The first rate increase in 3 years in China was a market-moving event today as the oversold U.S. Dollar bounced higher, sending Gold down sharply…U.S. Treasury Secretary Timothy Geithner spoke bullishly on the U.S. Dollar yesterday before the Commonwealth Club of California…G-20 finance ministers and central bank governors will be meeting in South Korea this coming weekend and no doubt the “currency wars” will be the hot topic of conversation…John’s technical analysis of the U.S. Dollar last night was timely to say the least as he stated a short-term reversal was at hand but any rally would not take the Dollar Index any higher than 79 before the greenback goes into retreat again…as of 8:55 am Pacific, the Dollar Index is up over 3/4 of a cent at 77.92 while Gold is off $27 an ounce to $1,343…the yellow metal dropped as low as $1,331… at this point no serious chart damage has occured in Gold and the fact the CDNX is holding up reasonably well, all things considered, is encouraging as that is our leading indicator…the CDNX touched its 10-day moving average (SMA) at 1806, a drop of 32 points, but has since recovered some of those losses and is now at 1818 for a 20-point loss on the day…the CDNX bounced off its 10-day moving average in late August and again in late September, so we’ll see if the trend continues…we believe it will…Gold Bullion Development (GBB, TSX-V) is off 2 cents at 56 cents (its 100-day SMA) as investors continue to wait for the closing of the company’s financing which should be in a matter of days…patience is a virtue in life and in the market, and having patience with GBB right now is important given the immense blue sky potential that exists with the LONG Bars Zone…we’re certainly excited with what the rest of the year may bring at Granada…we’re keeping a close eye on Richfield Ventures (RVC, TSX-V) which could announce additional drill results as early as today from its Blackwater Project in central British Columbia…there has been a remarkable degree of consistency in results from Blackwater over the past year with long intersections of mineable grade, so we are optimistic the newest batch of assays will be positive…Richfield is currently down 17 cents at $2.65 but on low volume of only 50,000 shares…a company around Blackwater we’re now watching again is Greencastle Resources (VGN, TSX-V) which was part of the BMR Portfolio earlier this year…we deleted it in August as we weren’t sure when Greencastle would start to get more aggressive in the exploration area…last week, however, the company announced it had acquired an option on 13,000 hectares (28 claims) in the Nechako Plateau on trend with Blackwater…work is starting immediately on that property which constitutes Greencastle’s first activity in the Gold sector in 3 years…that is an important development and may signal that Greencastle is also about to do something with its promising Nevada Gold properties…Greencastle’s chart is looking encouraging and yesterday’s close of 16 cents gives the company a market cap of only $7.2 million…the company has $6 million in cash and regular monthly oil royalties of approximately $125,000…at 16 cents VGN is a “no brainer” for patient investors who are looking for a low risk play with cash flow that offers considerable upside potential…as always, perform your own due diligence…
October 19, 2010
8 Comments
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Does anyone want to offer an estimate as to what the potential stock value of GBB would be assuming most of the optimistic views are reached. Time frame is not an issue for me and I am not holding anyone to their opinion.
Comment by MJJP — October 19, 2010 @ 8:11 am
I have made some calculations about this and have come to the conclution that the market price could well exceed 7-8 CAD in a 5 year period. This is at a gold spot at 1100 and somewhat 4-5 moz prooved and an open pit is in full progress. I think we have a lot more gold in our grounds and would be slightly shocked if we saw a price under 1500USD/troy oz by next summer. The outlook is as stated, blue sky all the way. Hold tight.
//J
Comment by Josef — October 19, 2010 @ 8:50 am
Keep in mind this stock has had a big run since the spring. Technically, the long-term uptrend remains in place with rising 100 and 200-day moving averages, and it’s not uncommon for a stock in an overall uptrend to test its long-term moving averages which is what Sidon is currently doing. They have a very good project in Morogoro and I’m confident they’re doing the right things on the ground right now to advance that property. Often in a situation like this – we saw it with Gold Bullion and others – there are some blemishes and some baggage from the past. Sidon has its share, and they’ve being going through some growing pains since the spring. But I’m confident they have a quality project they can really sink their teeth into now and do something with. They are focused on making it work.
Comment by Jon - BMR — October 19, 2010 @ 9:10 am
Hello-
Any news or updates on SFF?
Comment by Eric Benson — October 19, 2010 @ 9:15 am
Hi Jon
Just wondering if you’ve had a chance to look at EAG fundamentals, Andrea had asked a couple of weeks ago. Thanks for all your great work on GBB. We are all on the
edge of our seats, waiting for the PP to be announced, and hopefully some drill results soon.
Comment by Bob — October 19, 2010 @ 10:24 am
There are a large number of warrants on EAG due to expire on October 28th.I am thinking since this has been about the 3rd set and now they are done until next summer perhaps we will see some upward movement.I also would appreciate Jons take on it when he has the time.. if possible.
Andrea
Comment by andrea — October 19, 2010 @ 11:02 am
Andrea, if you look at EAG from a technical perspective, and John could offer a better opinion, but while there is some pressure at the moment I see excellent support at 18 cents and a rising 200-day SMA which appears to be in no danger of reversing…….other factors suggest this is probably a safe time to accumulate….fundamentally, Windfall is an attractive project which has produced some interesting results over the years…..the geometry of the system and structural controls still aren’t fully understood……it looks like they see strong potential of some wide (lower grade) mineralized zones with underground and near surface potential…….for patient longer term investors this could work out very well….the stock has shown the ability to move hard and quickly……I imagine they have a lot of information to review from the summer drill program and this could produce some good news before year-end……..not sure when the next drill program may start but the sooner the better….market cap of $18 million appears reasonable and offers upside…….those are my thoughts….I’ve followed this company off and on but I’m probably not as well versed on EAG as certain readers may be…..
Comment by Jon - BMR — October 19, 2010 @ 11:43 am
Thanks for the input . I appreciate it.
Comment by MJJP — October 20, 2010 @ 2:46 pm