Gold Bullion Development (GBB, TSX-V)
Gold Bullion has performed very well recently, especially considering the weakness in the markets…the behavior of the stock over the last few weeks is strong evidence that the mid-30’s was an important bottom, as we have been speculating, and GBB is now slowly working its way higher…a bullish “cup with handle” formation is still in progress on the chart – this remains valid…GBB was off 2 pennies for the week, closing at the now rising 50-day moving average of 45 cents…the stock does have declining 100 and 200-day moving averages but that situation could certainly change sometime over the summer which would add more fuel to the fire…so the technical picture and outlook have improved considerably with GBB after major weakness between mid-February and mid-May…the company provided an update on its Castle Silver Mine Project last week…the 6,000 metre Phase 1 drill program is nearing completion and a strong new vein structure was intersected at the first IP target…a 43-101 technical report on the property has also been released…assay results from the 10 holes drilled so far are still pending…meanwhile, the initial 43-101 resource estimate for the LONG Bars Zone of the Granada Gold Property is expected sometime during the third quarter…the market is a forward-looking machine and those who follow GBB won’t be waiting until after the 43-101 comes out before getting positioned appropriately in the stock…the company’s current market cap of $72 million puts a value of just $24 an ounce on Gold in the ground at Granada if one were to assume the 43-101 will outline approximately 3 million ounces in the measured, indicated and inferred categories…that’s just a hypothetical number on our part at the moment but whatever number GENIVAR comes up with, we believe it should exceed the 2.4 to 2.6 million ounce conceptual figure that Gold Bullion gave in April of last year…based on all the drill results to date, this appears to be shaping up as a half-gram deposit with a higher grade starter pit and massive volume…it’s all about volume at Granada which is why the drills have to keep turning and why we want to see more than just two rigs in the LONG Bars Zone which has such incredible potential…Gold Bullion released fresh drill results from Granada May 12 which were consistent with previous numbers…hole #173 was the star of the batch of 25 holes…it provided additional evidence that the north and northeastern parts of the Eastern Extension are highly intriguing…#173 cut 80 metres grading 1.36 g/t Au within a total intersection of 363 metres of 0.35 g/t Au…a 1-metre section of high-grade (89.83 g/t Au) was hit near the bottom of the hole below 300 metres…#173 was collared approximately 115 metres northeast of #55 and 100 metres east-northeast of #108, two stellar holes released last fall…this is critical – assays are still pending on 9 holes (165, 168, 178, 183, 241, 243, 246, 254, and 257) north of #55 drilled over an east-west distance of about 250 metres and a north-south distance of 200 metres…results from those nine holes will go a long way toward confirming just how prospective these parts of the Eastern Extension are…#241 is the most northerly of those holes…meanwhile, hole #200 in the southeast portion of the Eastern Extension (northeast of discovery hole #86) returned an impressive interval of 48.50 metres grading 1.68 g/t Au within a total intersection of 210.5 metres of 0.44 g/t Au…results from the second most northerly hole drilled north of the Preliminary Block Model suggest more drilling is definitely required in that area…hole #31 hit a modest 18.5 meters grading 0.64 g/t Au close to surface (36 to 54.15 metres) and another 28 metres grading 0.59 g/t Au between a depth of 125 to 153 metres…where’s there’s smoke, there’s fire, and our theory is that there could be a significant trail of mineralization running north of the Preliminary Block Model and connecting with what has been discovered over the northern part of the Eastern Extension…six more holes (213, 214, 215, 217, 221 and 224 and 224) from the southwest portion of the Preliminary Block Model returned mixed results – we were hoping to see a couple of exciting holes from that area but that hasn’t materialized yet…overall, Gold Bullion continues to hit long intersections of lower grade mineralization over a wide area at Granada…this is a massive project with much more drilling required but the multi-million ounce model that Frank Basa has in mind remains intact…the 43-101 resource estimate should reassure investors and give this play more focus and a big lift…drilling is also underway now in LONG Bars Zone 2 near the old Aukeko Property (2 kilometres east of Phase 1 discovery hole #17) and if Gold Bullion is able to connect these two zones, look out…GENIVAR’s Nicole Rioux, the head geologist for Granada, is genuinely excited about the Aukeko area and she is normally quite conservative in sizing things up…a couple of excellent results from this area could really ignite this play and based on all the historical information we have reviewed from “LONG Bars Zone 2″, the chances of a “hit” in this area have to be considered very good…
Currie Rose Resources (CUI, TSX-V)
Currie Rose is looking very promising at the moment as it prepares to commence a 10,000 metre Phase 1 drill program at its properties in the Lake Victoria Greenstone Belt of Tanzania…the stock was off a penny for the week, closing at 18.5 cents, but it held up very well in the face of declining overall markets…in addition, CUI’s recent overbought condition has unwound with the RSI(14) finding support just below 50…Slow Stochastics are in oversold territory…the chart is favorable and suggests a breakout above resistance in the low 20’s is only a question of when, not if…any loose stock is being gobbled up quickly and the Chaikin Money Flow (CMF) indicator shows consistent buying pressure and accumulation over the past four months…the 50-day moving average (SMA), currently at 17.5 cents, has reversed to the upside and the 100-day SMA has flattened out and appears ready to start pointing north as well…from a fundamental perspective, the company is busier than ever with its projects in northwest Tanzania as outlined in a news release Thursday…we’re particularly excited about the Sekenke Project which has “blue sky” written all over it…Sekenke is why we decided to start following CUI when it was trading around a dime last fall…results from satellite imagery provide additional evidence that Sekenke is a highly intriguing geological target and part of the same northwest trending structure that hosts Canaco’s (CAN, TSX-V) Handeni Project…satellite imagery has also shown that the structures at Sekenke are coincident with a strong alteration envelope…what’s unique about this project is that it surrounds and runs in between two former high grade Gold mines including Tanzania’s original producer…this greatly increases the chances of a discovery as it’s unlikely the former mines were fully exploited or explored as techniques a century ago in this industry obviously weren’t what they are today…CUI has a terrific chance to hit it big at Sekenke and we also wouldn’t be surprised if the company takes a shot at acquiring the former Sekenke Mine…that’s speculation on our part but it makes sense from a strategic point of view…pre-drilling exploration work continues at Sekenke to pinpoint the best targets and in the meantime the company will begin drilling at its Mwamazengo discovery at Mabale Hills…geochemical analysis has outlined a continuous anomaly over a few hundred metres that runs parallel to the west of the discovery where previous drill results included notable high-grade intercepts such as 34 metres grading 3.60 grams per tonne gold, 12 metres grading 9.11 g/t Au, 63 metres grading 2.59 g/t Au and 31 metres grading 5.97 g/t Au…CUI also has two other important targets at Mabale Hills, Sisu River and Dhahabu… while its Tanzanian properties are the market’s major focus, Currie Rose could also benefit over the summer from continued good exploration news out of Trueclaim Exploration (TRM, TSX-V) which is currently conducting an 8,000 metre drill program at the Scadding Gold Property near Sudbury…Trueclaim, which continues to release encouraging assay results, has earned a 51% interest in Scadding and can acquire a full 100% interest by completing a feasibility study, paying $2 million to Currie Rose, and giving Currie Rose a 3% net smelter royalty…CUI announced a joint-venture deal January 25 with Australian-based Liontown Resources for Currie’s Jubilee Reef Gold Project in Tanzania…CUI’s focus is on the Sekenke and Mabale Hills Projects, so finding a partner for Jubilee Reef made sense…the deal commits Liontown to at least 5,000 metres of drilling at the property this year which will give Currie Rose a minimum of 23,000 metres of drilling at all of its properties in 2011…while Currie Rose has had its market cap shaved by more than half, from a high of nearly $40 million late last year to the current $17.3 million, what hasn’t changed is the quality of this company’s project portfolio which remains as high as ever…Currie Rose has all the cash it needs ($2 million) to complete an initial major round of drilling (10,000 metres) in Tanzania this summer, so there will not be any dilution of the stock at current levels as confirmed by President and CEO Harold Smith…
GoldQuest Mining (GQX, TSX-V)
GoldQuest remains in a consolidation phase which provides a great opportunity for patient and long-term investors…for the week the stock was off half a penny, closing at 19 cents, after dropping as low as 16.5 cents Friday on CDNX volume of just 83,000 shares…the stock has had a difficult four months, falling from a high of 48.5 cents in early February, but the opportunity at current levels has to be considered highly attractive…Chairman Bill Fisher certainly sees value at these lower prices – he recently picked up 210,000 shares in the open market between 19.5 and 20.5 cents…GQC’s prospects remain solid as the company has an outstanding portfolio of projects in the Dominican Republic and Spain…while GQC is now slightly below its 300 and 500-day moving averages, these long-term term SMA’s continue to rise and are in no danger of rolling over anytime soon…technically and fundamentally, the downside risk from current levels is very limited in our view…the 200-day SMA at 30 cents continues to rise and that’s where major resistance can be expected for now on the upside… the 50-day SMA at 24 cents is also an area of resistance…the substantial drop in the share price from a high of 48.5 cents in early February was due to general market weakness and selling from speculators whose expectations may have been too high regarding initial drill results from the company’s La Escandalosa Project in the Dominican Republic…in addition, the company has stopped all drilling in the DR until probably August in order to conduct extensive IP surveys over Escandalosa and other properties…overall assay results from Escandalosa were decent though far from spectacular…the final set of assays for seven holes came out May 16…the best intersection from Escandalosa Sur, where an initial 43-101 inferred resource of 400,000 ounces was outlined last fall, was 20 meters grading 1.32 g/t Au…results from this area overall (21 holes) were somewhat disappointing though more drilling is required and will take place later this year…however, the company drilled three holes at the Hondo Valle target 1.6 kilometres to the north (outside the resource area) and all three intersected significant mineralization including 29 metres grading 2.18 g/t Au in hole #65…that’s the thickest and highest grade mineralized section drilled to date at Hondo Valle…the theory is that mineralization trends north from Escandalosa Sur to Hondo Valle…GoldQuest is now carrying out a 16-square kilometre IP survey and magnetic ground geophysical survey from 2 kilometres north of Hondo Valle to 2.2 kilometres south of Escandalosa Sur…this will be completed by the end of July and GQC will then use the data to pinpoint key targets for an additional 3,000 metres of drilling…GoldQuest also has other promising projects in the DR (in particular, Loma Oculta – formerly Las Animas – where an exploration program aimed at identifying new drill targets is now underway) in addition to its lead-zinc-silver deposit in Spain…GoldQuest’s potential has not diminished whatsoever yet the share price has dropped by more than half from its early February high…the company released a 43-101 resource estimate March 2 on its Toral zinc-lead-Silver deposit in Spain…it showed slightly lower grades but much higher overall tonnage than the previous historical non-compliant estimate…as a result, total resources came out 15% higher…resources in the indicated category are 4.04 million tonnes grading 11.8% lead and zinc (5.3% lead, 6.5% zinc) as well as 41 g/t Ag and 0.11% Cu… inferred resources are 4.67 million tonnes grading 9.8% lead and zinc (4.44% lead, 5.4% zinc), 32 g/t Ag and 0.14 Cu…Toral has significant exploration and development upside as a majority of the historical drilling (40,000+ metres) was conducted over one relatively small part of the property…the zone of sulphide mineralization is open along strike to the northwest toward a known lead deposit as well as along strike to the southeast and downdip…the project is also an ideal candidate for a fast-track to production…the deposit is close to a power line, highway and rail line…a large smelter is located just 300 kilometers away by rail…
Cadillac Mining (CQX, TSX-V)
Cadillac was off a nickel for the week, closing at 10 cents, but on very light CDNX volume of just 19,000 shares…this is a company with tremendous potential given its property packages but management needs to demonstrate that it can take advantage of the opportunities the company has been blessed with…we are frustrated but remain patient for now because the possibilities with CQX are still incredible, especially considering the current market cap which is just $2.5 million…not often does a company get the kind of opportunity that Cadillac was handed (and still has)…CQX holds a 100% interest in a very strategic piece of property that adjoins Richmont Mines‘ (RIC, TSX) Wasamac deposit, 15 kilometres west of Rouyn-Noranda…the principal Gold structure hosting mineralization at Wasamac dips northerly onto the seven claims held by Cadillac…Richmont started drilling Wasamac in the spring of last year and steadily ramped up its drilling due to excellent results…in February of this year, Richmont reported a nearly five-fold increase in resources (from 285,000 to 1.4 million ounces) at Wasamac…as a result RIC has been one of the best performing Gold stocks on the TSX this year…throughout the past year since Richmont started drilling Wasamac, and in particular over the last five months, Cadillac management has completely failed its shareholders by doing essentially nothing (or the wrong things) to take advantage of Richmont’s success at Wasamac…BMR brought the Wasamac situation to the attention of its readers in December…investors got excited about the story and the potential of Cadillac’s “Wasa” claims…the stock ran to 50 cents by early January and the market was clearly eager to see Cadillac pursue this project as quickly and vigorously as possible…in this business, it’s critical to “seize the moment” and take immediate advantage of opportunities like this when they present themselves…the company easily could have leveraged the Wasamac situation into a major financing anywhere between 25 to 40 cents (they began the year with only about $200,000 in the bank)…in order to take advantage of any opportunity, a company must be well-financed and Cadillac management absolutely dropped the ball during the first quarter of this year when they did have a chance to raise at least $1 million (potentially much more) and failed to do so…we give the company credit for securing an excellent project (Goldstrike) in Utah on fabulous terms but several million dollars is going to be required to tackle Goldstrike in the right way…after talking about getting a drilling program going at Wasamac “in the near future” shortly after their mid-February AGM, Cadillac has reversed course and stated in a news release May 16 that it needs more information from Richmont’s work before drilling for down-plunge extensions of the Wasamac main, #1 and #2 zones…President and CEO Victor Erickson’s heart is with the Utah project, not with Wasamac…in retrospect, that has been demonstrated in many ways over the last six months…Erickson would have to admit that himself…one potential solution in our view is for Cadillac to cut a deal with another company for exploration at Wasamac and the natural partner for that appears to be Visible Gold Mines (VGD, TSX-V) which last December entered into a JV with CQX on its other Rouyn-Noranda area properties…VGD has all the money and expertise necessary to unlock the value of Cadillac’s Wasa claims…Cadillac could let others do the heavy lifting at Wasa and then focus its energies on developing the Goldstrike Project…talk is cheap – the onus right now is on Cadillac to show investors that it can “walk the walk” and make things happen, however they decide to proceed…
Abcourt Mines (ABI, TSX-V)
It was another quiet week for Abcourt which was unchanged at 12 cents…Volume has dried up significantly and ABI hasn’t enjoyed a 1 million+ share day since May 16…the drop-off in volume is actually a good sign as that’s what typically occurs near the end of a decline…Abcourt has traded in a narrow range between 11.5 and 13 cents over the last 24 sessions…the stock, which now has 149 million shares outstanding for a market cap of $18 million, has found support at current levels and should begin to firm up over the summer given strong fundamentals and an aggressive exploration program at two properties…ABI’s decline from a 52-week high of 25.5 cents in late March was brought on by the closing of a financing (35 million units at 18 cents), a sharp drop in Silver, overall CDNX weakness, and selling by MineralFields Group…ABI’s 100-day moving average (SMA) is now in decline and will provide resistance for now around 17 cents while the declining 50-day is at 14.5 cents…it’s going to take some significant news or bullish new overall market sentiment to drive ABI through resistance over the next month or two, so investor patience will be required here…the company released more results from its Abcourt-Barvue Silver-Zinc Property May 25 including 4.9 metres grading 300.99 g/t Ag and 3.05% Zn in AB-11-24, and 10 metres grading 129.48 g/t Ag and 3.12% Zn in ABI-11-27…drill results to date should significantly upgrade and increase all-category reserves and res0urces…the 10,000 metre drill program continues…the last set of results from the company’s Elder-Tagami Gold Property near Rouyn-Noranda came out May 16…mineralization continues to expand to the west and the east of the former underground Elder Mine which is now being dewatered…the Tagami area to the north, meanwhile, has untapped potential including some higher grades…the latest NI-43-101 resource estimate of 216,000 ounces was released in the summer of 2009…the possibility of Abcourt expanding that resource beyond 500,000 ounces certainly exists given the encouraging results to date (look what Richmont has done at Wasamac)…the heavy accumulation that began in Abcourt in December was no fluke in our view…this is a company with significant assets that could justify a substantially higher valuation…nearly 60 million shares of ABI changed hands on the CDNX in December and January – record volume for this stock, accompanied by a price jump from 14.5 cents…while the stock price is now slightly below that level, the record volume in ABI since late last year (take a look at a 10-year chart) is still a very bullish sign…Abcourt has been under significant accumulation and our best guess is that some savvy players like the assets in the ground…continued drilling success and higher prices for Gold, Silver and zinc would be exciting developments for this stock which has a history of major moves…from mid-2005 to early 2006, Abcourt rocketed from 15 cents to nearly $1.40…
