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February 18, 2011

BMR Morning Market Musings…

Gold has traded in a range of $1,380 to $1,389.50 today while Silver has hit a new 30-year high…as of 7:15 am Pacific, Gold is unchanged at $1,386 while Silver is ahead 31 cents at $32.09…the U.S. Dollar Index is up slightly at 77.93…Chinese monetary authorities, in another attempt to cool off inflationary pressures in that country, have again raised the reserve requirement for Chinese banks by 50 basis points, the second such move this year after six reserve increases in 2010…no major U.S. economic reports are coming out today but traders will be keeping a close eye on developments at this weekend’s Group of 20 meeting in Paris…currency, trade and sovereign debt issues will dominate the meeting as well as concerns about rising commodity prices…the Dow hit its highest level since June 5, 2008, yesterday…the CDNX, after a 22-point jump yesterday, is down 2 points to 2420 in early trading…Batero Gold (BAT, TSX-V) is hot again this morning after releasing new drill results yesterday from its La Cumbre Property in the Quinchia District, very close to where Seafield is exploring…Batero’s eighth hole at La Cumbre returned a world class 591.50 metres grading 0.72 g/t Au and 0.13% copper…the company is operating with four rigs 24/7…the stock climbed $1.02 yesterday and is currently up another 38 cents at $4.31 for a market cap of just under $200 million…Batero’s success has spilled over somewhat into Seafield which gained 2.5 cents yesterday and is up another penny this morning at 40 cents…Gold Bullion Development (GBB, TSX-V) is stabilizing after plunging from a high of 77 cents Tuesday to a low of 52 cents Wednesday and yesterday…there is very strong technical support in the low 50’s as John pointed out in his chart last night and a recovery does seem to be underway…we continue to examine Tuesday’s results and we’ll be posting an article on the fundamentals by early next week…Gold Bullion is currently ahead 1 penny at 56 cents…Abcourt Mines (ABI, TSX-V) has enjoyed a good week after reporting strong drill results Tuesday from its Abcourt-Barvue Silver-Zinc Project near Val d’Or…the current 10,000 metre drill program is 40% complete and accomplishing its goal of upgrading and increasing the 43-101 reserves and resources…with silver at new 30-year highs, ABI is looking better than ever especially with a market cap of only $23 million…a major drill program continues, meanwhile, at Abcourt’s Elder-Tagami Gold Property near Rouyn…Abcourt is getting very positive results from there as well and should also be able to substantially upgrade and increase resources…the goal is to put Elder back into production by the end of next year…ABI is unchanged at 21 cents…we’re keeping a close watch on Cadillac Mining (CQX, TSX-V) as we suspect the company may be considering near-term exploration plans for its “Wasa” claims that adjoin Richmont’s Wasamac Property 15 kilometres west of Rouyn-Noranda…Richmont reported a huge increase in resources yesterday for Wasamac (inferred resources more than tripled) and this certainly has implications for Cadillac…CQX is currently up a penny at 31.5 cents…technically, Cadillac’s 20-day moving average (SMA) has reversed to the upside which is yet another bullish sign on top of the ones John pointed out in his chart this morning…Currie Rose Resources‘ (CUI, TSX-V) chart is also looking healthier these days…CUI is half a penny higher this morning at 18.5 cents…

23 Comments

  1. Good morning guys, I undersatnd that you are busy and receive many questions, but it seems that when I ask about VGN, the questions sometimes get passed over. Most likely just an error, but what are you thoughts on it now that it is dropping like a stone? Did you manage to read my questions that I posted yesterdat in the Market Musings portion? Im almost at the point of bailing out.
    Thanks,
    John.

    Comment by john — February 18, 2011 @ 7:43 am

  2. What a great comment Jon yesterday… GBB should have release the NR after the closing of the markets follow with a conference call. The NR was way to much complicated for average investors and for me also. I worked for Canaccord 10 years and a lot of our business was mining companies and I rarely saw a NR fill with so much details at once.

    Comment by Andre — February 18, 2011 @ 7:59 am

  3. Hello Andre, I agree and what an interesting week – I think we’re back on track quite quickly. Are you in La Belle Province? If so are you following the BAPE which I think is due on the 28th?

    Comment by Andrew — February 18, 2011 @ 8:12 am

  4. Andre

    I hold VGN, bought close to the highs, I am holding put though. I too have been disillusioned with its performance. However with no news its not uncommon for a stock to meander lower on no-news. I was really expecting Roodenberg to drop an NR sooner than this. I guess he is too heavily focused on SFF for now. I would hope he gives us an update soon.

    Comment by Herb — February 18, 2011 @ 8:13 am

  5. Hi
    Thanks for all the charting and support during a rather stressful week!! Sidon has had little news or updates for some time. Have you any idea when they will present news? This very extended quiet period is causing concern and great frustration.I assume they still have not agreed to an invterview date. Any comments will be appreciated.

    Thanks,
    Andrea

    Comment by andrea — February 18, 2011 @ 11:17 am

  6. Hi Andrew..yes I am from la belle Province..loll But it’s now become je me souviens. No I am not following the BAPE. Yes what a week Andrea…. Lucky I bought some Uranium stocks they did pretty good this week and thank you Jon ( I can be nice sometimes also..loll) bought 100 000 sahres of CQX at 0.26 now sold half at 0.32. Realy cold beer tonight…

    Comment by Andre — February 18, 2011 @ 11:32 am

  7. GBB definitely need to get better at PR.

    First of all, they should have done multiple NRs instead of 1 big one. They received their assays in 2 batchs (about 2 weeks apart), so there should have been at least 2 NRs.

    Second, they should have done a better job highlighing good mineralization of certain holes. When I skimmed through I’ve notice more negatives, like bunch of 0.3g/t or high minerlization of 1m only. I’ve noticed that there were around 7 holes that are good in my book (equivalent to 100m of 1g/t) and those could have been highlighted better.

    Third, they could have done 3rd NR stating extensions to NE, SE, etc like what they have done in the current release.

    I’m saying this because if enough people tell them how to PR better, then they might do a better job next time.

    Comment by Bruce — February 18, 2011 @ 12:04 pm

  8. You guys should look into Threegold Resources (THG) they have a good land package directly adjacent to GBB. Huge volume today.

    Comment by Andrew M — February 18, 2011 @ 12:33 pm

  9. Hey guys are know you guys are all above board, but are you ignoring VGN or just nothing to talk about for VGN?
    john.

    Comment by john — February 18, 2011 @ 12:54 pm

  10. HI ANDREW M

    3GOLD LOOKS INTERESTING, DO YOU KNOW IF THERE IS ANYONE FOLLOWING THIS COMPANY, HOW DID YOU COME ACROSS THIS ONE.

    THANKS GREG

    Comment by GREG — February 18, 2011 @ 3:33 pm

  11. Hello Greg, not sure if Andrew M is a regular BNR reader – but Threegold came to my attention last Monday in a vantage Wire notice with this release: vantagewire.com/blasts/20110214thg/

    Comment by Andrew — February 19, 2011 @ 4:29 am

  12. Thanks Andrew

    Comment by GREG H — February 19, 2011 @ 8:07 am

  13. Hi Andrea, I’m still waiting to hear back from Kamal. Will try to reach him again Monday and provide an update.

    Comment by BMR — February 19, 2011 @ 8:10 am

  14. Hi John, sorry for not getting back to u sooner. I’m traveling this weekend. Anyway, no worries about VGN…..we all know the fundamental value of it given its cash, oil revenue, and Gold properties. So there’s no need to be concerned here. And I personally take advantage of any additional weakness. That’s how money is made in the markets. VGN has weakened because Tony has not delivered news since the end of November after giving some bullish signals. Hang in there. It’ll be fine.

    Comment by Jon - BMR — February 19, 2011 @ 8:13 am

  15. Sorry, John……I was unable to do any postings yesterday after the 7:15 am update as I was traveling. Read the Week In Review on VGN which should be posted by tomorrow night. No worries here——-personally, when I see weakness in VGN like this, I get excited because this is such a great entry point given the fundamental value. The chart has not broken down. You still have rising long-term moving averages. Everything’s fine. Just needs some news and some activity.

    Comment by Jon - BMR — February 19, 2011 @ 8:16 am

  16. Great to hear from you Jon. I am now more encouraged and comforted with VGN, much appreciated. I will be buying more next week. Do you guys follow Encanto potash, EPO.v? It is about to release its maiden resource estimate on 1 of it’s 5 Potash properties in Saskatchewan within the next week or 2, right before they go to the PDAC show in toronto. It has been delayed a bit because as the IR guy told me the ” news and estimatye is bigger than even they imagined” it could possible explode to over $ 1.00 soon from the .50-.60 cent range. Be safe in your travels, and I look forward to your Weekend update.
    Best regards,
    john.

    Comment by john — February 19, 2011 @ 9:06 am

  17. I really like your comments and picks. I am intersted in the Golden Triangle in Bc. Have you done any work on companies like V.BCG etc.
    Thanks.

    Comment by gerry bouman — February 19, 2011 @ 10:09 am

  18. Love your comments. Have you done any owrk onthe Golden Triangle in BC. Companies like BCG,CUU etc are looking good.
    Any comments? Thanks, Gerry Bouman

    Comment by gerry bouman — February 19, 2011 @ 3:07 pm

  19. John or Jon

    found this comment on Everton and Goldquest on another board, what are your comments on this

    thanks Greg

    BTW lets see how long it takes bullmarketrun.com to figure out that “Deep & Deeper” exploration program of Everton makes EVR a much more interesting way to participate in the D.R. than GoldQuest which is very overvalued.

    Dreams that it will be turned into another GlobeStar are very premature. May happen but will take at least seven years to bring that about.

    Comment by GREG H — February 19, 2011 @ 8:32 pm

  20. Hi Greg, obviously this person likes Everton very much, and so do I. However, I am not sure how familiar this individual is with Escandalosa which is a near-surface, flat-lying deposit that will be quite easy to extract. Proving up a million ounces at Escandalosa (which would provide for production of 100,000 ounces a year) is a very real possibility as this property (up until the current drill program) has only been drilled along a section 350 metres long with a strike length of 2 kilometres. Open north-south and at depth. Fisher and Espaillat have proven track records in the DR. Production synergies possible as well between Las Animas and Cerro de Maimon. GQC also has highly attractive zinc-lead-silver project in Spain that will soon have a 43-101 resource. I do like Everton but personally I think GQC is the better opportunity, especially immediately and over the short to medium term.

    Comment by Jon - BMR — February 20, 2011 @ 4:58 am

  21. Hi Gerry, haven’t explored that situation in great detail. In general, I’m cautious about projects in British Columbia for political reasons (I’ve lived here almost all my life).

    Comment by Jon - BMR — February 20, 2011 @ 5:00 am

  22. Thanks Jon

    yes you are right that person doesn’t just like Everton he loves everton and for some reason wants to try and prove to anyone who will listen why GQC is overvalued in comparison to everton.

    Thanks for the feedback

    Greg

    Comment by GREG H — February 20, 2011 @ 9:00 am

  23. Hello BMR

    I was curious about the comment that Greg H brought forward from another board specifically this part “Dreams that it will be turned into another GlobeStar are very premature. May happen but will take at least seven years to bring that about.” Not being very educated on these matters I was curious what you thought would be a realistic time line to bring this into production. I understand that there are many factors involved and that it may never be brought into production, but what would your thoughts be on this. And I promise I won’t hold you to them.

    Are there any resources you would recommend to help further my education on these matters.

    Thanks for all you do Jon, John, and Terry.

    Comment by Mclatch — February 20, 2011 @ 10:33 am

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