Gold Bullion Development (GBB, TSX-V) has completed, in our view, a healthy and normal correction that took the stock from a high of 71 cents June 25, when it was clearly technically overbought as we had warned, to a low of 43.5 cents early this week. As of 10:15 am Pacific time, GBB is ahead 1.5 cents on the day at 49.5 cents. It has stayed above its opening price of 48 cents almost the entire trading session and has been as high as 50 cents. Technically, the stock is showing renewed signs of bullishness.
Interestingly, the pullback in Gold Bullion was almost identical in magnitude to the sharp and quick correction experienced by Osisko (OSK, TSX) in September, 2005, after it ran from the low 30’s to an all-time high of 80 cents. Osisko retreated 30% to 55 cents and just three months later it was over $1.50.
Like with Osisko, the drill bit will be the driving factor in GBB’s stock price as the summer wears on. Based on all of our due diligence, which has included two extensive on-site visits in addition to exhaustive research of current and historical publicly available information regarding the Granada Gold Property, we have every reason to believe significant new discoveries are on way in the LONG Bars Zone as Gold Bullion attempts to define a multi-million ounce open-pit deposit.
We will have more on Gold Bullion over the weekend.
