Resource World Magazine

at t he ma rke t Rod B la ke Gold's little sibling Most of us have a little sibling or two. In my case it's a younger brother. For the most part, younger siblings tend to go somewhat unnoticed in the family hierarchy, following patiently in the shadows of their older, bigger and more developed brothers and sisters, while making do with hand-me-down items. But then, somewhere along the line, and perhaps to the amazement of some, the younger sibling finds their niche in life and begins to outperform their more prominent brother or sister in some area. In my case, it was the game of golf; my brother has developed into an astute player, while I'm just happy to get around the course without embarrassing myself or others too badly. My point here is that when someone who is generally taken for granted does something out of the ordinary, attention should be paid as it could be a sign that the traditional structures are about to change. With the above in mind, I've been paying closer attention to the action of silver lately as it seems this, somewhat taken for granted quasi precious metal, is starting to do something out of the ordinary, that is, it's starting to dramatically outperform that bellwether of precious metals – gold bullion. This could be very significant because, just as a rise in the Dow Jones Transportation Index is needed to confirm a bull market in the Dow Industrials, a true bull market in precious metals needs an outperformance in silver to confirm the rise in gold bullion. This is because silver plays a dual role – both as an industrial metal and a precious metal – and when it outperforms gold, it confirms that the world's economies are taking up the metal at a rate that exceeds that of jewellery or defensive hording. Here's how I see the numbers. Back in mid-May, when the current short term uptrend in precious metals began, Gold was about US $1,570 an ounce and silver was at about US $26.30 an ounce, for a gold/silver ratio of about 58.3 to 1. Fast forward to early October and gold, while getting most of the market's attention, had moved up nicely to about 1,795.50 an ounce, but silver, with almost no attention at all, has increased to over US $35 an ounce for a new gold silver ratio of just 51.2 to 1. Silver had outperformed gold by over 8% in less than five months. Can this encouraging performance by silver continue? Time will tell, but at the end of the last long term precious metal bull market in 1980-81, gold bullion traded to over US $800 an ounce and silver, albeit with the help of speculators, made a dramatic move up to US $40 an ounce for a gold/silver ratio closer to 20 to 1. So keep an eye on gold's little sibling silver. If the gold/silver ratio drops below 50 to 1, it just might be foretelling us that the best of this bull market in precious metals is yet to come. n Rodney Blake is an Investment Advisors with Canaccord Wealth Management, a division of Canaccord Genuity Corp, Member-Canadian Investor Protection Fund. The information contained in this article is drawn from sources believed to be reliable, but the accuracy and complete-ness of the information is not guaranteed, nor in providing it does Rodney Blake, Canaccord Genuity Corp, or its subsidiaries, or affiliated companies, assume any liability. This information is current as of the date appearing in this article, we do not assume any obligation to update the information or advise on further developments relating to these securities. This article should not be considered personal investment advice or a solicitation to buy or sell securities. Canaccord Genuity and holdings of its respec-tive directors, officers and employees and their associations, from time to time may buy or sell any securities mentioned herein. The views expressed are those of the author and not necessarily those of Canaccord. Rodney Blake can be reached at 604-643-7567 or rod.blake@canaccord.com NOVEMBER 2012 Vancouver-based Orsa Ventures Corp. is a junior exploration company focused on the acquisition of quality gold, silver and copper assets in the Western United States • Experienced Management Team and Mine Developers • 2.85 million ounce inferred gold resource at Quartz Mountain Property in Oregon with excellent exploration upside • New gold discovery in Nevada • Less than 35 million shares issued and outstanding • Well funded tsx-v: orn www.orsaventures.com www.resourceworld.com 25

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