Resource World Magazine

AT THE M A R K E T Rod B la ke Bottoms up! 918 – Remember that number. That's the level that the TSX Venture Exchange got driven down to earlier this spring when the price of gold bullion took that very sudden and unexpected $200 plunge to US $1,321/oz. 918 is not a very big number. Not very big indeed, especially when you consider that the world's premier resource stock exchange was trading over 1,100 just weeks before, and worse still, had peaked out above 2,400 in March of 2011. 918 is not a very big number at all. And now, many are saying investing on the Venture Exchange is dead money and will be for years to come, that the resource super cycle is over, that up to one-third of Venture Exchange companies are not going to make it, that it's time to cut one's losses in the resource sector before it's too late and move on other exchanges like the Dow Industrials and S&P 500 that are trading at or near record highs. Then why is the Venture Exchange trading higher than 918? If the junior resource game is over, why is money continuing to flow into the promising Alpha Minerals/Fission Energy Patterson Lake South uranium project in Saskatchewan? Why have the shares of Colorado Resources moved up from just $0.25 to the $1.50 range since releasing a very encouraging copper/gold drill hole assay from its North ROK property near Imperial Metals' Red Chris copper/gold deposit in British Columbia? Why have Cosigo Resources' shares quietly tripled from just pennies to near $0.30 on word that the company has finally attained the environmental permits required to begin limited drilling its Machado gold project in Colombia? It may be limited, but there seems to be some selective optimism here. So far, as of May 15, the Venture Exchange is holding above that terrible low of 918. Are the pundits right in that this is just another of a long series of dead cat bounces and that lower lows lie just ahead? Are resource investors throwing good money after bad? What does a few points above 918 really mean when the traditional 'sell in May and go away' summer doldrums are just ahead of us? And goodness knows that the Venture Exchange hasn't done very well during recent summers. Or, could this be the quiet start of a rally off of the bottom and not just a dead cat bounce? Could it be that the low of 918 will hold and the Venture Exchange will begin to move higher? After all, the price of gold has recovered somewhat on increased physical demand. The price of copper has risen lately on reports of tightening inventories. Word has it that a few Japanese nuclear reactors are being prepped to be put back on stream. And low and behold, North American natural gas prices are rising as inventories are suddenly at five-year lows. I can't be sure, and we may well retest 918 again, but to me this resource market feels like the bottom has been seen. The next few months should tell, but if the Venture Exchange can hold here, the future could be more enjoyable. Bottoms up! 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 JUNE 2013 BOOK REVIEW $10,000 GOLD – by Nick Barisheff by Ellsworth Dickson A new book entitled $10,000 GOLD will be of interest to anyone interested in preserving their wealth. Written by Nick Barisheff, President and CEO of the Bullion Management Group, the author delves into the mysterious world of the yellow metal. one reads financial newsletters, it is If obvious there are opposing views on gold – from those predicting a major collapse in the price to Barisheff's bullish opinion. Barisheff combs through the problems of the Federal Reserve, the unsustainable US debt and many other details that impact the gold price – he makes a good case. He notes that that the perpetual expansion of debt is a requirement of modern banking, which has a direct correlation to the price of gold and a bullish influence. author points out that gold is not The a, so-called, barbarous relic, but instead, has had a historical stabilizing influence on the economies of countries that have adopted a gold standard, as opposed to the endless failures of fiat currency with no backing. Barisheff runs through 10 ways to buy gold and gold-related products. As might be expected, he favors bullion. With regards to the manipulation of gold, Barisheff said, "Currently we have had an artificial decline orchestrated by the sale of about 400 tonnes on the COMEX but the demand for physical gold has increased dramatically with gold and silver coins selling for 20% – 40% premiums. Eventually the physical price will prevail and the markets will act in a more rational manner." $10,000 GOLD is a worthwhile read and is available at major book stores and on line at Amazon.ca and .com and Chapters-indigo.ca  n www.resourceworld.com 25

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