OK-OK MY HOT LIST.-penny stocks..accumulate-slowly

Northern Mining mine yields 147,093 ounces Au in a year


2006-04-17 06:21 PT - News Release

Mr. Paul Girard reports

TULAWAKA MINE PRODUCES 147,093 OUNCES OF GOLD IN ITS FIRST FULL YEAR

Northern Mining Exploration Ltd.'s Tulawaka mine in Tanzania produced 22,350 ounces of gold in the quarter ended March 31, 2006. Tulawaka gold production now amounts to a total of 147,093 ounces since the start of production in March, 2005.

During the last quarter the plant facilities processed 87,143 tonnes of ore at an average grade of 8.35 grams per tonne (g/t) gold and a gold recovery of 95.5 per cent. The first quarter total cash costs averaged $255 (U.S.) to produce an ounce of gold versus budget of $265 (U.S.). Production during the first quarter was restricted by a lack of water during the month of February, due to an extended period of exceptionally low rainfall. This situation has been addressed by an increase in the mine's water storage capacity by 67 per cent, and by a doubling of water-pumping capacity.

Since start-up, a total of 134,367 ounces of gold has been sold, entirely into the spot market.

The Tulawaka mine has now registered more than four million man-hours worked without a single lost-time accident.

The Tulawaka project is a joint venture between Northern Mining (30 per cent) and Pangea Goldfields (70 per cent), a wholly owned indirect subsidiary of Barrick Gold Corp. and project operator through its Tanzanian subsidiary Pangea Minerals Ltd. The information contained in this press release was provided by the project operator.

 

Teuton, Silver Grail, Canasia identify Clone targets


2006-04-19 09:20 PT - News Release

Also News Release (C-CAJ) Canasia Industries Corp
Also News Release (C-SVG) Silver Grail Resources Ltd


Mr. D. Cremonese of Teuton and Silver Grail reports

GEOPHYSICAL TARGETS IDENTIFIED ON CLONE PROPERTY

Teuton Resources Corp. and Silver Grail Resources Corp. have identified several promising geophysical targets on the Clone property, currently under option to Canasia Industries Corp. The Clone property is situated 12 miles southeast of Stewart, B.C.

Approximately $3-million was spent on the Clone from 1995 to 1998, mostly on drilling of five subparallel shears (Main zone) carrying gold and cobalt mineralization. Drilling in the same area in 2003, returned a drill intercept of 27.8 feet grading 2.357 ounces per ton gold (see Teuton news in Stockwatch, Dec. 9, 2003).

Highlights from the interpretation of the recently completed Aeroquest EM and magnetometer survey carried out over the Clone property are as follows:


at least four new, northwest-trending magnetic lows have been identified, similar to the northwest-trending magnetic low which hosts the high-grade gold-bearing shears in the Main zone;
one of these, the Derby zone, lying 800 metres northeast of the Main zone in an area partially exposed by ablation (meltback of snow and ice) is interpreted as a thrust slice repeating the geological units within the Main zone;
the Derby zone is particularly prospective because the airborne survey also detected several parallel conductive (EM) sources within the magnetic low, which may be due to mineralization in Clone-type shears; and
Teuton, Silver Grail and Canasia have substantially increased the size of the Clone property by recent staking.

Ground truthing of the anomalous geophysical targets is to proceed as soon as field conditions permit. Targets prioritized by this work are to be followed up by diamond drilling.

D. Cremonese, PEng, is the qualified person for Teuton Resources and Silver Grail Resources, in regard to data presented in this news release.

 

Skyline Gold, Spirit Bear complete Iskut River deal


2006-04-11 15:05 PT - News Release

Mr. David Yeager reports

SKYLINE CLOSES FARM-OUT OF ISKUT RIVER PROPERTY

Skyline Gold Corp.'s agreement with Spirit Bear Minerals Ltd. has closed (see news in Stockwatch on Oct. 26, 2005). Spirit Bear, an arm's-length private company, may acquire a 70-per-cent interest and subsequently enter into a joint venture with Skyline to develop a 4,400-hectare portion of Skyline's Iskut River property. The property is located adjacent to the historic Snip Gold mine, last operated by Homestake Canada Ltd., 40 kilometres west of Barrick Gold's Eskay Creek deposit in northwestern British Columbia. The Bronson slope porphyry copper-gold-silver-molydenum deposit is not included in the property that is the subject of this agreement.

Skyline and Spirit Bear have agreed that Spirit Bear may earn its 70-per-cent position by completing $6.5-million in exploration work on the property, and by paying $240,000 and two million shares to Skyline ($50,000 and 200,000 shares of which have been paid) in stages over the next five years.

The property is underlain by late Triassic to early Jurassic sedimentary and volcanic rocks intruded by Jurassic to Cretaceous intrusive rocks. It includes the formerly producing Johnny Mountain gold mine that produced 2,815,400 grams of gold from 227,247 tonnes milled during the period 1988 to 1993. The property adjoins the formerly producing Snip gold mine that produced 32,093,700 grams of gold from 1,267,642 tonnes of ore during the period 1991 to 1999.

Numerous gold and base metal exploration targets have been discovered on the property by Skyline, that will be the subject of detailed review and target selection by Spirit Bear for an exploration program in 2006.

We seek Safe Harbor.
 

Silver Grail, Teuton to drill Clone, Tonga et al.


2006-04-24 10:35 PT - News Release

See News Release (C-SVG) Silver Grail Resources Ltd


Mr. D. Cremonese reports

CLONE, TONGA AND CAMPBELL RIDGE PROPERTIES TO BE DRILLED

Silver Grail Resources Corp. and Teuton Resources Corp. have signed a drill contract with Aggressive Drilling of Kelowna, B.C., to drill the Clone, Tonga and Campbell Ridge properties, all situated southeast of Stewart, B.C.

A summary of targets for each property follows:


Clone: new targets developed by ground truthing of several geophysical anomalies identified by a recently completed Aeroquest airborne survey. The principal target lies 800 metres northeast of the high-grade gold shears in the main zone that were the subject of a $3-million program from 1995 to 1998;
Tonga: an 800-by-1,800-metre area marked by anomalous electromagnetic responses within a magnetic low, coincident with a zone of silver-molybdenum geochemical anomalies; and
Campbell Ridge: a 2.5-kilometre-long trend is marked by pervasive molybdenum geochemical soil anomalies. Twenty-five of 60 rock samples taken from within the anomalous areas returned values from 0.1 per cent to 2.4 per cent Mo.

All of the properties are jointly owned as between Silver Grail and Teuton. The Clone property is currently under option to Canasia Industries Corp. Canasia can earn a 50-per-cent interest in the Clone property by spending $1.8-million over the five-year term of the option. Silver Grail and Teuton will be the operators during the term of the option.

D. Cremonese, PEng, is the qualified person for Teuton and Silver Grail in regard to data presented in this news release.

 

Lakota winds up $1.2-million private placement


2006-04-26 10:01 PT - News Release

Mr. George Breuler reports

LAKOTA CLOSING $1,200,000 FINANCING

Lakota Resources Inc. has closed its previously announced brokered private placement of units (see Stockwatch news dated March 10, 2006). The offering raised gross proceeds of $1,201,200.16 by way of the issuance of 3,906,342 million units at a price of 30.75 cents per unit, each unit consisting of one common share of the company and one common share purchase warrant. Each warrant is exercisable into one common share of the company at any time on or before the second anniversary of its issuance at a price of 41 cents per share.

Canaccord Adams acted as agent in respect of this placement and received 412,507 units and 390,634 agent's warrants as compensation for its services. The agent's warrants are exercisable into one common share of the company at any time on or before the second anniversary of its issuance at a price of 41 cents per share. A total of 4,318,849 common shares from treasury of the corporation were issued in this placement.

 

Tue Apr 25, 2006
Bell Accepted for Trading on the Frankfurt Stock Exchange

--------------------------------------------------

 Vancouver, British Columbia: Bell Resources Corporation (the "Company") is pleased to announce that the Company has commenced trading on the Frankfurt Stock Exchange (WKN 000AOD8C8, Symbol H1V/H1S). The Specialist on the Floor is Concord Effekten AG, Frankfurt (www.concord-ag.de).


LEDUC -property...owned by TUO

This large property, acquired by staking in 2003, surrounds the formerly producing Granduc copper property 40 km northwest of Stewart, British Columbia.

The area has been dormant since cessation of mining at Granduc in 1984 but has recently become active again due to the recent strong upsurge in the price of copper. In late 2004, Bell Resources Corp. ("BL") of Vancouver, BC purchased the Granduc property outright, with plans to re-explore and, if successful, resume production at the minesite.

In August of 2005, after completing airborne geophysical surveys over its core Granduc property as well as large portions of Teuton's surrounding Leduc Silver claims, Bell approached Teuton with an offer to option the Leduc Silver. A binding letter of intent was entered into which grants Bell an option to acquire a 60% interest in the Leduc Silver claims for total exploration expenditures of $1.5 million, total cash payments to Teuton of $85,000, and total share payments of 100,000 shares, over the five year term of the option.

 

Cassidy cuts 26.48 gpt Au over 3 m on Sanu Folo zone


2006-04-27 11:06 PT - News Release

Mr. James Gillis reports

CASSIDY GOLD CORP.: SANU FOLO DELIVERS RESULTS AT KOUROUSSA GOLD PROJECT, GUINEA

Cassidy Gold Corp. has provided results from continuing reverse circulation (RC) and diamond drilling on its 100-per-cent-owned Kouroussa project, located in Guinea, West Africa. A series of 21 RC holes totalling 1,774 metres and 12 core holes totalling 1,503.5 metres have defined Sanu Folo mineralization at a nominal 40-metre drill spacing. Sanu Folo is located 200 metres north of Cassidy's Sanu Filanan deposit. Highlights include 1.79 grams per tonne (g/t) gold (Au) over 24 metres in KD163, 26.48 g/t Au over 3.0 metres in KD171, 24.34 g/t Au over 4.0 metres in KRC874 and 3.70 g/t Au over 19.0 metres in KRC880.

Sanu Folo

The April program focused on defining up to three zones of mineralization along 500 metres of the west-trending Sanu Folo structure, between the JJ zone to the east and Sanu Filanan to the west. Latest RC drilling consisted of 1,774 metres in 21 holes arranged as a series of north-south fences between those completed in December. Highlights include 2.52 g/t Au over 9.0 metres in KRC872, 24.34 g/t Au over 4.0 metres in KRC874, and 11.92 g/t Au over 3.0 metres in KRC875. KRC880 intersected a broad zone of mineralization assaying 3.70 g/t Au over 19.0 metres, including 9.74 g/t Au over 6.0 metres (table 1). Insufficient material for sampling was encountered in four of the 19 metres, including two in the high-grade section, suggesting that the overall grades may be under-reported. True thicknesses are estimated to be approximately 65 per cent of the reported sample lengths.

 

Symbol: TUO U/TEUTF

03May06 Market News Publishing Inc. 2006/05/03 No:0007


TEUTON RESOURCES CORP. ("TUO-V")
- Geophysical Target Identified on 4J's Property

Teuton Resources Corp. ("Teuton") is pleased to announce that a major
target has been identified on its wholly-owned 4J's property by integrating
results from a recently completed, Aeroquest EM and Magnetometer survey
with all prior exploration. The property is located 40 km northwest of
Stewart, British Columbia.

Highlights from the interpretation are as follows:

* A complex 300+ metre long EM anomaly lying astride a magnetic low on the
flank of an intrusive body (see figure attached) is situated under thin ice
cover near the height of land on the west side of the Bowser River valley.

* Abundant sulphide-mineralized float boulders have been discovered
emanating from a source under the ice at two sites, both of them local
embayments into the icefield that encroach upon the area of the EM
anomaly. Six samples of galena-bournonite boulders averaged 24.54 oz/ton
silver, 0.047 oz/ton Au and 28.05% lead.

* Very fine-grained, Pb-Zn-Sb-Ag-Au mineralization hosted in argillites
near the edge of the ice has been characterized as sedex or VMS in nature
based on petrographic studies. VMS expert Dr. Ross Sherlock stated that
the 4J's has "potential for a deposit of significant size and value making
it a worthwhile exploration target."

BC government geological publications have previously cited the 4J's
as sharing some affinities with the very rich Eskay Creek gold-silver
deposits located 38 km to the northwest. The EM anomaly further
underscores the comparison. Jonathan Rudd, Ph.D., chief geophysicist for
Aeroquest Limited stated:
"The Eskay-style sulphide target can range from a non-conductive,
chargeable (will respond to an IP survey, but not to an EM survey) feature
to a semi-massive sulphide target which would be chargeable and conductive,
responding to both EM and IP surveys. Of note, the Eskay Creek deposit
itself is known to be a conductive massive sulphide body. So it follows
that where conductive sulphide targets exist, the priority for follow-up
must be very high given the bonanza grades that these sulphides can host.
The 4J anomaly has a known occurrence of fine-grained stratiform
sulphides in argillite in close proximity to the EM anomaly. The
mineralogy of the sulphide is encouraging with the strong presence of
bournonite, a mineral common at Eskay Creek. Graphite is also identified
as a constituent mineral in this occurrence Assays of this occurrence
indicate the presence of excellent grades."
Teuton will send a geological team to investigate the area of the
anomaly as soon as field conditions permit, probably in early July.
Because of the very rapid meltback of icefields in the Stewart region in
recent years, it may well be that parts of the EM anomaly area are already
exposed. The last time the 4J's was accessed by Teuton personnel was in
1998.
Dino Cremonese, P.Eng., president and CEO of Teuton, commented: "Our
decision to use Aeroquest Limited's state-of-the-art geophysical surveys on
many of our prime Stewart area properties has been rewarded by the
discovery of yet another exciting target. If possible we will drill test
the 4J's later on in the field season, or, alternatively, find an option
partner to undertake the work. With our Del Norte, Leduc Silver, Clone,
Tonga and Campbell Ridge properties already contracted for drilling, early
indications are that this will be the busiest field season ever for
Teuton."

 

Diese company hat engen kontakt mit TENKE und NOVA GOLD



TNR Gold to drill Iliamna's D claims


2006-04-27 12:53 PT - News Release

Mr. Gary Schellenberg reports

ILIAMNA DRILL PROGRAM COMMENCES

TNR Gold Corp. has mobilized technical teams and drill equipment to the Iliamna project's D claims. The drill contractor is Major Drilling Inc., which has substantial experience in difficult drilling situations involving thick overburden, such as is anticipated at the D claims.

Joint venture partner and project operator Geocom Resources Inc. plans to drill at least two 250-metre diamond drill holes to test a large geophysical anomaly that underlies the D claims. The anomaly consists of a large aeromagnetic anomaly that is further delineated by ground-based electrical measurements, which indicate the possible presence of sulphide minerals. Drilling in 2004 encountered copper-gold mineralization in a similar setting at the nearby H claims. Upon completion of this drill program, TNR and Geocom will vest their respective full interests in the D claims block of the Iliamna project, having previously earned their interests in the H claims.

We seek Safe Harbor..web site....www.tnrgoldcorp.com
 

www.jsmineset.com        fuer die beste analysis  

Kaiser says Lithic gets profile as awakening zinc play


2006-05-05 09:16 PT - In the News

John Kaiser, writing in an April 4, 2006, Tracker, says 35-cent Lithic Resources Ltd. offers lots of upside if its Crypto zinc project captures investor imagination and Stoke Mountain delivers a new discovery. Mr. Kaiser also said buy in November, 2003, at 18 cents. An investment of $1,000 is worth $1,886. The U.S.-baseed letter writer says Lithic is a prime example of an overlooked exploration junior about to get a profile thanks to rising commodity prices. Speculators, he says, want juniors with competent management and projects that already have a resource in place.  A significant speculation cycle is imminent, Mr. Kaiser advises. Lithic offers exposure to zinc in Utah with molybdenum, silver and even copper. It has more than $1.2-billion worth of zinc in the ground. Its implied project value is only $9-million. The upside limit until early May will likely be the 50- to 60-cent level. The market must digest 2.9 million warrants exercisable at 50 cents. The company plans geophysical surveys on both Crypto and the Stoke Mountain VMS project in Quebec. Mr. Kaiser says Crypto is quietly getting very pregnant as the price of zinc accelerates.
 

I went over the Crypto project with Staargaard, and the earlier stage Stoke Mountain project in Quebec that Lithic also optioned in June, I realized that Lithic had turned into a very interesting bottom-fish. Crypto is a carbonate hosted skarn/manto deposit discovered in 1961 which has had 66 holes drilled in it for a total of 86,200 ft. In 1993 Cyprus calculated a non 43-101 compliant geological resource of 6 million tons of sulphide ore grading 8.68% zinc plus another 3.1 million tons of 7% zinc oxides. At today's $0.84 per lb zinc price the Crypto sulphide resource has a gross value approaching $1 billion. Back in June when Lithic did the deal zinc was still bumbling between $0.50-$0.60 per lb and Eurozinc, despite its name, was heavily focused on its Neves Corvo copper mine. Staargaard believes that he needs to double the zinc resource to make Crypto feasible. Because the Crypto property has not had geophysical surveys done since the sixties Staargaard thinks that modern geophysical surveys may yield a better geological interpretation of the system that can generate new zone targets or sort out possible extensions of known zones. There is also evidence of molybdenum mineralization at depth which Staargaard believes has affinities with the world-class Henderson deposit. There also appears to be potential for peripheral high grade silver veins.  Staargaard went to Toronto in October looking for $250,000 to fund the first stage but the big swinging dicks chased him away and said come back when he needs some big money for a real project. They sneered that Crypto was more suitable for some piker broker on the west coast. Given that zinc is at a new recent high and that it is the only base metal whose futures curve is not in severe backwardation, that Crypto is a zinc sulphide deposit with $160 rock, that Crypto is part of a deep and juicy porphyry system whose geometry has never been sorted out, with no work done during the past 15 years, located in the mining friendly state of Utah, and with only 18 million shares issued of which 3 parties own nearly 50%, well, given all that I am mighty glad I already own the stock  And I haven't even mentioned the Stoke Mountain VMS play located a couple hours east of Miontreal where Staargaard thinks past exploration misinterpreted the geology  

Kaiser says buy Skyline as pint-sized Galore Creek


2006-05-05 17:18 PT - In the News

John Kaiser, writing in an April 6, 2006, Tip of the Day, says 18-cent Skyline Gold Corp. is a top-priority buy in the 10- to 19-cent range. This is Mr. Kaiser's first buy of the stock. The California letter writer says Skyline's short-term target is 40 to 60 cents. Skyline, he says, has awoken from a seven-year slumber to give its Bronson Slope copper-gold-silver-molybdenum deposit another shot. In charge is Cliff Grandison. He led the initial effort during the mid-nineties until weak metal prices and a disagreement with a shareholder prompted him to step aside. Bronson Slope is a smaller scale version of NovaGold Resources Inc.'s Galore Creek project. While Bronson Slope lacks Galore Creek's world-class size and better grade, its smaller scale gives it a shot in a hot market. Also, Bronson Slope was the subject of a prefeasibility study in 1999, so much of the groundwork has already been done. Mr. Kaiser says Bronson Slope has potential as a $100-million to $200-million dream target. At 18 cents, Bronson Slope has an implied project value of only $9-million. That would rise by 1,000 to 2,000 per cent if further work confirms the dream target potential. That translates into a $2-$4 price target longer term.

 

Posted On: Tuesday, May 16, 2006, 11:44:00 AM EST

The Drubbing of Gold

    Author: Jim Sinclair


 


Dear CIGAs,

The punch the markets took yesterday has participants in a mood akin to a person sitting on a razor blade, terrified to do anything.  
 


I recommend for those that did not read all of yesterday's postings to revert to the item that concerned a near financial failure of the entire carry trade, not copper alone. A failure of such magnitude on the catangos (the difference in spread between cash and futures) due to the bull move might have threatened the financial structure of the historic London Metals Exchange. This would certainly require a central bank rescue.

The drubbing of gold took overnight in the US was the catalyst to send the entire commodity market into panic mode. This was an orchestrated hatchet job via the British Central Bank making a loan of gold to an entity that sold with abandon to create the result. That was the decision anyone in charge might have made.

The $682 magnet functioned yesterday. The dollar stinks and the commodity world is like a boxer that took an upper cut with a glass chin, wobbling in the corner and attempting to get its focus back.

Gold held twice now on the magnet of $682. The US dollar had one day below Fibonacci Support and yesterday rose a smidge above the Fibonacci retracement line. Today the dollar gave that back falling below again. Some call yesterday’s action a rally in the dollar, but it hardly qualifies as that. As long as it remains under pressure it will be very hard to hold gold down.

Weak hands and those with margin calls continued liquidating today. This will cease assuming, which I do, that $682 holds tomorrow. Slowly the courage of the shaken will return.



 

sehr gutes management
Panterra to begin drilling in Saskatchewan in June


2006-05-15 14:08 ET - News Release

Mr. Fred Rumak reports

UPDATE ON COMPANY ACTIVITIES

Panterra Resource Corp. has released its upcoming program for the development of its large land blocks in Saskatchewan. After a very long and wet spring breakup period which has delayed activities, it has dispatched survey crews and is in the process of completing the surveying and licensing of 16 locations in the Foam Lake block and 16 locations in the Moose Jaw block. Drilling is expected to commence shortly after all of the well licences have been issued, likely toward the middle of June.

Engineering programs for the company's two wells cased earlier this year on its Shell Lake block are being put together and the company expects to evaluate these wells in the near future, likely in conjunction with the evaluation of some of the above locations to optimize expenditures.

The company wishes to report that, along with its partner, it has acquired an additional 77 gross sections of land (38.5 net to Panterra) at the last Saskatchewan Crown sale. Plans are being put together to have this land developed as soon as possible by a third party.

The company is also pleased to announce that Robert W. Adams, BSc, has joined the company as exploration manager. Mr. Adams brings numerous years of Saskatchewan geological experience to the company and will be an asset in helping the company achieve its goals by developing its land base in that province and pursuing potential acquisitions that fit within company guidelines.
 

Posted On: Thursday, May 18, 2006, 3:49:00 PM EST

The "Operations" Continued...

    Author: Jim Sinclair


 


Dear CIGAs,

It is a fact this gold market is NOT about gold, but rather copper, zinc and nickel.

The geniuses that trade differences rather than take outright positions (basically the hedge fund geeks) who made so much money over many years trading enormous positions have gone badly wrong on the LME in copper, zinc and nickel. The geeks have once again put a system into financial malfunction and cried to their central bank and treasury to rescue them.

 


The hedge funds have been the favored borrowers of international and especially British banks. This is due to their supposedly low-risk spread trades and thereupon OTC derivatives. These have gone so badly the LME itself fears the worst. The Exchange Chairman would inform the central bank and the British Treasury of the impending problem, seeking assistance. It is not only the LME that has the problem but all the banks that have lent huge amounts of money to these hedge fund geeks and their “Carry Trade.”

If I were the Chancellor of the Exchequer or the President of the Bank of England it would be much easier to attempt to break the market than put both the LME and the lending banks back together for hedge fund geeks not in the hottest of hot financial water.

What is at risk here is the hedge fund geeks, the exchange, lending banks and the reputation of Great Britain as a financial center.

Now what do we do?

The main item that opposes this tactic is the level of the US dollar. In order to keep the price of gold cold you need to make the dollar hot, not simply wiggle it on the upside. The Fib line the dollar has been rotating around is now acting as a support line and becomes a critical measure. Should it fail to hold the dollar up gold will move up and the BOE will, as they always have, pull out. The gold market can eat any central bank today. Just look at the gold ETFs that are now bigger in gold holdings than the majority of all central banks.

Another measure of how this strategy is working for the BOE will be how the spread between near cash and far copper, zinc and nickel acts. To benefit, the geek hedge funds need the spread difference between near and far to collapse, which is a bearish indicator for copper. If the spread stalls the strategy is in trouble. If the spread moves out then the strategy of pounding gold to avoid an LME crisis fails.

The key to gold’s future is not necessarily gold itself but the action of the US dollar and the spread between near and far on copper, zinc and nickel in London.

We are in a major bull market in gold, copper, zinc and copper which is far from over. The BOE “Save the Bacon” strategy will fail and they will have to liquefy the system, arranging loans to bail out the perps.

The BOE has tried this before and never succeeded as a market manipulator. That is because the BOE has never learned how a consistently successful manipulator works. You can only manipulate a market in the direction it wishes to go. In gold, copper, zinc and nickel that is up, not down.

Gold is going to $1650.

Margin is a financial death wish.

Courage lies in understanding.

Your emotions are always WRONG in gold.

Get a grip and hold that grip


 

Posted On: Thursday, May 18, 2006, 3:49:00 PM EST

The "Operations" Continued...

    Author: Jim Sinclair


 


Dear CIGAs,

It is a fact this gold market is NOT about gold, but rather copper, zinc and nickel.

The geniuses that trade differences rather than take outright positions (basically the hedge fund geeks) who made so much money over many years trading enormous positions have gone badly wrong on the LME in copper, zinc and nickel. The geeks have once again put a system into financial malfunction and cried to their central bank and treasury to rescue them.

 


The hedge funds have been the favored borrowers of international and especially British banks. This is due to their supposedly low-risk spread trades and thereupon OTC derivatives. These have gone so badly the LME itself fears the worst. The Exchange Chairman would inform the central bank and the British Treasury of the impending problem, seeking assistance. It is not only the LME that has the problem but all the banks that have lent huge amounts of money to these hedge fund geeks and their “Carry Trade.”

If I were the Chancellor of the Exchequer or the President of the Bank of England it would be much easier to attempt to break the market than put both the LME and the lending banks back together for hedge fund geeks not in the hottest of hot financial water.

What is at risk here is the hedge fund geeks, the exchange, lending banks and the reputation of Great Britain as a financial center.

Now what do we do?

The main item that opposes this tactic is the level of the US dollar. In order to keep the price of gold cold you need to make the dollar hot, not simply wiggle it on the upside. The Fib line the dollar has been rotating around is now acting as a support line and becomes a critical measure. Should it fail to hold the dollar up gold will move up and the BOE will, as they always have, pull out. The gold market can eat any central bank today. Just look at the gold ETFs that are now bigger in gold holdings than the majority of all central banks.

Another measure of how this strategy is working for the BOE will be how the spread between near cash and far copper, zinc and nickel acts. To benefit, the geek hedge funds need the spread difference between near and far to collapse, which is a bearish indicator for copper. If the spread stalls the strategy is in trouble. If the spread moves out then the strategy of pounding gold to avoid an LME crisis fails.

The key to gold’s future is not necessarily gold itself but the action of the US dollar and the spread between near and far on copper, zinc and nickel in London.

We are in a major bull market in gold, copper, zinc and copper which is far from over. The BOE “Save the Bacon” strategy will fail and they will have to liquefy the system, arranging loans to bail out the perps.

The BOE has tried this before and never succeeded as a market manipulator. That is because the BOE has never learned how a consistently successful manipulator works. You can only manipulate a market in the direction it wishes to go. In gold, copper, zinc and nickel that is up, not down.

Gold is going to $1650.

Margin is a financial death wish.

Courage lies in understanding.

Your emotions are always WRONG in gold.

Get a grip and hold that grip


 

Cassidy Gold drills 47 g/t Au over four m at Kouroussa


2006-05-25 14:01 ET - News Release

Mr. James Gillis reports

CASSIDY GOLD CORP.: 47 G/T AU OVER 4.0 METRES AT KINKINE, KOUROUSSA GOLD PROJECT, GUINEA

Cassidy Gold Corp. has released results from continuing reverse circulation (RC) drilling on its 100-per-cent-owned Kouroussa gold project, located in Guinea, West Africa. Resource drilling continued at Kinkine, adding 11 reverse circulation (RC) holes totalling 1,263 metres. RC drilling also targeted the 777 zone at Manie. Highlights from Kinkine include 47.08 grams per tonne (g/t) Au over four metres in KRC910, 3.94 g/t Au over 18 metres and 2.96 g/t Au over 21 metres in KRC913, and 2.30 g/t Au over 31 metres in KRC919. True widths have not been calculated because mineralization is controlled in at least two orientations. Kinkine is located four kilometres north of Cassidy's Sanu Filanan deposit.

Kinkine zone

The Kinkine zone consists of near-surface, potentially open-pittable, oxide mineralization. Latest drilling suggests that a hard rock source of the oxide mineralization has been identified and further drilling is planned to test potential new controls to primary mineralization in addition to expanding near-surface mineralization. Mineralization remains open to the north and south and to the east.

 

2006-05-31 14:53 ET - News Release

Mr. James Gillis reports

JUNCTION ZONE RESULTS AND NEW PERMIT, KOUROUSSA GOLD PROJECT, GUINEA

Cassidy Gold Corp. has provided the results from recently completed diamond drilling on its 100-per-cent-owned Kouroussa gold project, located in Guinea, West Africa. Highlights include 7.12 grams per tonne (g/t) Au over 13.0 metres in KD-174 and 1.57 g/t Au over 29.0 metres in KD-175. Diamond drill holes were oriented perpendicular to the moderately southeast-dipping Junction mineralized zone. Thus, reported lengths approximate true widths. Junction is located 2.5 kilometres northwest of Cassidy's Sanu Filanan deposit.

Cassidy is also pleased to announce that its wholly owned subsidiary, Cassidy Gold Guinee SARL, has been granted an exploration permit for the Kouroussa West property covering 226 square kilometres contiguous to the west of Cassidy's Tambiko permit, part of the Kouroussa property. The Kouroussa West exploration permit, Arrete No. A2006/2479/MMG/SGG, authorizes the company to explore for gold and associated minerals on the permit area for an initial term of two years, subject to a 15-per-cent state participation.

In addition, Cassidy Gold Guinee SARL has been granted renewal permits for its Kouroussa main and Kouroussa North permits as well. The project properties now comprise 1,066 square kilometres and are in good standing until May 10, 2008.

Junction zone

The Junction zone consists of near-surface gold mineralization stretching over a strike length of greater than 600 metres hosted in carbonaceous sediments adjacent to Niandan mafic volcanic rocks. The zone dips moderately to the southeast. Eight diamond drill holes totalling 817 metres were completed with seven of the eight spaced 50 and 85 metres apart. One hole failed to reach the zone of mineralization.

KD-174 to KD-178 were collared in the central portion of the Junction zone. Highlights include 7.12 grams per tonne (g/t) Au over 13.0 metres in KD-174 and 1.57 g/t Au over 29.0 metres in KD-175. To the north, KD-178 returned 0.95 g/t Au over 20.0 metres and KD-179 assayed 2.34 g/t Au over 6.0 metres. KD-184, at the southwest limit of the defined mineralization, was abandoned prior to entering the mineralized zone. KD-185 stepped 375 metres along strike to the southwest and intersected mineralization that assayed 1.06 g/t Au over 9.0 metres.


JUNCTION ZONE -- DIAMOND DRILL RESULTS

Hole   From   To   Length   Au
ID      m     m      m     g/t

KD-174  35.0  48.0  13.0   7.12
KD-175   5.0  13.0   8.0   0.64
and     18.0  47.0  29.0   1.57
KD-176  46.0  51.0   5.0   0.71
and     59.0  60.0   1.0  16.70
and     65.0  72.0   7.0   1.25
KD-177  10.0  12.0   2.0   1.50
and     29.0  40.0  11.0   0.83
KD-178   3.0   6.0   3.0   5.02
and     44.0  64.0  20.0   0.95
KD-179  46.0  49.0   3.0   1.67
and     55.0  58.0   3.0   0.83
and     69.0  75.0   6.0   2.34
KD-185  93.0 102.0   9.0   1.06
and    114.0 116.0   2.0   1.51

Core drilling confirmed geological interpretation, allowed detailed structural measurements and delivered samples for bulk density testing. Metallurgical testwork of the mineralization hosted in carbonaceous rocks is planned. Core assays follow up on highly favourable results of three phases of drilling completed earlier this year (see news in Stockwatch on Feb. 7, March 2, and March 30, 2006). An updated location map will be posted on the company's website shortly.

Kouroussa West permit

The new Kouroussa West permit is contiguous to the west of the Tambiko permit. Kouroussa West was acquired to cover the projection of favourable structures and geology interpreted from airborne magnetics and radiometrics data collected last December. The Dalaoule and Banjounani areas are the subject of continuing soil geochemistry and aircore drilling of geophysical and geochemical anomalies, in an area of significant artisanal mining activity.

Sampling and assay procedures

All drill core samples were split using a rock saw over sample lengths of 0.5 to 1.5 metres. Holes are drilled with HQ rods through the saprolite and reduced to NQ size once in bedrock, typically between 40 and 100 metres depth. All samples were sent to the SGS analytical laboratory in Siguiri, Guinea, for fire assay using a 50-gram subsample. Samples assaying greater than five g/t gold are reassayed using a metallics screen technique. Repeat assays are made on every 25th sample, and duplicates and blanks are submitted, one each in every 20 samples. Quality control/quality assurance is closely monitored by RSG Global personnel.

 

WHAT THE BLEEP DO WE (THEY?) KNOW??



May 31, 2006


Summary/Conclusions: Decision about investment in Cassidy obviously has passed almost entirely away from share price depending mostly on "latest drill results" to price governed by who has dominant share ownership and what such majority shareholders have in mind.



Cassidy (CDY) is delineating and evaluating more than a dozen promising discoveries. These are in close proximity to each other. Reports of discoveries and extensions do not move share price much. The third party resource calculations reported a year ago of results from parts of only three of the finds indicated more than enough gold to justify a mine even then. Those discoveries have since been confirmed and extended and new ones added.  Whether the next calculation (expected in June or July '06) indicates one million ounces, or more or less, really may not matter much to the share price anticipations. The shares are deeply under priced even on last year's announced resources. More good prospects are recognized to exist. The market simply does not care about these facts.  



CDY's shares enjoy good liquidity but continue to trade at a deep discount to underlying value. Highly knowledgeable, new shareholders recently took very, very large share positions. One new, huge shareholder is an investment fund that recently turned itself into an operating mining company. It purchased sufficient treasury shares and holds share purchase warrants in sufficient amount to become a 21% CDY shareholder. Under the rules of the TSX and Securities Commissions, that can cause it to be designated a "special controlling shareholder". Such shareholder's actions are subject to added regulatory scrutiny if the shareholder takes an active part in the management. This adds to assurance of fair treatment for small shareholders. What should an investor do? I have compiled some observations to help in my decisions and share them now with you.  



What does an expert say? Dr. Skousen is an economist, financial advisor, university professor, and author of more than 20 books. An ex-CIA economic analyst, he has been a columnist for Forbes magazine, The Wall Street Journal and appeared on ABC News, CNBC Power Lunch, and CNN, among others. He is a self-defined mining investment "expert" but I doubt he has heard of CDY. Here is what he says that is applicable in general. "The absolute best time to buy a mining stock is just prior to the drilling of a "discovery" to achieve spectacular returns for investors. But, statistics show that out of 600 properties where an ore body is discovered, only one is subsequently made into a mine! The experience gained over 30 years is that the truly best time to buy mining stocks is when a qualified management team is preparing to convert/construct an 'ore body' company into a producing mine".  Purchase and holding of mining stocks during the delineation, development/construction period has, historically, produced the most significant gains and carries a favorable risk/reward ratio.  Ore bodies are discovered.  Mines are made!



Key observation: Cassidy's largest (declared, known) shareholder is very much "a qualified management team" and CDY is definitely preparing to turn ore bodies into (a?) producing mine(s?).   As well, Cassidy continues to explore, in both, the traditional indicated anomalous areas of the Kourassa permits, and soon, on the Sigiuri permits, which are near a competitor's profitably operating mine! So one might get the discovery bonus Skoussen talks about in the next months, as well.  



Observations:



A. We see: Despite year to date trading of more than 16 million shares of Cassidy (about 25% of the entire currently issued and 20% of all if fully diluted) share price has gone up a paltry 40 cents from the levels at the end of 2005 to now hover around the $1.00 p.s. mark.



B. The treasury already contains sufficient funds to ensure unprecedented levels of exploration and delineation to be done for at least a year. Extant warrants priced below current share price exist. When exercised these will provide wherewithal to continue the same activity pace for about another year.



C. Who is selling? Significant puzzlement exists about the identity of the seller/buyer of the shares spoken of in A. above. Selling of large blocks comes from numerous sources.  Most of the time the "buy" broker is CDY's underwriter. Therefore some shares are likely sourced from the underwriter's clients as the fund managers lock in portfolio profits after a double in share price. They are secure in case of a runaway because they still hold warrants.



D.  But who is the buyer?  The underwriter's analyst "lowballed" the stock's potential. He sees it to only double this next year. So who is smarter than the analyst? Who has the knowledge and capacity to take up that number of shares. Is it another investment fund? Is it a potential takeover suitor? At least one major gold miner reacted to Cassidy's success by acquiring adjoining permits. Is it that same major? Or is it the largest declared shareholder? Whoever it is, it definitely appears to have the advantage of experience in interpreting announced results that the "great unwashed herd" of stock punters lack. It also has the money and patience to back a conviction.



E. Oops! Numerous junior exploration companies were able to raise spending money three and four years ago in the first blush of gold fever. Predictably (remember the one-in-600 number?) most "bent their pick". They have not had success sufficient to attract new exploration and delineation money. A few companies have done well, and a larger number have convinced the public that they are doing well, but really have less to show and less potential than does CDY. CDY is a true rara avis of undervalued junior companies even at the present low stage of gold stock fever enthusiaism. Holding one's own in these markets is testimony to value.



F.  Gold fever. Partly thanks to President George W. Bush, the following type of opinion is gaining ground among the world's investment community. "WASHINGTON (MarketWatch Update: 1:09 PM ET May 27, 2006) -- Flaws in the dollar are going to move the price of gold higher, said James Turk, the founder of Goldmoney.com, in an interview in Barron's magazine. The price of gold is "going much higher," and the $8,000 per ounce forecast he made a couple of years ago is "probably as good a target as any," Turk said. A near-term spike to $2,000 is possible," he added. Wowee! Remember what happens to CDY's (or any other miner's stock) price doesn't depend on whether such per ounce price actually comes about. What matters is how many people fear/anticipate it.  Remember the market is always 50% wrong! One of: the buyer, or the seller, shouldn't have!




 

Lithic: Crypto zinc project getting more pregnant by the day

Synopsis: Lithic Resources Ltd (LTH-V: $0.35) is a prime example of an overlooked exploration junior that is on the verge of achieving a much higher profile as speculators come looking for juniors with competent management and projects that already have a resource in place that is open to expansion through new exploration and whose economics appear to shine at current metal prices. Nearly 2 million shares have come out in the $0.20-$0.30 during the first quarter of 2006, but the selling is drying up in response to the recent announcement of a $400,000 private placement at $0.25 which has generated so much interest management is considering increasing the amount. I wish to confirm that Lithic remains a top priority buy in the $0.20-$0.29 range and to alert bottom-fishers that the timing for a significant speculation cycle is imminent. If you want exposure to a zinc play in Utah with molybdenum, silver and even copper possibilities that already has more than $1.2 billion worth of zinc in the ground, currently carrying an implied project value of only $9 million, then Lithic Resources Ltd is an excellent way to put some zinc exposure into your bottom-fish portfolio. The upside limit during the next five weeks will likely be the $0.50-$0.60 level as the market either digests 2.9 million warrants exercisable at $0.50 until late April and early May or waits for them to expire. The proceeds from the current financing will be used to conduct geophysical surveys on the Crypto project in Utah and the earlier stage Stoke Mountain VMS project in southern Quebec prior to summer-fall drilling for which Lithic plans to raise another $2-3 million. Stoke Mountain is an old VMS teaser play in the same belt of rocks that host the Buchans and Duck Pond deposits as well as Messina's recent Boomerang discovery. Lithic's approach involves targeting an untested stratigraphic horizon in the hope of finding a large cousin of the many small copper-zinc-silver deposits in the region. Stoke Mountain is a sleeper in the sense that very little exploration was done during the 20th century because Domtar Paper had held the mineral rights. At Crypto Lithic plans to extend the known carbonate replacement zinc zones, apply modern geophysical methods to identify new possible zones, investigate the molybdenum mineralization previously encountered at depth, further explore the potential for distal high grade silver-lead veins, and follow up a past intersection of high grade copper-zinc-molybdenum mineralization. Crypto's geology appears to be driven by a deep porphyry system whose geometry is not yet well understood, which leaves this play open to significant surprises. The story at Stoke Mountain is the potential for a new discovery, while the story at Crypto is to expand the known mineralization and upgrade the existing resource in anticipation of a Structural Bull scenario where zinc establishes a long term average above $1 per lb. The wild card for Lithic is that the management behind its major shareholder, the Resource Capital Fund, takes advantage of higher prices generated by market interest in Crypto to drag an even larger project into the fold. As Lithic currently stands it offers something for just about every type of speculator, including the Bay Street boys who last October pelted the president with eggs and tomatoes when he came looking for money. But that was before zinc exploded from the sink
The 1,164 hectare Crypto project is located in Utah about 150 km southwest of Salt Lake City and about 50 km southeast of Dumont Nickel's Gold Hill project. Utah is a mining friendly state which hosts the world class Bingham Canyon Mine. The Bingham Canyon porphyry system has a resource of about 3.1 billion tonnes grading 0.73% copper, 0.043% molybdenite and 0.013 opt gold. In addition Bingham hosts carbonate replacement and skarn mineralization containing high grade zinc, lead, silver and gold ore. Bingham Canyon's carbonate replacement mineralization, of which 13.5 million tonnes grading 8.8% lead, 3.4% zinc and 4.9 opt silver has been mined, is relevant because Crypto has a similar geological setting, although the inferred porphyry system would be buried deeper. The Crypto project includes the historic Fish Springs Mining District which underwent small scale mining of high grade silver-lead ore from structurally controlled carbonate replacement zones during the late 19th century until the 1970's. The Utah Mine produced 13,000 tons grading 128 opt silver and 44% lead. Lithic believes there remains potential for additional high grade silver mineralization at depth in the eastern part of the property
The main focus at Crypto, however, is a series of carbonate replacement and magnetite bearing skarn zones containing coarse grained sphalerite (zinc). This mineralization occurs at the contact where a possibly Tertiary aged quartz monzonite intrusive has cut a sequence of Ordovician to Silurian carbonates. The zinc zones were discovered in 1961 by Utah International while drilling iron (magnetite) targets and explored until 1985. During the nineties Cyprus Minerals optioned the property and tested the known zones at depth. In total 68 holes have been drilled for 88,400 ft. Cyprus calculated a non-43-101 compliant "geological in situ reserve" in 1993 which Roscoe Postle independently reviewed and deemed to be up to prevailing industry standards. Cyprus estimated a resource of 2.8 million tonnes of oxide zinc grading 7% to a depth of 250 metres, and 5.4 million tonnes of 8.68% sulphide zinc between 300-500 metres. The zinc oxide mineralization is not relevant because it represents metallurgical recovery problems, but the deeper sulphide resource has economic potential through underground mining methods. The sulphide resource contains 1,033,058,880 lbs of zinc worth US $1.3 billion at a $1.24 per lb zinc price, with a rock value of $237 per tonne. When Lithic acquired the Crypto project the rock value of the zinc sulphides was only half that amount, and when zinc was wallowing at $0.35 per lb the rock value was only $67 per tonne, far too low to sustain an underground mining operation. At a $237 rock value the Crypto deposit may very well be feasible, but what nobody is yet willing to grant as feasible is a long term average zinc price of $1.24. That is why the market is only assigning an implied value of $9 million to the Crypto project rather the $100-200 million the project might be worth if high zinc prices were here to stay. Lithic management feels that it needs to boost the overall resource by at least 50% to achieve a scale that would justify development of an underground mine premised on $0.80-$0.90 long term zinc prices. And because even that assumption requires one to throw out the history of the past 30 years, it is no surprise that Lithic management sometimes comes across as Crypto's biggest skeptics
But Lithic's Chris Staargaard and Russ Cranswick are both geologists, and what gets them excited is the possibility that Crypto's geological potential has barely been scratched. The intrusive associated with the carbonate replacement mineralization appears to be a cupola extending from a deeper intrusive body. Drilling at depth of the zinc mineralization has encountered molybdenite mineralization. The presence of molybdenite at depth and the structurally controlled lead-silver mineralization east of the zinc zones is consistent with the metal zonation found in porphyry system. Additional intriguing possibilities are raised by a 3 metre intersection 600 metres east of the main zone which graded 3.5% copper, 7.65% zinc, 0.1% molybdenum and 21.8 g/t silver. Copper is not part of the known zinc carbonate replacement zones, which leads Lithic management to suspect that a large porphyry is present at depth which has generated a number of carbonate replacement deposits with varying metal content. The idealized cartoon model below is a possible interpretation of the above Crypto geological cartoon. The exploration strategy will be to apply a variety of geophysical techniques in an effort to "see" targets not seen before, and to drill a number of deep holes designed to illuminate the geological context of the targets. The goal for Crypto is thus twofold: expand the known zones and find entirely new zones by developing a better understanding of the Crypto system's geometry. It is tough to raise money in bear markets for such a strategy, but in a bull market based on rising commodity prices this double pronged approach appeals to dreamers and number-crunchers alike.

The Stoke Mountain project was also optioned in June 2005 from a pair of geologists who had worked on this project during the nineties. Lithic can earn 100% by paying $155,000, issuing 450,000 shares and spending $975,000 over four years. The vendors retain a 2% NSR, of which can be bought out for $500,000. The property is located in southern Quebec about a 2 hour drive southeast of Montreal. It occurs within the Dunnage tectonic zone, "a belt of old oceanic crust that includes a collage of Cambrian to Mid-Ordovician island-arc terranes" which have potential for volcanogenic massive sulphide deposits (VMS). World class deposits include the mined out Buchans deposit in Newfoundland and the Brunswick 12 deposit in New Brunswick. Smaller examples in Newfoundland include Aur's Duck Pond deposit and the new boomerang discovery of Messina Minerals.


A number of small 1-3 million tonne copper-zinc-lead-gold-silver deposits have been exploited on the Quebec portion during the past hundred years. Examples include Cupra-d'Estrie at 2.43 million tons of 3.28% zinc, 2.74% copper, and 38 g/t silver, Solbec at 2.06 million tonnes of 4.57% zinc, 1.57% copper, 48.6 g/t silver, and Suffield at 1.39 million tonnes of 7% zinc, 0.9% copper, 0.5% lead, 91.2 g/t silver and 2.7 g/t gold. The town of Sherbrooke to the southwest of the Stoke Mountain property used to be a mining town but no longer so. The Stoke Mountain property is interesting because it has received little exploration compared to surrounding land because Domtar Paper held mineral rights until a forced divestiture in the eighties. The theory is that VMS deposits occur in clusters, usually with at least one larger deposit which in this area has not yet been found. Lac Minerals took a first crack at the property in search of Bousquet style gold deposits, and then Phelps Dodge took on the project during the nineties, shifting the focus to VMS targets. Phelps Dodge focused its drilling on IP anomalies deep within the volcanic sequence and obtained a few sniffs, and just as its geologists were figuring out that their focus should have been the volcanic-sediment contact higher up in the stratigraphic sequence, Phelps Dodge pulled the plug on the project. For at least one of the vendors Stokes Mountain represents unfinished business. Lithic's goal is to conduct detailed mapping and geochemical sampling to better sort out the stratigraphy and follow up with drilling.

Conclusion: Lithic has suffered from neglect by its major shareholder during the past couple years because the Resource Capital Fund group does not normally control the companies it bankrolls. Lithic was thus an anomaly with which it was unsure how to deal. The job has now fallen to RCF's Russ Cranswick to help Chris Staargaard breathe new life into the junior. Other directors include RCF's Ryan Bennett and Frank Wheatley who tend to be busy with other projects. Both Staargaard and Cranswick are relatively young in mining industry terms, and although they do not have significant equity stakes in Lithic, the junior is emerging as a proving ground for them. Prior to the recent private placement the company had almost no money left and a bunch of disgruntled shareholders wondering why they had ever invested in Lithic. All that is about to change, provided Cranswick and Staargaard pick up the ball and run with it. The IPV chart below reveals that at a $9 million IPV for the 100% owned Crypto project Lithic is among the cheapest of the juniors who own zinc deposits. With only 18,032,819 shares issued and 24,490,486 fully diluted, of which nearly 9 million are owned by Resource Capital Fund II, Cumberland and Eurozinc, the structure of Lithic offers lots of upside if Crypto captures the public's imagination, and Stoke Mountain delivers a new discovery.



 

Skyline Gold gets TSX-V acceptance of Bronson report


2006-06-21 16:23 ET - News Release

Mr. Jeff Smulders reports

SKYLINE ANNOUNCES THE ACCEPTANCE AND DETAILS OF ITS TECHNICAL REPORT

Skyline Gold Corp. has received the acceptance of the TSX Venture Exchange of the technical report referred to in Stockwatch news June 6, 2006.

The technical report includes comment on access, infrastructure, exploration, drilling, metallurgy and resource estimates and a recommended exploration program on the company's Bronson Slope property in northwestern British Columbia. The report is being filed on SEDAR and will be posted on the company's website, currently under development.

The report concludes that the resource estimate of Giroux (1996b) is reliable and relevant. Although this historical resource estimate does not meet current Canadian Institute of Mining and Metallurgy (CIMM) resource standards and classifications, it was an accurate and fair resource estimate, at the time, and should be referred to as a historical resource. This historical resource will be used by Skyline in future reporting and referred to as such.


                               BRONSON SLOPE
  GIROUX OCTOBER, 1996, HISTORICAL RESOURCE WITH CONTAINED METAL CONTENT
              (Cut-off based on NSR of  $6 (U.S.) per ton)

Category         Tons   Au g/t   Ag g/t   Cu%   Au (Oz)   Ag (Oz)      Cu (Lb)

Measured    2,280,000    0.574     2.59 0.210    42,076   189,856   10,555,625
Indicated  65,000,000    0.527     2.46 0.195 1,101,323 5,140,901  279,433,050
          ----------    -----     ---------- --------- ---------  -----------
Total      67,280,000    0.528     2.46 0.196 1,143,399 5,330,757  289,988,675      
Inferred   24,300,000    0.454     2.23 0.199   354,693 1,742,216  106,607,842

Based on the following 1996 metal prices and currency:
$1.00 (U.S.) equals $1.33 (Canadian)
Au at $385 (U.S.) per ounce
Ag at $5.25 (U.S.) per ounce
Cu at $1.10 (U.S.) per pound


A. Burgoyne, author of the technical report, recommends that Bronson Slope be advanced through further exploration and drilling. Mr. Burgoyne recommends a two-stage program. The first stage would include survey control, the tie-in to pre-existing grids and the geological database, and completion of 4,215 metres of core drilling. The drilling will focus on the Red Bluff, a part of Bronson Slope, at 50-metre and 100-metre centres. The cost of this program is estimated to be $1.75-million.

A second stage of core drilling is recommended, subject to stage one being positive, on the Red Bluff zone and High Wall gold zone, as well as the Bronson East and Bronson West targets. The program will total 10,656 metres of HQ-diameter core drilling, at an estimated cost of $3.7-million. Drilling will commence immediately as finances become available under the management of Cam DeLong, BSc, MSc, project manager.
 

By Dan Norcini        
June 19, 2006

 


Over the past years that I have been privileged to participate in this fledgling generational bull market in gold, I have written a goodly number of essays detailing the Commitments of Traders reports and analyzing how that relates to the price action experienced in the gold futures pit at the Comex.

Having been at this game for a long time now, I can usually get a pretty good feel for who is doing what during the course of the week by comparing the price action in the pit against the previous week’s COT report and looking at the long term trend of a market. In what I consider to be “normal” markets, a rising market in an established bull trend will usually see the bulk of the speculators, both large and small, on the long side with the bulk of the commercials taking the opposite or short side. That only makes sense as commercials/producers are using the speculator buying to implement scale-up selling programs to lock in profits. They sell a little here and a little there and continue to do so as prices rise, assuring themselves of a profit and minimizing risk which the speculators are more than willing to assume in exchange for an opportunity to make a profit. The higher the market rises, the happier these true or bona-fide hedgers are as that means higher selling prices for their goods.

Over the past years in this gold market we have witnessed some anomalous patterns in the open interest activity that I have detailed in great extent in various essays I have published out on the web. Unlike “normal” markets, the pattern for gold has been for the commercials to meet determined speculator buying in gold with fierce resistance all the way up in a manner that is normally not consistent with price maximizing selling. Upward progress is met, not with commercials standing aside and allowing the funds to drive the market north and then selling lightly into that buying only enough to cover their immediate hedging needs, but rather with fierce and determined selling that fights and contends against all upward progress. I have therefore come to expect this pattern as the norm in the gold market.

Imagine my surprise then to learn from today’s release of the COT report that the commercial category went even one step further than I had come to expect from them. Their normal pattern has been to sell with steady determination but only into rising prices as they attempt to cap the price rise and resist the upward progress of the metal. Once the fund buying has abated or stalled, they then launch a counterattack of heavy offers which overpower the bidders in the market. This has the intended effect of causing a quick retreat by the locals who front run their offers and proceed to knock the market down into the sell-stops below which are then automatically touched off turning speculators into sellers. The process then feeds on itself producing an avalanche of selling which trips all the short term technical oscillators and has the black boxes lighting up the computerized platforms with even more speculator sell orders which soon turns into a veritable blood letting.

The cartel of commercials then use this forced speculator selling to buy back or cover the short positions they had built up over the course of the price rise congratulating themselves for having fleeced the momentum based trading funds who chased the market higher. We have seen this pattern repeat itself going all the way back to 2001.

What is quite extraordinary about today’s report was that it detailed something which I have not seen during the course of this entire bull market since 2001, namely, increasing short sales by the commercial category in the midst of a falling market – not just a falling market, but a precipitously falling market at that. This is a startling new development.

What is even more remarkable is that the big trading funds, instead of dumping their longs into the lap of the waiting commercial cartel, actually appear to have been buying on the way down! This also is a FIRST! In other words, we have seen in one week a COMPLETE REVERSAL of the norm of the last 5 years in the gold market. As a matter of fact what I had been expecting to see was a REDUCTION in the net short position of the commercial category and a reduction in the net long position of the trading funds. I assumed that the gold cartel would dupe the trading funds into establishing a huge number of new short positions even as that same category sharply cut the number of long positions. I also assumed that the same thing would happen among the small spec category.

What actually happened was the exact opposite except for the small specs who ditched more shorts than they did longs! The big trading funds INCREASED their net long position as the market fell – something they have not done throughout the history of this past bull market. Instead of piling on a ton of new shorts, the trading funds added only a bit more than 700 new shorts and almost 4,000 new longs into the price weakness. Could it be that this category is finally wising up and actually learning to beat the cartel at its own game? We will have to see but the fact that this has occurred at all is nothing short of astonishing.


Let me try to put it another way. The COT report covers the activity of the traders from the Tuesday of the week past to the Tuesday of the current week. In other words, if we want to learn who was doing what from Tuesday to Tuesday we can get a very good picture from looking at that report. Unfortunately the report does not tell us who was doing what on Wednesday, Thursday and Friday of the current week. That will show up in the following week. Still, we can get enough information to correctly identify the transition of players for a week’s interval of time.

Having established this we can now go back to the gold chart and look at the price action of the market from Tuesday of last week, 6-6-2006 to the Tuesday of the current week, 6-13-2006.



On Monday of last week, the price of August Comex Gold closed the session at 648.70. This will be our starting point for the analysis that follows since the COT report will show us who did what from the following day until Tuesday of this week as compared against the price action of gold.

The next day, Tuesday, 6-6-2006, gold dropped down to 634.70. Wednesday it went down to 632.60. Thursday it took another huge hit and closed down at 613.80. Friday it closed down at 612.80. The following Monday, at the start of this week, it continued its downward progress and closed at 611.30.  Tuesday, the final day of this week which is covered by the COT report, it was walloped for a gargantuan hit of $55 closing all the way down at 566.80. It was further mauled overnight beginning in the afternoon Access session on into Tuesday evening when it began to gets it footing in the late afternoon Asian action and early morning European trading session. To sum up – gold went straight down from Tuesday of last week thru Tuesday of this week to a tune of a loss of $81.90, and if you include the Tuesday overnight action, a whopping loss of $102.30 in one week!

To further amplify on what I have described previously -  Whereas the normal pattern of the last five years in gold as I have described above would have expected us to see the commercial cartel covering or reducing their shorts and booking profits, the exact opposite occurred – the commercial shorts, aka known as the gold cartel, SOLD THE ENTIRE WAY DOWN – instead of REDUCING the number of their shorts and booking profits they actually PUT ON MORE OF THEM! The COT report reveals that they added a total of 5,282 BRAND NEW SHORTS as the price of gold collapsed. They have NEVER done this before during any time in this bull market in gold since it began way back in 2001.

What does this mean? – quite simple – it means that there was a concerted effort on the part of this group of short sellers to FORCE THE GOLD PRICE DOWN. They had absolutely no interest in booking profits on existing shorts as the price tumbled some $100. This is a stunning development as it clearly indicates a concerted attempt to derail what was becoming a runaway bull market in the gold price that was threatening to garner far too much public attention. Remember - gold’s perennial function is to serve as the financial “canary in the coal mine” which alerts the workers to hidden, toxic dangers. Quite simply, gold’s stunning rally to $730 in the matter of a few months time was sending shock waves through the corridors of the monetary elites who were “looking into the abyss” if gold continued its meteoric rise.  Something had to be done and quickly or this thing was going to get out of hand.

Along that line, this past week I had sent some comments up to my good friend Bill Murphy over at GATA’s fine site, www.lemetropolecafe.com detailing both in written and in visual chart form what appeared to me to be a deliberate assault that was being launched against the gold market beginning in the thin and illiquid conditions of the aftermarket Access trading session as soon as it opened for the resumption of trading in the afternoons. Bill included those in his daily Midas reports. Also, my trading buddy and good pal Jim Sinclair (www.jsmineset.com) had posted the same comments along with the price charts detailing the attack as shown on the 30 minute interval chart. As a trader who trades exclusively in the CBOT’s full-sized electronic gold contract every single day, I am quite attuned to the normal order flow into that “pit”. What caught my eye immediately beginning last week and continuing with the assault on gold early this week, was the huge size of sell offers that came flooding into those pits late last week and earlier this week during the normally comparatively quiet afternoon session. Offers of 500+ to sell were relentlessly pounding the CBOT electronic gold contract. One enormous sell order of 943 hit the pit much to my stunned amazement. I found myself talking out loud to myself saying, “What in the world is going on here? Did I miss something happening in the world? Did someone Central Banker or Fed governor say something? Who in the heck is selling like this?”

To give you some perspective – I rarely see buy or sell orders in the early afternoon session exceeding 100 contracts going either way. Clearly some entity was attempting to mercilessly pound the price down into lower levels looking to run stops in the thin conditions and set off a cascade of further selling which would then be expected to carry over into the TOCOM session that evening driving the price even lower as Japanese selling took over.

So the question becomes, who would do such a thing and why?

Then it all began to make perfect sense if one understands what both Jim Sinclair and Bill Murphy and the GATA gang had been saying about this recent price decline in gold, namely, that is was an orchestrated and deliberate attack by the Central Bankers of the West to break the back of the gold market and defuse the warning message that gold was sounding abroad. In our opinion, it started with the Bank of England either mobilizing its own gold supplies or gold from the IMF. This gold was then used to temporarily flood the market with extra supply with which to overwhelm the soaring investment demand thereby knocking the price of gold, and other commodities sharply downward to give the intended effect that fears of inflation due to commodity price rises had been effectively contained. In order to affect the most carnage on gold, this surreptitiously mobilized supply of extra gold had to be accompanied by a concerted and well-coordinated effort on the part of the Western Central Bankers and some of their allies of tough anti-inflation talk giving the impression that the CB’s were going to be especially vigilant to nip any inflation genie in the bud.

Think about this a bit and see if we can put two and two together. If you knew in advance that the BOE was about to make a move to derail the surging copper market and bail out its friends at the LME which was on the verge of witnessing a default among some of its members who had stupidly sold short into a roaring bull market in copper, and you knew that they would also do this by launching an all out assault on the base metals and especially on the gold price using mobilized Central Bank vault gold, what do you think you could conclude? Answer – the price of gold was going to fall sharply as it would be temporarily overwhelmed by the extra supply hitting the market. If you knew this would you not sell with complete reckless abandon?  Would you not attempt to chase the market down as far as you could pushing into one set of sell stops after another? Would you not do this in the hopes of wrecking as much carnage on the market as possible and then eventually clean up by buying all those shorts back after you had broken the back of nearly every would-be gold bull on the planet? I know I sure would have! You would be a complete nitwit not to recognize such a gift horse being dropped into your lap!

Well, that is exactly what I believe occurred. The BOE in conjunction with their cohorts at the Fed, would have tipped off its agents, or better yet, would  have plotted with its agents Goldman Sachs, et al,  that is was about to mobilize its gold or the IMF’s gold and dump it onto the market. In the meantime Goldman Sachs and friends were unleashed to smash the paper markets in gold at both the Comex and the CBOT, and run as many speculators out of it as possible while seeking to inflict the most technical damage possible on the price charts. The intended effect was to be to so completely dishearten and discourage the public and the investment funds from buying gold that it would suffer an ignominious death and fall off the radar screens of investors. That would effectively get it out of the headlines and remove the pesky metal’s telltale warning signs about the true state of the global economy. No more gold stories equals happy Central Bankers.

There is no doubt that the plan worked to near perfection – I have never seen so much near total despair and disillusionment among the friends of gold as I witnessed this past Tuesday and early Wednesday. Out of everywhere, as if on cue, analysts confidently pronounced that the bull market in gold and in commodities was over, finis, kaput!

However, a funny thing happened on the way to the forum. Someone showed up to meet the brazen sellers and began to buy in huge lots. Gold quickly ricocheted off the $545-$550 level running all the way back to near $590 in two days. Today, Friday, 6-16-2006, when the same group of sellers once again attempted to break the back of the gold market which had come roaring back in overnight trade in both Asia and in Europe, and began their coordinated selling assault during the New York trading session (what else is new), out of nowhere buying came out of everywhere forcing them to beat a hasty retreat. Gold, which at one point had been knocked down $20 off its overnight highs, came back with a vengeance stuffing the shorts and forcing them back out as it closed the session in remarkable fashion for a Friday afternoon.

The strong close augurs well for next week although gold did suffer some pretty heavy technical damage this week as a result of the attack. It will take our friend some time to repair the damage suffered but it demonstrated true grit this week by coming back from such a fierce beating in so noble a fashion to end the week. One has to understand that as a result of the work of GATA and especially the conference in the Klondike that the big physical market buyers know full well what is going on in the gold market and were laying in wait for Goldman and company. And why should they not? If one understands the war involving gold and knows that there exists a group of entities who are intent on smashing the price of gold and will utilize all the resources at their disposal, why not wait for them to pull one of their stunts, step aside for a while, let them knock the price back down and then buy all that you can fit into your boats at a greatly reduced price level. After all, if you are determined to own gold and increase your holdings of it as the Russians, Chinese and Arab interests are, why not let the fools make it available to you at a nice big discount and then load the boat complements of your short-sighted but “generous” benefactors?

In conclusion, we will need to see the price action this next week and the COT next Friday along with the daily open interest reports to see if the gold cartel is forced to cover those brand new shorts, many of which are underwater at this point and whether the funds will now trade this gold market a bit more intelligently. We want to see if gold can hold the recent lows on any possible subsequent revisiting of those lows. If so, and if especially the volume dries up in comparison to that of the day when the lows were made, then the bottom is definitely in and gold will start its next leg up from this region after a period of base building. We know that down at those levels there are huge buyers waiting in the physical market who want to obtain gold at what they consider to be a “value” area. That is the key. Those guys want all the cheap gold they can get and will pounce on it at a price they are happy with. If the CB’s want to dump more gold on the market, those big buyers will be more than happy to relieve them of it all. Heaven help the new shorts in this market if that gang of physical market buyers decides this is as cheap as gold is going to get again.

June 16,2006
Dan Norcini
read at www.kitco.com

 

Synopsis: Lithic Resources Ltd (LTH-V: $0.28) was confirmed on April 4, 2006 as a top priority bottom-fish buy in the $0.20-$0.29 range on the basis of its Crypto zinc deposit in Utah which at $1.20/lb zinc boasted an in situ resource valued at $1.2 billion. Since then there have been several important developments which prompt me to strongly confirm my top priority buy recommendation. Lithic is still cheap compared to what has happened to the price of zinc, but Lithic is on the verge of narrowing the gap.
To start off, Lithic management replenished its treasury with a modest private placement of 3,728,000 units at $0.25 in April 2006 that brought on board new shareholders seeking a stake in a zinc play. The company has used a small portion of the proceeds to conduct geophysical surveys on the Crypto project, but has yet to receive the results thanks to the extraordinary activity of the exploration service sector. Lithic's Chris Staargaard continues to claim that a $2 million plus drill program awaits Crypto in 2007
There has, however, been an additional development which is the primary reason for this Tracker and my confirmation that Lithic Resources Ltd continues to be a top priority bottom-fish buy in the $0.20-$0.29 range where it is currently trading. Until recently Lithic's principal shareholder, the Resource Capital Fund II LP, managed by the Denver based Resource Capital group, has viewed Lithic as an inconsequential mistake that ended up in its portfolio. The Resource Capital group is a venture capital outfit which specializes in financing advanced metal projects. One of its major investments has been EuroZinc Mining Corp (EZM-T: $3.90), whose acquisition of the Neves Corvo copper-zinc project in Portugal was largely financed by the Resource Capital group. On August 21 EuroZinc agreed to merge with Lundin Mining Corp (LUN-T: $41
the events of the past couple months have spurred a fresh interest in Lithic by the Resource Capital group, which is being cashed out of its major plays of the past few years. Whereas at the start of 2006 the Resource Capital group was willing to view Lithic as just a shell whose shareholders could be readily brutalized through a roll-back based RTO of some over-priced Australian asset, today RCF is viewing Lithic as a foundation of something much bigger. The Crypto zinc project, and even the longshot Stokes Mountain VMS play in southern Quebec, are now seen as stepping stones rather than disposable placeholders. This shift in RCF's perception of Lithic within the grand scheme of things is what I wish to communicate to bottom-fishers. The departure of EuroZinc into the Lundin fold creates a huge goodwill bank for RCF, and a funding vacuum for the RCF III LP.

With only 27.3 million Lithic shares fully diluted at $0.28, the implied project value of 100% owned Crypto is only about $8 million, a fraction of the Crypto zinc deposit's $2 billion in situ value which has the potential to grow substantially with the help of modern geophysical surveys applied for the first time in decades. My view is that Crypto could turn into a dream target worth $500 million, translating into $10-$20 price targets for Lithic if mother nature co-operates and the Cyclical Bears receive a major drubbing. But even with a more modest $100 million dream target, Lithic's Crypto project represents fair speculative value at the current stock price
If you look carefully at the Lithic chart you will see that the stock is just starting to rise off a bottom built during the past couple months. In early May Lithic had punched through $0.50 just as the central banks initiated a liquidity squeeze that squelched the flow of hedge fund money into the resource sector. Lithic then retreated to bottom-fish levels because there was no project news in the short term pipeline, RCF's priorities remained elsewhere, and the bookies were favoring the bears in the Showdown between the Structural Bulls and Cyclical Bears. The situation is very different now, and Lithic is primed to become a huge winner for bottom-fishers. RCF has apparently taken the view that the current economic setting is too unusual to leave the fate of Lithic entirely in the hands of the exploration process. Success may not just "happen" to Lithic, it will be made to happen. And that is the sort of bottom-fish I adore.

*JK owns shares of Lithic....www.kaiserbottomfish.com