A few months ago we added Visible Gold Mines (VGD, TSX-V) to the BMR model portfolio when it was trading around 40 cents. The weak overall market through April, May and June knocked half the value off the stock, not unlike some other situations, but we see more than just a rebound developing now. Given its very promising Joutel Property, with drilling scheduled to begin there very soon, and a 20-kilometre stretch of land along the Cadillac Break west of Rouyn-Noranda that could potentially yield a significant discovery given the prospective nature of the Break and the quality of the company’s geological team, we truly believe Visible Gold Mines is about to become a major player in this area of Quebec.
As we’ve already pointed out, VGD’s senior geologist is the highly respected Robert Sansfacon who was involved in the discovery of Osisko’s (OSK, TSX) Canadian Malartic deposit, the largest in the country. Sansfacon is a genius when it comes to understanding structure and when a company has a mind like that at work on its properties, all things are possible.
As readers know, we are very bullish on Richmont Mines’ (RIC, TSX) prospects and its growing Wasamac deposit. VGD is sniffing around that area, working on claims immediately to the south and west, and likely investigating additional opportunities. Martin Dallaire, VGD’s President and CEO, is a smart operator and understands the significance of a new mining camp emerging at Wasamac.
Technically, Visible Gold Mines‘ chart is telling us that something could be up. On the daily chart, the RSI(14) has shown slow but steady progression over the last six weeks and has climbed above 50 for the first time since early April. The Slow Stochastics are looking favorable now as well, and the 10 and 20-day moving averages (SMA) have just started to reverse to the upside which ends a long slump that started in April. Below, John examines a one-year weekly chart that takes out a lot of the daily “noise” and shows several positive indicators including increased buying pressure as demonstrated by the Chaikin Money Flow. Also, notice how the weekly RSI(7) is now coming out of extreme oversold conditions. There’s no doubt in our view that VGD has bottomed out which means it could be ready soon to challenge its 100-day SMA (32 cents) and 200-day SMA (42 cents). The company is sitting on $6.5 million in cash and has a current market cap of $11.4 million.
As always, perform your own due diligence and understand that any stock we refer to at BMR involves significant risk. Please read our disclaimer.
Note: Both John and Jon hold positions in Visible Gold Mines (Terry does not).
30 minutes before open & it appears we are looking at a strong open,
cheer up ! As for VGD, the daily chart is certainly looking better,
today will guide us further.
R !
Bert
Comment by bert — July 7, 2011 @ 5:13 am
Bert,
Any thoughts on gbb.v?
Thanks,
Andrea
Comment by andrea — July 7, 2011 @ 5:20 am
and CUI, SD and ABI Bert! You need your mown blog site. 🙂
Comment by Andrew — July 7, 2011 @ 5:33 am
Volume seems to be lacking this year and that’s what GBB needs to lift the stock price beyond the low 40s. If it hits .50 I’m out unless it’s clearly on a run.
Comment by Andrew — July 7, 2011 @ 5:34 am
Andrea
Sorry haven’t had an interest in that one.
R !
Bert
Comment by bert — July 7, 2011 @ 5:35 am
Thanks Bert and Andrew!!
Comment by andrea — July 7, 2011 @ 5:49 am
Volume is also lacking on VGD, we will continue to mark time, unless
the volume increases. We need a million shares, come on VGD anti up.
R !
Bert
Comment by bert — July 7, 2011 @ 6:18 am
From what I understand with my conversation yesterday with Tony’s secretary, Tony has been in MEXICO for the past 2 weeks…..hhhmmm…… Mexico is certainly ” somewhere in the Americas” Could it be perhaps that VGN might be looking at aquiring an ” advanced gold property, already permitted” from a struggling jr. gold or silver miner that is having problems with regards to funding??? Lest we forget that Evrim Metals is also in Mexico, which VGN has a substantial investment in. Something tells me that SOONER rather than later that VGN will awake from it’s slumber. I have to agree with BMR that we have NOT seen the HIGHS yet for VGN, and that IT WILL happen, THIS year!! I will keep you all informed if/when I get more info on WHY exactly Tony has been in Mexico.
Comment by john — July 7, 2011 @ 7:45 am
Are you sure he’s not in Zimbabwe?
Comment by Andrew — July 7, 2011 @ 7:54 am
POSITIVE Andrew, POSITIVE!!!!! EOM!
Comment by john — July 7, 2011 @ 7:59 am