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February 17, 2011

BMR Morning Market Musings…

Gold continues to show strength and has managed to battle through importance technical resistance between $1,370 and $1,380….as of 8:45 am Pacific, the yellow metal is at $1,383 for a gain of $8 an ounce…Silver has climbed 44 cents to $31.12 while the U.S. Dollar Index is down one-fifth of a point at 78.03…fresh tensions in the Middle East are helping Gold today along with a more bullish technical picture…China’s appetite for Gold remains very strong…China consumed 175.2 tons of Gold in the 4th quarter of 2010, bringing its grand total for the year to 579.5 tons or 18.5 million ounces according to the World Gold Council…by comparison, the U.S. bought 203.3 tons last year…it appears China is trying to legitimize its currency by ramping up its Gold holdings…aggressive buying of Gold and Silver by China’s central bank is generating a lot of different theories…the CDNX is ahead 7 points at 2407…Gold Bullion Development (GBB, TSX-V) is stabilizing, up a penny this morning at 54 cents…John is working on a new GBB chart for this evening…we’re still sorting through Tuesday’s GBB news and trying to connect some of the dots with so many drill holes…Sidon International Resources (SD, TSX-V) made a nice move yesterday as it jumped some technical barriers and closed at 16.5 cents (just below the declining 50-day moving average (SMA) where there is some obvious resistance) on volume of over 7 million shares…the move could have been due to speculation regarding upcoming drill results…Sidon has pulled back 1.5 cents this morning to 15 cents…the new technical support is at the 100-day SMA just slightly above 14 cents…Richmont Mines (RIC, TSX) came out this morning with an impressive new resource estimate for its Wasamac Property, 15 kilometres west of Rouyn-Noranda…as we speculated, the numbers have gone up substantially and the company has announced 35,000 metres of additional drilling for this year…this not only has implications for Richmont, of course, but also for Cadillac Mining (CQX, TSX-V) whose Wasa claims represent the possible down-dip extension of the deposit…there are also some very interesting VMS targets on Cadillac’s 100%-owned ground…the new measured and indicated resource estimate for Richmont’s Wasamac is 5.1 million tonnes grading 2.51 g/t Au (411,000 ounces) while inferred resources now stand at 11.5 million tonnes grading 2.72 g/t Au (1 million ounces, more than triple the previous inferred estimate)…Richmont President and CEO Martin Rivard stated, “Results announced today confirm that the Wasamac property has the potential to play a pivotal role in our plan to transform Richmont into a 200,000-plus Gold ounce producer”…we suggest investors perform their due diligence on Richmont which is currently up 9 cents to $4.91…the key for Cadillac will be to seize on the opportunity this presents for them at Wasamac…after attending their AGM Tuesday in Vancouver, we believe they will get aggressive in exploring the potential of their ground next to Richmont especially after this morning’s news…Cadillac is currently unchanged at 29 cents and the chart is looking more bullish…Bonterra Resources (BTR, TSX-V) came out with some interesting assays from the first six holes of its 2011 drill program at its Eastern Extension Gold Project, 170 kilometres northeast of Val d’Or…results included 14 metres grading 8.01 g/t Au…the Eastern Extension is open laterally and downdip with a new zone discovered that extends the strike of the mineralized envelope to the west…the market has a tendency sometimes to sell on news, as we’ve seen with GBB, and BTR is currently off nearly a nickel at 49.5 cents…Bonterra has a healthy looking chart, however, and is certainly worth keeping a close eye on…Visible Gold (VGD, TSX-V) is off half a penny at 41 cents…we see VGD as one of the major up-and-comers along the Cadillac Trend and it’s armed right now with approximately $9 million in cash…it has launched a very aggressive 2011 exploration program, part of which covers ground held by Cadillac as the two worked out a joint venture in December…Richfield Ventures (RVC, TSX-V) has formed a nice base recently around the $5 level and it’s now starting to move higher on increased volume which is always a positive sign…RVC has gained 16 cents morning to $5.35…its all-time high is $5.49 (February 8)…Seafield Resources (SFF, TSX-V) seems to be stabilizing in the vicinity of its 100-day rising moving average (SMA) at 39 cents…SFF is currently 2.5 cents higher at 39 cents…the primary trend with Seafield remains up given the bullish alignment of the 100, 200 and 300-day moving averages…the 200 and 300-day provide excellent technical support in the high 20’s, so the fact the stock snapped back from a 31-cent low the other day should not have been a surprise…in terms of assessing risk, that appears to be the downside floor while of course there’s a great deal of upside potential given the geological dynamics of Quinchia…

16 Comments

  1. so about that interview with frank….still on? or is it off now because of the results.

    Comment by Joe Bob — February 17, 2011 @ 9:31 am

  2. Hi Jon,
    are you going to post your CQX coverage now? 🙂

    Comment by Peyman — February 17, 2011 @ 9:38 am

  3. Requested an interview with Frank but haven’t heard back from him. I’m sure he’s very busy and I respect that.

    Comment by Jon - BMR — February 17, 2011 @ 9:43 am

  4. President and CEO Victor Erickson has agreed to an interview – coming very soon.

    Comment by Jon - BMR — February 17, 2011 @ 9:44 am

  5. jon, I sleep easier at night when you enlighten me on VGN. Is it breaking down technically? We are at .235 and seems there is no end in sight for how low it will go. The lack of news from management about the advanced gold property acquisition is really troubling to me. Could that have been a ploy on their part to get the share price up? Seems strange thet VGN just drifts lower and lower everyday. I understand they have the monthly royalties but I thought they were changing focus to be more active in the gold exploration space? Encouraging words are welcome.
    John

    Comment by john — February 17, 2011 @ 9:46 am

  6. Thanks Jon, you’re the man 😉

    Comment by Peyman — February 17, 2011 @ 9:47 am

  7. Hi Jon, could you cast your experienced eye over the latest nr from EVR. I know they are not yet in the portfolio but they are on your watchlist and this could be of importance to GQC, They are starting 20000 mts of additional drilling split into two 10000 mt sections. The second part seems very interesting where they are going to do deep drilling to test the “barren lithocap theory” which was propogated by eminent geologist Richard Sillitoe (unfortunate name) in 2006. This was that the lithocap could be concealing the same type of mineralisation as Pueblo Viejo next door. If this is the case they say that they will have a similar geological situation to Barrick/Goldcorp next door. What are your views on this as if it is proved correct it would seem to be a game breaker for EVR and also GQC who are nearby?

    Comment by Patrick — February 17, 2011 @ 10:49 am

  8. Richard Sillitoe “Porphyry & epithermal systems….Science Driven Exploration”
    http://video.google.com/videoplay?docid=-2467098079447302061#

    What and why GoldQuest & Everton are doing is made clear in this 28 min video which mentions neither GQC nor EVR nor the Dominican Republic.

    If you invest in miners you have an opportunity to understand how things have changed and how science driven exploration can impact your investments.

    Comment by george wohanka — February 17, 2011 @ 11:11 am

  9. Thanks, Patrick….u are 100% correct……I was actually reading the NR yesterday and planning to comment…everything is looking very good for EVR…patient investors could do extremely well with this one, so we’ll be mentioning it quite a bit more….

    Comment by Jon - BMR — February 17, 2011 @ 11:18 am

  10. Batero gold is up 85 cents today on this news, I believe they are pretty close to Seafield’s property.

    Batero Gold Intersects 519.70 Metres Grading 0.80 g/t Gold and 0.14% Copper From Surface at Batero-Quinchia Project, Colombia
    9:17 am ET 02/17/2011- Market Wire
    VANCOUVER, BRITISH COLUMBIA — (MARKET WIRE) — 02/17/11 — Batero Gold Corp. (TSX VENTURE: BAT) today announced its most significant drill results to date at the company’s 100-per-cent-owned Batero-Quinchia project in Risaralda Department, Colombia.

    Comment by GREG H — February 17, 2011 @ 11:35 am

  11. Yes, Greg….great intersection for Batero, and good for Seafield. Further demonstrates the potential of the Quinchia District.

    Comment by Jon - BMR — February 17, 2011 @ 12:01 pm

  12. The panic selling seams to have stop with GBB…we now find a good balance with the sellers and buyers. I have a feeling tomorow we will have a good day. Maybe 65 cents… Me to I think the results of batero is very good for SFF. Got in at 0.365. I think when gold will go over 1400 the chance are good for another rally in junior gold stocks.

    Comment by Andre — February 17, 2011 @ 12:11 pm

  13. WOW! Is the party for VGN over? Looks like resistance has broken and the stock is heading lower. Without news from management, it appears share holders are losing patience with this play. Is it time to move on? VGN does not seem to have any direction. They have great gold properties in nevada, yet fail to drill them or Joint venture them. They have a property in BC nect to RVC, yet no drill program has been announced. They were supposedly looking at acquiring an advanced gold property, but seems like they have failed in their efforts? Does BMR still like the stock, and do you guys still hold it? I guess the only saving grace for VGN is their monthly royalty payments form the oil wells, otherwise they would have nothing really to speak of.
    Regards,
    John.

    Comment by john — February 17, 2011 @ 3:21 pm

  14. Hi Jon, do you expect to have the interview with Victor Erickson of CQX this week? Also GQC made a small gain on increased volume towards the end of the day Thursday. This one could really take off if they hit on a step out.

    Regards, Dan

    Comment by Dan — February 17, 2011 @ 6:52 pm

  15. Hi Dan, I spoke with Victor again today and he has agreed to an interview for Tuesday next week. I think that’s very positive. Everyone can gain a better sense of who he is and the direction he’s taking this company. Personally, I am extremely bullish on the Wasamac situation (huge increase in resources announced by Richmont today). Also, I like CQX’s claims that are adjacent to the Galloway Project and of course the project in Utah. Well-run company with a very exciting future. I agree with you on GQC – nice strength today. I fully expect Fisher and Espaillat to do with GoldQuest what they did with GlobeStar and then some.

    Comment by Jon - BMR — February 17, 2011 @ 7:14 pm

  16. Excellent. Thanks Jon.

    Comment by Dan — February 18, 2011 @ 3:57 am

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