CDNX and Gold
It was a volatile week in the markets again with the CDNX down 38 points or 2.5% to 1465, just very slightly below its rising 200-day moving average…there were three triple-digit daily moves in the Dow and the TSX which were off 2% and 1% respectively last week…the CDNX is underpinned by very strong support areas at 1400 and above, so despite the fear in the markets right now – which is actually a good sign – a sudden and nasty drop below 1400 is highly unlikely…continued consolidation can be expected until the markets “sort themselves out” and break out of the doldrums that began in early May…Gold enjoyed a strong day Friday, jumping $12 an ounce to $1,220 as the Euro hit a fresh four-year low…all of Gold’s major moving averages are in bullish alignment and it’s hard to imagine a near-term correction that could take it much below $1,200 an ounce…our technical analyst sees exceptional support at $1,170…
The BMR Portfolio
Gold Bullion Development (GBB, TSX-V)
Gold Bullion continues to consolidate nicely above 40 cents and finished the week up a penny at 43 cents…BMR has canceled its plan to attend the World Resource Conference in Vancouver to remain in Rouyn-Noranda for a few more days to further study this prolific region and the Granada Gold Property in particular…we’ve obtained some publicly available historical information from the Quebec Ministry of Mines which clearly demonstrates the blue sky potential of Gold Bullion’s LONG Bars Zone, especially to the east…GBB has two drill rigs going 24/7 at the moment with one of them doing definition drilling within the Preliminary Block Model and the other doing exploratory drilling outside the Block Model…with two rigs we estimate Gold Bullion is drilling approximately 200 metres a day…the company reported last Tuesday they had completed 11 holes and 2,400 metres so far in a planned 20,000 metre Phase 2 program…
Seafield Resources (SFF, TSX-V)
We expect to hear news shortly on Seafield’s proposed $2.5 million private placement at 17.5 cents which was supposed to close Friday…the stock was off a penny last week to 17 cents where it has very strong technical support…Seafield has lost half its value since the end of February when it reached a 52 week high of 35.5 cents…with a strong treasury and some highly prospective properties in the Quinchia District of Colombia that the company will be exploring aggressively over the summer, there’s a strong chance Seafield is ready for a rebound…another interesting situation to keep an eye on with Seafield is in northwestern Ontario where Manitou Gold (MTU, TSX-V) is drilling its Kenwest Property and the Big Master Mine which is in very close proximity (immediately adjacent) to Seafield’s Elora Gold Property which has delivered very encouraging results in the past…if Manitou Gold were to make a discovery at Big Master, this would certainly have positive implications for Seafield…Manitou has plenty of cash in the bank and will be aggressively drilling its properties throughout the Gold Rock mining camp…
Richfield Ventures (RVC, TSX-V)
The recent weakness in Richfield has indeed been mysterious…the share price dropped as low as $1.07 this past week before rebounding to close at $1.25 Friday…fundamentally the company’s Blackwater Gold Project has all the makings of a potential world class bulk tonnage gold deposit as revealed in their first round of drilling last year…a 25,000 metre drill program is currently underway and more results could be out soon…technically, the stock has huge support around $1.00 and a rising 200-day moving average which is in no danger of declining…we therefore believe this weakness is only temporary…Friday’s 14-cent move was encouraging and a sign that we may have seen an important low at $1.07…
Kent Exploration (KEX, TSX-V)
Kent has dropped five of the last six trading days since jumping as high as 21 cents May 27 on the release of assay results from Gnaweeda…we have a few major concerns with Kent at the moment, not the least of which is its weak financial position…the company has also still not been able to raise the financing for the proposed Archean Star spin-off and we’re not 100% sure now that it will…a growing problem is the Australian government’s proposed 40 per cent tax on profits generated from resource projects in that country…it never ceases to amaze us how stupid and ignorant governments can be…capital can easily get scared away from a country or a region in a heartbeat if it senses it is not welcome, and Australian Prime Minister Kevin Rudd has made it clear, as far as we’re concerned, that mining investment is no longer welcome in Australia…Xstrata announced last Thursday it will axe investments worth $500 million U.S. in two projects in Australia in a move that puts the creation of $3,250 jobs at risk…if Rudd stubbornly persists with this wrong-headed policy, you will see a mass outflow of mining investment in Australia to the benefit of other areas in the world (places such as Quebec) where governments encourage mining and exploration in every reasonable way…taxes kill jobs and investment but the Labour government in Australia, not surprisingly, hasn’t figured that out…they may learn the hard way…where does this leave Kent?…the stock closed at 13 cents Friday, a drop of 4.5 cents on the week…we hope they’re still able to pull off the Archean spin-off and they have an excellent project in New Zealand (Alexander River) and the Flagstaff Barite Property in Washington State…under pressure, it’s possible Australia may reverse its proposed “super tax” but whether they do is anyone’s guess…
Sidon International (SD, TSX-V)
There is very little to report on with Sidon as we await news on its proposed financing and further information on its plans regarding the Morogoro East Gold Property in Tanzania…at the end of March Sidon signed a letter of intent with a private company for an option to earn an 80% interest in Morogoro or even a 100% interest under certain conditions…this is a highly prospective property in an under-explored region of Tanzania where mining and exploration have experienced tremendous growth over the past decade…technically, Sidon has extremely strong support at current levels…it closed Friday at 4.5 cents on low volume, a half-cent drop for the week…
North Arrow Minerals (NAR, TSX-V)
North Arrow was down 2 cents on the week at 17 cents…as we mentioned when we introduced this company a couple of months ago, this is not a stock to flip or trade but a tremendous opportunity that an investor has to be patient with…North Arrow is led by Gren Thomas, a member of the Canadian Mining Hall of Fame, who is renowned for his part in the discovery of the Diavik diamond deposit in the Northwest Territories…Thomas is as good as they get in the grassroots exploration business and he has partnered again with Dr. Chris Jennings, who BMR interviewed recently, to help North Arrow make a discovery at its Las de Gras holdings (on trend with Diavik) where drilling commences this summer…North Arrow is also currently drilling its promising Beaverdam Lithium Project in North Carolina…we see great things ahead for North Arrow which has the money in the bank to carry out all of its exploration plans this summer…
Colombian Mines (CMJ, TSX-V)
Colombian took a hit this past week, dropping 13 cents to 84 cents but on low volume…the stock is now very close to its rising 200-day moving average of 78 cents where it should find strong technical support…fundamentally, CMJ holds a very large and attractive package of properties in Colombia that hold considerable blue sky potential…with a strong management team and a healthy balance sheet, the outlook for CMJ remains very positive…
Greencastle Resources (VGN, TSX-V)
Greencastle released its updated financials last Monday (to March 31) which showed cash in the bank of just over $4 million and total working capital of approximately $5.5 million or 12 cents per share…the stock closed Friday at 12.5 cents, a half-cent drop for the week…as we have mentioned before, the best strategy with Greencastle is to buy it when it drops near or just below its cash value and simply wait for it to make its run and then sell…short-term, there’s no way of telling where Greencastle is going but from a medium to long-term perspective it’s an excellent value at current levels…
