TRM 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…Trueclaim’s results were encouraging but considerably more work needs to be completed at Scadding to better determine its ultimate potential…while Currie Rose has had its market cap shaved by 70%, from a high of nearly $40 million late last year to the current $11.6 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 (six months) show 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…CUI has fallen 3 pennies since being added to the BMR model portfolio a year ago…

Adventure Gold (AGE, TSX-V)

Adventure Gold is now testing strong support around 40 cents as it closed Friday at 42 cents, a drop of 6.5 cents for the week…this company remains one of our favorites, though, with several exciting projects on the go…our contention is that there’s a strong chance at least one of them will “hit” but in the current market environment, it’s impossible to say what the potential impact could be on the share price…President and CEO Marco 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 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…initial results from Phase 2 were released September 13 and were solid…they included 7.1 g/t Au over 4.3 metres, 4.5 g/t Au over 9.3 metres and 4.1 g/t Au over 5.8 metres (different holes)…Pascalis 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 in the general area…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 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, drill results are pending from Agnico-Eagle’s 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 has reached a core length of 2600 metres…with recent wedging it appears to be on track to potentially hit its intended target by the end of October…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…AGE course also still has plans for the Granada Extension Property…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 as the company is well positioned to survive any downturn in the markets…

GoldQuest Mining (GQX, TSX-V)

What an unexpected change of events for GoldQuest…long-term, the proposed merger with Takara Resources (TKK, TSX-V) could work out exceptionally well but investors, who often look at just the short-term,  aren’t impressed at the moment…GQC closed Friday at its weekly (and 52-week) low of 10 cents while TKK finished at 6.5 cents, giving the two companies a combined current market cap of $16 million…GQC investors aren’t pleased with the ratio – GQC shareholders will receive 1.6287 shares in Takara for each share held in GoldQuest…talk of a potential rollback (perhaps 1-for-4) and a possible large financing prior to drilling aren’t going over very well with investors either…over the long run, however, GQC Chairman Bill Fisher is positioning for making the combined GQC-TKK entity a producer…that makes sense but, still, investors believe he could have negotiated a better ratio for GoldQuest given the company’s substantial assets in the Dominican Republic and Spain…insider trading reports show that Fisher stepped into the GQC market at the end of the week to add 165,000 shares to his position…GQC has fallen 49% since being added to the BMR model portfolio a year ago…

Seafield Resources (SFF, TSX-V)

We remain very pleased with how things are proceeding with Seafield, especially considering the current markets…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 fell another penny last week, however, to close at 19 cents, half a penny below its 1,000-day moving average (SMA) which is actually now in decline…from a technical perspective, some additional share price weakness is clearly possible with a major area of support at 16 cents…the company released positive results September 21 for the initial scoping level metallurgical testwork on its Miraflores Property which showed gravity recoveries as high as 94.3%…the stock has been less volatile recently after bouncing up and down for a period of time between the low 20′s and the low-to-mid-30′s… the company’s June 30th financials were released August 26, showing SFF with $18 million in cash…Seafield announced August 31 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…more drill results from Dos Quebradas are expected in the next four weeks…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 217%% since we made it the first company in the BMR model portfolio two years ago…its current market cap is $32 million…

TSX Venture Exchange and Gold

The month of September has been a “game changer” for the CDNX for the second year in a row.  Last year, the Index broke out in September and went on a Nasdaq 1999-style run with a gain of more than 80% from an early July low to an early March high.  This year, the CDNX broke down in September to such an extent that it’s now safe to say the bull market phase that started at the very end of 2008 is over – the CDNX is now in the grips of a bear market which could last well into next year.   There will be trading opportunities and many great long-term “buys” but what this unfortunate and sudden turn of events means, in our view, is that the world has entered a very dangerous economic period that has the potential of becoming quite frightening in the months ahead.

Cracks first started to appear in the CDNX during the first quarter of this year when the Index curiously began to under-perform against the broader markets after many months of out-performance.  The CDNX has proven to be an astoundingly reliable leading indicator of the major markets in general and even the overall economy.  Normal major corrections during a CDNX bull market typically last anywhere from a month to several months with an average drop of around 25%.  In this instance, the CDNX has gone beyond what would be considered a normal correction with a 17% drop over just the last 11 sessions inflicting serious technical damage.  The Index has now declined 998 points or 40% from the March 7 high of 2465, leaving the 300 and 500-day moving averages destined to reverse to the downside sometime during the fourth quarter (the last time this occurred was just prior to the 2008 Crash).    This is particularly disturbing given the fact that Gold is trading at over $1,600 an ounce.  The “correction” argument was valid up until the last two weeks in particular when the CDNX started warning us in very clear fashion that something is seriously wrong with the global economy.  This has also been confirmed by the breakdown in Copper.  The commodity-driven Canadian dollar is also suffering.  All these factors point to the strong likelihood of Canada and other countries slipping into recession despite widespread assurances from government and even private economic forecasters that this won’t occur.

We’ve brought this up before but the weakness in stocks at the moment reflects a loss of confidence in political leaders and (tax and spend) governments in general. The euro zone, of course, is a basket case at the moment and just today it was announced that Greece won’t be able to meet its 2011-2012 deficit targets imposed by international lenders as part of the country’s bailout.  Greece is destined to go bankrupt with Ireland, Portugal, Spain and Italy also in major financial distress.  In the United States, President Obama is engaged in class warfare and continues to pursue reckless economic policies that have divided the nation and paralyzed Congress until the November 2012 elections.  In addition, the Fed – which came to the rescue of the markets in 2009 and 2010 – appears to be out of bullets.

Meanwhile, Canada has its own freak show getting underway.  The country’s two largest provinces, Ontario and Quebec, are each in a fiscal mess (they also lack effective political leadership) with Ontario shockingly on the verge of electing a Liberal-NDP “coalition” that will surely drive that province into the ditch (or, even worse, over the cliff).  The National Post’s John Ivison correctly describes NDP leader Andrea Horwath as “Ontario’s most dangerous woman”.  Even the liberal-leaning Globe and Mail stated in an editorial tonight that “if given an opportunity to influence policy, either in government or in a minority parliament, (Horwath’s NDP) would wreak havoc on Ontario’s economy”.  The current political situation in Quebec is equally disturbing, and the Liberal government there is proposing legislation (Bill 14) that could have major adverse affects on the mining industry.

As Ronald Reagan so famously stated, “Government is the problem, not the solution”.  For investors, governments almost everywhere are the problem right now.  Markets are making that abundantly clear.  The pathetic and misguided Wall Street protestors, who are playing right into Obama’s class warfare strategy, are an example of how the seeds of social unrest are now beginning to sprout in the United States.

The CDNX was off 79 points last week or 5% to close at 1467.  From a technical perspective it seems almost certain the July 2010 low of 1343 will be tested this month.  The TSX was actually up 1.4% last week, the Dow fell 1.3% while the Nasdaq was off 2.7%.

Gold

Gold may have hit an important bottom last Monday when it found support just a few dollars above its 200-day moving average (SMA) and bounced off an important trendline support channel as shown in the 2.5-year chart below from John that we posted last Monday evening:

The long-term bull case for Gold remains solidly intact even in the event of a spike to the downside, below the trendline support, which it seems could only be caused by a stock market crash and liquidity trap that temporarily forced traders and investors out of Gold to raise cash.  Such a downside move would likely be short-lived, just like in 2008 when Gold fell as much as 30% and then quickly went on to new highs.

Gold finished down $42 last week to close at $1,625.  Silver dropped as low as $26 and recovered to finish at $29.97, a loss of 96 cents for the week.  Copper fell another 15 cents to $3.15.  Crude Oil declined $1.81 to $78.04 while the U.S. Dollar Index showed continued strength as it gained another half point to 78.79.

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.