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Intro...
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I should start out my musings this weekend by ranting about the general lack of drill results. Am I the only squid out there who gets twitchy when there's no news about drilling coming in? Could we please pick up the pace?

Seriously... it has been a quiet week out there for the stocks I follow. But there's no lack of great stories out there even if you have to do some serious sifting and DD to find them. I'm still hopeful for some drill cores out of Gold Bullion Development (V.GBB) we can always keep our fingers crossed. (I should also mention that I've come up with a way to value drilling results which I am waiting to try out any day now... but I'll talk more about that when news comes in!)

It appears that people/media are finally starting to make the link between high prices and the fall of governments. Readers should know that this sort of thing has been going on in China too. Note that the link below talks about Chinese imposed price controls...

(link disallowed due to 'profane' words I'll post another below)

...anyhow, I think there's a serious inflation issue going on world wide... not just the U.S. My monetary current worry is that if the U.S. dollar does start to move down, the Canadian central bank is going to try and make the exchange rate stable and drag it down as well. This worry might be unfounded, however, I haven't seen much in the way of policy response discussion to counter it.

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A Junior I follow
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Recently Pelangio exploration announced that they have conducted soil geochemistry on their Obuasi property for both gold and arsenic. This is big news since the previous thinking was that it was unreliable and thus not worth doing to any great extent. Gold structures on this property are thought to resemble the ore shoots within the AngloGold/Ashanti properties. Unfortunately, if they do, they are long and thin and hard to find without some compelling physical or chemical evidence. While VTEM surveys have shown the presence of numerous similarly conducting anomalies as found to the South-East, I personally found the last set of Obuasi drill results to be disappointing. If you superimpose where the drilling was done versus where the geochemical anomalies were found, there is no overlap. This next set of targets is completely new and are based on both VTEM and chemical evidence. This sort of thing gets me excited.

I should mention that the shares outstanding are starting to creep up to the 150 000 000 mark (including the recent issue) which makes me antsy, but with two solid targets and a management that brought you Detour Gold (T.DGC) I'm willing to hang on.

(There's also some interesting news about the Manfo property... but that can wait for another time.)

Pelengio's 2011 exploration outlook... http://www.pelangio.com/News/2011/02/01/Pelangio-Exploration-Provides-2011-Exploration-Outlook-For-The-Manfo-And-Obuasi-Properties.aspx

Some basic info about VTEM surveys... http://geotech.ca/images/stories/vtem/vtem031208_HR.pdf

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Opportunity Lost Not Money!
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People might remember that I was very positive on Great Western Minerals Group (V.GWG) some time ago. I bought in the .20's and sold when it hit the .30's. Why? Because they did a share issue and (as of now) have 356,796,959 shares outstanding (which may or may not include ~50 000 000 more in options/warrants).

This is way over my limit for investing in juniors. In retrospect I was wrong to do so since it now trades over a dollar. As a conservative junior mining investor (there's a contradiction for you!) I think that companies that
issue too many shares are a major risk to portfolio returns and try to avoid them like the plague. In my opinion they are a sign that either management has raised money at the wrong time (or worse was forced to!), isn't examining their full range of financing choices, or has a project that is expensive or burning cash way too quickly.

What's worse is that if the project eventually hits and has some sort of book value or cash flow it gets divided over a greater number of shares which keeps the investor returns down.

I don't want to seem that I'm beating up on GWG here, I'm not, their company is based on a solid strategy and are one of the few REE companies that will survive into the future...just with so many shares out, the upside is limited.

I should also note that likely only very few of these REE plays you see promoted in S-H Blog posts are going to have any measure of success. They may go up... but it will be the madness of crowds that drives them as opposed to anything fundamental.

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Risks of doing Business in Mali :)
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Despite the risk inherent in investing in Africa, a risk I often take depending on the country, I never thought this
was one of them...


http://www.afrik-news.com/article18831.html

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Weekend Listening
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My favorite weekend financial podcast...


http://www.financialsense.com/financial-sense-newshour/big-picture/2011/02/05/02/nick-barisheff-david-morgan-jeff-christian-don-coxe/silver-roundtable

This podcast is particularly good because it features an interview with Don Coxe. In my experience, he's one of
the best people in the commodity space. I also like the Korelin Economics Report... but unlike the "Financial Sense Newshour" the website has sponsors and those sponsors are often of the show. Anyhow, there's a relatively high density of good quality interviews. 
 

http://www.kereport.com/2011/02/05/gold-manipulation-middle-east/


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Disclaimer
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I own a full position in all stocks mentioned here except V.GWG which I do not own.  Do your own DD from reliable third party sources. Don't trust my words as if they were Gospel... while I like to think I am an honest Cephalopod, I am not a fiduciary (relative to you the dear reader) and thus you should not act solely on my advice.

A.