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Belo Sun Mining
(TSX-V: BSX; Pink Sheets: VNNHF)
Belo Sun Continues to Extend Gold Mineralization at Volta Grande – December 14, 2010

Constructionchallenges aside, we like this Brazilian project and consider theprospects for a future gold mine at Volta Grande to be good. Themineralization contains higher grade sections that should help witheconomics and the project could support an operation of above-normalsize (200,000+ ounces of gold per year). We’d like to see the capitalcosts come down with one possibility being to develop the project instages or perhaps to increase cutoff grades. Although we have not fullyvalidated the project in our model, it does look leveraged to highergold prices and becomes particularly-attractive above $1,250 per ounce(a level we suspect mining companies may consider baseline in thecoming two years). [Silverax]


Wolverine Minerals (TSX-V: WLV; Pink Sheets: WLRMF)
WolverineAnnounces Acquisition Of Option To Acquire 21 Yukon Gold Properties,Closing Of Private Placement And Filing Of Technical Reports – December 14, 2010

Decentwin so far for private placement participants who are sporting 200%paper gains upon closing excluding the warrant or flow through taxbenefits. The “acquisition of option to acquire” the extensive Yukonland package from Strategic Metals (TSX-V: SMD; Pink Sheets: SMDZF)provides lots of exploration opportunity and it may be worthwhile towatch the company closely in the latter stages of next year especiallyif the shares come down toward the private placement level in the lastSpring or early Summer. [Silverax]

Richfield Ventures (TSX-V: RVC; Pink Sheets: RVCTF)
Richfield Extends Blackwater Southward with BW 97 – December 14, 2010

Overthe past year, we have watched with great fascination Richfield’sadroit drilling of a property that had previously hosted what wasgenerally assumed to be a smallish gold deposit clustered in severalmineralized pipes of limited size. A methodical approach of grid-baseddrilling, however, has now disabused the market of such thinking,revealing Blackwater to be a bulk-tonnage gold deposit with surfacedimensions of approximately 300 by 800 meters for the 100+ gram-meterenvelope. That’s perhaps a 2+ million ounce gold deposit grading around1 gram per tonne gold with decent initial metallurgical results andnear surface as well. Arguably ahead of itself at C$5, we feel that agood trading opportunity could present itself on a pullback toward C$3or perhaps a bit lower. That said, a huge amount of work lies ahead tomove the project through the development plan and it wouldn’t beuncharacteristic for the market to get bored in the meantime. Releaseof the NI43-101 resource report next Spring followed by pre-feasibilitylater in the year may provide some excitement but possibly of atemporary nature. In any case, the latest drilling is starting todefine the edges of the deposit although there is a small chance thegold system could open back up to the South under cover. [Silverax]


Galway Resources (TSX-V: GWY; Pink Sheets: GWYRF)
Galway Intercepts 24.0 Meters of 8.4 G/T Gold and 96.0 Meters of 1.6 G/T Gold, and Reiterates its Fractional Land Position – December 15, 2010

Theimpressive-looking assays come from the Pie de Gallo and Northeastareas which have not been expanded meaningfully by this latestdrilling, although they do confirm good continuity within these twomoderate-sized zones. What Galway needs to do now is bravely step out abit to see if their property has a meaningful amount of gold. Buyersresponsible for spiking the shares on the basis of these resultshaven’t looked at the drill map carefully. As for fractional landpositions internal to Ventana’s (TSX; VEN; Pink Sheets; VENGF) claim,we don’t feel Galway would get substantial payment for them. Miningwill more-than-likely be underground, rendering theseseveral-meters-wide slivers irrelevant (for example, the mine engineerscould plan to locate the pillars there). That said, Galway may stillhave speculative value at current prices especially if its neighborskeep moving toward mine development. [Silverax]


Mantra Resources (ASX: MRU; TSX: MRL; Pink Sheets: MNRZF)
ARMZ MAKES ALL CASH OFFER FOR MANTRA RESOURCES VALUED AT A$1.16 BILLION – December 15, 2010

Itappears M&A in U3O8 is picking up and the price being paid here,over $10 per pound of resource (including inferred) is quiteencouraging. On a separate note, the three main players in Peru’sMacusani Plateau (on a combined basis) should have a 100 million poundresource under their belts next year, which should go a long way inhelping to overcome the geographical and logistics challenges of theremote location. With 3 active uranium explorers plus Bear Creek’s(TSX-V: BCM; Pink Sheets: BCEKF) huge Corani silver deposit, I like theeventual odds of Macusani becoming a future uranium and silver miningdistrict. As if giving a positive nod of approval to the odd pairing ofuranium and silver, a certain other junior explorer has been on a rollrecently. [Silverax]

Eagle Hill Exploration (TSX-V: EAG; Pink Sheets: EHECF)
EagleHill Intersects Near Surface, High Grade Gold at Windfall LakeIncluding 18.82 g/t Over 9.90 Meters and 53.64 g/t Over 4.55 Meters – December 15, 2010

Theessential substance of these holes was a very high-grade one meterintercept and that is what should be mentioned first. Secondaryimportance is the wider mineralized envelope grading 2-4 grams pertonne. Windfall lake is known for extremely high-grade intercepts ofgold. It is also known for random grade distribution and no apparentcontinuity, something that 25 and 40 meter stepouts aren’t going tochange. [Silverax]


Bayfield Ventures (TSX-V: BYV; Pink Sheets: BYVVF)
Bayfield Drills 89.96 g/t Gold Over 1.1m Within 46.6m of 2.28 g/t Gold in Rainy River, NW Ontario – December 14, 2010

This is a preferable way to report a narrow high-grade intercept that is contained within a wider mineralized envelope. As Otto points out,there is a lot of grade “smearing” going on with Bayfield’s longerinterval but as long as it is placed into proper perspective there islittle reason to get upset about it. There are many companies abusinginvestors’ credulity by showcasing narrow high grade intercepts as bulkgold discoveries. That’s not the problem here but rather theoverstatement of the importance and relevance of Bayfield’s claim blocksin respect of the Rainy River gold deposit. The fact is Bayfield’sland is not critical to the mine plan at Rainy River and the mostprospective target for Bayfield isn’t a bulk open pit deposit but ratherhigh grade gold at depth in narrow but long ore shoots. The individualshoots at Rainy River have very little if any lateral continuity butthey can extend for many hundreds, if not several thousands, of metersdowndip. This may be visualized as a stack of straws although onBayfield’s land so far it seems to be just a single straw. [Silverax]

Supatcha Resources (OTCBB: SAEI)
SEC Suspends Trading in Supatcha Resources – December 17, 2010

Not much more than a week after we commented on Supatcha’s unusual trading activityit get suspended by the SEC. Not that we expected it to get suspended,but we certainly aren’t surprised. Here’s a quick excerpt:

Moscow-basedOnexim, controlled by billionaire investor Mikhail Prokhorov, said ina statement that it “categorically denies any involvement withSupatcha Resources Inc. A news release by that company indicating thatMr. Prokhorov is involved in an unsolicited bid to purchase shares iscompletely false.”
Probably the most humorouspart of the whole episode (at least for those who don’t own anyshares in the company) is that the company is claiming its website hasbeen brought down by hackers.But not just any hackers, we’re talking about cybervigilante JaniceShell and her motley crew. I hadn’t heard of her before this, so forthose similarly unschooled here’s an introduction from a Fortune article written way back in 1998:

Theunofficial queen of the cybervigilantes is Janice Shell, a 50-year-oldart historian who lives in Milan and got hooked on busting online conmen after she was burned in an Internet investment scheme two yearsago. A tireless–even obsessive–pursuer of online malefactors, Shellsays she spends 12 hours a day trolling the Internet, looking forcrooks. Thanks to this single-minded dedication, she has become acelebrity–at least to those who hang out on Silicon Investor. There aretwo threads devoted just to her: “Janice Shell for President” and“Janice Shell–A Retrospective.”In the past two years, Shell says she hasexposed an investor relations director with a murder rap, a so-calledbiotech company that really sold kitty litter, and a CEO who claimed tohave run the largest corporation in Nevada but who was really the headof a two-man air-conditioning repair shop. “God help us if [Shell]ever goes to work for the hypester pump-and-dump gang,” one admirergushed in an August posting. “Being an international sex symbol is hardwork, but someone has to do it.”

In June, Shell took note of amining company called Mountain Energy. What caught her eye, she says,were postings announcing that the stock, then trading for pennies,would soon hit $5. Shell started digging, and here is what she says shefound out: An “informant” told her that Mountain Energy’s managementteam had once been charged with fraud. She also heard that the firm’smain asset–a tract of land Mountain Energy claimed was worth $200million–was worth little more than $100,000.

Between June andAugust, Shell posted her findings on Silicon Investor, warninginvestors to stay away. During that time the stock, which had earlierclimbed 200%, fell from $1.70 to 22 cents. That’s when trouble began.Investors who had already bought Mountain Energy stock were furious.“These Bulletin Board Stock Guardian Angels…why don’t they want ushonest investors to make money?” complained one. Finally, in late Julythe SEC halted trading in the stock. So far it hasn’t taken any furtheraction, but it still has its eye on the company. Meanwhile, thecompany’s management has resigned and dismissed all its employees. “Alot of people were really hard on her; they didn’t believe her, but shewas right all along,” says Bill Liang, a medical researcher at Harvardwho invested $3,000 in Mountain Energy. “We should have listened.”

What’s Mountain Energy’s side of the story? FORTUNE tried calling company headquarters. The phone was disconnected.

Shellhas been accused of being an underhanded broker, a short-seller…and awhole lot worse. (“Well, Miss Janice, protector of the small investor,”reads one typically creepy Silicon Investor posting, “you must be verytired of being the north end of a south bound donkey, a.k.a. horse’sa**.”) She’s even received death threats. But Shell isn’t fazed–she’sfar too busy defending her fellow investors, whether they like it ornot. “There are a bunch of psychos out there–I’m not exaggerating–eachone weirder than the next,” she warns.

How easy is it to cononline investors? Shell wanted to find out. Last April Fools’ Day, sheand seven other cybervigilantes set up a phony IPO for a firm thatpromised it could cure the year 2000 problem. They named the firm FBN(for Fly By Night) Associates, established a Website for it, andstarted a forum on Silicon Investor where they announced FBN’s publicoffering. The site was a doozy: It included information about FBN’s hotproduct, seductively named NeuralNet2000; a section on careers at FBN;and a slew of glowing press releases with headlines like “FBN CuresY2K Bug.” They even created a very legitimate-looking issue of FORTUNEwith a cover story about FBN. There was one small giveaway: a pressrelease that noted, “FBN to receive papal blessing.” But even that didnothing to slow people’s interest in FBN’s IPO: Shell was inundatedwith E-mails requesting the prospectus and other information about thecompany. “Now that I know how people do these things, I’m thinkingmaybe I should do it myself,” says Shell with a laugh. “I could make alot of money.”

 Has Janiceturned evil since 1998 as Supatcha claims? Maybe, but more than likelySupatcha’s grasping at straws. Here’s a screenshot of their “hijacked”home page for posterity:

And now the chart:

Thehalt was only put on through December 31, 2010, so it will beinteresting to see what happens on Monday, January 3, 2011. [Zurbo]

Silver Predator (CNSX: SPD)
Golden Predator (TSX: GPD)
Silver Predator Signs Definitive Agreements – December 13, 2010

An excellent deal for Golden Predator, a company recently profiled in our Royalty Company report.Silver Predator will issue its sister company a minimum of 15 millionshares to exercise the property options associated with transaction,which are currently valued at about $18 million. [Zurbo]

Molybdenum Market
Molybdenum Expected to Hover around Lower End of $11-$14/lb Range in 2011 – December 15, 2010

From the article:

MrPablo Bascur MD of Chile based consulting firm MolyExp toldBNamericas that “Current excesses in inventories, mostly in China andcontrolled by Asian companies, are not expected to be depleted in thenear future, even if some stockholders cash in to pursue otherinvestments.”

According to Mr Bascur’s estimates, added toexcess production of 53 million pounds from 2009, the molybdenummarket will see a surplus of 100 million pounds in 2011. Molybdenumprices could only go higher than USD 14 per pound in 2011 if westerneconomies show a much stronger pace of recovery, but peaks will notlast more than a few weeks.

With globalconsumption of under 500 million pounds, a 100 million pound surplus ishuge. If Mr Pablo Bascur proves to be a trustworthy source ofinformation then this certainly isn’t the best of news for themega-moly projects looking for project funding. Fotunately for Moly Mines (ASX/TSX: MOL) and General Moly(AMEX/TSX: GMO) they’ve already secured theirs, but if these andprojects come online then this will only further exasperate thesupply/demand imbalance and put further downward pressure on prices. Becareful out there. [Zurbo]

New Gold (AMEX/TSX: NGD)
New Gold Announces Closing of $150 Million Undrawn Revolving Credit Facility
– December 15, 2010

On the prowl with nearly $600 million in readily available cash and credit. Time to start speculating on likely targets. [Zurbo]


United Mines, Inc. (OTCBB: UNMN)
United Mines, Inc. Signs Letter of Intent with a Major Chinese Investment Group
– December 16, 2010

When a CEO ends a press release paraphrasing Lao-Tzu, your eyebrows should be raised:

Mr.Martin added his variation of Chinese philosopher Lao-Tzu, “A journeyof 10,000 miles starts with the first step.” That first step has nowtaken place.

Buyer beware. Need we say more? [Zurbo]


Benton Resources (TSX-V: BTC; Pink Sheets: BNRJF)
Benton Sells Bermuda Property to Stillwater Mining for $14 Million
– December 16, 2010

Withthis latest transaction we welcome our newest “Cash King”. BentonResources is now trading slightly below the combined value of its cashand investments. [Zurbo]


Starcore International Mines (TSX: SAM; Pink Sheets: SHVLF)
Starcore Reports First Quarter of 2011
– December 16, 2010

Theweight of Starcore’s poorly timed and ill conceived hedge at $731/ozis proving unbearable, with the company unable to post a profit even atrecord gold prices. The following chart says it all:

Nowthings are so bad that the company’s outstanding hedge liability is 2xgreater than the market cap of the company. Wake us up in 2013 whenStarcore is scheduled to pay off the last of its hedges, and then maybethis will be something of interest. Until then, and without any majordevelopments, it is hard to imagine getting too excited about this one.[Zurbo]

Disclaimer:  We may own shares in several of the companies mentioned in this analysis (Metal Augmentor subscribers know which ones), but no compensation has been received fromany of the companies mentioned. This is not investment advice; shouldyou seek investment advice we recommend you discuss the company with alicensed investment advisor or broker.