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Canadian Gold producers have been on fire this year, led by Richmont Mines (RIC, TSX) which has been our favorite for quite some time.  The Rouyn-Noranda based company’s share price started the year at $4.50 and closed yesterday at $12.04 as it rapidly closes in on its all-time high of nearly $13.50 in late 2011.

Richmont’s turnaround and amazing run actually began at the beginning of 2014 when the stock could have been bought for just over $1 per share!  Its high-grade Island Gold mine in northern Ontario was the catalyst, and of course Richmont is now being aided by a much higher Gold price in Canadian dollars (see chart below).

Gold Bullion Development Corp. (GBB, TSX-V)

If you’re looking for a turnaround story under 10 cents among the juniors, consider Gold Bullion Development (GBB, TSX-V) – another Rouyn-Noranda based company that we’ve followed closely over the years (in February we added it to our Top Opportunities List at a nickel, just prior to a 3-fold jump in 3 months).

GBB just came out with news this morning regarding an interesting high-grade Gold exploration opportunity it’s pursuing in the Gowganda Camp 45 miles southwest of Kirkland Lake, but of course GBB’s key asset is the Granada Gold mine in Rouyn-Noranda that has finally been fully permitted by the Quebec government (“Certificate of Authorization” received, at long last!).

Late last month, after the CA was announced, we warned about the possibility of a near-term pullback in GBB out of temporarily overbought conditions after the stock had tripled in value from a low of a nickel at the end of February to 15 cents (resistance).

Guess what that same chart is telling us now! 

RSI(14) has unwound to support at 50% while the previous Fib. resistance band between 7 and 8 cents is now new price support, while shorter-term charts also suggest GBB is gearing up for an immediate reversal.

This is a 2nd chance to get in at a favorable valuation on an emerging new Canadian Gold producer targeting 25,000 ounces per year in its 3-year high-grade “rolling start” followed by a goal of 100,000 ounces annually from the broader resources within the expansive LONG Bars Zone at Granada.

With the “CA” now in hand, and the project fully permitted, GBB is also a more attractive potential takeover target if a bigger player likes the idea of acquiring Gold resources at less than $10 an ounce in a favorable jurisdiction surrounded by excellent infrastructure.

The encouraging 2014 Pre-Feasibility Study on GBB’s “rolling start” also assumed a Gold price of just $1,400 CDN, $300 per ounce below where the yellow metal is now in loonie terms.

“Wave 1” in GBB was on the breakout above the long-term downtrend line.  “Wave 2” has been the healthy pullback from the high last month.  The next wave could be the longest and most powerful, consistent with how we view Gold over the balance of this year and beyond.  As always, perform your own due diligence.

Gold In Canadian Dollars

Can there be any doubt, based on this chart, that Gold is headed to a new all-time high this year in Canadian dollars?

Below is John’s most recent Gold chart in Canadian dollars (June 23).  We’ll have an updated version in today’s Morning Musings.  Measured Fib. resistance on this 2.5-year weekly is $1,876.  Our longer-term charts, though, are pointing to the possibility of $2,800 U.S. during this cycle, and that would likely mean +$3,000 CDN.  Global threats, from radical Islamist extremists to the level of negative-yielding debt, could ultimately push bullion into the stratosphere.

We stated all along that Gold bottomed in loonie terms during the spring of 2013.  Those who caught on to that early have made a lot of money on Canadian producers in particular, but there’s still plenty of upside potential over the next year or two.  The same tsunami of buying that drove Internet stocks to dizzying heights in 1999/early 2000 may appear in Gold stocks in general anytime over the next 12 to 24 months.

Note:  Jon holds a share position in GBB.