Gold is weak again today and has traded between $1,339 and $1,366…as of 8:00 am Pacific, the yellow metal is down $20 an ounce to $1,340…Silver is off 31 cents to $25.22 while the U.S. Dollar Index has moved higher to 78.95…U.S. core producer prices unexpectedly fell in October to post their largest decline in more than 4 years…the PPI rose 0.4% in October, the same as September, but core PP (excluding volatile food/energy costs) fell 0.6% after rising 0.1% the previous month…this will certainly help keep the Fed on track in its “quantitative easing” efforts designed to rekindle inflation in the United States…China’s Shanghai Index was off 4% overnight after a 5% correction last Friday…these kinds of sell-offs can be a bit unsettling but are necessary in order to re-fuel the bull market…the same applies with the CDNX which is down sharply this morning, falling 54 points to 1928…as we’ve stated before, we see very strong technical support for the CDNX at 1900, the bottom end of the previous resistance band we identified between 1900 and 2000…if a 10% pullback were to occur from the November 9 high of 2070, the CDNX would actually drop to 1863 – slightly above the current 50-day SMA…our “big picture” outlook has not changed and what this pullback represents in our view is a “last chance” entry point under 2000 on the CDNX prior to the next major leg up in this bull market which should begin in earnest within a month or so…smart investors therefore will not be driven by fear but instead will embrace this weakness which amounts to an early Christmas gift…in the meantime some select stocks should perform very well and we believe we’re tracking a few of those…one of them is Gold Bullion Development (GBB, TSX-V) which came out with outstanding Phase 1 metallurgical results from Granada yesterday…GBB also says it expects to release additional assay results from the LONG Bars Zone sometime this week…now is when we could begin to see some of the holes that looked so attractive visually over the summer based on GENIVAR’s core descriptions in GBB news releases in July, August and September…GBB is off 2 pennies to 63 cents but technically the stock is looking much stronger and showing signs of a potential major move…we’re very bullish also on Currie Rose Resources (CUI, TSX-V) which is another company to keep a close eye on during this market weakness…CUI is off a penny to 21.5 cents…the company continues to drill its Sisu River Property at its Mabale Hills Project in northwest Tanzania, and we believe there’s a significant chance of a discovery there given the geological dynamics…CUI could become our next Gold Bullion…GoldQuest Mining (GQC, TSX-V) has released a 43-101 inferred resource estimate this morning for the La Escandalosa zone at its Las Tres Palmas Project in the Dominican Republic…the La Escandalosa zone remains open to both the north and the south with a current inferred resource of 4.9 million tonnes grading 2.60 g/t Au at a cut-off of 0.30 g/t Au…this implies 406,000 ounces, which was certainly in line with our expectations…the deposit is modelled as a flat-lying body and clearly offers major upside potential as this 43-101 has been done early in the game and is based on only 25 holes drilled between 2006 and 2010…everything is in place for additional drilling at Las Tres Palmas which is expected to commence in the near future (at the latest, our guess is January)…GoldQuest hit a high of 30 cents this morning but has since backed off on overall market weakness to 27.5 cents, down a penny…Sidon International (SD, TSX-V) is off half a penny at 9.5 cents after reporting some very encouraging sampling results yesterday from its Morogoro East Gold Property in east-central Tanzania…Sidon appears very much on track at Morogoro and we like what we see in the early stages of exploration there…we’ll be reporting more on Sidon and Morogoro in the near future…Richfield Ventures (RVC, TSX-V) has bounced off support at $3.00 and is currently up 6 cents to $3.13 while Greencastle Resources (VGN, TSX-V), which still needs to unwind an overbought condition, is down 2.5 cents to 23 cents…
November 16, 2010
3 Comments
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Are you still having a interview with Frank this week?
Thanks
Comment by Marc — November 16, 2010 @ 4:59 pm
A reader asked me to comment on when I thought GBB would be a five bagger. Here is my answer:
First, you want to read my book How to Invest in Gold & Silver. I have a long chapter on investing in Juniors. The book will be released next week on Amazon and you can listen to an interview I recently did with Jim Puplava. On my web page (Donald David Durret) is a link to the interview. You will like it, I have received some good reviews on the interview. You will love the book. I’ll send you an email when it is available on Amazon.
Okay, to your quesions. Don’t load up on one stock (maximum of 10% of your portfolio). Get positions in several and sit tight (I own 63 and have 10 on my buy list). Gold is going to take off. My target is $3000. When we hit that number GBB will reach $5 to $10, maybe more. GBB is not unusual. There are a lot of stocks that are incredibly undervalued, such as the three I mentioned (Souther Arc, Spanish Mountain, Bear Creek Mining). But it won’t be long before they come to life. However, which ones will fly??? It’s hard to know, that’s why you have to own several.
Note: I own 10,000 shares of GBB.V at .31 cents, 10,000 of SPA.V at .62 cents, and 10,000 of SA.V at .42 cents. I expect 5 baggers from all of them by the end of 2013.
Look at ATAC. It went from .50 cents to $8 this year. GBB could be compared to ATAC. They both have large open pit deposits. Golden Minerals is another that went from $5 to $25 this year that is a lot like GBB. The key is finding stocks with huge upside and jump on board and WAIT. Canaco is another.
I think the stocks that will really do well in the near term (next 12-24 months) are the young producers or near term producers. Then when gold goes to $2500, the companies like GBB with reserves in the ground will take off. So, my conservative forecast for GBB to be a 5 bagger would be approximately the end of 2012 (but more likely 2013). I expect gold to hit $2000 in 2012 and $2500 in 2013. But you never know. Look what happened to ATAC. A few good holes and it could take off.
I could be wrong and gold could be peak at $1800 and then head lower. But I’ll take that risk.
Here is my current buy list (I’m waiting for severe correction in the next 90 days, and I am hoping for $1200 gold). Most of them are producers and might not make 500%, but I want to add quality to my portfolio since it is weighted with a lot of home run shots:
Jaguar Mining JAG 7 Growth 700 MC 100 shares, headed for $3 bil
Bear Creek Mining BCEKF 9 .87oz 500mil oz Peru 70 shares 600 cap
Revett Min RVMIF .67 .11 300 Mil oz. 88 cap 131 shares
Chesapeake G Cp. CHPGF 12 38 shares 550 cap. 17 Mil oz gold! 500mil oz silver!
Exeter XRA 6 11oz 500 cap 76 shares 44 Mil oz gold!
Greystar GYSLF 5 27oz 450 cap 84 shares 9Mil oz gold in Columbia
Kaminak Gold KMKGF 3.25 188 MC 150 MC (3=5 mil oz!)
Paramount Gold PZG 1.80 234 MC 200 MC .69oz 200mil oz silver
Golden Minerals AUMN 5/25 350 MC (wait for correction)
Crocodile Gld Corp CROCF 1.50 300 MC 250 MC 5 mil oz. $65/oz
Note: If gold goes to $3000, companies with the goods are going to be rewarded. For instance, Bear Creek might seem expensive with a $600 cap. But their silver is valued at .87 cents an ounce. If silver goes to $100, there is no reason that silver in the ground can’t go to $10. that is a 10 bagger.
Newager
Comment by Newager — November 16, 2010 @ 6:57 pm
Just wanted to mention about GBB, it also has a big silver mine, currently under the radar I m guessing because all the focus in on Granada for now. But should Gold go for a run, so will silver. Kind of icing on the cake I guess!
Alec
Comment by alec — November 17, 2010 @ 12:01 am