The BarkerLetter

December 31.

Greetings folks.

Some time back - last summer in fact - we cautioned investors against getting into $1.00 gold stocks, and as I recall we weren’t too keen on the fifty centers either.  We reasoned that in the event of a blow off those stocks would be heavily sold, and also have the highest potential returns in any subsequent rally.

After the sell off occured we advised readers to get into a pair of my faves that went down to a quarter, West Timmins Mining and Western Geopower, trading on the TSX and TSX-V respectively (please see our October post called The Gathering of the Clans). Western Geopower was actually a $0.50 stock.

Both of those are now cooking right along, and I’m suggesting investors take some money off the table on both in the coming days, and pocket a 25-50% gain. I think we’re at the start of a bear market rally that will take many junior stocks higher, and these two in particular to just under their 52 week averages. I advise adding to positions if and when we hit another dip.

Also, I erred in my comments on West Timmins, (trading symbol WTM.TSX), when I said they had intersected 1 gram per tonne gold on their wholly-owned Thorne property in Timmins, Ontario: The cores had actually returned better than 10 g/tn in a gold rich sub zone of the Golden River West property there.  In fact, they hit grades ranging to 23 g/tn over widths of 1.0 to 4.5 meters.

Subsequent to that, the company has drilled seven holes into what it calls a ‘continuation’ of that gold rich sub zone, and logged broad intercepts of mineralization ranging from 13 to 45 metres, including 37.50 metres of 1.60 g/t.  That earlier high grade zone remains open to the west and down plunge.

Actually WTM has done ever better than that of late, grade wise, on its Thunder Creek JV with Lakeshore Gold, also at Timmins. They’ve hit 11.2 g/t over 10.4 meters at the Rusk property, which is less than a kilometer from Lakeshore Gold’s Timmins West deposit, and apparently at the same depth.

I have high hopes for the Rusk zone, for a pair of reasons: For one, that Timmins West mine has a rather high cash cost, extending to $600 per ounce. It’s very important for Lakeshore to find some high grade gold zones near it, and quickly too, because production is scheduled to begin in the first quarter of ‘09. They have to get their costs down.  Consequently, I believe that exploration at the Rusk zone will be a very high priority in the coming months, and let’s face it - companies have to be very selective about that they choose to spend money on nowadays. Not every good property is going to be drilled until risk appetite returns and financing becomes more readily available.

The other reason is the bigger picture. I think that both Ontario and Quebec have been overlooked as companies scrambled to find and develop the giant, near-surface copper/gold porphyry systems of Latin America.  The Quebec and Ontario camps are loaded with gold, but they’re a little more expensive to drill and the deposits are certainly more difficult to model. But the multi million once deposits are definitely there to be discovered! As the political risk in Latin America, and around the world, continues to grow, I think it is slowly dawning on investors that Canada is a darned good place to make world class discoveries, no matter what the challenges are.

So, long story short, I’m still hoping somebody will find and map another world class project along the lines of Prime’s Hemlo discovery in the 1980s, and soon.

Lakeshore and West Timmins are both in the running for that.

Careful out there!

Kb

December 8 -

I’m scouring the pink sheets for the cheapest gold deal I can find.  Originally I had a budget of $100, and I wanted to accumulate at least a million shares for that, excluding commissions. In hindsight, that may have been a bit optimistic. However I did stumble across something  called Consolidated Golden Quail Resources Ltd., trading symbol GQRFF, which trades for a thousandth of a cent per share. The trouble is there’s no trading on the stock.

Golden Quail is a British Columbia corporation with a business address in Carlsbad, California. It has no assets which I can find. However, by some incredible coincidence I just happen to know the CEO, a guy in Vancouver. Well whaddya know! So I’ve put this one on my watchlist.

Here’s one that is liquid: Hunt Gold Corp, symbol HGLC, a non reporter in Florida with a market cap of $58 million and some 290 billion shares issued and outstanding as of last June. The stock traded 641million shares by today’s close, down 300 thousandths of a cent.  It has a 52 week high of over $3 per share and volume has been growing exponentially over the past two weeks. The company lists several gold properties in its public filings but I can’t seem to get any information on them.

More tomorrow…

December 3. Greetings investors! Or is it me, or did everybody fail to call the top in commodities last September. I’m sure somebody did, I just can’t seem to find them.

Meanwhile, I´m looking for different investment reading fodder these days. It’s no secret I think the mining industry needs to change, that it needs to reach out to a younger, more hip, less gullible audience. That calls for two things chiefly: greater disclosure, and less fibbing. These kids today aren´t stupid!

I’ve found a couple of guys who seem to be hitting the mark. One is Jim Letourneau (the Big Picture Speculator, and I’ll have more on him in subsequent editions), and the other, with whom I´m rather enamoured of late, is Kevin Graham. He has a website called grahamanalytics, and his posts are funny, irreverent, and wickedly accurate.

I particularly like his June 2 post, Run Hard, Run Fast, in which he questions the veracity of television, the wisdom of experts, and the rather prudent act of heeding Winnie the Pooh.

Check it out, and hey….

Be careful out there.