Gold Bullion certainly suffered some chart damage February 15 when the stock sold off into the 50’s. Some technical selling took over again late yesterday and early today when GBB fell below 50 cents and traded all the way down to a low of 43 cents. However, those who are focused on the fundamentals went bargain-hunting today and Gold Bullion recovered to close at 48 cents in a turnaround that may even inspire some of the technicians who have been bearish lately.
The bottom line is this: Gold Bullion is sitting on a significant near-surface Gold deposit in one of the best areas in the world for exploration and mining. Just how big that deposit is (and could yet become) will be better known later this year after more drilling, more results, and an initial 43-101 resource estimate. Gold Bullion’s current market cap is $76 million. Richfield Ventures (RVC, TSX-V), which just recently released a 43-101 resource estimate for its Blackwater open-pit deposit in central British Columbia, has a current market cap of $254 million with 1.83 million ounces of Gold in the indicated category and 2.34 million ounces in the inferred category. A LONG Bars Zone with four million or more ounces is certainly within the realm of possibility. Mineralization appears to be over a wider area at Granada though Blackwater’s grades are generally higher. Granada is in a better jurisdiction and potential mining costs should be low. Investors who are focused on the fundamentals are seeing real value with GBB at the moment which is why buyers stepped up to the plate today when the stock hit levels not seen in eight months.
Below we highlight what we consider to be the top 24 holes so far from Granada – a dozen from the Eastern Extension and a dozen from the Preliminary Block Model. These results show continuity between the two areas. Assay results have been received on only about one-third of all the Phase 2 and Phase 3 holes drilled to date.
Note: We’ve added these tables to the article that was posted this morning. The writer holds a position in Gold Bullion Development.
Any opinion or input on Sidon’s results and the sell off that followed?
Thanks,
ANF
Comment by andrea — March 8, 2011 @ 4:22 pm
I feel for you Andrea. You asked many times questions on SD. I hope it was only your pocket changes that was invested in SD. The result are what you call a big zero. Get out and take your lost and get on with your life.
Comment by Andre — March 8, 2011 @ 5:20 pm
Andrea, I feel for you too as I know you have been following SD very closely. Allow me to make a few observations:
1. Sidon’s numbers from their first 6 shallow holes weren’t good – plain and simple. There’s no sugar-coating the results.
2. Exploration at Morogoro is at a very early stage – this initial drilling was no doubt helpful for SD in terms of gaining a better understanding of what could be a complex geological system there. We’ll see what the deeper holes produce. Poor initial assays doesn’t mean this is not a property of merit – some very big deposits weren’t discovered until after 50 or 100 holes or more.
3. This is a good example of why it’s so important to hold a basket of these speculative stocks. Never put all your eggs in one basket. There are risks. Not every play, no matter how good it looks, is going to work out.
4. Control your losses. We’ve suggested this before at BMR – I think a good trading/investment strategy to consider is selling a stock once it’s down 10, 15 or 20%, no matter what…limit your losses and move on. The last thing you want to do is lose 50% or more on one play.
5. Sell into strength, buy into weakness. There was a lot of fear in the Sidon market today. The herd was selling. You often make money going against the herd mentality.
6. Be realistic – Sidon incurred some chart damage today. Over the near future, it’s going to have a hard time pushing through 9 or 10 cents which was previous support. It’s oversold at the moment so a bounce is likely but then a re-test of today’s levels could occur.
7. A few positives – Sidon does have a placer operation it’s trying to develop at Morogoro, and the company does have a land position near Canaco’s discovery. More drill results are also coming from Morogoro. And the current market cap is $6 million, pretty cheap. One can’t rule out a strong rebound and maybe even new highs at some point down the road. This has been a volatile stock.
Comment by Jon - BMR — March 8, 2011 @ 6:39 pm
I think they had better first proven up the 2.4 million ounces in the PBM. THat would have given them a much better market cap and a bottom in share price. Now we have to pray for some better holes, otherwise they will have to dillude themselves at lower prices…
Comment by Hildert — March 8, 2011 @ 11:10 pm
Thanks Jon,
Looks like some very nice holes to me!
Alec
Comment by alec — March 9, 2011 @ 12:08 am
Nice holes indeed!
Comment by Herb — March 9, 2011 @ 1:46 am
Almost all holes….mineralization starts practically at surface….gota like that.
Comment by Dan — March 9, 2011 @ 3:14 am
GBB great buy opportunity has gone… Nobody knows how high it will go but 43 cents seems to be in history now. I still like this stock even though it dropped so much in the last couple of months. Thank you for BMR’s detailed information and analysis.
Comment by Theodore — March 9, 2011 @ 4:11 am
if gbb did a 43-101 with what they have right now, they would get bought out for what ?? not a good price for sure .The buyer might have lots of voting power now…So at these levels you don’t wan’t a proposition. They’re trying to grow that 43-101 to the max, drilling castle too, fating the land position etc… All to get more $$ when they put out the 43-101.. Meanwhile mm’s are draging the s-p lower, using the free trading pp as fuel..But when free pp shares run out selling at loss and a few good holes come out on BOTH PROPRIETY’S , s-p is just going to respond back up to new highs, specialy on 43-101 speculations, it’s hard times for gbb but we ‘ve seen this before didn’t we , as for sd at 6c , it’s a good speculative buy to me..
Comment by steve — March 9, 2011 @ 7:09 am