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February 6, 2011

The Week In Review And A Look Ahead: Part 2 Of 3

Gold Bullion Development (GBB, TSX-V)

Gold Bullion had a relatively quiet week, trading in a range of 71 to 77 cents and closing Friday at 76 cents…that was a 1 penny increase for the week…the 10-day SMA, in decline for most of January into early February, has flattened out and is starting to rise again while the 20-day SMA has also flattened out and could soon reverse…the stock remains in an impressive and firm overall uptrend with the Chaikin Money Flow (CMF) showing very strong buying pressure recently…there are plenty of buyers around to soak up any loose stock...with Gold likely having bottomed out, and new results expected soon from the LONG Bars Zone, this should be an interesting month for Gold Bullion…while some have expressed a concern that no drill results have come out since late November, our take is that GENIVAR is probably reviewing an immense amount of data and trying to connect the dots…based on visuals that have been reported, the drill map pattern, and GBB’s January 21 news release,  we have total confidence that the news when it does come soon will be very positive…Granada has consistently delivered over the past year and we see no reason why that won’t continue…

Cadillac Mining (CQX, TSX-V)

Our updated chart on Cadillac this morning shows a stock whose retracement from a January high of 50 cents likely bottomed out last week…CQX hit an intra-day low of 21 cents Thursday and closed Friday at 25 cents for a weekly loss of 3.5 cents…selling pressure has eased considerably the last few sessions, as shown by the CMF, and RSI and Stochastic indicators are looking a lot more positive as well…this stock has had a huge run-up the past couple of months, surging from a low of 5.5 cents to a high of 50 cents…a pullback to the mid-20′s, in retrospect, was healthy and normal from a technical standpoint and has paved the way for another potential major surge…there are many reasons we like Cadillac so much and why we believe it has the potential to soar in 2011…the tight share structure (25 million outstanding and 27.5 million fully diluted) is highly attractive and the management team is focused and shrewd….Victor Erickson and Andre Audet also have a combined immense amount of geological and engineering expertise…all of this was clearly demonstrated when the company announced January 21 a very significant precious metals property acquisition in the Great Basin of southern Utah near the Nevada border…the market hasn’t quite caught on to this yet but that’s okay – we have and so have some of our readers…what Erickson and Audet skillfully pulled off, through negotiations with individual landholders, was the acquisition of an entire former mining camp (the “Goldstrike District”) with patented claims that cover a dozen former near-surface deposits…in addition, the company staked further ground, contiguous with the patented claims…those mined deposits very likely feature extensions…our research shows this area has been hugely under-explored despite the production of 200,000 ounces of Gold and nearly 200,000 ounces of silver between 1988 and 1996…not only could there be near-surface extensions but there are parallels here to Nevada where some major deposits have been discovered underneath old heap leach operations…Erickson has a lot of successful experience in the Great Basin and wants to aggressively explore this 15 square kilometre area at Goldstrike….we expect Cadillac will employ some sophisticated techniques to help unlock the potential of this mining camp…they have a wealth of historical data at their disposal which will lead directly to numerous drilling targets…the property acquisition came at minimal expense for Cadillac (no stock issued either) which demonstrates this group’s business savvy – you don’t always have to spend a small fortune and issue vast amounts of paper to acquire a quality project…some of the most successful properties were picked up for a song through careful research which is what Cadillac has pulled off with Goldstrike…as far as CQX’s Cadillac Trend presence is concerned, Richmont Mines (RIC, TSX) is expected to come out with new results and an updated resource estimate for its Wasamac Property within the next week or two…we’re expecting a major upward revision in resources…the principal structure hosting Gold mineralization at Wasamac plunges north onto claims held 100% by CadillacVisible Gold (VGD, TSX-V) has also announced an aggressive exploration program for 2011 over its Quebec properties which include its Cadillac Break venture with CQX

Abcourt Mines (ABI, TSX-V)

Volume dropped off in Abourt last week but the stock held its ground, closing Friday at 18.5 cents for a loss of half a penny for the week…the rising 50-day moving average (SMA) at 16 cents is providing tremendous technical support…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…we’ve seen these type of volume surges before and they are always a very positive sign…Abcourt is being accumulated, and our best guess is that some savvy players like the assets in the ground…the company came out with news January 27, announcing it had intersected two new zones of high grade silver and zinc mineralization at its Abcourt-Barvue Property near Val d’Or…the 10,000 metre drill program continues with the goal of upgrading and augmenting existing 43-101 reserves and resources…the company is also trying to justify an expansion of the proposed mill from 650,000 tonnes to 1 million tonnes…Abcourt-Barvue is a former producer and one of the best silver assets in the country with nearly 20 million ounces in all-category reserves and resources (plus nearly 300,000 tonnes of zinc)…in addition, the company holds the former producing Elder Gold Mine near Rouyn-Noranda which it hopes to put back into production within 18-24 months (considerable infrastructure is already in place as we saw during our recent site visit)…drilling continues at both Elder and the adjacent Tagami Property where there is excellent potential for a significant discovery…technical analyst Clive Maund came out with a buy recommendation on Abcourt thisone of the things that caught his attention was exactly what caught our attention initially – the sudden spike in volume starting in December…there has been some major accumulation of this stock and for good reason – the value of this company’s Gold, silver and zinc assets…Abcourt recentlyraised $4 million…with 110 million shares outstanding, its market cap currently sits at just $20 million…continued drilling success and even higher prices for Gold, silver and zinc would be extremely bullish 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…

Currie Rose Resources (CUI, TSX-V)

Last weekend we stated that a turnaround was likely underway with CUI which was starting to come out of deeply oversold conditions…sure enough, the stock jumped as much as 41% with a move from 16 cents Monday to a high of 22.5 cents Wednesday with a combined CDNX volume Tuesday and Wednesday of over seven million shares…rumor has it, some brokers who thought the stock had become undervalued decided to jump in and grab a bunch of paper at what they felt were very favorable prices…the 22.5 cent high coincided with the still-rising 100-day moving average which is providing resistance for the moment…CUI closed Friday at 19 cents for a gain of 3 pennies for the week…the company last came out with news January 25, announcing a joint-venture deal with Australian-based Liontown Resources for Currie’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…the deal commits Liontown to at least 5,000 metres of drilling at the property this year which will give Currie Rose a minimum of 23,000 metres of drilling at all of its properties in 2011…an 8,000 metre program is now underway at its Scadding Gold Property near Sudbury which was optioned to Trueclaim Exploration (TRM, TSX-V)…this property will be getting some major exposure with a segment on “Today in America” which is expected to air nationally on the FOX Business Network and regionally on CNN Headline News…while Currie Rose has had its market cap shaved considerably, from a high of nearly $40 million to the current $16 million, what hasn’t changed is the quality of this company’s project portfolio which remains as high as it ever was in our view…

Richfield Ventures (RVC, TSX-V)

Richfield hit a new all-time high of $5.24 Friday before being pushed back and closing the week at $4.90…that was still a 20-cent jump over the previous Friday…given the state of the Gold market and the likelihood of continued exploration success at Blackwater, we don’t believe the stock will be hanging around current levels for very long…we were very pleased to see that Richfield got a well-deserved buy recommendation recently from GMP Securities which has initiated coverage on RVC with a 12-month target price of $11.10 per share…BMR introduced Richfield to its readers in December, 2009, when the stock was trading at only $1.20…GMP sees the potential for at least five million ounces of Gold at the company’s Blackwater Project in central British Columbia…Richfield released results on six more drill holes January 25…BW-106 returned 205 metres grading 2.04 g/t Au including 81 metres of 4.33 g/t Au…this hole was collared 70 metres northeast of previously reported BW-76 and 111 metres northeast of BW-78 which also returned excellent values over considerable widths…together the three holes outline an area of about 7,000 square metres of near-surface high grade which offers starter pit potential…another phase of drilling is underway as Richfield continues to define a potential multi-million ounce Gold deposit at Blackwater with silver and copper values as well…the primary trend remains up with Richfield and there’s every reason to expect more excellent drill results throughout 2011…RVC is ahead 308% since we introduced it to BMR readers just over a year ago at $1.20…we believe the company’s ultimate objective is to find a buyer who can put Blackwater into production…if good drill results continue as we expect they will, we’re confident that objective will be met and the takeover price could be much higher than the company’s current market cap of approximately $210 million…

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