Currie Rose Resources (CUI, TSX-V), one of our favorites, blasted through resistance at 24.5 cents today on CDNX volume of 1.4 million shares (336,000 on ALPHA) to start what appears to be a new up-leg. The stock hit a new 52-week high of 26 cents and closed at 25.5 cents.
We first alerted BMR readers to Currie Rose when it was trading at a dime in mid-September. This is a company with Canaco-type potential as it has been active in Tanzania since 2005 and is aggressively exploring a very attractive package of advanced staged and grass roots exploration projects in the prolific Lake Victoria Greenstone Belt of northwest Tanzania.
Currie Rose is currently drilling the promising Sisu River Gold Property at its Mabale Hills Project. As of a week ago the company had completed 14 holes at Sisu River with drilling intersecting “good source rocks” (it appears they’re successfully penetrating the highly silicified and sheared quartz porphyry beneath the ‘mbuga’ clays) at depths of approximately 100 metres per hole. Artisanal miners made a discovery at Sisu River just over a year ago and Currie Rose’s random sampling program turned up grades as high as 89 grams per tonne. This Phase 1 RC drilling at Sisu River will consist of 3,000 metres or approximately 30 holes. The company is using a nearby local lab, speeding up turnaround times, and initial assay results are pending.
Chances of a discovery at Sisu River, based on the favorable geology of the area, have to be considered good (the exploration business is risky, as our readers know, but we do have an impressive track record at BMR in terms of identifying possible discoveries). Just 8 kilometres to the southwest, Currie Rose made a near-surface discovery in 2005 at Mwamazengo with results including 31 metres grading 5.97 g/t Au and 63 metres of 2.59 g/t Au. Mwamazengo remains a target of high interest for Currie Rose.
Approximately 200 kilometres to the southeast of Mabale Hills is Currie Rose’s highly prospective Sekenke Gold Project – a nearly 300 square kilometre land package that runs in between and surrounds two former high grade producing mines. As the old saying goes, the best place to find a new mine is near an old mine. CUI has already identified a highly prospective structure (12 km x 800 m) within a shear zone on the margins of a large granite intrusion that hosts numerous vertical quartz reefs of the same type that developed at the nearby former mines. Currie Rose is launching a major geophysical program at Sekenke in order to prioritize drill targets for the spring.
Even though Currie Rose has more than doubled since we first brought the company to our readers’ attention more than 2 months ago, we still love the risk-reward ratio here which is why this writer continues to hold a substantial position (270,000 shares). The situation with Currie Rose has the same “feel” as Gold Bullion (similar trading patterns and the Sekenke Project reminds us of the Granada story – extensions to a former mine) when we introduced GBB at less than 10 cents in December of last year – GBB became a 10-bagger and still has tremendous potential. Currie Rose has solid management and we’ve interviewed President and CEO Harold Smith twice already on BMR.
Below, BMR’s technical analyst takes a look at the Currie Rose chart after today’s strong move through resistance at 24.5 cents:
John: Today, Currie Rose Resources (CUI, TSX-V) opened at 22.5 cents, its low, and during the day climbed to a new 52-week high of 26 cents before closing at 25.5 cents for a gain of 3 pennies on CDNX volume of 1.4 million shares.
We see from this 2-month daily chart that CUI broke to the upside from a small horizontal channel on October 21 at 13 cents. It then climbed steadily over the next 13 sessions to reach a 52-week high of 24.5 cents. Over the next 7 sessions it consolidated and formed a bullish downsloping flag. A breakout from the flag occurred with a 2 doji followed by today’s white candle.
The downside risk at the moment appears minimal. There is now strong support at previous resistance around 24 cents. There is also a very strong support band between 19 cents (the 61.8% Fibonacci level) and 20.5 cents. The EMA(20) moving average is at 20.6 cents and pointing up, also providing strong support.
The set of Fibonacci levels (green) shows the next target level is at 32 cents (this is not a BMR price target as we don’t give price targets but a theoretical near-term Fibonacci level as a guide for investors based on technical analysis). The volume today was the highest in the last 9 sessions. If the volume stays high we could see the Fibonacci target reached this week.
Looking at the indicators:
The RSI, at 78%, is pointing up and in the overbought region but has room to move higher – bullish.
The ADX trend indicator has the +DI (green line) at 38 and pointing up. It has plenty of room to move higher. It’s above the -DI (red line) which is way down at 7.
The ADX (black line) trend strength indicator is high and flat at 61, showing the trend strength is high and constant – very bullish.
The Chaikin Money Flow (CMF) is bullish but the buying pressure has been low for the last 3 sessions. It has been sufficient, however, to move the stock to a new high and that is very bullish.
Outlook:
CUI is in an excellent position to reach the Fibonacci target of 32 cents in the near future if the volume remains high.
