By: AllPennyStocks.com News

Friday, October 26, 2012

Friday’s latest reading of the United States gross domestic product was modestly better than expected; showing a rise of 2 percent in the third quarter. The report increased trader’s risk appetite and weighed on gold futures, sinking bullion for the third straight week. What traders ignored is the fact that inflation rose by 1.8 percent in the quarter. With money being printed at breakneck speed because of the latest round of quantitative easing, the inflation hike in Q3 could be an ominous sign of things to come. Generally, gold is lofted higher as traders rush to the precious yellow metal as a hedge against inflation, but, as is becoming a pattern in the broad markets, up is down and left is right. This will not last forever and a correction will happen, which will boost gold again and increase valuations for the miners that are processing the ore. A junior that should be on people’s watchlist for a future climb in value is Kesselrun Resources Ltd. (TSX-Venture:KES) a Thunder Bay, Ontario-based mineral exploration company focused on growth through property acquisitions and discoveries, which completed a listing in late July 2012.

Kesselrun’s main asset is its 22,512- hectare flagship Bluffpoint Project in Ontario’s Wabigoon Subprovince, host to several recent gold discoveries such as Osisko's (TSX:OSK) Hammond Reef Project and Rainy River’s (TSX:RR) Rainy River Project. Previous work by Homestake Canada Ltd. – now Barrick Gold (TSX:ABX) – in the early 1990s recognized the potential for the Bluffpoint Project to host a large-tonnage granite hosted gold deposit. A lack of road access and low gold prices caused the project to be abandoned at that time. Now roads are in place and gold is around $1,700 per ounce, making the project economically feasible.

Through Osisko’s and Rainy River’s projects, Wabigoon is known to host more than 16 million ounces of gold at grades better than 1.0 g/t, making it a preeminent location to discover a world-class, bulk tonnage deposit.

Early research shows that Bluffpoint could be of similar multi-million ounce potential as its neighbors. An extensive trenching program was recently completed by Kesselrun which confirmed the presence of broad, disseminated gold mineralization extending along strike on surface over 700 metres in length, 100-150 metres in width and open in all directions.

Kesselrun plans to conduct diamond drilling and air mag/geophysics programs to commence in the fourth quarter which should continue to prove-up the magnitude of the gold on the property. The fact that they are able to conduct a $1 million financing at a time where lenders are extremely tight with capital speaks volumes for what the experts who analyze the loan must see. The share structure is clean with only 17 million shares outstanding and the market capitalization of Kesselrun only $9 million gives this junior a great deal of potential for appreciation. Proper due diligence is, as always, encouraged.

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