GoldQuest Mining (GQC, TSX-V)
GoldQuest closed Friday at 39.5 cents for a weekly loss of 3.5 cents…despite the recent weakness, however, the stock is still in an area of strong support as was very evident Wednesday when GQC quickly rebounded after falling to a low of 36 cents…what’s going to drive this stock higher over the coming weeks and months, in our view, is the company’s pipeline of quality Gold projects in the Dominican Republic where a mining boom is clearly in full swing…GoldQuest has been conducting a Phase 2 drill program at its promising La Escandalosa Property for the past two-and-a-half months and initial results are expected soon…based on the success of the last drill program, GoldQuest is getting closer to the centre of the mineralizing system at Escandalosa and we’re expecting results that could ultimately elevate this project to the 1 million+ ounce category…400,000 inferred ounces have already been outlined (43-101) based on just 25 drill holes…approximately 40 holes are being drilled in the current program…Escandalosa is a flat-lying, near-surface deposit where the Gold should be easy to extract…as Chairman Bill Fisher told us in a recent interview, “the economics could be really quite compelling”…proving up a 1 million ounce deposit at Escandalosa could give GoldQuest production of at least 100,000 ounces a year…GQC’s other promising priority projects in the DR are Las Animas and Jengibre which are next in line for drilling after Escandalosa…GoldQuest released a 43-101 resource estimate last week on its Toral zinc-lead-silver deposit in Spain…it showed slightly lower grades but much higher overall tonnage than the previous historical non-compliant estimate…as a result, total resources came out 15% higher…resources in the indicated category are 4.04 million tonnes grading 11.8% lead and zinc (5.3% lead, 6.5% zinc) as well as 41 g/t Ag and 0.11% Cu… inferred resources are 4.67 million tonnes grading 9.8% lead and zinc (4.44% lead, 5.4% zinc), 32 g/t Ag and 0.14 Cu…Toral has significant exploration and development upside as a majority of the historical drilling (40,000+ metres) was conducted over one relatively small part of the property…the zone of sulphide mineralization is open along strike to the northwest toward a known lead deposit as well as along strike to the southeast and downdip…the project is also an ideal candidate for a fast-track to production…the deposit is close to a power line, highway and rail line…a large smelter is located just 300 kilometers away by rail…core from Escandalosa will be on display at the PDAC Core Shack in Toronto Tuesday and Wednesday…
Greencastle Resources (VGN, TSX-V)
Greencastle was unchanged for the week at 23.5 cents on relatively light volume…the stock continues to trade between its rising 200-day moving average (SMA) at 20 cents and its rising 100-day SMA at 26 cents…this is likely to continue until news arrives…rising oil prices will help Greencastle’s monthly cash flow as it receives royalties from heavy crude production at Primate in Saskatchewan…Greencastle tripled in value over a six-week period from late October to early December…since the beginning of January, though, the stock has struggled due mostly to impatient investors frustrated with the lack of news…there hasn’t been news from Greencastle since November 30…however, with approximately $6 million in working capital, three Gold properties and monthly cash flow from an oil royalty, it doesn’t take a rocket scientist to figure out that VGN is a bargain in the low 20′s…volume has been light on the move down which confirms there’s nothing to be concerned about here…Greencastle will shine again soon enough…the long-term chart remains very bullish with rising 200 and 300-day SMA’s that are in no danger of reversing…it’s also interesting to note that President and CEO Tony Roodenburg, a large shareholder in VGN, has refrained from selling any of his holdings in recent months despite the fact the stock price more than tripled in value on high volume…this is different from past runs in the stock and adds further credence to our view that we haven’t seen the highs in this cycle yet from Greencastle – it’s poised for what we believe could be a massive breakout sometime during the first half of this year…Pinetree Capital has also accumulated more shares in Greencastle, so there’s every reason to be very optimistic regarding this company’s prospects in the days, weeks and months to come…Greencastle is up 68% since we added it back in to the BMR model portfolio nearly five months ago…
Adventure Gold (AGE, TSX-V)
Adventure Gold continues to look strong and was up another nickel last week to 74 cents…the company released results Thursday from the first two holes at its Pascalis Colombiere Gold Property near Val d’Or…both holes were drilled approximately 150 metres west of the former L.C. Beliveau Mine and intersected Gold-bearing structures at various depths which is encouraging…the system is showing strong similarities to the one observed at L.C. Beliveau…hole #13 returned 5.4 g/t Au over 20 metres which included 2.9 metres grading 34.6 g/t Au…hole #14 intersected 7 g/t Au over 4.8 metres…results from seven more holes are pending…six of them were drilled west of the former mine while the other, which may prove to be very important, was drilled at depth to test the geometry of the Gold system below the underground workings…this former mine was a low cost producer and holds excellent potential for extensions laterally and at depth…it’s still early but Adventure Gold appears to be on track with its exploration goals at this property based on these early results…we expect AGE will begin drilling its Granada Extension Property in the near future…last month’s results from Gold Bullion and the latest drill map on the GBB web site reveal exciting new potential over the far western portion of GBB’s Preliminary Block Model which supports Adventure Gold’s geological interpretation that it holds part of the western extension of the LONG Bars Zone…we first mentioned Adventure Gold to our readers in an article September 29, just a couple of days following the company’s announcement that it had acquired land at Granada, when the stock was trading in the low 20′s…we officially added AGE to the BMR model portfolio at 34 cents October 28, so the gain since then is 118%…Adventure Gold has been around only since late 2007 and we are impressed by the company’s solid portfolio of properties (19 in six strategic areas in Quebec and Ontario)…also of immediate interest is AGE’s partnership with Lake Shore Gold (LSG, TSX) on the Meunier 144 Property where deep drilling is still testing the down plunge extension of Gold zones located at the Timmins and Thunder Creek deposits…the current initial deep drill hole onto the Meunier JV property is continuing…when completed it’s estimated the hole will provide a deep cut on the projected target area at about a vertical depth of 2,600 metres…this will enable shallower wedge cuts to be considered if significant mineralization is found to be present in this area…the initial deep hole was collared on LSG’s Timmins mine property last August…if this deep hole succeeds, AGE could absolutely explode…
Sidon International (SD, TSX-V)
Sidon traded in a tight range again last week, between 12 and 13 cents, and closed down a penny for the week at 12 cents on relatively light volume…the stock has gradually pulled back after a big day February 16 when it rose to 16.5 cents on over 7 million CDNX shares…investors are anxiously waiting for drill results from Morogoro East where drilling started in early December…that’s not an unusual delay so we’re not concerned at this point…the stock has shown clear trading patterns since the spring of last year and has been quite volatile…however, the primary trend remains up and Sidon has consistently found support right around its 200-day SMA where it’s trading now…the company reported zones of disseminated sulphides of pyrite and pyrrhotite as well as some chalcopyrite and arsenopyrite over intervals of 30 to 70 metres throughout the first six holes it drilled at MEG…we caution that visuals are not always reliable but there’s reason to be optimistic that Sidon could be on to something…the company is also trying to develop a placer operation at Morogoro and has also acquired ground near Canaco’s (CAN, TSX-V) discovery…this company has come a long way over the past year but we’re hoping to see more progress in the very near future…the chart continues to hold up but the big turnaround may not come until the 50-day moving average (SMA) swings positive again as it did at the beginning of December…
Seafield Resources (SFF, TSX-V)
Seafield was off 2 pennies for the week at 41.5 cents but that’s still a 35% increase over the low of 31 cents February 14…panic selling occurred that day following an unfavorable article on Seafield’s Colombian Country Manager Ian Park…that was an unfortunate attack and some nervous investors were unnecessarily hurt…those who have done their homework and know the underlying value of Seafield jumped in at the height of the fear February 14-15 and picked up some cheap stock…for the moment Seafield has some obvious technical resistance in the upper 40′s near the declining 50-day moving average (SMA) but we believe that will eventually be overcome as more drill results start to flow out of Quinchia…what excites us most about Seafield is its Dos Quebradas Property as well as the adjoining Santa Sofia and La Loma targets…drilling continues at Dos Quebradas while a second rig has been brought in to commence drilling at Santa Sofia…the geological case for Seafield’s Quinchia land package is compelling and we’re looking forward to initial results from Dos Quebradas…patient investors have an opportunity to do extremely well with this play given the geological merits of Quinchia and the real potential for 5 million+ ounces there…the company is sitting on at least $15 million in cash and has a very modest market cap of just over $60 million…
