Analysts Love Rubicon Minerals

Shares of Rubicon Minerals (RBY) have lifted over 500% since our buy alert last year and recently closed at an all-time high of $ 4.45, up over 10% since our last commentary. During such time, the company released great news including a possible southwestern extension of the F2 zone at its Phoenix Gold project as well as being listed on the S&P/TSX Global Mining Index. Moreover, analysts have recently increased coverage of RBY and are increasingly bullish:

“With the intersection of a substantial zone of high-grade gold
mineralization in hole 122-10, the company appears to have identified
a new F2-like zone of structurally controlled mineralization.”

- Canaccord Adams on 9/15

The discovery of a potential new high-grade gold structure adjacent to the core F2 Zone… further demonstrates the projects substantial exploration potential…these results highlight the accelerated pace of drilling results to the market…our 12-month target price rises to $6.00 per share (from $5.00). We maintain our Speculative BUY recommendation.”

- Daniel Earle, TD Newcrest on 9/15

“Hole 122-10 is a significant step for RMX (Rubicon TSX symbol) in identifying look-a-like structures to the F2 Zone. BMO Research expects that RMX will focus drilling on this area and beginning delineating the dimensions of this new zone.”

- Andrew Kaip, BMO Capital Markets on 9/15

“…the intersection in hole 122-10 is exceptional, with a particularly
wide gold-bearing interval….deeper than most of the higher-grade intersections reported to date. This opens up a target area of high-grade potential for further drilling.”

- Timothy Lee, Dundee Securities on 9/14

“…we are moving our target price from C$4.30 to C$5.00. In our
opinion, the summer drill campaign will in all probability continue to
establish that the F2 Zone is in fact materially larger than what we previously believed (1.5 million ounces)…We continue to recommend RMX as a BUY, and believe that RMX’s discovery is in the early stages of being defined.”

- Barry Alan, Research Capital on 9/14

“As the shaft continues to be deepened simultaneously with underground and surface drilling, we expect ongoing positive results from all nine areas of the 9x drill program. Thus far, four areas remain largely unexplored, and opportunity remains for the strike to extend beyond the existing boundary of the 9x areas (1,200m length) to
the SW and NE.”

– Andrew Mikitchook, Thomas Weisel on 8/31

“…Rubicon’s resource will wind up being a lot more than 3 million ounces. Deposits at Red Lake wind up growing consistently over time…Rubicon probably has 5 million ounces or more in their F2 property which would support a price in the $5 plus range in the next two years…”

- Brian D. Pacampara, Motley Fool on 8/27

“we could see a 3.0–8.0m oz deposit in the F2 Zone. Valuing contained ounces at $200–250/oz, we arrive at a range of potential share prices, of C$3.60–12.10 (C$3.65-11.80 fully diluted).”

- Graham Copley, Macquarie Research on 8/18

Still Doubt the Bull Market?

After last year’s huge stock market correction, it’s understandable if you’re still apprehensive about trading or investing. Since then, the markets have rebounded in the biggest 10-month rally since 1937. So if you still doubt the bull market then you’ve missed out on all the action. In less than 2 months, the price of gold rose $ 90 and has revisited $ 1,010 for only the second time ever. On Friday, the price of platinum finally broke the $ 1,300 resistance level, up considerably from a low near $800 last year. Silver has performed the best, having advanced over 25% since July.

Our preferred gold stock, RBY hit an all-time high of $ 4.00 last week, up well over 400% since our fall buy alert. If this isn’t a bull market, then I don’t know what is.

It’s not just precious metals either. The DJIA recently broke through the 9500 resistance level, the S&P is firmly above 1000 points, and those troubled bank stocks that were worth pennies per share last fall have rebounded by triple-digit percentages.

So everything’s trading above 50-day moving averages, which traders and investors generally regard as the best time to hold. Nevertheless, many think that we’re running out of gas and that just isn’t so. Surely short-term corrections are expected, but there’s still a lot of upwards momentum left.

We can say this with confidence because at the height of the markets in 2008 (before the correction), the price of oil was beyond $ 140. Now it’s only half that price (see charts below).

So really, this leg of the bull market has only begun and should run well into 2010. Even in bull markets there are better times to buy than others, so use your best judgment.

RBY Reaches All-Time High

The bull rages. Today our recommended gold exploration stock, Rubicon Minerals (RBY) reached an all-time high of $ 3.79 per share, after climbing to a new high of $ 3.59 yesterday. Earlier this week, the company updated investors of ongoing drilling at its Phoenix Gold Project in Ontario, which revealed not only more high-grade gold, but a 20% increase in strike length.

Also significant was the fact that RBY’s volume was at all-time highs. Yesterday volume was 5 times higher than on average, indicating new investor/trader interest.

As RBY reached new highs, the price of gold advanced by $25 dollars to over $980, its best single-day performance in over a month. Gold is once again nearing the important $ 1,000 mark, but it must break this resistance level this month in order for the bull market to continue. If it does, then we could only guess how high the price of gold and RBY will go.