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March 5, 2010

The Growing Appetite For Gold Bullion Development

There are a lot of tools we use to examine a stock’s potential and where it’s likely headed.  In the case of Gold Bullion Development (GBB, TSX-V), we have been extremely successful with an intense fundamental analysis which has made it clear to us that this company is quite possibly sitting on a potentially huge bulk tonnage, open-pit deposit at the Granada Gold Property near Rouyn-Noranda, Quebec.

Technical analysis is crucial also.  The chart for Gold Bullion turned very bullish last December and the combination of super-strong fundamentals and a very bullish-looking chart led us to initiate coverage on GBB at 7 cents.

We also look at who’s buying and who’s selling, and this morning we have some numbers that unequivocally suggest to us that Gold Bullion Development is likely headed a lot higher.

Jordan Capital has an incredible appetite for this stock.  Since December 1, 2009, through yesterday, Jordan has bought 5,337,500 GBB shares plus another 150,000 or so in early trading today.  During that time they have sold only 588,000 shares for a net position of 4,749,500.  This week alone, they have picked up 1,329,000 shares (plus today’s 150,000) and have sold only 65,000.

Jordan is staying for the ride.  They did the financing on Gold Bullion at 7 cents in December, so one can assume they are sort of “in the know” on this thing.  They picked up large chunks of free trading stock as well in December at prices ranging from 7 to 9 cents, and they’ve essentially held on to every share.  That’s a huge clue this story has a long ways to go yet.

To the best our knowledge, and we’ve done some digging on this, Gold Bullion insiders have not sold a single share this week despite a huge price increase and eye-popping volume of nearly 20 million.   What that does that tell you?  They’re as convinced as we are that they’re sitting on a major discovery.

The three-year chart below for Gold Bullion shows how this stock has a history of moving very quickly.  Over a 14-day period during November and December, 2006, for example, GBB jumped from 14 cents to 39 cents.

The massive volume we’re seeing in this stock right now, however, unlike 2006,  is the type of thing that often occurs when a game-changing event takes place.  The news Gold Bullion put out Monday was a company changer.  Plain and simple.  It’s a whole new game now and there’s nothing but blue sky.

This is one of the most exciting situations we’ve ever come across in the junior resource market, especially since we identified it as such an early stage.  We suggest investors “follow the money” and take a cue from Jordan Capital.

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