There are times when a chart just “jumps out at you” and Rainbow Resources (RBW, TSX-V) is an excellent example. Below is a 5-month weekly RBW chart from John that shows a dramatic shift in volume and buying pressure, a very defined upsloping channel and bullish RSI momentum. This is a textbook example of a stock on the move.
Recently, Jon conducted a site visit to one of Rainbow’s properties in southeast British Columbia and has met with company officials as part of a due diligence exercise. Rainbow has assembled an impressive land package in our view, including a Silver-lead property we really like, and has aggressive plans for 2012 as evidenced by Wednesday’s announcement of a private placement financing. One of the keys to this deal is the people involved – some very respected Calgary businessmen and geologists. There’s money, entrepreneurship, expertise and a lot of enthusiasm in Alberta, and some of this will definitely be flowing into Rainbow.
This is a highly speculative situation of course, and not for the faint of heart like with any penny stock, but we do expect the Rainbow story to gain traction and develop in the weeks and months ahead. At yesterday’s 16.5-cent close, the current market cap is a modest $4 million.
As always, perform your own due diligence. Both Jon and John hold positions in Rainbow Resources (Terry does not)…
Thanks for this Jon and John. “This is a highly speculative situation of course, and not for the faint of heart, but we do expect the Rainbow story to gain traction and develop in the weeks and months ahead. ” I’m assuming that this statement depends on the revival of a bull market in the CDNX and not continued volatility and the bear market?
Comment by Andrew — December 9, 2011 @ 5:36 am
Correct, Andrew…the downside risk on RBW however is quite limited IMHO…this is a fairly new company with a low market cap that has never yet had its first big run…the people involved are highly respected, which is critical to these CDNX situations, and they are determined to make this thing succeed…the land package they acquired from Braveheart was in Braveheart for several years and a lot of time and work went into it…the district covering this land package is very rich geologically and has hosted numerous deposits…this one could be a big winner in my view given the people involved, the capital structure, and the land package…they are moving forward aggressively…I have bought some and I am buying more, and I’m not playing this for pennies or a flip…long and strong on RBW…I’m very bullish on Silver and they have a dandy Silver property (Gold properties as well in that area)…John loves the chart and has bought some as well…
Comment by Jon - BMR — December 9, 2011 @ 5:48 am
is it even remotely plausible that international could have a mine up in 2 years
Comment by Dan — December 9, 2011 @ 7:20 am
Yes, Dan, some near-term small-scale mining is possible with this initially given the near-surface, high-grade showings at International as reported by the company in September…a lot of promising historical work needs to be confirmed and made 43-101 compliant but we like what we see…the property is in a very rich historical mining area, easy access, and the Trail smelter is not far away…under-explored with historical showings grading 15 to 25 ounces of Silver and 40% to 60% lead…strike length reported to be at least 1500 metres…the company has a series of other properties (including Gold) in this land package…the individuals involved in this deal are solid as a rock and very prominent in Calgary…ground floor opportunity at these levels IMHO…I spent $2,000 of my money doing DD on this (traveling) so that should tell you something…
Comment by Jon - BMR — December 9, 2011 @ 7:36 am
Couple more questons, the B.C government doesn’t seem to mine friendly and how about the Indians any claim issues and are they going to do most of the exploration on the international property. Thanks Dan
Comment by Dan — December 9, 2011 @ 8:02 am
First off, I’ve lived in BC my entire life…the current “Liberal” government (free enterprise “coalition”) under Christy Clark has made its support of the mining industry abundantly clear and its objective is to have half a dozen mines or more go into production in the near future…they are also adding staff to various ministries to help speed up regulatory/work permit issues, etc…..Clark is saying all the right things…no jurisdiction is perfect and every jurisdiction these days has risk, but I have little concern about BC as long as the NDP doesn’t get back into power, and given their current leader I doubt that…I would describe BC as being more mining-friendly right now than Quebec, believe it or not…in terms of aboriginal issues, that is not a factor regarding RBW’s claims – checked into that…I suspect they’ll be working on not just the International Property but others as well…
Comment by Jon - BMR — December 9, 2011 @ 8:10 am