Gold is quieter today…as of 8:40 am Pacific, the yellow metal is off $3 an ounce at $1,493 while Silver is essentially unchanged at $43.37…crude oil is up slightly at $107.15 while the U.S. Dollar is off one-third of a point to 75.16…China’s Foreign Ministry said today that the United States must take “responsible” measures to protect investors in its debt after Standard & Poor’s threatened to lower its credit rating on the United States due to a bulging budget deficit…China’s foreign exchange reserves, already the world’s biggest, rose by nearly $200 billion in the first quarter to $3.05 trillion…about two-thirds are estimated to be invested in American dollars…U.S. housing starts and permits for future home construction rose more than expected in March, snapping back from the prior months’ winter depressed levels according to government data released this morning…the CDNX is looking to find its footing after falling 161 points or nearly 7% over six sessions…2200 is major support…as John’s chart yesterday showed, we could be looking at the Index trading in a band between 2200 and 2300 for the immediate future – that’s probably the best case scenario given some of the technical deterioration in the Index since April 11…as of 8:35 am Pacific, the CDNX is off another 14 points at 2225…GoldQuest Mining (GQC, TSX-V) has reported assay results from its La Escandalosa Property this morning…17 holes are in with seven more pending…results confirm the 43-101 resource model with mineralization remaining open to the north toward Hondo Valle, a distance of 1200 metres…best assays included 36.5 metres grading 2.74 g/t Au in hole #62, 16 metres grading 2.45 g/t Au in hole #47, and 9.2 metres grading 3.54 g/t Au in hole #48…the fact that any potential southern extension of La Escandalosa may have been displaced by faulting, as reported this morning, is not a big surprise or a major concern as the ground going north has always been considered more prospective and provides GoldQuest with all the opportunity it needs to achieve its goal of a 1 million+ ounce deposit…another round of drilling at Escandalosa is scheduled for the second half of this year…in the meantime the company has other highly prospective targets in the DR to explore including Las Animas and Jengibre…the stock is currently off 4.5 cents to 25.5 cents…the chart shows excellent support in the low-to-mid-20’s…the 300-day moving average (SMA) is 23 cents…Richfield Ventures (RVC, TSX-V) has also reported drill results this morning – five holes from the northern section of the Blackwater deposit where Silver Quest (SQI, TSX-V) holds a 25% interest…two step-out holes to the west of BW-59 produced impressive numbers…hole #135 cut 82 metres grading 3.29 g/t Au while #138 intersected 163 metres grading 1.01 g/t Au…Richfield, which of course has been moving in step with New Gold Inc. (NGD, TSX) ever since NGD announced its friendly buyout offer April 4, is off 15 cents at $9.05 (NGD is down 16 cents at $9.90) while SQI has gained 3 pennies to 75 cents…Gold Bullion Development (GBB, TSX-V) is unchanged at 49.5 cents…GBB’s rising 20-day SMA at 47.5 cents is providing technical support…Abcourt Mines (ABI, TSX-V) came out with news at 7:30 am Pacific, saying it expects to close its unit offering at 18 cents possibly this week…the offering could raise as much as $5.5 million…ABI is currently off a penny at 15.5 cents…Visible Gold Mines (VGD, TSX-V) is unchanged on light volume at 36.5 cents…with a strong cash position ($8 million), excellent management and a very attractive land package in northwestern Quebec, VGD is definitely one of the companies bargain hunters should be looking at closely in this period of CDNX weakness…there are of course other opportunities as well in this market and we’ll be examining some of them in the days ahead…despite the weakness in the CDNX we’ve seen over the last seven trading sessions, and the fact the Index is now off slightly for the year, the long-term bull market remains fully intact and it’s likely one of the greatest bull markets we’ll ever see…
April 19, 2011
11 Comments
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Taking a look at the map on their website it looks good to me. I really dont why the selling. I guess its just the usual sell into the news crowd. I am gonna get more at these cheap prices 🙂
goldquestcorp.com/i/maps/LE_DrillHoles.jpg
Comment by Herb — April 19, 2011 @ 8:01 am
Herb,the map does an excellent job of helping investors understand where the drilling was located, previous holes and the grade found in all the holes for which assay results are available. This is indicated by the size of the circles. Green for previous. Red for present holes and grade. But the disappointment relates to what investors were expecting. Would have hoped for just as many large red circles as the prior drilling produced.
It appears that some overlook the fact that the 400,000 ounces found previously were inferred ounces, not measured and indicated.
The drill results show only one really good or great hole but that hole simply confirms a previous good hole which would help move what was previously found into M & I.
One will have to wait for the calculations of a new or amended 43-101 but until then there is nothing spectacular that jumps out as that promising. Deposit no longer extends to the south and the northern extension hole was much lower grade than the previous great, most norther hole.
Comment by george wohanka — April 19, 2011 @ 11:15 am
Well those are very good points and well put, thanks! However I believe that further mineralisation to the north still holds a lot of promise so I am staying put and adding in the low 20s, also there are the other properties to consider.
Comment by herb — April 19, 2011 @ 1:21 pm
GQC’s result was horrible. There was only 1 hole that stood out amongst the 17 holes. I’m suspecting that GQC was holding the NR until they got the LTP-62 result (which happens to be the highest hole number). I don’t think they will be able to increase the resource from 400k oz. At least they shouldn’t be getting the resource decreased due to LTP-47, which I think is the saving grace. Since they are losing areal in the south side (due to LTP-43 and 44), they are gaining areal in the north side with LTP-47.
Hopefully they do better in 2H.
Having said that, resource that they have for La Escandalosa and Las Animas is worth about 30 cents in my books. The market is not giving anything for Toral (about 30 cents in my book as well). I’ve put conservative number because they are no where near production. I think they should spin out Toral like what GBB is doing with Castle Silver.
Comment by Bruce — April 19, 2011 @ 6:38 pm
Hi Bruce
I dont think ‘horrible’ is the right word. I agree that they were not impressive by any measure, I know the market was expecting higher but little has changed in the overall story here. This company is on track to shore up its existing resource estimates and continue drilling north another 1.2K. I also agree that company is undervalued but right now with PMs soaring and most good juniors in the doldrums, its hard to get handle as to why there is not more money flowing into the miners. I guess overall volume in the markets is weak and that sets up good opportunity for the shorts. That can only last for so long before everyone is on the wrong side of the boat. Good luck all – stay the course!
Comment by Herb — April 20, 2011 @ 1:06 am
After GQC, GBB, even SFF’s results came back with less than satisfactory results I feel it is a much safer investment with ABI which is already 43-101 verified with 20 000 000 ounces of silver and numerous gold deposits in the ground. With them also having the infastructure in place is another appealing peice of the pie. And then you have SILVER MOVING UP nearly $1.00 EVERYDAY…….that 2005/2006 run in share price is about to happen ALL OVER AGAIN with ABI (ABCOURT MINES TSX-V)
Comment by Jeff — April 20, 2011 @ 3:21 am
Jeff, you have an excellent point regarding ABI and IMHO it’s an absolute steal at 16 cents. However, I would not say GQC, GBB and SFF’s results were less than satisfactory – the Escandalosa model is entirely intact after yesterday’s results (the company is aiming for a 1 million+ ounce deposit there), GBB’s model is also intact (LONG Bars Zone could hold millions of ounces), and with SFF we’re still waiting for most of the results from Dos Quebradas while drilling at Santa Sofia has just started. Markets are volatile and these speculative plays fluctuate wildly sometimes just based on sentiment at the moment and not always fundamentals.
Comment by Jon - BMR — April 20, 2011 @ 3:35 am
Jon-BMR, I had thought the drilling would move some if not much of previous discovered ore from the inferred category into measured and indicated. While I am not sure, I am understanding, the drilling map perfectly, it appears this will not be the case. I understand the concept of the map, and even think it is excellent. Just don’t understand why it was necessary to use the numbers 10 and 100 in front of the explanation that the circles are proportional to the grade X the intersect.
Fisher emphasized that the deposit would be cheap to mine. But there has to be a deposit first and inferred does not get one there.
Be great to hear what Fisher says. Hope you are able to do another interview soon.
Comment by george wohanka — April 20, 2011 @ 4:06 am
Hi George, yes we will do another interview with Fisher soon and hopefully expand on yesterday’s news. The inferred resource was based on just 25 holes – it was done at a very early stage. I suspect resources will be able to be upgraded based on results from these additional 24 holes. Plenty of room going north to increase ounces substantially. They’ll have a much better understanding of Escandalosa prior to the next round of drilling. This continues to look very good.
Comment by Jon - BMR — April 20, 2011 @ 4:55 am
Hi all. What do you think about Mainstream Minerals (MJO) ? Management plan to become a significant player within the Birch-Uchi.
Thanks to BMR for your good job.
Comment by Stephane — April 20, 2011 @ 6:16 am
Yes, as a follower of GCU I like MJO’s news, and from a purely technical perspective – quite interesting…the long-term trend is certainly going in the right direction. Worth keeping an eye on.
Comment by Jon - BMR — April 20, 2011 @ 4:17 pm