February 22nd, 2017 Issue 265 HRA Journal 1

HARD ROCK ANALYST JOURNAL • ISSUE 207 • DECEMBER 17,

If you’ve got much experi-ence trading resource stocks then you don’t need to ask “which curse?” We’re closing in on the Prospector and De-velopers Association of Cana-da (PDAC) convention in To-ronto in the first week of March. This is the world’s biggest mining industry con-ference. Companies try hard to have something new to say at PDAC so expect a flood of news releases in the next 10 days. That news glut up to and around PDAC leads to an inevitable news drought fol-lowing it. Combine that with seasonal weakness that is common in the gold market in Q2 and you’ve got the ma-

kings of the PDAC Curse. The Curse is a (literally) per-ennial subject of debate. Will we have one? How deep will the correction be? Should we just get the hell out of Dodge? Most traders take it as a given we’ll see a big correction during and after PDAC. They’re right about that just about every year. For that reason alone some caution is warranted. So what about this year? (I DID say perennial) On the balance of probabilities alone we’ve got to assume a cor-rection BUT there are a cou-ple of things that could alter that calculation. One is met-al prices in general and in-

Traders are starting to bail in ad-vance of PDAC. That’s usually a wise move, though the editorial lays out some counter arguments. Even if your preference is to do some selling I think you need to be selective and look at which stocks are more likely to weather a pull-back. I t may seem counter-intuitive but I think some of the earlier stage stocks could be the stronger ones through the next couple of months. When traders decide to get behind a story, they can more than coun-ter act the seasonal sellers. We’re starting to see that behaviour in a couple of the early stage compa-nies HRA tracks, with the first com-pany in the update section being a prime example. Note too, that seasonal effects for gold and silver won’t necessarily translate to other metals. The poster boy for that idea is zinc which I don’t expect much softness in unless China really falls off a cliff. In this case it’s the last com-pany in the update section that I think will shrug off the general sea-sonal trend. We a little over a week away from the next Subscriber Summit in To-ronto. Seats are disappearing but we always give subscribers prefer-ence even if the room is full. Take advantage of that and register now, while you still can. CLICK HERE TO RSVP FOR THE

SUBSCRIBER SUMMIT

Eric Coffin

T C

HRA Journal 2 Issue 265 February 22nd, 2017

creased interest in the space. The gold chart on page one does give one pause, but only to a point. Gold has flattened out in the past couple of weeks, its true. There have been a number of days during which gold saw significant drawdowns only to be bought back to even before the close. Its all those epi-sodes of buying to “save” the trading day I find inter-esting. When you combine major markets at all time highs, a US Fed that is sounding in-creasingly hawkish and re-newed strength in the USD its surprising gold hasn’t traded a lot worse. It wouldn’t be surprising to see a large pullback in the gold price under current circum-stances. The fact it hasn’t happened is, in my opinion a bullish sign. While so many fret about the gold rally appearing to run out of steam they’re ig-noring the fact a rally of any sort under current circum-stances is pretty impressive. That doesn’t guarantee con-tinued short term gains but it tells me there are other forces at work here. The composition of the buyers is shifting. In part, I think this is due to increased focus on the po-tential for higher inflation. I’m not completely sold on the idea myself. The move in most countries (not just the US) CPI and PPI indices has been impressive. All of the EU countries, for in-stance, are out of the defla-tionary environment that plagued them for 2-3 years. I think the shift is real and the price increases are being

seen in a broader range of products. A lot of the move is energy prices however which I’m leery of. Even so, the moves in infla-tion and widespread increas-es in metals and commodity prices has brought general-ist traders back to the space. I have talked to many management teams that have spoken of unsolic-ited approaches by general-ist funds in the past couple of weeks. Some of those are value types that seem drawn to the gold and silver subsectors precisely because they haven’t seen the sort of price moves that coal, iron ore, zinc and even copper have. They’re looking for the next big thing, not the last one. That sort of money can be fickle but, once it makes an entry it tends to stick around. Whether these out-side funds start buying soon enough and in a quantity that balances selling by re-source traders remains to be seen. It could well be that the correction is much shal-lower than most seem to ex-pect. The other factor is an in-creased appetite for gold as an insurance trade. The markets are doing great and seeing new highs almost daily. In fact, things are SO good that many experienced hands are getting paranoid about it. I’ve seen more and more brokerage houses suggesting gold or gold stocks get added to the mix lately. Most aren’t doing this be-cause they expect signifi-cant, or even minor, weak-ness in the US Dollar. Their focus is increased political

The HRA Journal is not a broker and is not affiliated with any brokerage firm. There is no assurance the past performance of these, or any other forecasts or recommendations in the newsletters, will be repeated in the future. These are high-risk securities, and opinions contained herein are time and market sensi-tive. No statement or expression of opinion, or any other matter herein, directly or indi-rectly, is an offer, solicitation or recommenda-tion to buy or sell any securities mentioned. While we believe all sources of information to be factual and reliable we in no way represent or guarantee the accuracy thereof, nor of the statements made herein. We do not receive or request compensation in order to feature com-panies in this publication. We may, or may not, own securities and/or warrants to acquire securities of the companies mentioned herein. This document is protected by the copyright laws of Canada and the U.S. and may not be reproduced or for other than for personal use without prior, written consent. This document may be quoted, in context, provided that prop-er credit is given. HRA Journal is published by Stockwork Con-sulting Ltd. (Box 84909, Phoenix, AZ, 85071) 1-877-528-3958. www.hraadvisory.com Subscription Rates for the HRA Journal: One year (22 issues), $299. Quarterly auto-bill $67.50.

Editorial:

The Busy Donald........1

Extended Review:

Osprey Gold…….……5 Updates: 11 Adamera..……………………………12 Arena...…..……………………….....13 Black Sea……………………………13 Colorado..……………………………13 Columbus,,…………………………..14 Energy Fuels….…………………….15 GMV Minerals………..……………..16 GoldQuest……....…..…...………….17 Lion One……………………………..18 Mirasol………....……………………18

Mundoro………... ……………….….19 Precipitate…………………………...20 Vendetta……………………………..20

February 22nd, 2017 Issue 265 HRA Journal 3

uncertainty in both the US and Europe. This isn’t a currency trade, it’s a bit of “risk off” insurance. Again, this may not be enough to counteract seasonal forces that portend weakness in March but it could certainly blunt the impact. To this you could add a third reason which, I admit, is me putting on my contrarian hat. I’ve had so many con-versations with good traders I know that are selling that I’m beginning to wonder how many have done their selling for the time being. I don’t think we’re out of sellers just yet, but trades do have a way of reversing when they get too one sid-ed. We also need to take into account that we are still in a pretty young bull market here when it comes to re-source stocks. Markets be-have a bit differently early in a cycle. Last year was a good example. Pretty much everyone sold to avoid the PDAC curse and it turned out to be the wrong thing to do. The market kept running until May. I’m not prepared to say we’ll have a repeat just yet, but I suspect if we get a consolidation it will be milder than many fear. Last but not least, there’s the subject of real interest rates. This is something I’ve touched on a few times in the past year. It bears repeating however since it’s a powerful force that has defined many commodity price trends (bullish and bearish) in the past. The two charts on the next page show the current state of affairs. The top chart shows the gold price along

with an inverted chart of US 10 year Treasury real yields. The chart presentation makes the inverse relation-ship between real yields and the gold price fairly clear, and the same relationship holds for other commodities. Based on the relative moves wouldn’t be surprising to see gold move higher based on this relationship. The bottom chart on the next page is a 10 year trace of the urban CPI and the 10 year yield less the urban CPI (the real yield). You can see from the chart that, using the CPI meas-ure, 10 year real yields just dipped below 0% for the first time since mid-2012. The charts are not on the same scale but if you look at the last peak in gold pric-es in 2011 then look at the real 10 year yield on the bottom chart, you’ll find the trough in real yields coin-cides with the peak in gold prices. There’s a reason I keep track of this. Why did yields just go nega-tive? It wasn’t because of falling nominal yields. There has been a slight drop

in 10-year yields since mid December but nowhere near enough to account for the change in real yields. The real change is due to rising CPI readings as you can see from the black CPI trace on the bottom chart. That tells is where we are now, and certainly helps ex-plain gold’s resilience. What about the market going for-ward? Opinions, as always, are mixed. Several Fed governors have weighed in on the subject of inflation recently. Most think the in-creases will moderate. I’m inclined to agree until I see inflation readings broad-en more. Most of the move so far has been energy, rents and medical costs. Oil prices have flatlined recent-ly. That should help flatten the inflation curve unless there is another up-leg in oil prices. There are lots of traders expecting higher oil prices. Indeed the specula-tive long positioning in the oil market is the highest in history. That alone makes me skeptical. We’ll see. The other thing that could reverse the trend in nega-

HRA Journal 4 Issue 265 February 22nd, 2017

tive rates is, of course, the Fed raising rates. The mar-ket is still pricing in only two more increases this year. That might be optimistic if we take recent FOMC mem-ber comments at face value. There is a large contingent that believes the Fed can’t raise rates. Their argument is summed up in the chart on the previous page. It shows central bank balance sheets over the past few years. The Fed stopped ex-

panding its balance sheet almost two years ago but the ECB and BoJ more than made up for it by expanding theirs. Central bank bond purchases “crowded out” lo-cal buyers in Europe and Ja-pan. That drove those buy-ers into the US market, helping to drive down US yields. If the era of QE is indeed coming to an end in Europe and japan that trend would reverse. The Fed could be

faced with rapidly rising Treasury yields even if they do nothing. Those that be-lieve this model also believe that spike in rates will be disastrous for Wall St. It would force the Fed to back off on rate increases. I’m not sure I buy this argu-ment without more empirical evidence. If its true howev-er, negative yields will be here for a while and The Curse just might be avoided.

Ω

February 22nd, 2017 Issue 265 HRA Journal 5

Gonzaga Resources Ltd. (GN-TSXV) to be renamed Osprey Gold Development Ltd (OS-TSXV) Initiated in SD #667, first trade at $0.14 I initiated coverage on January 10th when GN announced acquisition of a project set in Nova Scotia including an existing high grade gold resource. I noted that Gonzaga was listed as a shell in search of a deal by colleague Lawrence Roulston several years ago and I bought a block then. And then waited, and waited, and waited… The company ultimately changed hands and a new group of major share-holders came prior to and around the acquisition. Gonzaga is completing a 25 cent placement and working through the exchange approval process for the acquisition of Crosby Gold which holds the four projects in NS. I don’t expect issues with approval but the process does take time. It should be approved and the company trading under the new name “Osprey Gold” and symbol in a couple of weeks. As far as I know the placement is oversubscribed but it can’t close before the acquisition is exchange approved. There might be some slippage in the place-ment list due to the wait. If you want to try and squeeze in last minute feel free though I can’t promise there is any available. The main asset acquired is Goldenville, the largest historic gold producer in Nova Scotia with a current high-grade underground (though near surface) resource of about 250,000 ounces. Mineralization is gold in quartz veins hosted by slates and/or shales. Structural preparation by folding, with thicker high-er grade sections near anticline noses is a common feature through the belt. The best analogue for the deposit is the Bendigo camp in Australia. The gold does tend to be coarse which will require care-fully taken samples. The leader in the region and reason Nova Scotia is “cool” again is Atlantic Gold (AGB-V) which is com-pleting construction on their Moose River mine. Atlantic’s breakthrough was to recognize that there was some grade between the veins as to treat the deposit as an open pittable resource. Goldenville may be amenable to that as well. That is one thing that GN plans to check out early in the process. Twenty holes drilled a few years ago were never sampled or logged due to a payment dispute. Man-agement is working to acquire that core and has commissioned a new resource estimate geared to a potential open pit. There should be good news flow quickly once the deal is approved. Buy in the current range ahead of final approval of the acquisition and a new resource esti-mate that should follow soon after.

O Note: For the sake of simplici-ty I’ll refer to the company as “Osprey” or “OS” going for-ward. This is one of those stocks that was sitting almost for-gotten in my portfolio until January. I bought it originally when it listed in 2011. My col-league Lawrence Roulston was one of the forces behind it. The company listed with a project on Vancouver Island that was clearly just a “place holder” until something better

was found. There things stayed for six years. I kept the stock be-cause I knew it was well-owned and would be capable of recovering quickly if a good project was found. In the in-terim, Lawrence and friends sold their positions to new owners who went it search of “high grade” That high grade was found in Nova Scotia, a province with a good mining history that has recently regained a lot of market attention. That’s

Briefing Book (amounts in $CAD)

Osprey Gold Development (figures are post PP and acquisition)

Listed: OS-TSXV Share Issue: 25.3 MM; 30.2 MM F.D. Share Float: 12 MM Working Capital: $ 2 MM; $ 3 M F.D. 52 Week High-Low: $0.34-$0.01 Recent Price (TSX): $0.32 1 Mo. Ave. Daily Volume: 100,000 Phone #: 1-236-521-0944 E-mail: info@ospreygold.com Website: www.ospreygold.com

HRA Journal 6 Issue 265 February 22nd, 2017

thanks to the efforts of Atlan-tic Gold (AGB-V), a gold developer I wish HRA had jumped on over a year ago. Atlantic has done a great job of consolidating part of the same belt Ospreys main pro-ject is in. AGB has shown that it could treat its close spaced high grade veins as an open pit target. It’s cur-rently constructing a mine at its Moose River project that should start production later this year. Osprey has picked up four projects. A couple of them, including the main project Goldenville, are hosted by the same rocks as Moose River. There is some indication of grade in the host rock as well as the veins but this is some-thing that will need to be more rigorously tested. OS has commissioned a new resource estimate for Golden-ville. It will model the re-source as an open pit rather than underground target. I expect that resource will be substantially larger than the current one. Management is also negotiat-ing to buy the core from 20 holes that were drilled a few years ago that the driller wasn’t paid for. The core was never logged or sampled. Those won’t be part of the resource update but will gen-erate more news in the next month or two. The financing being complet-ed will be sufficient to fund a large drill program and this is a group that shouldn’t have trouble raising more if its needed. The stock is still very tight and should respond well to good news. You want to own this before the updated resource and assays from the 20 historic holes arrive.

C S /M

As noted in the introduction, Osprey was a shell in every-thing but name when it listed. Unfortunately, it listed just before a multi-year bear mar-ket in resource stocks. Unlike other companies that found themselves in the same situation, Osprey was ex-tremely disciplined financially. Everything was shut down and spending was kept to an absolute minimum. The com-pany only had to complete a single placement (half a mil-lion shares at a dime) in the past four years to keep the lights on. Shares slowly moved to new hands, or most of them did. Lawrence and those close to him sold their positions to new holders. I know who some of them are but its not my place to “out” them, other than to say I’m comfortable the new owners aren’t there for a short term flip and want to build something larger. Osprey is acquiring its pro-jects by taking over a private

company in a share-for-share transaction. 5.8 million shares will be issued to ac-quire the NS project options. The private company, Crosby, did most of its fund raising at 6.5 and 13 cents, paid the initial $150k on the project option and has over $200k on hand. The takeover does not create a new control block. Concurrently, Osprey is com-pleting a $1.8 million place-ment of 25 cent units which include an 18 month 40 cent half warrant. I’ve had ques-tions from SD subscribers about why this placement is-n’t closing faster. The reason is that it can’t close, in its en-tirety, until the transaction does. Management has crafted the transactions to avoid trigger-ing the “reverse take-over” rules of the Exchange which would add months to the ap-proval process. The transac-tion needs to be approved first to increase the share to-tal and ensure the new place-ment doesn’t exceed 50% of the outstanding shares when it closes. None of this is tricky, it just has to happen in the right order.

February 22nd, 2017 Issue 265 HRA Journal 7

Exploration costs in Nova Scotia are very competitive. You can get a lot of drilling done with $1 million and OS has plenty of targets to work with both at Goldenville and the secondary projects. I’m expecting a steady flow of news through the summer and fall. Other potential news flow would come from other pro-ject acquisitions. I know management is looking at a number of opportunities both in Nova Scotia and elsewhere. They have plenty to keep them busy. There’s no guar-antee any of these other ac-quisitions come to fruition but don’t be surprised if some-thing pops up. Osprey’s management is quite familiar to me, and probably to many of you as well. It’s a strong technical group backed by experienced financiers, a good combina-tion for an exploration com-pany. It’s a small tight-knit group for now but one with a network that can find and add people with the right qualifi-cations with ease. Chairman Adrian Fleming has 35 years experience in the mining sector, including direct involvement with sev-eral significant discoveries, including Hope Bay and Porgera. Probably best known to most of you as CEO of Un-derworld Resources which kicked off the Yukon rush with its White Gold Discovery and eventual sale to Kinross. CEO and Director Jeffrey Wilson I know is familiar to most of you, given that he’s also CEO of Precipitate Gold. He’s been involved in a number of successful deals during his 20 year career and built an extensive financing

and market support network. Though PRG will continue to be his “day job” (yes, I asked) he’ll be available for market and marketing in-sights and advice. President and Director Cooper Quinn is tasked with the day-to-day manage-ment of Osprey. He’s a geolo-gist by training with experi-ence world wide with a partic-ular emphasis on high grade projects. Quinn’s exploration credentials include work at White Gold and Lion One’s Tuvatu, as well as work in the Carolina Slate Belt which has many affinities to Osprey’s Nova Scotia project set. Director Greg Beischer is an Alaska based geo with 30 years experience in mining and exploration. Many of you know him as the founder and CEO of Millrock Resources (MRO-V), the Venture listed project generator.

P S : G N S

Osprey is acquiring the right to earn a 100% interest in four projects, namely Golden-ville, Miller Lake, Gold Lake and Lower Seal Harbour. The four projects can be ac-quired by making payments totalling $1 million over three years. The first payment was made by Crosby and the pay-ments in years two and three can, by mutual agreement, be satisfied by the issuance of Osprey shares. The projects carry gross roy-alties of 1.5-2.0% but Osprey can buy back 75% of them for $1.7 million. There are no spending requirements other than annual assessment work and fees.

All four projects are located in the Meguma Terrane, a belt of Cambrian to Triassic metasediments that forms, roughly, the southern half of the province of Nova Scotia. The large map on the next page shows the Meguma and the historic gold mines locat-ed in it. The Meguma had up to 60 small high grade gold mining districts that collectively pro-duced over 1.2 million ounc-es, most of it between 1860 and 1920. Gold in the Megu-ma is found in quartz veins, predominantly structurally controlled stratabound veins hosted by slates and shales. Higher gold concentrations are found in collections of stacked veins, usually in or near anticline structures where folding helped open up larger spaces for veins to fill. Some camps, including Gold-enville also have gold in cross cutting structures. The best analogue for the Meguma Terrane is probably the Bendigo goldfields of Aus-tralia which also had signifi-cant high grade gold produc-tion. That’s a “good news and bad news” story. The good news is there are indications that Nova Scotia’s historic gold camps have the potential for larger scale just as Bendi-go proved to. One issue at Bendigo is ex-treme nugget effect and its been the downfall of a few mine operations there. While nugget effect appears less extreme in Nova Scotia’s gold camps, at least some of them, its an issue that needs to be managed. One way to deal with nugget effect is to shift to a bulk ton-nage model where mining

HRA Journal 8 Issue 265 February 22nd, 2017

larger volumes reduces the impact of uneven gold distri-bution. This is the path being followed by Atlantic Gold at its Moose River Consolidated project. The former small high grade resources there have been reconfigured as open pit resources grading 1.4 g/t and the project, cur-rently under construction, displays good economics. In order to be successfully open-pittable, you’d need a combination of relatively near surface vein sets, sufficiently small spacing between the veins and, ideally, some gold grade in the wall rock be-tween the veins. The Osprey project most likely to contain this combination is also the most advanced: Goldenville.

G : G C Goldenville is the main pro-ject of the four being ac-quired and will be the focus of work for the remainder of 2017. Goldenville is located in east central Nova Scotia, 135km east of Halifax and 60km south of Antigonish. The property is fully accessible year-round by gravel roads leading to the nearby small community of Sherbrooke. Power and other utilities are available on site. The Goldenville project pro-tects the Goldenville camp which is the largest historic gold camp in Nova Scotia

with recorded production of 212k ounces at an average grade of just under 12 g/t gold. Goldenville has been subject to several (relatively) recent exploration campaigns. This led to a resource calculation, prepared for Acadian Re-sources in 2005. According to this non-43-101 compli-ant report and using a 3.5 g/t gold cut off, Golden-ville hosts 33k Indicated ounces in 107k tonnes grading 16.6 g/t gold and 232k Inferred ounces in 385k tonnes grading 18.8 g/t gold, uncut. The table on top of the next page shows the 2005 Golden-ville resource at various cut off grades. The resource was

February 22nd, 2017 Issue 265 HRA Journal 9

modelled as an underground resource. Calculations were based on 30,000 metres of historic drilling and sampling of four levels of underground workings that had been de-watered and rehabilitated as part of the program. The minimum grade threshold for resource blocks used was 1 g/t diluted over a mining width of 1.2 metres. Note that the ounce totals on the right side of the table are un-cut. The second column from the right shows the grade es-timate after applying a 50 g/t top cut. A tonnage total for the top cut calculation is not provided but applying it re-duces Indicated grade by 10% and Inferred grade by 35% at the 3.5 g/t cut off. These grade reductions show you the impact of nuggety high grade sections though, even after applying the 50 g/t top cut, the overall grades are still quite good. A grade like that could carry a lot of dilution from being reconfig-ured as an open pit zone, as long as enough of the zones are shallow. Quite a bit of it IS shallow, with most of the zones hosted

by an anticline that is near surface at its eastern end and dips shallowly to the west. Most of the resource area re-mains open along strike and to depth. Goldenville actually bears a lot of similarity to the main lodes at Bendigo. Those ex-tend to over 1200 metres depth while Goldenville has only been tested to about 300 metres. There is a lot of po-tential to extend veins/zones to depth though I’d prefer to see testing along strike first. The map below shows the claim area with the Golden-ville workings on the right

(eastern) side. I’ve added an oval to indicate the Mitchell Lake area. Gammon Lake drilled two holes there in 1997, one of which reported 20.2 metres grading 1.33 g/t gold starting at 54 metres. There is an untested gold in soils anomaly to the west of the Gammon Lake hole and a larger untested area between that and Goldenville itself. There is still a lot of prospec-tive target along the trend of the anticline. Even if Osprey chooses not to focus on an open pit develop-ment model there is still a lot of room to grow Goldenville. It would require careful drill-

HRA Journal 10 Issue 265 February 22nd, 2017

ing and bulk sampling but the cut grade of over 12 g/t does give Osprey significant mar-gin for error. I expect the market to react well to new resource numbers and drill intercepts going forward. M L , G L , L S Goldenville will be the compa-ny focus so I won’t spend much time on the other pro-jects unless they get active. I think we may see drilling at a couple of them this sum-mer, if only for “proof of con-cept” purposes. All three projects are past producers, albeit at a small scale, of high grade gold from veins. All three have seen varying amounts of explora-tion in the past 30 years but records are not as organized as Goldenville. One of this year’s tasks will be building models for them and generat-ing targeting ideas. Based on the small amount of data available at this time Gold Lake looks the most interesting. It occupies the same anticline as Goldenville and has a reasonably exten-sive work history. Four small shafts were sunk at Gold Lake and there is minor historic production from the project which is about 70 km from Halifax. Like Goldenville, Gold Lake reports gold in quartz veins hosted in shales and grey-wackes of the Goldenville for-mation. The project was fairly active in the 1980’s, with over 50 holes drilled and ex-tensive IP, VLF and soil geo-chemical surveys and trench-ing programs completed. The table at the top of this page lists a number of highlight

drill intercepts from the late 1980’s programs. There is obviously some good grades here and a number of the drill intercepts are mineable width if the true widths are close to those reported. More work will be required to determine if there is potential for a re-source of economic size but it’s a nice add on project. The other project that looks interesting is Lower Seal Har-bour, for different rea-sons. Lower Seal Harbour produced about 40,000 ounc-es at reported grades of 0.75 oz/ton prior to WWII from a couple of declines that were completed to the 500 foot level. There doesn’t appear to be a lot of more recent ex-ploration. Historic records describe gold a being hosts by “belts” or “leads” that were 1.5 to up to 10 metres in thickness. It’s unclear if these were individ-ual veins or zones containing multiple narrower veins and stockworks. I assume it’s the latter or the project would have seen a lot more recent activity. There is some evidence of gold in wall rock as well as veins in the historic descrip-tions. Lower Seal is adjected

to Orex Minerals Goldboro project which is known to host some disseminated gold zones. That alone makes Lower Seal Harbour interest-ing and worth doing some fol-low up on since disseminated gold in host rocks is an im-portant aspect of the Atlantic Gold story. Miller Lake is reported to have produced a few hundred ounces from small sporadic shipments over several dec-ades. It has two shafts with a km of strike length between them but less recent explora-tion than the other projects. Its reported that 2000 metres of drilling was done in the late 1980s but I haven’t seen results of that work. Miller Lake is on trend from the Dufferin Mine that Re-source Capital is working on restarting. It’s believed that the gold zones in this trend don’t include disseminated grade in wall rock. That may make them slightly less inter-esting though I’m sure OS will do some further study. Osprey has a good set of pro-jects capable of reporting high gold grades and a team that can get those grades no-ticed in the market.

Ω

February 22nd, 2017 Issue 265 HRA Journal 11

Updates

From one Mining Week to the next. We’re just ending the news lull that comes after the Van-couver mining conferences and about the start the news rush (I hope) that annually precedes the PDAC convention in Toronto (and my Subscribers Investment Summit) during the first week of March. We do have some news in this issue but I’m expecting more through the next two weeks. I’ll be in Toronto to speak at SIS and at PDAC but I’ll try to squeeze out another issue around that time. Might be finishing it on the plane on the way back though... We got more news from both Adamera and GMV Minerals, positive in both cases. Both com-panies are in the midst of either receiving or interpreting data and I expect at least one more news release, potentially more, between now and PDAC from each company. Odds are we see one or two from San Marco as well. GoldQuest updated the number of holes its drilled at additional Tireo targets but didn’t release results. We may see drill results PDAC week from them. GQC also announced the second rig will be fired up at Cachimbo, no doubt in response to heavy pressure from shareholders. Colorado made good on its promise not to be inactive during the winter months, an-nouncing a drill start and another project acquisition. No doubt CXO would like some drill re-sults to announce around PDAC but I don’t know if they will get any that fast. I expect we’ll see companies with ongoing programs trying to make (I hope) a splash with new drill results during or before PDAC week. Companies on that list include Pure Gold, possibly Columbus if they get results fast enough. I’m also expecting a large set of drill results from SilverCrest as it should be 20 holes into its current program at Las Chispas by now. There may be more holes from Lion One as well, though I don’t think their lab turnaround is very quick. Mundoro reported more mediocre drill results which the market took in stride. Traders were happier with managements assurance they would be drilling several projects this year. And the list of drilling reporters had better include Moneta. Shareholder patience is definitely wearing thin with that one and there is risk of substantial selling if they don’t get some decent holes out in advance of or during PDAC. Mirasol reported its lost its JV partner on the Claudia project, news the market took in stride. Victoria Gold appears determined to press ahead on its own at Dublin Gulch, adding to its executive team for that purpose after announcing a debt package that will cover a large portion of the capex. Other development level stories like Amaden have also been releasing news and raising money and Orezone will likely do some reporting during PDAC as well. I’ll wait for the next issue to update them. Vendetta continues to trade well and hit an all-time high as this issue was being completed. Management assures me they should have reporting out on their metallurgical program in time for PDAC. Just for the record, MIF has sent videos for approval to ALL companies that were involved in the Metals Investor Forum last month. Most of them were sent some time ago but they can-not be added to the publicly available list of videos until someone at the company approves them for release. If your favorite company presenting at MIF doesn’t have its video up on the Beneath The Surface channel, feel free to bug them about it to speed things up. Again, the videos are posted to YouTube at https://www.youtube.com/user/BeneathTheSurfaceBTS

HRA Journal 12 Issue 265 February 22nd, 2017

Adamera Minerals (ADZ-V; $0.125) received final leveled results for its combined VTEM/Mag airborne survey flown in late 2016. The survey generated 8-10 high pri-ority targets, shown on the map below. There is a larger number of secondary tar-gets which may prove to be just as important but will require additional processing to rank and finalize. Adamera’s geophysicist is now modelling the high priority targets, a process that will take 2-3 weeks. As the same time, ADZ is receiv-ing additional results from its large soil sam-pling campaign completed on the Cook Mountain project area last year. The model-ling will help management determine the ge-ometry and depth of the anomalies. The ad-dition of geochemistry from the soil surveys and structural detail and lithology from last year’s extensive mapping program will be used to complete the target ranking process. ADZ will apply for drill permits for the areas of the anomalies shown on the map to the right. Additional targets that come out of the secondary target analysis will be added as they are generated. Management hopes to be ready to go with an extensive drill pro-gram that will test the primary targets start-ing in April. I doubt they could start earlier than that this year as the snow pack is unu-sually heavy in NE Washington. The survey was successful in picking up the known mines within the survey area and those anomalies give manage-ment a good profile to apply to new areas. The survey also succeeded in generating good looking anomalies in several ar-eas that have never seen signif-icant exploration even though they are within a known high grade gold camp. We should see more releases through February and March as target modelling is completed. I’m hoping for one or two be-fore or during PDAC that include the results of soil surveys and mapping in addition to the tar-get modelling for a couple of areas. ADZ has seen good ac-cumulation during the past few weeks as I suggested it would.

I expect this trend will continue as manage-ment releases details for individual target ar-eas. This is still early stage and high risk ex-ploration but traders should get more com-fortable with this play if ADZ can demon-strate the targets are based on multiple data sets and are backed up by mapping and soils, not just geophysics, which I expect it to be able to do. ADZ is seeing increased warrant exercise that that alone could be enough to finance initial drilling in this low cost jurisdiction. Adamera is a buy in this range for what should be a flood of follow up reporting through the next several weeks. www.adamera.com

February 22nd, 2017 Issue 265 HRA Journal 13

Arena Minerals (AN-V; $0.18) After a long delay Arena and JV partner JOGMEC have received drill permits for the Pampa Union block. The National Environmental As-sessment Service has approved up to 241 drill pads which will allow the JV to recom-mence the grid drilling RC program covering most of the concession, with closer spaced holes in the vicinity of Hole RC-39 which re-ported an intercept of lithocap and pyrite ha-lo typical of the outer fringes of a porphyry system. The drill permitting was initially held up at the local level but this nationally approved permit will allow for an estensive testing program. The JV has awarded an initial 10,000 metres contract. The first drill should be working now and a second will be added in a few weeks. Like all the drill programs in this se-ries this is blind drilling though caliche aim-ing at generating intercepts of porphyry style alteration that can be used to vector towards a (hopefully well mineralized) copper porphyry intrusion. Hole RC-39 was one of the best looking holes from last year’s multi-ple JV programs and Arena has been anxious to follow it up. Traders are responding to the announcement though I’m not expecting any sort of big run. After several drill pro-grams last year without a discovery I expect many will wait to see a mineralized intercept before jumping in this time. Hold for news from the drill program. www.arenaminerals.com Black Sea Copper and Gold (BLS-V; $0.265) updated shareholders on work performed at the Zlatusha project in Bulgaria and the Kalabak project in Turkey. There wasn’t a lot of reaction in the share price which is to be expected from early stage re-sults. BLS has successfully navigated the passage of the hold periods from last au-tumn’s placements. Doing that without a significant pullback is a good sign. Holders recognize this as a story that will take time to develop. At Zlatusha, BLScrews carried out 1:20,000 property wide mapping with 1:5000 scale mapping in known areas of alteration and mineralization. Mapping outlined hydrother-mal alteration footprints of up to 1.2 km by

2.5 km typically developed near porphyry in-trusions. Oxide copper was noted in a num-ber of locations in or near mapped alteration. Grab sampling of outcrop exposures in these areas reported up to 4.45% copper and 0.73 g/t gold. The mapping program successfully demon-strated that fully or near-fully preserved porphyry systems are present at multiple lo-cations throughout the Zlatusha concessions. The next targeting step requires an airborne survey across the entire project area fol-lowed but focused IP surveys in areas high-lighted by the airborne results and mapping programs. BLS is awaiting permits to carry out these surveys and plans to commence them as soon as they are received. So far, things have been going according to plan, albeit more slowly than planned. Bu-reaucrats in Bulgaria seem to be slow to pro-cess permits, a problem common to many jurisdictions. Black Sea remains a good way to play one of the most important emerging exploration areas on the planet. Accumulate on weakness as we wait for permits. www.blacksea.ca Colorado Resources (CXO-V; $0.29) is certainly living up to management’s prom-ise to be more active than it was last winter, which is helping its market recover. CXO announced the acquisition of a new project, Castle, in the golden triangle region of BC, roughly west of its NorthROK project. The property, outlined in red, is shown on the map on this page. It’s surrounded on three

HRA Journal 14 Issue 265 February 22nd, 2017

sides by CXO’s Kinaskan project and lies im-mediately west of high grade anomalies re-cently announced by GT Gold. This is a property management has had its eye on for a long time which they think has potential for both porphyry and high grade discoveries. The project will be advanced this summer. It looks like this area of the golden triangle will be active and closely watched so the addition of Castle should get CXO some favorable at-tention during the summer. Colorado also announced a 4000 foot RC drill program at the Green Springs project in Ne-vada has begun. 10 holes will test the Chain-man Shale/Johanna Limestone and Pilot Shale/Guillmette Limestone contacts along a three-kilometre trend that includes open pit areas from past mining activity. These contacts are common targets in Carlin style gold systems as they represent areas where hydrothermal fluids circulat-ed over long periods and deposited higher grade gold mineralization. Several good intercepts have been reported in the past from these contacts at Green Springs. Odds are good this program returns some high-grade numbers and CXO is worth accumulating on weakness before these results ar-rive. Colorado closed out the reporting period with the announcement of a financing which will ”help” provide some weakness in the short term as financings often do. CXO is selling 4 million units at 32 cents and 9 million flow-through units at 42 cents, both with half warrants exercisable at 50 cents for 30 months. Combined with funds on hand, this financing will be enough for a substantial program in the Golden Triangle with plenty left over for Green Springs if drilling goes well there. www.coloradoresources.com Columbus Gold (CGT-T; $0.93) continues to be one of the stronger names in the gold de-veloper space, which is impressive given the company just closed a

$5 million bought deal financing at 63 cents. This was a short form prospectus issue,

February 22nd, 2017 Issue 265 HRA Journal 15

meaning the shares are immediately trada-ble. It wouldn’t be shocking if there was some profit taking now that the issue has closed but CGT has held up well. Columbus is now drilling at Paul Isnard where the feasibility study by partner Nord Gold should be delivered in the next few weeks. Traders may be anticipating a set of strong economic metrics from that report. I think the results will be good but I’m mindful of the infrastructure costs that come along with a location like French Guyana. I’d ra-ther not second guess those at this point other than to say I don’t expect Paul Isnard to be a low capex project. With that in mind, if the stock runs through $1.00 again in ad-vance of that study being delivered I would be tempted to take at least some profits on say a quarter to a third or one's position in order to lower your holding costs. Once the study is out and we have a better feel for Nord’s intentions we can trade accordingly. Hold or take some profits if the stock sees another major run in advance of the feasibil-ity study release for Paul Isnard. www.columbusgoldcorp.com Energy Fuels (EFR-T; $2.88) continued to benefit from the mini mania affecting the entire uranium sector since the start of the year. The buying has tailed off some in the past few sessions as the uranium spot price itself pulled back a bit. All things considered, the move hasn’t been that large given the scale of the drop that preceded it. We’ll have to see if there is another leg up that renews the excitement or the market returns to its former dreary state. I remain a skeptic where the uranium price is concerned. I haven’t seen sufficient changes in the basic structure of the market for me to expect a large and sustained rally. The uranium mar-ket remains extremely oversupplied in the near term and people I’ve talked to that are actually involved with the physical market—as opposed to those trading and touting the stocks –remain highly skeptical and surprised there is so much sudden excitement. I’d be happy to be proved wrong on this one but I’m not prepared to chase prices after the move most uranium names have already put in. Notwithstanding the short term drama in the uranium market, EFR continues to advance

projects on several fronts, positioning itself for better days ahead in the uranium spot market, whether they happen right away or later. Management announced EFR has re-ceived its aquifer license for the Jane Dough well field at its Nichols Ranch ISR project. Jane Dough represents the next stage in de-velopment for Nichols, with reserves of 3.5 million pounds of uranium at a grade of0.11%. EFR still needs to build a few more header houses at Nichols before beginning development of Jane Dough. I don’t expect that until there is a sustained improvement in prices that allows for some new long term sales contracts to be negotiated at profitable rates. Nonetheless, its good news that Ener-gy Fuels has the permit in hand now as it can accelerate development if the market turns sufficiently bullish. EFR also reported new assay results for addi-tional drill holes at its Canyon project where resource definition drilling of this high grade breccia pipe continues. The news holes con-tinue to support the assumption that the re-source will be increased in size and probably in uranium grade as well. In addition, the new holes continued to report spectacular copper grades as high as 20%+. As noted in earlier updates this is not expected to be a large resource but these holes should further improve the economics at Canyon, which was already expected tobe a relatively low cost producer. Like the permit news above this is further evidence that EFR is well posi-tioned for a renewed uranium bull market, one that hopefully arrives sooner rather than later. I wouldn’t chase the stock at these prices unless we see a renewed uptrend that carries spot prices past $28. At this point

HRA Journal 16 Issue 265 February 22nd, 2017

I’m happy to be patient and wait to see if there is a pullback in uranium and EFR’s share price before accumulating any more of it. www.energyfuels.com GMV Minerals (GMV-V; $0.50) Has re-leased two sets of drill results from its re-source expansion RC drilling campaign. Holes reported so far include early holes to extend the SE trending H2 zone and two holes testing the NE trending main zones. Still to come are holes that tested further to the NE which were the holes that has just been completed when I visited Mexican Hat

in December. These later holes included some of the broadest hematite zones though I caution that we were looking at small RC chip which tell us nothing about grade. Hopefully we see more holes with broader zones like Hole 8 and Hole 14 (see below). Also still to report are diamond drill holes testing in and around the new Hernandez Hill discovery as well as results from ongoing soil geochemistry and ground geophysics. All the step out holes on H2( the drill holes within the oval in the lower right of the drill plan on the net page) reported mineralized intervals except for hole 3, the farthest to the SE from the existing resource. The zones were intercepted at shallower depths

February 22nd, 2017 Issue 265 HRA Journal 17

than expected in most holes, indicating the dip may be flattening. That’s not a bad thing as it may positively impact the strip ratio on this zone, which is not wide to begin with Contiguous intercepts in H2 ranged from 6 metres grading 0.4 g/t gold to 9 metres grading 0.89 g/t gold. Some the holes re-ported secondary intercepts that may be new NE trending zones. It will take more drilling to determine that. Overall, the H2 inter-cepts extend this zone by roughly 400 me-tres, which is quite a bit. The overall grade of the intercepts is a bit lower than the exist-ing resource but these holes will add to the resource. Four holes were reported from the NE portion of the resource area, two in the first set and two in the second. The weakest hole was Hole 13, the farthest to the NE from the ex-isting resource zones. This is the hole that was being completed when I visited. The ge-ologist logging the chip noted that this hole was the only one that contained magnetite. Magnetite destruction is a common outcome of hydrothermal alteration. It may be that the area Hole 13 drilled through was not sub-ject to as much hydrothermal activity as oth-er areas tested. That may help explain why this hole displayed some hematite zones but those zones had only slightly anomalous gold values. The other three holes in the NE extensions reported better results, as was expected. Holes 7 and 8, drilled on the most northerly drill pad, succeeded in doing that, adding anywhere from 20 to 40 metres of strike and up to 100 metres of depth to several of the main “A” zones. Hole 7 generated two shal-low intercepts from previously unknown zones (9.1 metres @ 0.65 g/t and 6.1 me-tres at 0.39 g/t gold, respectively) and Hole 8 reported 27.4 metres of cumulative inter-cepts in several zones that averaged 0.87 g/t gold. The best hole released so far from the RC program was hole 14, sited 200 SE of holes 7 and 8 and, like them, drilled to the SE to in-tersect extensions of the NE trending main zones. Hole 14 reported multiple mineralized intercepts including 3 m of 1.06 g/t gold, 3 m of 1.55 g/t gold, and a broad zone of 39.7 metres grading 0.38 g/t gold, including 9m of 0.97 g/t gold and another broad zone of

21.3m of 0.56 g/t gold, including 6m of 1.07 g/t gold. Cumulatively, these holes will add ounces to the resource. GMV management was hoping for a 20-30% increase in the resource from this drill phase, with at least some zones re-maining open. Still to report are the most easterly azimuth holes from the pads used for holes 7&8 and 14. If those holes deliver management should be able to meet its ob-jectives for resource growth. Still to report are the diamond drill holes in and around Hernandez Hill and geophysics and geochemistry from newly staked areas. I like these new target areas as much, if not more, than the existing zones. It’s become clear that we’re dealing with a much larger mineralized system than historically thought and it may turn out that the underlying mod-el and exploration philosophy will need to be altered. Its going to take more work and more results to determine that but I continue to think Mexican Hat will ultimately turn out to be a much larger resource than anyone expected. Buy on weakness for develop-ments to come. www.gmvminerals.com GoldQuest Mining (GQC-V; $0.485) has been getting more love in the market since the last issue was published. After hit-ting resistance in the 40 cent range for days GQC finally staged a breakthrough and trad-ed as high as 53. Its currently consolidating again in the 50 cent range but the chart looks stronger and its back to a six month high. I wouldn’t be shocked to see a financ-ing if it holds or gets above this level. I think management would like to do one on the back of the Cachimbo discovery but wanted some market appreciate for it first. Speaking of Cachimbo, GQC announced they would start up the second drill rig and start step out drilling at the new discovery. I know this wasn't the original plan. I think GQC is getting a lot of pressure from Bay St. to keep drilling the discovery rather than testing other targets. Management has com-promised on the issue and will keep doing both. One rig will stay at Cachimbo while the other continues to test the rest of the target list from last year’s mapping/IP pro-

HRA Journal 18 Issue 265 February 22nd, 2017

gram. GQC announced they were on hole 17 of the broader testing program and that holes have now been drilled at eight of the initial 20 tar-gets. No assays were released but I’m hop-ing we see some before PDAC. Its likely most will be misses as that’s the way this sort of program goes but some of the targets on the eastern sid of he GQC holdings look good so I’m hoping for a couple of hits. GQC aso announced they brought Alan Gal-ley, a VMS expert from Ottawa down to the project to review the core and targets. Gal-ley works with Jim Franklin, a retired GSC geologist and arguably the world’s best known VMS expert. GoldQuest is hoping for some insights that will increase the targeting efficiency in the Tireo, something that has been a constant problem as both GQC and neighbour PRG can attest. I’m hoping Galley has given GoldQuest a report by the time I see them at PDAC. GoldQuest is a buy on weakness for drill results from new targets and the potential for high grade step out re-sults to come from Cachimbo. www.goldquestcorp.com Lion One Metals (LIO-V; $0.89) re-leased another impressive high grade inter-cept from Tuvatu but didn’t see a lot of mar-ket reaction from it. Granted, its just a single hole and while the company didn’t release an accompanying map its likely this is an infill hole. It’s still a very good hole and indicative of the sort of high grade shoots that make up the resource here. Hole TUDDH-419 inter-cepted 9.07 metres grading 13.52 g/t gold including 5.57 metres grading 21.04 g/t gold staring at 33 metres as well as several deeper flat lying zones that included intercepts of 1.44metres grading 19.65 g/t gold and 2.12 metres grading 14.28 g/t gold. The deeper in-tercepts are apparently flay lying so the in-tercepts should be near true thickness but the true with of the shallower, thicker inter-cept is still uncertain. Most of the mineralized zones are sub-vertical so this may indicate something new. The Vanuatu mine produc-es almost exclusively from flat lying structure so there may be something similar at Tuva-

tu. Sub vertical is preferred for underground mining but if the flat lying zones add ounces that’s fine. Management also reported that everything is going as expected with dewatering of the ad-it and geotechnical drilling in the area where LIO wants to place the production decline. No surprises is what you want with that sort of work. Still no update on the financing package for mine construction which is what most shareholders, particularly the newer institutional ones, want to hear about. The pace of drill reporting should increase with the underground rig about to get activated so news flow should be good. Accumulate for more drill results and news on construc-tion financing. www.liononemetals.com Mirasol Resources (MRZ-V; $1.88) Mirasol had, for it, a flood of news. Not all of the news was positive but the market took it in stride and the stock continues to trade in the $2.00 range. The negative news was the withdrawal of Cerro Vanguardia SA from the Claudia JV. Reasons weren’t given but, pre-sumably CVSA decided it couldn’t build a via-ble zone quickly enough to justify continuing. MRZ notes there are several vein trends that remain untested and that management will update shareholders on future plans once its interpreted all the new data generated in the past year. Mirasol is likely to seen a new JV partner though I don’t know if they can get a similar or better deal for Claudia. CVSA is the “obvious” JV partner and would have the lowest hurdle for a viable zone.

February 22nd, 2017 Issue 265 HRA Journal 19

In happier news, Mirasol reported that Yama-na has started a drill program at the Atlas project that forms part of the Gorbea JV in Chile. Yamana’s 2016 exploration reported a number of decent bulk tonnage gold/silver intercepts that were too deep to be econom-ic. They did reinforce the potential of the belt however and more recent mapping and IP has highlighted a number of breccia bod-ies that could host mineralization at shallow-er levels. A drill program of at least eight holes and 3500 metres will test several of the breccia targets to a depth of 300 metres. MRZ also delivered some good news from its 100% owned La Curva project in Argentina on both the JV and exploration front. Mirasol has optioned La Curva to Oceanagold which can earn up to 75% by spending $7 million and making payments to MRZ of $1.2 mil-lion within 4 years to earn 51%, then deliver a PEA within two years to get to 60% and then deliver a feasibility study within a fur-ther two years to get to 70% and may then have the option to go to 75% by fully fund-ing construction. The agreement incudes a minimum commitment of $1.25 million in spending in the first year including 3000 me-tres of drilling. Shortly after that announcement MRZ an-nounced a new target, Cerro Chato, at La Curva. Cerro Chato is a lithocap area, gen-erally depleted in precious metals but recent mapping has discovered a 300 metre long zone of gold and silver bearing veintlets that cuts across the lithocap that reported up to 10.5 g/t gold from surface sampling. The zone overlies part of a 1.2 km long IP resis-tivity target that bears similarities to other epithermal discoveries in Santa Cruz prov-ince, including others Mirasol itself was in-volved with. The JV is obtaining drill permits for Cerro Chato and other nearby targets and should be starting a phase one drill program soon. MRZ always seems to be able to pull a new target out of its hat when it needs one. That one reason I continue to follow the story and why the stock continues to trade well. MRZ can have big swings so only accumulate on weakness but I view it as a core holding for those that like the prospect generator model. www.mirasolresources.com

Mundoro Capital (MUN-V; $0.175) re-ported drill results the Sumravkovic conces-sion located in the southern portion of the Timok belt, a few km to the west of Nevsun’s Cukaru Peki deposit. The first pass program reported a couple of interesting but not ex-citing intercepts from multi-phase porphyry intrusions with a best result of 63 metres of 0.46 g/t gold equivalent. Cukaru Peki itself, at least the high grade portion of it, is high sulphidation style mineralization that sits above a porphyry. Management says there are several untested targets still in this sys-tem which they are calling Skorusa, and also reported the identification of a new alteration system three km to the east of Skorusa, closer to Nevsun’s discoveries. MUN also announced drilling is starting at the Borsko Jezero concession that is part of the JV with JOGMEC. The one hole program will test a copper soil anomaly associated with an altered andesite dyke and strong resistivity anomaly. The partners are also designing follow up drill program for several other tar-gets within the JV area. Though MUN still hasn’t released exciting re-sults traders are clearly happy that the com-pany is accelerating both work programs and reports, as it should do now that we’re back in a bull market. Mundoro has the projects and funding to assure strong news flow and buyers are starting to arrive now that man-agements is assuring the market that strong news flow is what it will get. Accumulate, on weakness only, before the bulk of this year’s reporting. www.mundoro.com

HRA Journal 20 Issue 265 February 22nd, 2017

Precipitate Gold (PRG-V; $0.13)announced it has agreed to grant Golden Predator (GPY-V) an option to earn 100% interest in the Reef project in the Yukon, subject to PRG retaining a 2% NSR. Reef is immediately north of GPY’s 3Aces project, which HRA followed in the past when it was held by Northern Tiger prior to its takeover by GPY. Golden Predator has been aggres-sive with its 3Aces exploration program and its paid off in both results and market atten-tion. The Reef-3Aces region has been under staking moratorium for several years now. Acquiring Reef allows GPY to control the en-tire area and it was willing to pay up for the privilege based on the option terms. PRG used Reef as its listing project and carried out a couple of phases of work there. Re-sults were encouraging but not, to be hon-est, all that special. I think PRG manage-ment is wise to accept an offer this strong. GPY can earn 100% of Reef by paying PRG $1.05 million, issuing $900k in GPY stock and 800,000 GPY options over three years, including an initial payment of $400,000 and 100k GPY shares. This is a very good deal for PRG in my opinion. The company re-ceives an immediate non-dilutive addition of $400k and $200k worth of GPY shares. Pre-cipitate now has over $3 million for contin-ued work in the Dominican. Just before this issue was completed, PRG released a field update from the DR. This release was obviously more about getting shareholders to be patient than anything else but it did stress some important points. PRG is working at Ginger Ridge now, map-ping and sampling to the south and east of the main GR anomaly. There is a one km long gold anomaly to the south that didn’t receive a lot of attention after the Ginger Ridge discovery hole. There is also evidence of a parallel though weaker IP anomaly to the east of GR, roughly on trend with GoldQuest’s new Cachimbo discovery. Man-agement still wants to test some areas of the main anomaly as well, as only about 25% of it has been tested. In addition to Ginger Ridge and environs, crews are still at work completing IP, mag, and soil surveys on the five outside target areas that came out of last fall’s work pro-grams. In short, PRG has plenty to keep it-self busy. Management also pointed out that the drill is still onsite at Ginger Ridge and

that only half the phase II meterage was drilled though a lot of the contract was pre-paid. Crews are working on several fronts to refine target vectoring and drilling should re-sume next month once that’s done. The Tireo has never been an easy place to target and making discoveries requires a willingness to think outside the box and be persistent. PRG has those qualities and lots of working capital to move things forward. It’s been a tough month but I think the worst is over for the stock. www.precipitategold.com Vendetta Mining (VTT-V; $0.255) management expects to have metallurgical results to release prior to PDAC. Met is par-ticularly important to base metal projects and I expect the news to be favorable. I think we’ll see an update to the Pegmont re-source estimate not long afterwards. Man-agement also told me warrant exercise has accelerated. Given that, the stock is holding up well and had another leg up with new all time highs. I still think we’ll see a financing soon and management is determined to speed up the work programs and get Peg-mont to at least a PEA stage as soon as pos-sible. The strong trading profile should help VTT get good terms. Zinc itself continues to look strong, trading in the $1.30 range with declining inventories. Here too we may see new highs soon. I think VTT still has some room to run even at today’s elevated price levels. Accumulate on weakness for further gains. www.vendettamining.com

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