Three weeks ago we added a company called Sidon International Resources (SD, TSX-V) to our portfolio. It has been under extremely heavy accumulation up to 7 cents over the past 23 trading days with a total of 53,183,861 shares changing hands – two-thirds of all the outstanding shares.
Sidon closed yesterday at 5 cents, the price we initiated coverage at. In a moment we’ll explain why Sidon looks so much like two other stocks BMR readers have made huge returns on – Gold Bullion Development (GBB, TSX-V) and Seafield Resources (SFF, TSX-V) which were introduced here at 7 and 6 cents respectively.
The news we were waiting for on Sidon came Wednesday, signaling the company is going ahead with its option to enter into a formal agreement with Kokanee Placer Ltd. to purchase an 80% interest in the high grade Morogoro East Gold Property in Tanzania – approximately 100 kilometres south of Canaco’s (CAN, TSX-V) Handeni Gold Project. Sidon announced it’s arranging a private placement of up to $750,000 at 5 cents. Just like with Gold Bullion at 7 cents and Seafield at 4.5 cents, smart money is positioning itself with Sidon and grabbing as much paper as possible because of the massive potential here. Tanzania is hot and still has enormous untapped potential even after a significant number of major discoveries over the past decade.
Laurence Stephenson, a long-time and successful British Columbia geologist, runs privately-held Kokanee Placer Ltd. which presented this property acquisiton deal to Sidon. Stephenson knows Tanzania like the back of his hand and he’s out there again now. He is hugely bullish on this part of the world for gold exploration and very excited about what he has found for Sidon.
“The grades at Morogoro East are higher than what I first saw at Handeni,” Stephenson explained to us a few weeks back. “The big companies haven’t had the expertise or the time to look around. It’s like the wild frontier of the 1860’s. This area hasn’t had any exploration. The gold and formations are really interesting.”
The Morogoro East Property is a flat-lying sedimentary-type horizon that Stephenson believes could be drill ready very quickly. The grades local miners have been scoring are astronomical – 40 to 60 grams of gold per 25-kilogram bag of recovered rock. Little pits can sometimes develop into big gold mines, and that’s what Sidon will be hoping for here. There is gold at Morogoro and perhaps LOTS of it including high grade. Showings are all over the place. BMR has the pictures to prove it and we’ll be including those in another piece on Sidon over the weekend.
A couple of readers sent us emails recently complaining that Sidon has a lousy web site. We agree, but we don’t care as it doesn’t matter. The type of grass roots, home run opportunity companies we present here at BMR often have poor web sites and a few other blemishes, at least initially, because that type of corporate marketing and infrastructure typically follows progress that’s first made on the ground. When we introduced Gold Bullion in December, its web site was atrocious. Same with Seafield (their web site is still atrocious).
So what does the chart tell us about this stock? Sidon’s technicals are EXTREMELY bullish and suggest it’s as low as it’s going to get and likely going higher very quickly. John, BMR’s technical analyst, gives his views below:
Recent massive accumulation in Sidon can mean only one thing - a big move is in the works.
John: The trading of Sidon International Resources shares has been locked in a horizontal channel for the last 9 months with a range of 3 cents to 7 cents. This is shown on the weekly chart as two horizontal blue lines.
During this time the shares were being accumulated as shown by the Accumulation/Distribution (A/C) line indicator below the chart. The level of the line does not matter – it is the slope. In this case the line is sloping up and is above its upsloping SMA (20). Thus, even though the trading range has been restricted this A/C line indicates bullish accumulation.
The RSI indicator shows a level between 50% and 70% which is bullish without being overbought.
The ADX indicator shows the ADX line (black) below 20 but rising, indicating a weak trend. The +DI line (green) is above the – DI line (red), confirming the trend is up.
Over the past 5 weeks more than 70 million shares have been traded and with the volume relatively low this week, we can expect the price to increase from the present level of 5 cents when volume picks up now that the overhang of shares seems to have been absorbed.
When the price breaks above 7 cents the target will be 11 cents. At the 11 cent and 12 cent levels there will be a hand of resistance (horizontal green lines).
