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January 19, 2011

BMR Morning Market Musings…

Gold is firmer this morning but has pulled back from its earlier $1,380 high for the day…as of 9:20 am Pacific, the yellow metal is ahead $3 an ounce to $1,371…Silver, which John featured in a chart yesterday, is 2 cents higher at $28.90 but also down from earlier this morning…Copper hit an all-time record high of $4.44 per pound this morning while Platinum hit a 30-month high…Asian buying  and a weaker U.S. Dollar are factors helping Gold today…Tokyo now has its first Gold-selling vending machine, a concept that is attracting more and more interest around the world…construction of new homes in the U.S. fell 4.3% in December as builders endured their second worst year on modern record after 2009…U.K. inflation data came out higher than expected this morning…China reports on its consumer price inflation tomorrow and markets will be paying close attention to those numbers…the greenback has hit a two-month low with the U.S. Dollar Index currently down half a point at 78.50…the CDNX is following up on yesterday’s strong move with more gains so far today…as of 9:20 am Pacific, the CDNX is up 3 points at 2296 after climbing as high as 2310…there is obviously some resistance at and near the recent high of 2312 but we suspect it’s only a matter of time before that’s taken out…Gold Bullion Development (GBB, TSX-V) is off three pennies at 73 cents but on low volume…Abcourt Mines (ABI, TSX-V), which came out with some very good assay results yesterday from its Elder-Tagami Gold Project near Rouyn-Noranda, is down half a penny at 21 cents…Abcourt has some technical resistance between 22 and 24 cents…once that is cleared, ABI could accelerate rapidly…the fundamentals underpinning Abcourt are impressive…the company continues to build resources at Elder-Tagami which potentially could go into production as early as next year…in addition, Abcourt has one of the best undeveloped Silver assets in Canada just north of Val d’Or…the Abcourt-Barvue Silver-Zinc Property has all-category reserves and resources totaling 19.6 million ounces of Silver and nearly 300,000 tonnes of Zinc…drilling is ongoing at this former producer and more assay results should be coming out soon…investors who have not done their DD yet on Abcourt should definitely check it out…the potential of ABI is phenomenal (current market cap is only $24) in a rising precious and base metals market environment if the company plays its cards right…Sidon International (SD, TSX-V) President and CEO Kamal Alawas has agreed to a first-ever interview on BMR…we’re not certain of the exact date we’ll be able to do this but we’re hoping it will be within the next week to 10 days…Sidon is off half a penny to 17.5 cents…it has strong technical support at the rising 50-day moving average (SMA) of 16.5 cents…Cadillac Mining (CQX, TSX-V) is off two pennies at 34 cents where it bounced from strongly in November…this is unquestionably one of our favorites with a market cap of only $8.5 million at 34 cents…the company has pulled off a major coup with an important and strategic acquisition in southern Utah, near the Nevada border (Gold/Silver), and we expect its Cadillac Trend properties (especially adjoining Wasamac and Galloway) are going to generate considerable interest and excitement in the coming weeks…smart management and a highly favorable share structure are also in Cadillac’s favor…Galahad Metals (GAX, TSX-V) traded nine million shares on the CDNX yesterday after reporting drill results from its Regcourt Gold Property 30 kilometres east of Val d’Or…intersections included 79.37 g/t Au over 3.6 metres…the stock hit a high of 22 cents yesterday before closing at 17.5 cents…it has pulled back a little more this morning and is currently at 15 cents…this is certainly worth keeping on the radar screen..technically, the stock may have to consolidate for a brief period after a significant recent run-up…Greencastle Resources (VGN, TSX-V) is up a penny at 32 cents…Greencastle has been quiet lately but the stock needed to catch its breath after a powerful move from 14 cents to 44.5 cents between late October and early December…based on recent news releases, we believe the odds are good that Greencastle is searching intensely for an advanced Gold project to add to its portfolio…the company has approximately $6 million in cash with oil royalties in excess of $100,000 each month…Greencastle is focused on becoming much more active in the Gold exploration space and currently holds two promising properties in Nevada plus its recently acquired land package near Richfield’s (RVC, TSX-V) Blackwater Project…

22 Comments

  1. FWIW I like PPI. Do your DD, and all the best with your investing. News pending!

    Comment by Terry — January 19, 2011 @ 9:58 am

  2. “Abcourt has some technical resistance between 22 and 24 cents…once that is cleared, ABI could accelerate rapidly”. Unfortunately Abcourt is financed, like so many juniors that wouldn’t otherwise have financing, by Joe Dwek Management Consultants and the share price may meet resistance for sometime – same with Cadillac?

    Comment by Andrew Turner — January 19, 2011 @ 10:37 am

  3. Jon, are you still planning an interview with GBB president Frank Basa? Has it been postponed until additional assay results are released? With reference to reports that GENIVAR has returned assay results for further analysis, this news comes from a telephone conversation with Roger Thomas. Why the otherwise “hush, hush” about it I honestly don’t know.

    Comment by Roger — January 19, 2011 @ 1:27 pm

  4. Hi Jon, could you ask Kamal if the purchase by Encore Renaissance Resources EZ of a 50% option to a 50.5 sq km plot near Handeni is in any way connected to Sidon’s plot in the area of the exact same size. As there are some board members who are in both companies I feel it is important that this issue should be clarified. They are probably two different plots but it is important that this issue should be aired. Is it possible to get a map of Handeni and show the positions of all the new players in relation to Canaco’s plot?

    Comment by patrick — January 19, 2011 @ 1:30 pm

  5. Yes, we will be interviewing Frank…my preference is a face-to-face interview and preferably after news comes out so there is something concrete to speak about….I’m sure once GENIVAR is satisfied with all the data, results will come out…don’t forget, there were many Phase 2 holes that hit visible gold…high grades that come back often go through a re-checking (metallics) analysis which can take some time…our faith in Granada delivering more solid results remains as strong as ever…

    Comment by Jon - BMR — January 19, 2011 @ 2:38 pm

  6. Hi Andrew, I’m glad you brought this up. First off, Joe Dwek Management (MineralFields) holds no position in Cadillac Mining. They used to but not anymore – 0 shares (they do hold a stake in Cadillac Ventures which is a company completely unrelated to Cadillac Mining). In terms of MineralFields’ investment in Abcourt, the fundamentals with Abcourt are so strong that MineralFields’ position in the company will be happily and eagerly taken out in a flash by the right people at the right time if MineralFields wishes to unload. As simple as that. Don’t think we haven’t looked into this.

    Comment by Jon - BMR — January 19, 2011 @ 2:45 pm

  7. Thanks, Patrick. Will do.

    Comment by Jon - BMR — January 19, 2011 @ 2:46 pm

  8. Hi Jon, why is it that high-grades would sometimes have to go through a re-check? Thanks a lot.

    Comment by Emma — January 19, 2011 @ 3:12 pm

  9. Jon, You must be very hesitant to answer questions about GBB these days, I totally undrestand.

    Comment by Forb — January 19, 2011 @ 3:14 pm

  10. Hesitant? Not at all……but there just isn’t a great deal to say until more news comes forth. Also, the stock is trading completely within its normal patterns and ranges.

    Comment by Jon - BMR — January 19, 2011 @ 3:38 pm

  11. Standard practice in the industry, and important for 43-101 purposes. Sometimes you’ll also have situations when complete re-assaying on a hole is asked for if values don’t jive with visuals (too low or too high)….sometimes labs do make mistakes of course….

    Comment by Jon - BMR — January 19, 2011 @ 3:42 pm

  12. Jon is right. Just look at GNH, they had to send some of their samples back for re-assaying (Full Pulp Metallic it is called) and it could be that the small sample came in too high or too low…it is called the nugget effect. Another example is GAX who sent theirs back because the samples were too high and low and behold the Full Pulp Metallic assays came back even higher.

    Comment by Dan — January 19, 2011 @ 4:31 pm

  13. And look what happened to GNH, it’s SP dropped by more than %60.

    Comment by Forb — January 19, 2011 @ 4:51 pm

  14. GNH Assays are not back yet……….give it time there Forb…relax.

    Comment by Dan — January 19, 2011 @ 5:41 pm

  15. Dude, I would never invest in GNH, in my opinion what happened there was mostly due to inappropriate risk management,(poor management),I just don’t want the same thing happen to GBB.

    Comment by Forb — January 19, 2011 @ 6:08 pm

  16. Well, there is nothing we can do now only wait for results…we are talking about the venture exchange and there is high risk high reward…I was just trying to make a point about why assays go back for further testing, not trying to influence you to buy any other stock. IMO I just think GBB is on the lower risk higher reward side given what we know to date. What you invest in is entirely up to you. Let’s not turn this into a SH type board as I don’t think this is what it is meant to be. GLTU.

    Comment by Dan — January 19, 2011 @ 6:30 pm

  17. I agree.

    Comment by Forb — January 19, 2011 @ 6:39 pm

  18. What’s interesting to me regarding drill results, is Richfield Ventures.
    As compared to GBB …

    Every three weeks we get a news release on drill results.
    These are for results for holes drilled for a period approx. 1 month prior.

    How does Richfield achive a steady stream of results with no problems or delays???

    Comment by Frank — January 19, 2011 @ 8:19 pm

  19. Because RVC is one of the few gold companies in BC operating drills right now through the winter months as well as the fact that BC has half if not a third of companies drilling gold properties compared to the Quebec region which I can name 25 companies with drill campaigns ongoing off the top of my head at the moment. This isn’t a bullboard on Stockhouse, Bullmarketrun provides a thorough enough analysis on a daily to weekly basis that they shouldn’t be expected to also run a 24/7 Investor Help-line when you have a query about one of their stocks. They’re providing you with the stocks to pick, their important support levels as well as weekly graphs and updates on fundamentals and people still need their hands held in investing..

    Most of the answers to questions here can be found simply by looking through weekly archives or a 5 minute look over the company’s website, and drill results are out of BMR’s control so demamding answers as to delays is nonsensical.

    Comment by Taylor — January 20, 2011 @ 4:38 am

  20. Hello Jon, Thank you very much for clarification re Mineralfields and Abcourt and non involvement with Cadillac Mining – much appreciated.

    Comment by Andrew — January 20, 2011 @ 5:30 am

  21. Hi Jon,

    Appreciate if you comments on MTU.

    Comment by Eric Benson — January 20, 2011 @ 8:28 am

  22. Hi Eric, we’ve mentioned Manitou before and I like its geological prospects. Of course they’re in what’s called the Gold Rock Mining Camp in northwest Ontario, east of Kenora and near Dryden. I first became aware of MTU due to Seafield whose Elora Property (excellent prospect) is in very close proximity to some of MTU’s land. MTU started trading on the Venture last spring. They’ve smartly tied up much of this camp by acquiring property from a major. For long-term investors, MTU is certainly worth considering as its properties definitely have discovery potential. The problem with the stock since it got listed is low liquidity. They don’t seem to be doing much on the marketing/IR side of things which companies need to do.

    Comment by Jon - BMR — January 20, 2011 @ 8:50 am

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