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Gold Resource Corp. (AMEX: GORO)
$55.6 Million Private Placement to Accelerate Production Profile and Exploration - September 20, 2010

Ourproblem with GORO isn’t in understanding their math. Our problem is withbelieving it. These guys are good at building and commissioning plants,that is what they do and they have done an excellent job in buildingone of the prettiest plants that I have ever seen. They also have a nicebit of gold right at surface that they can mine by simply scooping itout. Next comes the hard part — underground mining in multiple stopes ina deposit they have only drilled to indicated level and in many placesonly to inferred level. They are using polygons to estimate in somecases 100 meters or more of mineralization in zones where they plan tobe actively stoping within 1-2 years. They are also making veryaggressive estimates about continuity at depth and laterally despiteindications the deposit is pinching out or at least becoming morevariable and discontinuous away from the core.

Otherpotential problems include the wet climate in this part of Mexico duringthe rainy season. There are signs of recognition in plant constructionsuch as covered conveyors but you can’t deal with many of the problemsuntil you are actually in production and exposed to the elements.

The bigquestion remains, what will Hochschild be able to do to help them whenthe underground mining proves to be every bit as difficult and dastardlyas it has for every other mining company on Earth? Perhaps they willpull off a miracle and in that case the share price deserves to be $40.More likely they will be just another victim of over-promise andunder-deliver except with perhaps one difference being that they havemade numerous statements not permitted under SEC rules and thus they areat risk of being fined by SEC and successfully sued by shareholders ifthings don’t go well.

It istrue there are some very high grade shoots in this system and it is alsotrue that during the next few months the operations might lookmiraculously profitable as they process the stockpiled ore they scoopedoff the surface prior to commencing commercial production. So there isprobably a couple of quarters of partying left before the really hardwork begins and in the meantime it is possible they will build up a goodstockpile of easy-to-get underground ore as well. The crapshoot startsafter that so I suppose there is plenty of time to ride the sharesbetween now and then. That still leaves the question of how much thenext year or so of operations has already been baked into the shareprice. If nothing else, great timing on the equity raise. [Silverax]

Bullion Monarch Mining (OTCBB: BULM)
Royalty Payment from Third Mine in Carline Trend and Updates to Newmont Litigation - September 20, 2010

Consideringthat no dollar amount was given for the headlined royalty payment andBullion Monarch has made no projections for the amount or duration ofthese royalty payments, the real news here relates to the company'slitigation against Newmont Mining (NYSE: NEM).

We recently introduced Bullion Monarch to our subscribers in a piece entitled Uncle Franco May Be Rich -- Good News for the Royalty Juniors. Some of what was said follows below:

[Bullion Monarch's] royalty interest in Newmont Mining’s(NYSE: NEM) Leeville mine is currently generating $5-$6 million per yearin revenues, which is enough to pay overhead, advance some early stageexploration projects, slowly move forward its interesting EnShale subsidiary,and buy back a few shares now and then. But this royalty doesn’t appearlikely to take the price beyond $1 in the short term without somepositive newsletter or broker coverage. What entices us here beyondunlocking value over the longer term is the potential for a substantialwindfall payment from Newmont/Barrick if the ongoing litigation leads toa favorable ruling for Bullion Monarch. Such an outcome would mean thata 1% royalty is due retroactively on production since 1991 on a a 250sq. km area within the Carlin trend containing several major miningoperations.

We arenow told that the courts have granted summary judgment in favor ofNewmont on its defense of laches*. There is no denying that this is amajor setback, and it now seems highly unlikely that Newmont will settlethe suit rather than risk letting it go to trial. Bullion Monarch isseeking clarification of the extent of the ruling and will seekreconsideration of the ruling while continuing a similar case againstBarrick Gold (NYSE: ABX), which means this may drag on for a while yet.Meanwhile there are other royalty companies that we currently find more compelling.

*Theperson invoking laches is asserting that an opposing party has "slept onits rights," and that, as a result of this delay, that other party isno longer entitled to its original claim. [Zurbo]

Romarco Minerals (TSX-V: R; Pink Sheets: RTRAF)
Romarco Intersects Bonanza-Grade Gold In Upper Portions Of Horseshoe - September 20, 2010

Whenever Isee drill results like this -- 19.2 meters of 46.5 grams per tonne gold-- I give myself a mental kick in the butt if I don't already own thestock. The Haile Gold Project in South Carolina is the real deal -- aworld-class gold deposit in the making -- despite its somewhatunexpected location. It helps that the project is on private land but itdoesn't help that a federal wetlands permit will be required or that asuitable location for tailings disposal has yet to be identified.Overall, we like the project and plan to keep close tabs on it (from thesidelines at this point, unfortunately). [Silverax]

Eagle Hill Exploration (TSX-V: EAG; Pink Sheets: EHECF)
EagleHill Continues to Extend Zone 27 and Intersects 12.0 Meters of 17.36G/T (Uncut) in a New Mineralized Structure at Windfall - September 20, 2010

There isstill no notable continuity to the gold mineralization at the WindfallLake project despite claims to the contrary based on the idea of widerzones containing lower grades of gold. It was neat thinking but EagleHill is basically getting the same haphazard gold distribution thatconfounded the prior operator. Speaking of which, Noront Resources(TSX-V: NOT; Pink Sheets: NOSOF) spent (more like wasted) $15 millionbuilding a 1400 meter exploration ramp to test gold continuity atWindfall Lake and failed spectacularly. That's when they sold 75% of theproject to Eagle Hill for C$1 million in cash plus a 2% NSR. [Silverax]

Metanor Resources (TSX-V: MTO; Pink Sheets: MEAOF)
Metanor Updates the Resource Estimate of the Barry Gold Deposit - September 21, 2010

A classic "buy the rumor, sell the news" event. Technically there really wasn't a rumor so much as an advanced noticeby Metanor that a resource estimate would be published during the weekof September 15th. That notice was given on August 24th, a day on whichMetanor closed at C
.44 within a few pennies of its 52 week low.Metanor then went on to rally to a high of C
.71 on September 20th, arise of over 60 percent in less than one month. But here we are on the21st of September following the much anticipated resource estimateupdate and after less than 1 hour of trading the stock has alreadyfallen by over 20% on 5x average daily volume. More generally speaking,Metanor's suffers from persistent dilution and an inability to achievemeaningful production despite plenty of promises to the contrary.


It has been a long see-saw ride for shareholders. [Zurbo]

Metanor Resources (TSX-V: MTO; Pink Sheets: MEAOF)
Drilling Campaign of 25,000 Meters
- September 23, 2010

This wassupposed to reassure investors? Metanor made a big mistake. Theyover-promoted upcoming results and those results did not end live up toexpectations. Now it's probably too late to bandage over the damagedone, even when the bandage is an impressive-sounding  25,000m drillprogram. Either this drilling should have taken place already to proveup a more substantial initial resource at Barry in the first place, orelse expectations should have been brought in line with reality.[Zurbo]

I notethat the biggest component of the increase in resources at the Barry Pitcame from a reduction in grade. The reason this is not positive is thatMetanor's processing plant at Bachelor Lake is not high capacity and itprobably doesn't make sense to run 1-2 gram per tonne material throughit. [Silverax]

Silvermex Resources (TSX-V: SMR; Pink Sheets: SLVXF)
Genco Resources (TSX: GGC; Pink Sheets: GGCRF)
Silvermex Resources Ltd. and Genco Resources Ltd. Enter into Business Combination Agreement & Silvermex Resources Ltd. and Genco Resources Ltd. Enter into Business Combination Agreement - September 20, 2010

The deal terms are somewhat convoluted and partially as a result the shares have been trading upside down as described in our recent post to subscribers.Regardless, this deal makes fundamental sense: combine a companypossessing a solid management team but underwhelming projects with acompany possessing essentially a non-existent management team but apotentially major gold-silver deposit. Make no mistake, Genco's LaGuitarra project within the Temascaltepec Mining District in the Stateof Mexico is going to be difficult to develop. There are community andsurface right issues. The mining plan will need to be carefullydeveloped and implemented given the multi-phase nature of the operationthat will likely include both open pit and underground mining andprocessing of both oxide and sulfide mineralization. Gammon Gold's(AMEX: GRS; TSX; GAM) Ocampo Mine is a pretty good example of how thingscan go wrong with a complex mining operation in Mexico. Bottom line,Genco was desparately in need of credibility and the Silvermexmanagement team has provided it. Although the combined pro forma marketcap is not cheap (around C$100 million), competent project developmentat La Guitarra should reward shareholders more than amply. [Silverax]

Gold Fields (NYSE: GFI; JSE: GFIJ)
Gold Fields signs option agreement for 60% interest in Philippines Gold-Copper FSE Project - September 20, 2010

Investorsin companies with wannabe world-class gold (+/- copper, moly, silver)porphyry deposits please pay attention here. Remember when the companywas extolling the virtues of the latest drill results -- typicallysomething like 300-500 meters of 0.4 grams per tonne gold and 0.3%copper -- and comparing them to successful porphyry mines (if it's theEast Asian Pacific Rim, the benchmark is usually Newmont's Batu Hijau)?Well, here is what an early stage world-class porphyry deposit lookslike, from the Gold Fields news release:

Morethan 80 diamond drill holes totalling more than 35,000 metres haveintersected a mineralised zone with approximate dimensions of 900 metreseast-west by 900 metres north-south by 900 metres vertical. Within thiszone Gold Fields considers that mineralisation is continuous. Whilegrades are variable, the following historic drill intersections areconsidered typical of the mineralized zone: 691m at 2.5g/t Au, 0.9% Cu;906.8m at 1.5g/t Au, 0.5% Cu; 613.1m at 0.8g/t Au, 0.8% Cu; 733.9m at0.7g/t Au, 0.4% Cu; and 517.4m at 0.6g/t Au, 0.4% Cu.

If yourcompany's project has something approaching the above, it's good oddsthey might have a world-class mine on their hands too. With respect tothe Gold Fields deal, we think they are getting a steal by acquiring 60%of the project in staged payments of US$340 million. [Silverax]

Minera IRL Update on Pan de Azucar Gold Exploration Project, Santa Cruz, Patagonia - September 20, 2010

Last week we decided not to comment on Minera IRL's press release announcing the discovery of a new gold system at its Escondido projectin Patagonia, Santa Cruz Province, Argentina. After some furtherconsideration and analysis, we believe that both last week's news andthe latest announcement -- that exploration will shortly commence at thecompany's Pan de Azucar project -- are significant and warrant ourattention. Minera IRL has quite a few things going for it: modest butprofitable production of 30,000 oz. gold per annum at its Corihuarmimine in the high Andes of Peru, a competent exploration team pursuingcommon sense exploration strategies, prospective land positions inemerging mining districts in Argentina, Peru and Chile, and possiblyseveral important gold discoveries in progress. There are very fewshares available for trading on the Toronto exchange due to significantinstitutional ownership and a triple listing on the Bolsa de Valores inLima. This tight float could significantly leverage any upcomingdiscovery news. On the flip side of the same coin, the shares appear tobe held in strong hands and that might limit downside risk. Inconclusion, this might be a neat little company in which to own a fewshares for patient investors who would like combined exposure to currentgold production, mine development, ongoing discoveries and early stageexploration. [Silverax]

Barkerville Gold (TSX-V: BGM; Pink Sheets: BGMZF)
Barkerville Makes New Gold Discovery And Drills 22.6m of 6.93 g/T Gold at Bonanza Ledge - September 20, 2010

We arenot talking about big gold deposits here, but as with Minera IRL, asub-100,000 oz. gold producer with ongoing exploration and developmentprograms seems like an okay way to have gold exposure in a stockportfolio. We'll call the Barkerville's and Minera IRL's -- and thereare certainly others as well, like Gold-Ore Resources (TSX: GOZ; PinkSheets: GREXF) -- the "GORO-lights" of the world. GORO of course is inreference to Gold Resource Corp (AMEX: GORO). We'll note that about 8-10GORO-lights will currently fit into the market cap of GORO and thatlooks a bit lopsided to us. [Silverax]

Tahoe Resources (TSX; THO; Pink Sheets: THOEF)
Tahoe Resources Announces New Drilling, Extends Mineralization - September 20, 2010

We wonderhow much higher Tahoe's share price would be if Escobal were not inGuatemala where legislators are currently drafting a new mining law thatis expected to implement stricter environmental and local communityconsiderations. Escobal is a true world class silver deposit containingat least two ore shoots that are remarkable for their lateral andvertical extent with a 5-20+ meter vein width of bonanza-grade silver.At a contemplated 3,500 tonnes per day of mining, Escobal could produce15-20 million ounces of silver per annum over a 10+ year mine life at alow cash cost thanks to the significant gold and base metal credits.Those kind of numbers arguably mean fair value for Tahoe at its currentmarket cap of around C$1 billion especially considering MAG Silver (TSX:MAG; AMEX: MVG) is trading at a similar valuation. Of course MAG'scomparable (in terms of grade, size, and blue sky expansion potential)Juanicipio property is perfectly located and the only risk there iswhether and how Fresnillo (LSE: FRES) might again try to take advantageof its junior JV partner. In our view, the worst-case outcome for MAGshareholders would be another buyout offer from Fresnillo, but thatwould have to be at a much higher share price (Fresnillo made a"take-under" offer of US$4.54 at the height of the 2008 financialcrisis). By contrast, the worst-case outcome for Tahoe shareholders isoutright rejection of a mine at Escobal by local communities and/or thefederal government. It seems to us that such a risk has not beenfactored into Tahoe's present share price. [Silverax]

Anfield Nickel (TSX-V: ANF; Pink Sheets: ANCKF)
AnfieldReports Interim Mineral Resource Estimate for Mayaniquel NickelProject, Guatemala - Significant Increase over Previous Estimate - September 20, 2010

As if oncue, here comes news from another Guatemalan project. This time it isnickel laterite in the northeastern corner of Guatemala surrounding LakeIzabal. The chance of a new open pit mine being developed at thisproperty under the current circumstances is almost nil. We'd say dittofor Hudbay's (TSX: HBM; Pink Sheets: HMBFF) Fenix property but theyalready have a mine construction permit. Thus, the main question forHudbay is how much local and international opposition would they be ableto withstand. The answer is "a lot" judging by the company's aggressiveinvolvement with other projects that are environmentally controversial. [Silverax]

Minera Andes (TSX: MAI; OTCBB: MNEAF)
Minera Andes Resolves Lawsuit with Hochschild Mining and Will Receive Cash Payments This Year of $5.9m - September 20, 2010

The goodnews: it looks like Minera Andes will start getting some money back outof the San Jose joint venture this year. The bad news: the terms of the"settlement" seem to simply reflect what one would reasonably expectfrom a mining joint venture in the first place, so it doesn't look likeHochschild gave up much of anything. The contrary news: Rob McEwenappears to be jealous-yet-excited by the recent developments over atAndean (TSX: AND; Pink Sheets: ANDPF):

Thetiming of our resolution could not have been better: the otherremarkable development was Goldcorp Inc.'s recent $3.6 Billion bid forthe neighboring Cerro Negro project owned by Andean Resources, thisproperty is located approximately 20km away. This massive bid highlightsthe exploration potential of the region, and of our property.

Yet if the exploration potential is so great, why exactly is the joint venture putting all free cash flow toward the repayment of debt?

East Asia Minerals (TSX-V: EAS; Pink Sheets: EAIAF)
East Asia Minerals Advances Miwah's Block M Towards Moon River With 149.7 Metres of 1.05 g/t Gold - September 23, 2010

The gradeand length of hole EMD-043B continues to suggest that the gold systemat Miwah may consist of several flat-lying layers persisting forsignificant distances, possibly stacked with the same layered sequenceoutcropping over an area of 2 kilometers by 2 kilometers.  This suggeststhe presence of a very strong hydrothermal system with a strongpossibility that multiple high grade feeders exist somewhere in thevicinity. We continue to expect that East Asia will stumble across oneor more of these high grade zones as it systematically steps out itsdrilling with the result being fireworks for the share price. [Silverax]

North Country Gold (TSX-V: NCG)
North Country Gold Corp. Final 2010 Drill Results; High-Grade Intercepts of 12.51 g/t Au over 19.41 m and 7.84 g/t over 10.00 m - September 23, 2010

Thesummer drill program at Three Bluffs has ended on a downer since merelysolid results are not enough to captivate this market. It is hard todetermine how far along the company has progressed this summer towardits goal of increasing the gold resource at Three Bluffs to 1.5 millionounces but our guess would be that a revised NI43-101 will come inaround 1.0 million ounces (including inferred resources). That's notshabby and certainly well ahead of Kaminak's (TSX-V: KAM; Pink Sheets:KMKGF) progress at the Coffee project in the Yukon but it is also notsomething that will imminently capture the market's imagination. Giventhe share price differential and similar project profile, we preferNorth Country Gold over Kaminak for long-term exposure to goldexploration although we are going to take our time should we decide toestablish a position. The boredom that is likely to infect NCGshareholders during the long Nunavut winter should give us plenty ofopportunity to accumulate shares although the release of the revisedNI43-101 resource as well as promotion surrounding a financing couldcreate some renewed interest in the shares before the next drill programcommences in the spring. [Silverax]

Rio Tinto (NYSE: RTP)
India Diamond Project Is Biggest Global Find in Decade - September 22, 2010

It sayssomething about the lack of major diamond discoveries being made whenRio comes out touting its Bunder project in India as the largest find inthe past 10 years, measuring in at a current inferred resource of 27million carats. After all, consider that the Diavik mine owned by HarryWinston (NYSE: HWD) is expected to produce nearly 8 million carats in2010 all by itself. We're not saying this lack of discovery impliesdiamond prices are about to skyrocket. After all, there is still thatpesky problem of supply overhang. But it certainly can't hurt those in the business of discovering diamonds--like one of our favoritesthat has the potential to one-up Bunder in size and grade--when the$110 billion Rio Tinto is getting excited about 27 million carats.[Zurbo]

WorldVest, Inc. (OTCBB: WOVT)
Iron Mining Group to Acquire 70% of Chilean Iron Sands Reserve Project - September 22, 2010

We think it's probably a bit presumptuous for WorldVest to be signing $15 billion iron ore sales contracts.After all, they only expect to begin production at a rate of 200,000tonnes per month sometime in 2011. That's not bad, and we wish WorldVestthe best of luck, but the following statement which sounds more like itcame from a newsletter pump and dump than a company news release sendschills up our back:

IMGbelieves that by acquiring new mining properties, coupled with theexisting CIM reserves and the development of increased port capacity,the Company can ultimately grow its annual iron ore production andexport capacity in excess 25,000,000 metric tons. Such production hasthe potential to push annual revenues toward $3.5 billion based ontoday’s CIF iron ore prices and make IMG a major player in the global iron ore marketplace.

Thecompany appears to have about 100 million shares outstanding adjustedfor the recent deal with Chile Inversiones de Minerales (CIM), whichmakes for a market cap of over $200 million. Yikes! Could someone pleaselet investors in WorldVest known about Cardero Resource Corp. (AMEX:CDY) which has already sold one of their iron ore projects to theChinese for $100 million, is trading below the value of its cash andinvestments, and still retains its most promising Iron Sands project inPeru. More for subscribers. [Zurbo]

Sacre-Coeur Minerals (TSX-V: SCM)
Executes Agreement for its Acquisition by Severstal - September 22, 2010

Having recently bullied its way into control of Crew Gold,Severstal is now moving aggressively into South America with itsacquisition of Sacre-Coeur. Will the buying spree continue, and who aresome likely targets? Input welcomed. [Zurbo]

Golden Hope Mines (TSX-V: GNH; Pink Sheets: GOLHF)
Intersects 34m at 3.68 Au g/t and Significantly Expands the Mineralized Structures at Bellechasse-Timmins - September 22, 2010

Hopeswere dashed when the best result Golden Hope could pull out of its longoverdue assays was 34 meters of 3.68 g/t gold. Sounds decent except forthe fact that 82% of the gold lies within a 1 meter intercept grading103 g/t. Whoops, now that's a different story altogether. Someone musthave been pumping this one given the run up in price from around C
.50to C
.98 in a few short weeks. Now it's time to pay the piper.

Click here for more information on "grade smearing", a key concept to learn for anyone investing in junior exploration stocks. [Zurbo]

Strategic Metals (TSX-V: SMD; Pink Sheets: SMDZF)
$15 Million Private Placement - September 22, 2010

Personallywe think the more "strategic" way to raise funds would be to sell a fewmillion shares of ATAC Resources (TSX-V: ATC). Strategic owns 9.8million shares of ATAC at a cost basis of just $3.4 million--now worthover $64 million. In the words Bernard Baruch, "Nobody ever lost moneytaking a profit". Hey Strategic, time to pat yourself on the back for ajob well done rather than adding to the share count and enriching thebanks while your share price still barely gives any value to the companybeyond its cash and investments. After all, what's the good of theproject generator model if you're afraid to realize some profits on a very big winner. [Zurbo]

Vale S.A. (NYSE: VALE)
Sagging Steel Demand Spells Trouble - September 23, 2010

Steel demand may not actually be sagging that much as this other articlepoints out but nonetheless there does appear to be a weak patchdirectly ahead. Longer term we expect iron ore and steel to be positiveand perhaps even among the better performers in the mining and metalssector. So while Vale might be a profitable short in the next severalmonths, it's probably a buy-and-hold for the next several years. Inaddition, the recent unsolicited buyout offer for Baffinland Iron Mines (TSX: BIM; Pink Sheets: BIMGF)suggests that juniors active in iron projects may increasingly becomeprime acquisition targets. Companies for futher research includeLabrador Iron Mines (TSX: LIM; Pink Sheets: LBRMF). [Silverax]

Caerus Resources (TSX-V: CA; Pink Sheets: CAEUF)
Caerus Resource Sets The Record Straight On Buritica Gold Project - September 23, 2010

This isexcitement of the wrong variety and has deflated the near-term prospectsof the Antioquia property in proximity to Continental Gold’s (TSX: CNL)Buritica project where recent drill results (which we anticipated months ago)were smoking hot. We don't believe Caerus breached confidentiality butit appears there may have been something questionable, unethical orperhaps a contract law violation going on. It's risky enough speculatingon the outcome of exploration without also having to speculate on theoutcome of litigation. Cheap as it is, we are inclined to avoid Caerusfor now. [Silverax]

Dorato Resources (TSX-V: DRI; Pink Sheets: DRIFF)
Dorato Receives Highly Positive Lucero Results from Cordillera del Condor, NW Peru - September 23, 2010

Stockhouse wrongly claimed that there was profane language used in this section and would not allow us to publish this blog entry without removing this section. If you would like to read our thoughts on Dorato's news, please visit the original Mining News Review for the week of September 20th at our website: http://www.metalaugmentor.com/eforum/?p=4546

Midland Exploration (TSX-V: MD; Pink Sheets: MIDLF)
ExplorationMildand and JOGMEC discovers two new rare earth bearing mineralizedsystems on the Ytterby Project, south of Strange Lake, Quebec. - September 23, 2010

It isn'tthe rare earth project in particular that makes Midland interesting butrather the prospect generator model along with the number of qualityjoint venture partners (Angico-Eagle, Goldcorp, SOQUEM, Osisko) workingon early- to mid-stage exploration projects throughout Quebec. Thereshould be little doubt that a major discovery will be eventually made bya Midland JV given the prospective areas being explored. This is astock you buy and put away in the sock drawer although it would be niceto get it at a lower price just in case the recent runup is a temporaryphenomenon. [Silverax]

Halo Resources (TSX-V: HLO; Pink Sheets: HLOSD.PK)
Halo Extends Cold-Lost Mineralized Trend - September 23, 2010

Halo isexploring the Sherridon volcanogenic massive sulfide (VMS) field inwestern Manitoba with a portion of the property already under jointventure with Hudbay Minerals (TSX: HBM; Pink Sheets: HBMFF). VMSdeposits tend to occur in clusters and it looks like that is what theyhave here. A short while ago it appeared that Hudbay's Flin Flon smeltermight be a perfect match for the base metal concentrates that would beproduced from a mining operation at Sherridon but the closure of the smelter this past summerremoves some strategic value from the play. The project is stillprospective, as is the West Red Lake property optioned from Goldcorp,but we will watch from the sidelines while the company completes itsreverse split and readies itself for follow-up exploration programs.[Silverax]

Crowflight Minerals (TSX: CML; Pink Sheets: CMLGF)
Private Placement Financing Announced - September 23, 2010

Things don't look good for Crowflight. As Silverax recently remarked in our Editorial Forum:

Atthis pace Jinchuan and Kings Place will be fighting over the carcassof the crow, with perhaps Xstrata also buzzing overhead. This thing istrading like it is going into receivership.

This past April Jinchuan made an offerto buy the company for C$150 million, or about C
.22 per share. ButJinchuan has since been dragging its feet, and meanwhile Crowflight hasbeen forced into desperation financing. As a result the shares have taken a beating as the company's future becomes more uncertain. [Zurbo]

Carpathian Gold (TSX: CPN; Pink Sheets: CPNFF)
Signs Project Financing Mandates for Up to $97 million for the Riacho dos Machados Gold Project
- September 21, 2010

A bigstep in the right direction towards bringing Riacho does Machados (RDM)into production, but nothing is finalized just yet. According to ourvaluation model, the RDM project alone justifies a share price greaterthan $1.

Carpathianalso owns 100% of the 4.7 million ounce (after assumed metallurgicalrecovery of 68%) Rovina Valley gold-copper project in Romania. The roadto production at Rovina Valley will not be easy, and at this point itmakes sense to heavily discount Rovina due to country risk factors andits significant expected capital cost. But considering the recent drilling successas well as progress being made by European Goldfields (TSX/AIM: EGU;Pink Sheets: EGFDF) and Gabriel Resources (TSX: GBU; Pink Sheets: GBSDF)on their respective development projects in the country, the situationis clearly improving and Carpathian share price arguably has somecatching up to do.

We'readmittedly kicking ourselves a bit for not biting on the 30-35 centprices on offer in August, but perhaps we'll still get another chancefor a low risk entry. We'll be keeping close tabs on this one. [Zurbo]

Metalline Mining (AMEX: MMG; TSX: MMZ)
Metalline Mining Updates Progress on the Sierra Mojada Project - September 22, 2010

It'snever the best of signs when the first paragraph of a company's pressrelease makes note of a new investor presentation being posted to thewebsite as if that was a major accomplishment. Metalline has never beengood at the investor relations aspect of things, and we are stillhopeful that the recent change in top managmentwill remedy the situation. But as in the past, Metalline is still aplace where things happen over years rather than months, and that is notinvestor friendly.

We like the potential of the Sierra Mojada project a lot, but we were extremely disappointed with the irresponsibly dilutive deal struck with Dome Venturesearlier this year. In our opinion, Metalline could have done better forshareholders. Worse still, even after all that dilution we're not surethe money received from the Dome transaction will be enough to seethem through completion of the feasibility study they've been promisingfor years now, as there still remains a significant amount ofdrilling, mine and plant design and metallurgical work to be done. Atsome point this may once again become an attractive investmentopportunity, but not today folks. [Zurbo]

Skyline Gold (TSX-V: SK; Pink Sheets: SYGCF)
Skyline Gold Announces Positive Preliminary Assessment Report Update for Bronson Slope Gold-Copper-Silver-Magnetite Deposit - September 23, 2010

Theaddition of magnetite to the resource model seems to make a majordifference but it is the rising gold price that has the Bronson Slopeproject starting to look like a potential mine. We're not sure howwell-thought-out it is to bolt a magnetite recovery process onto agold-copper project -- novel approaches typically don't get assigned adecent value by the market until proven a success in actual operation.Barrick proposed a magnetite processing plant at its Osborne Mine inAustralia a couple of years ago but in the end they opted instead tosell the project to Ivanhoe Australia for about AUD$50 million. Skylineis probably not a buyout candidate given the modest annual productionprofile and resource base but with the addition of a few competentminebuilders a company like this has a reasonably good shot of going italone and eventually becoming a profitable junior producer. On the otherhand, gold play aggregators like Dundee Precious Metals (TSX: DPM; PinkSheets: DPMLF) or Endeavour Mining (TSX: EDV; Pink Sheets: EDVMF) couldcertainly take interest in a cheaply-priced development story likeSkyline. Speaking of development, an important piece would fall intoplace with the construction of the Northwest Transmission Line alongHighway 37 (though the project has other options for power). [Silverax]

Millrock Resources (TSX-V: MRO; Pink Sheets: MLRKF)
Millrock Samples 9.1 Grams Per Tonne Gold Over 27.4 Meters At Estelle Project, Alaska - September 23, 2010

TheEstelle project is interesting given the number of significant golddiscoveries that have been made recently in the Pacific Northwest on thebasis of soil or outcrop sampling. There isn't much to go on so far atEstelle, where Millrock is the operator pursuant to an earn-in beingfunded by Teck Resources (NYSE: TCK; TSX: TCK-B,) but the progresswarrants our attention. Millrock is another prospect generator likeMidland Exploration (TSX-V: MD; Pink Sheets: MIDLF) and Kaminak (TSX-V:KAM; Pink Sheets: KMKGF). In addition to a joint venture with Kinross(NYSE: KGC; TSX: K), Millrock has a project with Valdez Gold (TSX-V:VAZ; Pink Sheets: VLDZF) at the Bluff property near Nome in Alaska.Valdez Gold has been halted since September 21 pending review of a newsrelease announcing exploration results, but since Millrock is theoperator for this program, the halt is unlikely to be related to theBluff project. That leaves the Flume property in the White Gold Districtof the Yukon joint ventured with Valley High Ventures (TSX-V: VHV; PinkSheets: VHVLF). [Silverax]

Anglo Pacific Group (TSX: APY; ASX: AGP; Pink Sheets: AGPIF)
Agreement to Acquire Brazilian Iron Ore Production Royalty - September 23, 2010

Althoughnot primarily a precious metals royalty company, Anglo Pacific hasrecently popped up on our radar as an active royalty aggregator and wewill be adding the company to our royalty model shortly. The summaryresults of this model are available to Metal Augmentor subscribersin the form of a periodic report that includes comparative peervaluations and leverage to changes in metal prices. The royalty modeland data are also available to institutional clients for whom we canconstruct detailed scenarios and provide in-depth analysis to assistwith their investment and business decision-making. [Silverax]

Xtierra (TSX-V: XAG; Pink Sheets: XRESF)
Xtierra Reports on Drilling at Bilbao - September 24, 2010

TheBilbao project represents an interesting segment of the junior resourceworld: modest to moderate size deposits without a lot of excitingfeatures to captivate investors but enough going for them to eventuallybecome a small-scale mine assuming metal prices can hold up longer term.We are just now starting to see quite a few small gold depositsbeing developed given the potential profits that can be generated evenfrom small operations at sustained $1,000 plus gold prices. Base metal(with silver by-product) deposits like Bilbao are a bit more complicatedthan the average small gold deposit and arguably require a more seriousand competent management team than is usual in order for them to besuccessfully developed; Xtierra would arguably fit that bill. It will besome time yet, however, before these types of projects and companiesdeserve close attention from investors. We will be prepared should thattime eventually come by keeping companies like Xtierra warm on the backburner. [Silverax]

Soltoro (TSX-V: SOL; Pink Sheets: SLTOF)
Soltorostep-out drilling returns 259.7 metres of 50 gpt silver including 87.5metres of 72 gpt silver at the El Rayo Primary Silver Project in Mexico - September 24, 2010

Thanks tothe excellent cross-sections provided by the company, it is obviousthat the Las Bolas deposit on the El Rayo property was extended bothtoward surface in the northwestern portion of the system and also alongthe NE-SW rhyolite-andesite (fault?) contact at depth. This has likelyadded relevant tonnage to the ~25 million ounces of silver currentlydefined in the indicated and inferred resource categories (at a 40 gramper tonne silver cut-off). That said, the deposit at Las Bolas appearsto us to have limited expansion potential near surface and instead themost prospective target consists of the higher grade, well-defined zoneof silver concentrated along the northwest dipping fault contact.Underground mining could end up being a more appropriate approach forexploiting the higher grade zone rather than open pit. In any case, morework is needed to expand the mineralization either along the faultcontact or in near-surface areas in order to make a compelling case fordeveloping a mine at El Rayo, but a rising silver price couldpotentially make the project worthwhile as it stands (see above Xtierracomment about modest-sized mines), in which case the currnet share pricewould be pretty cheap. [Silverax]

ECU Silver (TSX: ECU; Pink Sheets: ECUXF)
ECU Silver Receives Favourable Ruling in Arbitration Hearing - September 23, 2010

It'sprobably worthwhile hearing how the opposing party (Golden Tag Resources-- TSX-V: GOG; Pink Sheets: GTAGF) views the court ruling beforeconcluding that ECU Silver has emerged untarnished and victorious fromwhat is admittedly a distraction and nuisance in the grand scheme ofthings but might still be a good guide for understanding how ECUmanagement operates. Among other things, the fact that ECU was removedas operator of the joint venture does not paint a pretty picture. Untilthese guys start operating and acting seriously, ECU doesn't look like aserious company even despite (or is it in spite of?) the sweet promisesof a billion ounces of silver*.

*"Silver"is defined by ECU as gold and silver along with a heap of base metalsthrown in for good measure -- in other words, ECU Silver should ratherrename itself "ECU Silver Equivalent Mining Inc.". [Silverax]

Strait Gold (TSX-V: SRD; Pink Sheets: SAIDF)
Strait Gold samples 9.27% copper, 0.83g/t gold over 4.0 metres at Alicia Project - September 22, 2010

Thisthing has a tiny market cap of under $5 million and a tiny amount ofcash (under $500,000) to explore the Alicia Project, a copper skarndeposit in the Cusco department of Peru. Although located near a clusterof world-class copper porphyry-skarn projects headlined by Xstrata's(SWX: XTAN) Las Bambas deposit, the target at Alicia is just the skarndue to the porphyry stock being only weakly mineralized. Still, theAlicia skarns may turn out to have decent value as suggested byhistorical trenching across decent widths (up to 50 meters) atsignificant copper grades (typically 2-5%). Drilling will need toestablish that the skarns extend to depth, and if so, whether theycontain oxides or sulfides and at what grade (surface sampling couldreflect copper enrichment associated with oxidation and weathering). Wesuspect the skarns will extend to depth given the widespread presence ofskarn exposure at the periphery of the outcropping porphyry. Moreover,the porphyry appears to extend under the limestone country rock at ashallow dip in many places, indicating that the intrusive body mayexpand at depth like an iceberg does under water. If so, drilling shouldbe relatively straighfoward. Ideally, the outcropping skarn willrepresent the upper portion of a system that has not eroded to anysignificant extent. In any case, there isn't likely to be much happeningto get the market excited before the commencement of a drill program.[Silverax]

Globex Mining (TSX: GMX; Pink Sheets: GLBXF)
Test Work on Refractory Gold Ore Highly Successful - September 22, 2010

If the"Eco Refractory" process does indeed work and can be applied efficientlyand effectively to many different and complex mineral assemblages thatare refractory, there could be a significant new gold rush into goldprojects that are either currently dormant or are not being movedforward due to the cost or complexity of constructing processing plantsthat can treat refractory ores. We'll keep close tabs on the Globexprocess -- we suspect final development is still months if not yearsaway -- as well as projects that may benefit from it. [Silverax]

East Asia Minerals (TSX-V: EAS; Pink Sheets: EAIAF)
East Asia Minerals Announces Initial Gold Resource Estimate for Sangihe - September 22, 2010

Theinitial gold resource at Sangihe has been long in the making, originallypromised for summer of 2009. The 1 million ounces of gold and 20million ounces of silver are pretty much what everybody was expecting.Taking the project to the next stage will require even more extensivedrilling in order to define 3 million ounces of gold equivalent.Expanding the deposit to such a significant size appears entirelypossible based on the ubiquitous nature of the near-surfacemineralization on this property. Yes, releasing the resource estimatenow may have been anticlimactic, but one would hope it will be followedup with another round of aggressive exploratory drilling soon. Andalthough we like what East Asia has so far accomplished here and atMiwah, we'll lay another bit of mild criticism at the feet of managementby pointing out that neither the Sangihe press release nor the propertysection of the website has clearly disclosed the protected foreststatus of the company's projects despite the recent media knock(unfairly to a large extent) at East Asia for being somewhat cagey aboutthe subject. The shares clearly continue to be pressured by uncertaintyand perceived risk surrounding the forestry issue and as a result thecompany would do well to proactively define it instead of letting themarket define it for them. [Silverax]

Arian Silver (TSX-V: AGQ; Pink Sheets: ASLRF)
Arian Silver Commences Silver Production - September 22, 2010

This isan interesting strategy: contract mining at 500 tons per day with custommilling at 400 tons per day in order to generate monthly revenue ofapproximately US$1 million with an apparent mining cost of approximatelyUS$500,000 to US$600,000 per month. We're not sure if this will work orbe worth the trouble when the "hidden" costs start getting added butwe're fairly certain it does not deserve the excitement and consequentrise in share price since the announcement. [Silverax]

Decade Resources (TSX-V: DEC; Pink Sheets: DECXF)
Mountain Boy Minerals (TSX-V: MTB; Pink Sheets: MBYMF)
Decade Resources Ltd.: 49.2 Grams Per Tonne Gold Over 18.45 Meters Intersected in DDH-UMON-2010-1 & Mountain Boy Minerals Ltd.: 49.2 Grams Per Tonne Gold Over 18.45 Meters Intersected in DDH-UMON-2010-1 - September 21, 2010

No needto sell all your other shares to get on board the Red Cliff train justyet; the headline hole is a 20 meter stepout from the area drilled in2009 and consists primarily of 0.3 meters of 2,847 grams per tonne gold.In other words, we are still looking at a small deposit with a highgrade core that amounts at best to several hundred thousand ounces ofgold. Such projects look a lot better to the market when being drilledcompared to developed; see Jayden Resources (TSX-V: JDN; Pink Sheets:PNMLF) and its Silver Coin project nearby. [Silverax]

UEX Corporation (TSX: UEX; Pink Sheets: UEXCF)
UEXOutlines the 58B Deposit and Expands Mineralization at the KiannaDeposit, Including Intercepts of 12.40% eU3O8 Over 3.7 Metres and 1.39%eU3O8 Over 34.3 Metres - September 21, 2010

Slowlybut surely Shea Creek in the western Athabasca basin is becoming one ofthe most significant undeveloped uranium projects in the world. In thispart of the basin the unconformity is pretty deep (about 600-800 meters)and so building a mine will be no small feat. If it weren't so, UEX'sjoint venture partner AREVA would probably have lobbied for aconstruction decision by now. Even then, advancing the project towardproduction will make more and more sense as the Shea Creek resourceexceeds 100 million pounds U3O8 sometime in the near future. We notethat currently worldwide there are only 5 major underground hardrockuranium mines in operation or development (one of which, Cigar Lake, hascertainly seen its share of catastrophic problems). AREVA did operatethe Cuff Lake mine near Shea Creek in the 1980's and 1990's and it doesoperate one of the few remaining underground uranium mines, at Akouta inNiger, but the mining there is relatively shallow at around 250 meters.In any case, it's hard to believe that a company like UEX can still bedown more than 90% from its all-time high achieved during theshort-lived uranium boom of 2006-2007, but we suppose this shows howmuch room there is to the upside if and when the uranium boom returns inthe years ahead. We hope to be there (not too far) in advance withcompanies like UEX firmly planted in our portfolios. [Silverax]

Valley High Ventures (TSX-V: VHV; Pink Sheets: VHVLF)
Levon Resources (TSX-V: LVN; Pink Sheets: LVNVF)
Valley High Reports Additional Drill Results At Cordero JV Project, Mexico: Pozo De Plata
& LevonReports Excellent Phase 2 Bulk Tonnage Ag, Au, Zn, Pb Drill Results,Open to Expansion in Two Discovery Zones at Cordero Project, Chihuhua,Mexico - September 21, 2010

Thetonnes are starting to add up at Cordero with the completion of phase 2drilling but there is still a long way to go before this is proven to bea world-class deposit. The Pozo de Plata diatreme represents the mostsignificant discovery so far but continuity of mineralization betweendrill holes appears limited to tabular, flat-lying zones with verticaland lateral constraints. We are not looking at another Penasquito yet --the large Penasco diatreme hosting most of the tonnage there hasremarkably consistent mineralization in all three dimensions for severalhundred meters with lower grade mineralization forming a shell around acentral higher grade core. We don't appear to have the same thing atCordero but the mineralization does appear to be widespread and thereseems to be plenty of open space in the favorable geological setting toprovide blue sky potential during the phase 3 drilling program, forwhich both joint venture partners have recently raised a significantamount of money. Speaking of the partners, there are several"interesting" aspects to this joint venture. For one, Valley High isunable to command a similar valuation as Levon despite the two beingnearly equal partners in the project and in spite of Valley High havingan arguably better project portfolio outside of Cordero. Perhaps thevaluation disconnect can be explained by Levon being more promotionaland investor savvy. Another thing is that each company writes its owntitle and tweeks the content of the press releases about Cordero insteadof releasing the exact same information as most joint ventures tend todo. This indicates that some internal differences and perhaps even arivalry exists between the joint venture partners. If so, that would bean additional reason for the joint venture partners to realize value forshareholders sooner than later. [Silverax]

Rockhaven Resources (TSX-V: RK)
Rockhaven Resources Ltd. Announces Expansion Of The Klaza Zone And Discovery Of A New Zone At Its Klaza Property - September 21, 2010

Althoughthis is yet "another Yukon gold play", what seems interesting about theKlaza property is the consistent elevated gold grades from the surfacechannel sampling program. Perhaps this is due to surface weatheringand/or oxidation given that visual core analysis from the summer drillprogram reveals the mineralization at depth to be primarilybase-metal-rich sulfides. Depsite the recent manic run up in the shares,Rockhaven is still relatively cheap but will need substantial assayresults from drilling to maintain its momentum. [Silverax]

East Asia Minerals (TSX-V: EAS; Pink Sheets: EAIAF)
EastAsia's EMD040 Adds to Miwah With 2.22 g/t Gold Over 82 Metres Within117 Metres of 1.68 g/t Gold, and Bottoms EXD003 in 11.78 g/t Gold Over3.5 Metres - September 21, 2010

This isthe first time a drill hole at Miwah has come back without any gold butthat was made up for by several others holes that continue tomeaningfully expand the gold system as well as establish internalcontinuity between the first pass holes. As the program moves away fromthe central, near surface, disseminated core of the main Miwah zone, weare starting to see some higher grade sections such as the 11.78 g'tover 3.5 meters in hole EMD040. East Asia should eventually discoverseveral wide zones with similar grades as the drills target the deepernorth-south trending structures. That could be a good time to takeprofits. [Silverax]

Disclaimer:  We 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.