Resource World Magazine

AT THE M AR K E T Ro d B la ke Ante Up In his hit song The Gambler, Kenny Rogers references a late night train encounter with a card playing drifter who maintained that whether in a poker game or the game of life, one had to "Know when to hold 'em. Know when to fold 'em." That is, one has to be able to recognize when they've been dealt a bad hand, toss it in, and move on the next. I think we saw this play out in the resource markets in midApril when, after the price of gold bullion, which had been struggling for a number of months, suddenly plunged by over $200 in just two-days, the largest drop since 1980. Many resource stock investors, who had up until then had been holding on to their already underwater positions in the hopes of better markets to come, just couldn't take it anymore and folded their hands and hit what bids were available and moved to cash. Time will tell whether or not this was right move to make, but make it they did, leaving the TSX Venture Exchange down by another 9% to about 958. Up until then, the TSX Venture Exchange had been holding its own, trading either side of 1,050 through much of the month of April, as investors stayed in the game by continuing to accumulate resource positions in the hopes of a spring rally because of the positive trading action of the Alpha Minerals/Fission Energy new Patterson Lake South uranium discovery in northern Saskatchewan – this being the first real action in the uranium space in about two years. That action suddenly ended and the risk now will be to see if investors have the fortitude to ante up again in anticipation of the next resource rally or if they fold for good and move on to other markets. And who could blame them? After all, it's been an ugly bear market in the resource sector since the Japanese tsunami of April, 2011. The resource markets have been hit with a series of lower lows that have pulled the Venture Exchange down by over 60% from the 2,465 level two years ago. The only visible support level left now for the Venture Exchange is the post US housing bubble low of 680 established in December of 2008, and to test that level again would be devastating for most. Resource investors understand risk better than most, but even they can only afford to lose so much. Especially as they watch the Dow Jones Industrial Average and S&P 500 Index reaching new post recession highs. Money naturally flows to where it is treated the best, and right now, that is not the resource sector. Hold them, fold them, or ante up to buy more. These are the hard decisions being made by the resource players today. Me? I'm betting the selling in the resource sector is overdone and those buying at these levels will be the ultimate winners in the end. It's time to ante-up and play the next hand. Cards please… 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 completeness 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 respective 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 Primero Mining Corp. is a Canadian-based gold and silver producer with operations in Mexico and intentions to become a leading intermediate gold producer in the Americas. Primero is focused on delivering sustainable, superior value for all stakeholders with low-risk exposure to gold. www.primeromining.com 26 www.resourceworld.com TSX: P NYSE: PPP M AY 2 0 1 3

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