Non-meat proteins - food for thought?

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There are a few ASX equities which are exposed to the agricultural sector. An issue that has caught my eye is the question of antibiotic use in livestock. Judging by this article in the NY Times, you might wonder what is the implication of increasing bacterial resistance to antibiotics used in farm animals. It is an interesting dilemma in terms of its future outcomes, and these of course have implications for investors, whether you are:

1. A farmer with a multi-million dollar investment in livestock raising assets

2. A passive investor interested in, or holding stock in Australian Agricultural Company (ASX:AAC).

There are two counterfactuals here:

1. The prospect of increasingly resistant bacterial counts in livestock turning people off meat

2. The prospect of bacterial resistance turning people off imported meats

3. The prospect of non-US farm assets becoming more valuable because they do not use antibiotics in farm animals, or because they are more sensible with respect to dosage.

I personally don't know enough about the topic to say more....just its interesting. Feedback is welcome. I wonder if it will make these farm assets more valuable outside the US; but I suspect, consumer suspicion and paranoia might in fact result in consumers dropping meat altogether. Of course, you will have no problem if you simply ensure you cook your meat well.

For the investor, perhaps the safest investment strategy is to invest in non-animal forms of protein, as these are surely to benefit from the oncoming scandal. Lentils anyone? Who grows these? I came up with a few plausible investments:

1. Alliance Grain Traders [AGT:TSX] - This is a stock with a longer equity market history, and it appears to be a good timing for an entry in this stock, since the stock is at a 2-year low, and the PE ratio is a reasonable 12x earnings. You can follow this stock at Google Finance, however you will want to look at its earnings outlook. Having said that, the earnings per share of $1.09, or earnings yield of $1.09/$19.51 = 5.5% is not overwhelming for a $500mil stock. The question is whether its a turn-around story? Download the latest presentation (Nov 2011).

2. Legumex Walker [LWP:TSX] - see this company presentation. I've not researched this stock much, but it appears to be a new listing or equity enterprise, so you might want to follow it to find a technical entry point on the chart.

These are both Canadian-listed companies. The appeal of lentils, as a source of protein, is that they use less water, and of course don't entail the same exposure to meat-born bacterial (i.e. staf) infections.

3. Viterra Ltd - part of the larger Canadian group - see Google Finance and their website.

The nice aspect of these stocks is that they are tangible commodities and Asia is not meeting its own requirements; and there is clearly the prospect of a shift to greater edible 'non-meat' proteins, and this could see greater profit margins for these companies. This trends could be surprisingly quick if there is a 'scandalised' US beef industry. There is plausibly the prospect of higher profit margins from greater global consolidation of these businesses. I already see this happening with these two players. Are these enterprises the consolidators or the target? It probably does not matter....as long as they stay trading at appealing earnings multiples.

If you want further research on 'pulse' crops - see this website. There seems to be a great deal of upside for consolidation in the Australian pulse market, as I could not find listed producers, so expect these Canadian players to step in to do that.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Press release by Adamus Resources (ADU.ASX)

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Adamus Resources (ADU.ASX) has just released an announcement highlighting its developments in Africa. I find this company a good example of the type of stock to buy for the reasons alluded to. The other reason is perhaps the diversification of risk; and the prospect of higher grade ore being found as well as the inevitable addition to resources when you have so much exploration area to test. Watch those drill results! The stock is up today on this announcement.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Interest returns to the gold stocks

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Its been some time since I posted some news on speculative mining stocks. The reason is that I see little appeal in exploration stocks at the moment for several reasons:

1. The lack of appetite for risk

2. The lack of capital for risk, i.e. the difficulty raising money, i.e. Base Metals Ltd

3. The difficulty for non-gold projects given the worrisome outlook for commodity demand

4. The development lead time for projects

One of course can find stocks which one likes like MIL Resources (MGK.ASX), however without a rapid development schedule or adequate funding, then the market will pass them by. Recognising the slow pace of exploration or gold conversion by MGK, I decided to sell this stock 2 months ago. The concern is that even when they release results, the market will say - these results are good, but what about the spectre of another cash raising. When the company is not going to have an operating mine for 3 years, then its looking too long term, and of course in a recession, they will be looking at share price debasement with each successive cash raising. The alternate picture of course is that they are able to attract funding from one of the majors. They have been passed over by a major Chinese company, but that company was probably interested in the iron ore project. The gold side is promising, but sadly not in this commodity cycle.

In this last week, I have been drawn back to an old favourite stock - Adamus Resources (ADU.ASX), which is merging with a Canadian mining stock Endeavour Mining Corp (EDV.TSE). Adamus Resources is a small miner with the capacity to add resources to its existing mine, as well as to scale up its existing plant given the prospect of promising exploration results.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Evolution Mining - dubious entitlement

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A prospectus offer for Evolution Mining has just arrived in my email box. This offer does not look attractive at all. What is wrong with it:

1. Assets are not particularly solid. i.e. Cracow is mined out, the projects are small and have dubious or risky upside potential.

2. Newcrest will sell out - Even if they are getting vendor shares, I'd expect an investment bank to find a way to upload the stock through a CFDs platform.

3. The finance market is risk-averse to new project investments, and these gold projects are dubious.

Yes, I know, this is a gold stock, but I don't believe this company will ever reach anything near these production projections. This is an exit strategy.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGX.ASX) - moving higher

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MIL Resources (MIL.ASX) has been going sideways in recent times. "Gold is great", but it makes more sense if you are producing it, or exploring for it. This only occurs when companies start sinking holes. This is the case with MGK. This month they commenced a drilling program on their PNG gold projects, and based on the indicators from surface trenching and their geological association, I am expecting some high grade results over widths of 4-20m. This makes for very attractive small scale mining. I'm expecting this stock to break out of its 2c resistance very soon, so I have rebuilt my stake in this company.

Alkane Exploration (ALK.ASX) - a stock which I have liked for a long time, has recently announced that its looking at a 1mtpa processing plant for its Dubbo rare earths-zirconia plant. This project has a NPV of $1.2billion, yet the company is capitalised at just $450mil. I see upside for this $1.70/share stock (we recommended at 45c) to $2.00, however its going to need an issue soon, despite its $18mil in cash. Market confidence will be another factor paring back the prospects of a 1mtpa plant, even if the 'anti-China' stigma favours full development of this project. I'd question if their suite of rare earths are even refined in China. I've done no research to find out.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Questions raised about impact of coal seam gas

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On the 15th July 2010 I questioned the claims of the coal seam gas industry that it was in fact 'climate friendly'. Read my post here. When I say 'climate friendly', I mean that I have huge problems with the global warming hypothesis that its largely caused by human activity, but IF there is solid evidence for 'said influence', then coal seam gas is a future 'sensitivity'. Other people seem to be questioning this issue now - a year after our post.

Of course the greater issue is the question of 'climate change' itself. It was only in 2007 I think that a satellite was placed launched to measure the variations in sunspot intensity. Yes, that's right. Only from 2007 do we have statistics which may or may correlate the Earth's climatic variation to solar radiation. The sun is of course the source for most of the earth's heat, so you'd think this question would be the first 'cause' to identify; but no, academics have to blame 'dirty corporations'. We of course discuss the false science at our climate change blog.

Such issues of course place a risk in people's minds about the appeal of coal seam gas.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGX.ASX) - consolidating

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With the calamity behind us and the market likely to settle down, we are going to see gold prices slump a little, the $A drift, and confidence return to the speculative end of the market; at least the end which is cashed up. MIL Resources (MGK.ASX) are well positioned for recovery. The company has $4mil in cash, and is just about to launch into a drilling program; at a time when gold prices are $1800/oz, and copper prices still a healthy $4/lb. Mostly they are a gold story!

With drilling starting in several weeks, expect speculative interest to return to this end of the market. We can already see this happening. The stock fell to 1.6c when risk capital evaporated, but it quickly returned, and the stock reached 2.2c on Monday before closing at 2c. Today the stock was stronger, reaching 2.2c before sustaining a sell-off due to off-screen selling. It might take a little time to regain the confidence, but I expect it to remain above the moving average.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Gold stocks will lead the market

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The Sydney Morning Herald has come out with an introduction to some gold stocks. The price of these stocks is already very high. I prefer to go into the future and look at stocks which have the capacity to:

1. Excite the market with attract drilling results

2. Increase gold resources substantially

3. Greatly increase their share price

4. Other factors which I explain in the eBook

We really want to anticipate the stocks which will be big in the future, so that we minimise the downside, and maximise the upside. We don't have to speculate on market volatility. If we stack all the factors in our favour, we maximise our chances of success.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGX.ASX) - a short term hit

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MGK will take a hit today after a 550pt hit to the Dow Jones after bad news from the EC. The Dow closed at its low, so further falls can be expected in Friday trading. I note however that gold was strong until gripped by profit-taking. Low interest rates or asset deflation is actually good for gold, because 'no yield' gold becomes more profitable against falling yields of other assets. Gold is going to $2400/oz, so expect more upside. Meanwhile the Dow Jones is going back to 10,550 points - technical support. MGK will probably get support at 2.2c, however it will probably go as low as 2c during the day, so be in there. The Dow will go lower tomorrow, but gold has already had its profit taking. Gold will recover, so buy today. The day to buy is today.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Vital Minerals (VML.ASX) - a starter, but...

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Vital Metals (VML.ASX) has restored some confidence since the last announcement. The early drilling results were not encouraging. The latest results offer some promise of high grades, though the widths and lack of consistency are reasons to retain some risk-aversion. Check out the results here. Some 15 drill holes of the 60 hole (5000m) program are outstanding. It is not clear what the relationship between mineralisation and host lithologies is, so there is the potential for a new association. This is not clear from the disclosure; nor is the position of the intrusives in relation to the mineralisation, i.e. At depth?

Mind you, with a market capitalisation of $18mil, I'm inclined to think MGK.ASX is far better value, with far more upside. I must acknowledge though that Vital's Watershed tungsten deposit is strategically important, and a nearer term project, as opposed to MIL Resources' Amazon BAy, which they will be sitting on for another decade.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGX.ASX) - a mover! 2nd day

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As expected MIL Resources (MGK.ASX) closed up around 10% today at 2.4c, having touched 2.5c yesterday. There are no announcements at this point; however irrespective of any corporate news stimulus, I suggest there are 'technical' (chart based) reasons to expect a breakout tomorrow to new highs, i.e. above 2.5c. Watch for news overnight or tomorrow.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGX.ASX) - building support for next move!

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MIL Resources rose to 2.5c today in lunch time trading. The stock has fallen back to 2.3c in the last 30minutes. I see it trading as low as 2.2c (support) before it consolidates for a bigger move in coming days.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGX.ASX) - moves higher

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MIL Resources (MGK.ASX) is in recovery mode. As expected the company established a support at 2c, or more correctly 1.9-2c, and is moving higher. There is temporary resistance at 2.3c, and I expect them to challenge the 2.5c level next week. The company is planning a 4000m drilling program, and I'd not be surprised if they expand this, though this will depend on their capacity to prepare drilling platforms and to schedule a drilling rig. The reason I say this is because they might have more current interpretation of the gold anomalies.

MGK is a rather undervalued stock compared to its peers, so I see this as a good stock to buy. It is an exploration stock, so there is a necessity to trade out of this one. Its a buy, and don't hold for too long. Its a stock you might be able to trade 3-4 times before production, at which point I loose interest, because at that point, they cease to offer predictability. Blessed are the explorers! That's about as religious as I get. Oh, and of course GOLD!! I had to repress it whilst I was a coal analyst.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Realm Resources (ASX:RRP) - or was that 'real'?

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This is a stock I found 2 weeks ago which was trading at a support. I see that its up 20% today on the announcement that they have an expand coal resource. This is an attractive buy on the face of it. The problem I have is the high entry price for buying into the project ($20mil plus equity).

The other issue for me is whether there are any issues barging coal down the Barito River. They are so far up the Barito River...I'm wondering if the 'proverbial paddle' would do them any good. Barging is a wonderfully low-cost mode of transporting coal, but up the top, you will have issues with shifting sand bars, adequate water levels.

As a coal analyst, I didn't have the opportunity to deal with projects this far up, or to live and breath this river. It might well still be a substantive river at this point.

If you know the answers - great!

See http://www.google.com/finance?q=ASX:RRP

This is a fairly low energy coal, so better suited to domestic power generation. No problem; the Indonesian economy is doing well!

The problem with companies buying projects at the top of the commodities boom is that there is very little profit to etch out by shareholders. In this case, I there is plausibly a profit because of the Asian growth, i.e. Sustainable prices. But then I think there are cheaper entries. i.e. Coal seam gas in Australia. This project though is close to production. Still, I'm interested if they are "mining the market", and will suddenly announce that they cannot ship ore, so they have to truck it 300-500km down river. For you to find out. I'm a lazy analyst!

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGX.ASX) - prepares for drilling

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A number of announcements have been released by MIL Resources (MGK.ASX) over the past week which should result in interest from the 'gold market'. These announcements can be downloaded from the ASX:

1. Drilling schedule

2. Golden Peak trenching results - this report suggests that the company has yet to report for the trenching of the broader Western Zone geochemical anomaly. My guess is that geochemical results for this region will be released in the next few weeks, and that the zone might be added to the drilling program.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGX.ASX) - a mover!

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This is one of my favourite stocks - for several reasons:

1. Its so undervalued compared to its contemporaries

2. Its got great projects

3. Its timing for exploration is good - its a gold boom

I was recently expecting this stock to fall to 1.1c. This was on the basis of several concerns:

1. Slow drilling schedule - which I expected to cause the stock languish - it did, but not to the extent of reaching my target - 1.1c.

2. Technical support - The strongest support was 1.1c, and I expected it to at least fall to that level for a short term before recovering.

3. Loss of confidence - I actually expected a rapid correction due to market correction. I expected this to hit explorers who are considered less tangible. The broader market did fall; though my forecast was a little 'tragic', so MGK only fell as low as 1.4c.

4. Priorities - The company continues to allocate funding to its titanomagnetite project, which I see as a long term strategic assets. This might be because it has a statutory 'minimum spend' to comply with, however I do see this project as a short term distraction from the 'greater gold' value.

5. Gold price - it started to recover.

6. End of tax year - This was the other short term negative on the stock.

In response to consolidation, and the stronger gold price, MGK share price, I jumped on the stock from last week. I was still accumulating as of yesterday. So I should at least reverse my prior negativity which was mostly short term. I have also been busy in recent times...so equities are not getting my full focus.

I cannot recall when the drilling program is due - I think around Sept 2011; however there will be short term trenching results, which will at least give some surface indicators of the tenure of the gold grades, and the lateral extent. For this reason, we might expect some short term strength. The technical resistance levels are 2.5c, 3c, 3.7c, 4c, 4.5c. It will not be a straight line.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Base Metals Ltd (BSM.ASX) - off support

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Base Metals Ltd (BSM.ASX) offers one of the best exposures to the base metals industry if you believe that industrial metal prices are going to stay high. i.e. That China and the third world are expanding at such a rate to offset weakness in the developed world, and that the developed world is about to be transformed by globalisation....nevermind what is happening in Greece. I am in the Philippines as we speak. The economy here is very strong. Property prices are booming, and yields are still very reasonable compared to the rest of Asia. There are a lot of people working in the coffee shops, whether call centre agents, programmers or the like. Suzuki has a 80,000 motorbike plant here, and has committed to a new 200,000 unit plant.

So why BSM? The company has an established treatment plant at Hellyer, Tasmania. This is an old mining centre operated by Aberfoyle before if I'm not mistaken. The new operators are modifying the plant and recommissioning it on the basis of extensions to worked out operations. I see a lot of upside if they can 10 years more operating life from the project area. The company is only capitalised at $42mil according to Google Finance, and they have $15mil in cash, they own the treatment plant. I think these are pretty humble numbers, so I agree with the CEO...there is potential for a revaluation up to $500mil; with excitement for traders on every drill hit. Some drilling results out already look good. I jumped on this stock because the technicals look good. The 20c support level looks good...so I've grabbed some. Their moving average is about to cross, and sellers have backed off.

I'd not be surprised to see a Japanese, Korean or Chinese trading company back this company with further development finance. i.e. Any new development headings will cost money, and I'm unsure how much of the $15mil is left. Besides, I do need to do more research. But looks ok so far. More info - File 1 - File 2

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Union Resources - longer term outlook - its a short term sell

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Union Resources (UCL.ASX) last Friday released its preliminary feasibility study. There are a number of reasons why it offered a mix of good and bad news:
1. There is nothing technically bad about the project; it is a world class project and I think it will be globally a very competitive source of product (phosphate)
2. There is going to be a longer development lead time than I expected based on this report.
3. Expect the stock to fall back - probably to the 0.6-0.8c support levels in coming months, at which point this stock represents attractive long term buying
4. There remains the prospect of a takeover by Minemakers (MAK.ASX)

I have had other commitments of late, so little time to trade stocks. I bought UCL several weeks ago at 1.1c...I was able to unload 1/3rd of my holding at 1.4c, buying it back at 1.1c. The feasibility study gave me the opportunity to sell 2/3rds at 1.3c, the balance I was unable to sell yesterday, as I was invited to the induction of new generals into the Philippines National Police in Camp Crame, Metro Manila. So I sold the remaining 1/3rd this morning.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon Applied Critical Thinking www.SheldonThinks.com

MIL Resources (MGK.ASX) - better buying ahead

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MIL Resources (MGK.ASX) might be looking at a time of 1.1c before they recover. Despite their very attractive prospects, the company is not taking a path best for shareholders, but rather spreading their cash resources very thinly. This is of course a problem for shareholders between now and when they ultimately reach bottom - I'd say at 1.1c. The problem is not the quality of the projects but timing and strategy:

1. The directors are not acting in the best interests of short range shareholders - but those looking for long term opportunities. What is the difference? Some are directors accumulating unpaid salary which I dare say will be paid out from debased shares with options at an opportune time.

2. There projects are long term, i.e. Titanomagnetite resources to be developed in a decade, and gold resources (very attractive) requiring a lot of drilling. Easy to get excited; but what happens after the great requires - another drilling program requiring money.

In the short term, I believe this stock is too long term. It has over $4mil in cash, which will not go very far in PNG, given the dispersion of projects they are testing. Thereafter there is upside with:

1. Exploration results from drilling

2. Farming in by JV partners who will have 3D results to justify farm-in and high buy-in provisions

3. A stronger gold price

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Union Resources (UCL.ASX) - making a 2nd move

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Union Resources (UCL.ASX) can be expected to take another run from herein. Having bought in 2 weeks ago for 1.1c, I sold some at 1.3c, and bought back today restored that holding at 1.1c. This stock can be expected to return to 1.4-1.5c, for a little consolidation before moving back to 2c.

The 1.1c level was support. The 1.4c level was resistance. I sold some at 1.3c because I was en-route to the Philippines, and missed an opportunity to get a higher price.

Refer to previous posts on this stock, i.e. search for 'phosphate'.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Union Resources (UCL.ASX) - breaks out - 2nd time lucky!

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Union Resources (UCL.ASX) broke out of its downtrend yesterday, as expected, rising 18% in the day. They will probably rise at least another 10% by the end of the day, as shares at 1.3c are acquired. This is not the first time we picked the break-out in this stock. Consider the following posts:

1. UCL post - 5th Jan 2011

2. UCL post - 18th Jan 2011

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

UCL.ASX - technical break out, MGK - break down

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People should be cashed up at this time. I think MGK is going to fall back to 1-1.1c because of the following reasons:

1. End of year tax selling

2. Too long term - the iron ore project is strategically important, but that style of iron ore will not find a market for another decade....and yet MGK is wasting money on it.

3. Great gold projects, a lot of potential, but they are spending their money too thinly over too many projects. That is not a problem if you are planning to invest in another year, or you are a director who will seek shares en lieu of all the funds spent and share price debased.

4. The state of the market - a bit of instability.

I still have confidence Union Resources (UCL.ASX) will hold because its food-related, its a huge world-class resource. There might however be technical issues, so the feasibility study is important. I also like that they have this shareholding in the largest undeveloped zinc deposit. Even if that shareholding is in question...it might be restored by a revolution in the region in the coming years...but thats very long term, but very valuable stake....if financial security. The phosphate project is the project of the day.

The feasibility study is due....and the stock is technically set for a break-out. The question is - which way? I am impressed by a phosphate deposit on the coast in a food commodities boom. Easy mining I'd say, and its an area with a history of offshore diamond mining, so there is some skills in the region. And they have a huge tenement position in the region. Offshore rig will probably suit use of contractor gear as well, so it might be easy to finance. I wonder even if they can use downstream processing facilities in Morocco up the coast in the short term for short term income. That will depend on:

1. The amenability of blends

2. The location of Moroccan processing facilities....maybe inland???

Anyway, its a large scale project which will find a market, held by a company worth bugger all.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGK.ASX) - expecting trenching results

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With MIL Resources (MGK.ASX) having bedded down its issue and raised $5mil. I have bought back into this stock. They have fallen to an important support, and with funds raised, and months of trenching under their belt, we can expect a drilling program ahead, and I think this will be a precursor to a JV partnership to fund any further development. I am expecting positive drilling results from this project given the appealing grades from trenching, as well as the extensive occurrences of gold/copper. I believe they are on to a Highlands Gold style deposit (high grade fissure deposits) rather than massive, disseminated porphyry-copper targets. This will auger well for a faster development, but a shorter mine life unless they can find repetitious structural controls....which is not far-fetched. Its still early days, but its a good trading opportunity.

I am comforted by the strong rally on Wall Street overnight, as well as the strong gold price.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Marengo Mining (ASX:MGO) - major copper project

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Damn! I missed out on Marengo Mining (MGO.ASX) before Friday closing...and now its running away from me. I had an order on at 31.5c at 3:40PM Friday, and missed out in some late buying. This is a stock which I recommended back in October. Meant to tell you lately, but never found my desired entry price. On Friday, I just gave up and decided to get some...or so I thought :( Hope you did better.

Ok...I managed to get a few MGO on opening at 35c....not sure how because I expected them to open higher...anyway frenetic trading on both sides. I'll have to wait to see the ledger as they are now 36.5c. The appeal of this stock is that they have a VERY large copper-gold deposit in PNG; the company is well-supported by institutions, and the company is at a fairly advantaged stage of development. Copper-gold are the commodities to be in, so if you have them, you are in a good position. I am expecting a rally over the next few weeks in this stock.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Golden Cross Resources (GCR.ASX) - scoping it out

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Golden Cross Resources (GCR.ASX) is a stock which I have taken a great deal of interest in over the years. The reason is simple enough - the company has been a prolific 'project generator' insofar as it is able to generate projects and get others to fund. That appears to have stopped after Dr David Timms left the company, but nevertheless his legacy remains.

The positive for this company was that it has a potentially large target in the Central-West of NSW. The problem with this large target is the grades. We can expect more tonnes from this project. In fact I expect a lot of more tonnes from:

1. Extensions of the Buckley's Proposed Pit

2. Possibly from nearby satellite deposits around Larras Lee, which has had only a few drill holes put into it some years ago...with pretty decent results.

My concern is that a lot of investment might be going on hope. They have already outlined a 150Mt resource containing 1.5Moz of gold (grade 0.3%Au) and 0.5Mt (grading 0.3%Cu) of copper. The project has great infrastructure. The problem I have is the low grade. You also have to conclude that similar grade material at Larras Lee (assuming so) would not be viable given the extra trucking distance.

What this project needs is a new method of mining. I have a few ideas, but I have no idea as to their commercial viability. These types of deposits were formed by the micro-fractioning of the rocks millions of years ago, and subsequent ingress of mineralised fluids. It would be nice to think that these rocks can be leached the same way. i.e. You drill the region with heaps of holes, allow fluids to enter these holes to react with the host minerals, which were formed at far higher temperatures and pressures, so might be unstable under present conditions. The problem is achieving 'micro-fracturing'. The problem is the confining pressure. The drill hole provides some access, but hard to see micro-access being achieved...which brings us to the contemporary solution: Drilling holes at 25m spacing, developing tunnels into the ore, blasting the ore, crushing it, grinding then extracting the minerals.

Anyway, why can't I dream as well.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Union Resources (UCL.ASX) - support

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Having exited Union Resources (UCL.ASX) some weeks ago I re-entered the stock today. They are back to their issue price. I suggest they will not stay at this price very long for the simple reason:

1. The company will be making good progress on its feasibility study

2. There is the prospect of news related to those studies, including costings

3. The issue was only a 1:10 issue, so there is not going to be much dilution. For this reason, I don't see them going back to 1c. They touched 1.2c today, and that I think will be their support.

4. Fertilisers is a food-related business, so I expect some good news there.

5. Morocco which is experiencing some political unease along with the rest of North Africa is the largest supplier of phosphate. It will be interesting to see if that becomes a value proposition. Perhaps not. Though I do think UCL/MAKs JV in Namibia would have to be the most compelling exposure to the phosphate market. There is plenty of experience in this reason dredging the seafloor for diamonds, so I look forward to the feasibility study. The upside in food (i.e. commodity) prices can only make this project more appealing....particular given the environmental disaster in the USA precipitated by uninformed, emotive environmental groups who have caused food stocks to go into fuel production. People are starving because of environmentalists.

I expected the stock to fall back to this price level, so having reached my target price, once again I see myself trading into this stock.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Vital Metals (VML:ASX) - drilling results uninspiring

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Its early days but the drilling results from Vital Metals (VML.ASX) do not strike me as very good. There are a few commercial intersections, but early drilling suggests mostly low-level grades. Not impressed, so I shall not be re-entering this stock without a substantial drop. They do not have such a large exploration lease, which means their prospects for finding something commercial are lower.

You can read the report yourself at their website.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Crescent Mining (CRE.ASX) - a basket case???

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Ouch! Just lost a few grand trading Crescent Gold. The problem with this stock is the inadequate disclosure and regulation. Already fired off a letter to ASX. The company came out with a statement that the company had repaid all debt. It should have been suspended pending a disclosure of its finances.

It is so stupid not having a separation of regulation from the market maker. Who benefits from such a situation....investment bankers like Deutsche Bank with 'inside information'. i.e. Chinese walls made of Japanese paper. Yep. The same paper I have had the pleasure of falling through after a night out drinking, and returning to an ryoukan (Japanese guest house).

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Crescent Mining (CRE.ASX) - now debt free

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Today is a good day to re-enter the market for several stocks I believe. MIL Resources (MGK.ASX) has bedded down its issue, and so I bought 200,000 stock this morning at 2.2c. These funds will allow the company to explore its various PNG gold deposits.

The other entry I very much like at 5c-5.2c is Crescent Gold (CRE.ASX). The company has just raised $48mil to cancel debt. The company has since seen its gold mining operations flooded. This was of course bad news, a short-medium term cost, but this did not stop the share price from falling from 11c to 5c. With 1 billion stock on issue, the company is now capitalised at $54mil. This is with an arrangement with Barrick Gold to treat gold ore through the plant, a 2mil oz resource, plus resource upside. Most importantly, this company is in the position to produce gold, and has just raised $48mil at 11c. I remain a little suspicious as to the value of the resource...as indicated by previous post. Residual ores have a wonderful tradition of being 'non-mineable'.

The fact that yesterday (10th March 2011) Crescent Gold paid off all of its debts. What is the significance of this? For me, it means the company is well positioned to refinance operations, and shareholders can be comforted by the prospect of a recovery in the share price. The downside has been reduced. Most importantly, the share price has fallen to a 2-year low, so its a very important 'support level'. So, there should be a good trade here when equity market confidence resumes.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Crescent Mining (CRE.ASX) - mining suspended

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In the last week Crescent Gold (CRE.ASX) has been collapsing, and one is inclined to question the tangibility of this mining operation. A number of salient issues arise:

1. The company had an operating mine producing 110,000 oz per annum of gold

2. The company completed a $31mil rights issue; actually they were trying to raise $45mil

3. Deutsche Bank have been dumping the stock - having previously held over 50%.

4. The board is full of analysts, financiers and accountants. Where are the geologists and mining engineers. Looks like a recipe for failure.

I am left wondering whether news of expanded output from the Summit project area, is the same scam performed by Matrix Metals, which proposed an expanded 60% increase in output, but when broke instead. No clarification from management...it makes people wonder. The prospectiveness of a 2km exploration target seems moot in that context.

The gold price is at record highs...but I am always suspicious when I see some 20-odd resources in a resource inventory. The implication is that they are going to develop mine plans for all these 'pithy' little resources, and make a go of it. There is something to be said for virgin gold provinces, as opposed to the scraps from old mines which closed down. But of course, this is a gold boom. I keep telling people....but it seems more people lose money than gain in such times...at least in these small companies where regulators could not be bothered to tread.

We'll see. It gives one confidence to see that the company raised $31mil at 11c, and the stock in now 8.1-8.4c, and capitalised at $85mil. They ought to be able to make $50mil a year at their output, with the prospect of gold price upside. That's all I can garner from the limited info available.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

A few issues of late - MGK, UCL, AZS

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There are a number of my favourite stocks having rights issues at the moment. There are a number of things to note about these issues:

1. MIL Resources (MGK.ASX) - The company remains good value in the medium to long term. They are having an issue which is diluting of existing shareholders in two respects - it was at a low price, and its a sizeable issue. Understand however that the issue price at a huge discount, effectively makes it a combination of a rights issue and a bonus issue. The implication is that the stock you bought into at 3c is going to be worth 2.7c to you after considering the issue if you hold it until the record date, which I think is the 16th March 2011. These are renounceable rights, so they will trade on the market. The rights are underwritten, which also means there will be some pressure upon the stock after the rights issue, as many underwriters, and this seems like a small group who are likely to have limited financing resources, will dump the stock. The underwriter can be expected to support the stock above 2.8c (technical support) until the record date, and perhaps as long as the rights still trade. Given the size of the issue, I am expecting a lot of volatility, so I have been a seller. In the last 2 weeks I was a little suspicious of an issue, as there was support, but all off-screen buyers picking off sellers. I'm uncertain about the prospect of future results. I'm inclined to think it will be several months before we see results from more trenching, and they will need to build roads and drill pads for drilling...which has probably been contingent upon these funds. There is of course still the prospect of a JV partner. Maybe prospective JV partners are waiting until some holes have been drilled.

2. Union Resources (UCL.ASX) - This company is having an issue as well - at 1.2c. I just bought back in at 1.3c, though my particular interest is the gold stocks, I like this stock, as the fertiliser project has a lot of appeal. I think this stock will hold 1.2-1.3c.

3. Azure Mining (AZS.ASX) - They are having an issue - this will be a temporary setback. Its a minor capital raising, and I do expect they will recover when results from their main project are released. I think the extra capital is needed for the manganese project, which looks good. This stock has good support in the low 9c.

Vital Metals are not having an issue to my knowledge, though one can expect drilling results soon. The stock has sunk back in the meantime from 18c to 13c today. This I think will be a support level.

P.S. Check dates indicated as I didn't.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Azure Minerals (AZS.ASX) - new rally expected

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Another stock which I am expecting to rally again is Azure Minerals (AZS.ASX). With copper prices at record highs, the proving up of more resources, and their inclusion into the mine plan, as well as the revision of copper prices in the feasibility study, will just add a great deal of value to this protect. We therefore expect when the final feasibility study is released, a great deal of upside to this stock. There is also the potential for success at its JV with OZ Minerals, who are farming into their project. We also watch with interest results from the newly-acquired manganese project. This project appears to have been under-capitalised, so there may well be scope to greatly expand the resource base. Being close to the coast/port, this is a very attractive resource.

The stock is looking a little weak this morning, but we expect that they will close the day on a solid footing. We are expecting new highs from this stock. See the chart here. I took the opportunity of adding to my stake.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Clean Seas Tuna (CSS.ASX) - 2nd rally coming

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Clean Seas Tuna (CSS.ASX) came to gloval attention about a year because its featured 2nd on Forbes List of best inventions or innovations in 2010. This stock has struggled in the last year because of cost-overruns, but in recent times it has attacked support, as it has advanced its technology, and cut costs. We have thus watched this stock. It broken out of its consolidation trend a few weeks ago, and appears to be entering a 2nd rally.

We live this industry because it promises an ample supply of tuna, a much sought after fish, at a time when there is a shortage of fish, and ample recognition of the benefits of fish in your diet. We have witnessed a lot of illegal fishing, and farm fishing will have its day. Commodity prices are rising, and I dare say fish will also rise in price as pressure grows on natural fishing stocks. Tuna is a premium grade of fish which wealthy people will pay handsomely for. The fact that its hard to harvest these fish only adds to the value of any technology or process for commercially doing so.

The moving average for this stock is just crossing. see the 1 month chart. The 3-month chart also suggests the stock is about to rally to new highs.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGK.ASX) - just about to move

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Gold prices are stronger. Expect stronger gold and oil prices as the Middle East is thrown into a frenzy of political turmoil by riots for democracy. The reality is that this is just the start of the democracy movement. These protests will spread like wildfire for several reasons:

1. Online social networking. You cannot stop it. There are technologies which will by-pass government scrutiny.

2. Wikileaks. there is only one agency disclosing embarrassing information about governments and corporations; tomorrow there will be hundreds of them. It will result in the credibility of government reaching a new low. Don't think that just Middle Eastern governments are worried. In fact politicians around the world who have engaged in corruption, and channelled kickbacks through secret Swiss bank accounts are more than a little worried by WikiLeaks.

We are likely to have democratic governments in the Middle East within 10 years. The implication is that these governments will have no reason to discount their petroleum to preserve the sanction of the US government. The implication is that we might be looking at higher petrol prices. This is not assured; though given the global shortage, we might expect OPEC to be stronger than ever. So there is a good probability of higher oil prices. Of course, the other reason is China, India, and global economic activity in general. We are in the midst of a technological revolution not seen before. Its not just China, its the unemployed in Libya, Turkey and the Philippines who are learning programming, or other online skills, and providing outsourcing skills to the West. Its an educational revolution. They are learning Western values. If they are really smart; they will leapfrog our structured democratic values, and develop a meritocracy....however that is improbable....since too few people are canvassing that.

Anyway, in such times, gold is very good. Many of the established producers are over-priced, so I am always looking for new, emergent stocks with good prospects for developing resources. In the last 2 weeks we have seen a favourite Vital Metals go from 10c to 17c, settle to 15c, and now its going for another rally. Today, we can see another favourite just starting to move. MIL Resources was unable to retain Sinotech as a strategic partner to develop its PNG interests. I am confident they will find a partner for these interests. They have a recent low of 2.8c, however the market at 3.3c is still cheap. They are sitting on a strategically valuable 4billion tonne titanomagnetite resource (i.e. iron, titanium, vanadium). I do not think this will be developed for 10 years, however its good to know they have it for the time the high strength steels market develops. These ores will be highlight sought after.

In the interim, the company has the Poi gold-copper deposit. Gold and copper prices are at all-time highs, so a company which has been soil sampling and trenching, getting attractive results, and will be ready to drill in 3mths looks rather attractive. In the short term, I am expecting this company to find a new partner to drill test the targets in this project area. PNG has some very substantial gold-copper resources, so the results from drilling will be very attractive. I would not be surprised to see a company like Indophil Resources becoming a JV partner.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGK.ASX) - JV dead but not the end

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Gold stocks are likely to recover this week, and copper prices are also rallying due to shortages of supply, with copper prices up to $4.63/lb. Gold was up $11.50/oz overnight to challenge the short term downtrend. I expect we will see stronger trends in the resources sector in the coming weeks. The cheapest entry is MIL Resources (MGK.ASX). This stock was recently marked down because a prospective JV partner, a Chinese company, decided not to follow thorough with the MOU. This does not concern me because I think they were always more interested in the titanomagnetite resource. They might not have liked PNG as an investment market as well.

I think we can expect some positive sampling results from MIL's PNG Poi project, as well as a commitment to some drilling. They will want to give some 3-dimension value to the positive surface expressions of gold and copper.

The great aspect about a company like MIL is that if you are comfortable that they have a good project, you can sit back and watch the tangible value be added. You can of course trade them. But you can also feel comfortable with the trend in gold prices and project development.

Currently, MIL Resources is trading at its support level of 2.8c.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

A1 Minerals (ASX.AAM) - reinventing the future

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Some time ago I liked A1 Minerals (AAM.ASX). A succession of failures resulted in the loss of my confidence in the stock. Weeks after that the Managing Director of the company resigned. To this day, the company is evasive in its reporting of the current state of affairs. More excuses...but ultimately in the quarterly report it does highlight the problem. From the Dec quarterly it is apparent that, despite good mine operating performance the operation is not producing the expected output of gold, i.e. The problem is contained gold since recoveries are normal. The problem then, as with many mining operations, is the original grade estimate.

I am not so familiar with the A1 ore geology, however I would be willing to bet that the style of mineralisation for all deposits in the ore reserve are similar. This casts a shadow over the total ore reserve. This lack of confidence is conveyed to me by the fact that:

1. The company is playing up the potential of its broader tenure

2. The company is playing up the discoveries by other mining companies in the area.

For this reason, I believe that A1 Minerals is a dog. There is always some temptation to jump on a stock like A1 Minerals which has a functional plant, but I think you cannot place any value on its resource. Current operations are likely 'high grading' the better quality resources, and despite that their operating costs are over $1000/oz. They are thus not making much money, and thus I expect the mine to close this year. Those discoveries nearby don't seem to offer any potential for toll treating since they are low grade. Its possible they could treat the higher grade ore through this plant....which grades 1.9g/t, but I'm not aware of the distances involved. Is the company worth $14.7 million? (i.e. 200mil shares at 7.3c). Probably not when they will need to embark on another capital raising, since they have just $850,000 in cash. They will need to undertake another round of exploration. i.e. Another $15 million to get to the position they were before.....if they can find anything, and then they are stuck with a treatment plant in the wrong locaiton. There is potential for a merger or takeover if there are other resources in the area. I don't know what non-AAM resources are available near the plant.

It seems to be the way with mining companies - one is forced to read between the lines. It can make you paranoid sometimes. That is the nature of disclosure with Australian resource stocks. That is the quality of government-sponsored regulation around the world. Utterly no respect for facts or the interests of shareholders. Who wants to kill a good story? One can bet there were plenty of geologists in WA who knew the nature of the ore in this region. It does not of course preclude someone floating a company and taking it to the market. We have of course seen this all before....Bendigo Gold, Gleneagle Mining, Perserverence Mining, etc etc. Its always been the way with gold mining. Whispers were probably made at conferences and pubs, but don't expect a regulatory bureaucrat to be in the right place. Nope....they are waiting for some 20,000 odd shareholders to lose all their money before they will act. Yep, good luck with your government.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Vital Metals (VML:ASX) - drill testing results imminent

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Well its all happening today. Union Resources are in suspension after doubling today. Makes me think I am to blame...but then I'm sure their are greater forces at work...simply because I'm not always right. Anyway. Some of your may have recognised there is a boom going on, and are now buying Vital Metals (VML.ASX). They are up to 12c now, and are destined to break out this afternoon. No doubt its all the inflation around the world at the moment, combined with low interest rates. Really there are few other places to put your money but commodities.

Anyway, we will keep bringing you the opportunities. I'm running out of good stories, so don't forget to check out my ASX Stag website, since I am just reviewing some of the new listings offered here. You don't need to rely on me though - you can always buy my book - Mining Fundamentals eBook. Surely there must be a few buyers out there after Union Resources rose 120%. Oh well....maybe you are just looking. A bit of buyers fright perhaps. Can understand that. Understand the risk though - the longer you wait the greater the risk you will lose money because you will finally be convinced when the top of the market is reached. By that point I have a habit of buying into the lies and deceit that grips the market. That is when all the good (truthful) stories are fully-valued, and the deceitful mining executives are undervalued (for good reason), and are known to be undervalued in the industry, which does not include you or I, because we have better things to do than hang around Perth bars listening to gossip.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Union Resources (UCL.ASX) - breaks out

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Union Resources (ASX.UCL) has broken out, achieving new highs. The stock was 0.9c yesterday, now its trading at 1.2c. This stock has a lot of upside, so I suggest people should hang on. There is no announcement out yet, but the quarterly due soon will shed more light on their offshore phosphate mining project in Namibia. Possibly there is news about the base metals project in Iran...but who knows. You can certainly trade this stock, but there is a bigger story unfolding here. The Iranian Ministry might have capitulated...allowing them to proceed with development of the world's largest undeveloped zinc-lead deposits. More likely there is the prospect of finance on the phosphate project given rising food prices. This project is far better than anything I've seen offered in Australia. e.g. Minemakers being its JV partner. Minemakers has had a rally lately. I do believe this company is getting set to make a bid for Union Resources. Not that I want to be the source of any rumours. This sector is already 'consolidated' with most output coming from Morocco (North Africa).

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Diatreme Resources (DRX.ASX) - future mineral sands producer?

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Reading about this stock, I must say how impressed by the mineral wealth of Australia. The Eucla Basin is one of those Australian basins which has hardly been explored for minerals. It has been scantly explored for oil & gas. Low & behold, it is rich in mineral sands, and Diatreme Resources (DRX.ASX) has a commanding position in the region along with Image Resources. Better still:

1. It has a JV with a Chinese partner, so we can expect an offtake agreement to push the feasibility study along and to assist with project finance. I assume, but this needs to be checked, that BaoTi is a subsidiary of the Chinese steel group BaoSteel, which is probably as big as BHP now, give or take a takeover. Need to check because Chinese companies love to grab the names of counterparts.

2. It has high grade product (50Mt at 2.7%Heavy Metals) compared to many other deposits, so it ought to rank highly in terms of cost competitiveness for mine-gate product. The project is remote (240km) though just to a railway heading, though this will involve extra product handling. It would be trucked in 250t road trains. The distance does not bother me, but who is building the railway. The good news is that it gives the company an advantage handling others ore. Clearly there is scope for multiple developments in the region using a shared rail link.

3. They have a high ratio of zircon as compared to titanium products. I must admit though that the long term outlook for titanium might even be more appealing given the eventual development of high-strength steels. This is particularly the case with so much iron ore in South Australia.

4. Shallow overburden of 10-16 metres is satisfactory....based on section, however given the distribution of the ore grades, the average modal depth of the ore, if I can call it that, is around 25 metres, i.e. The higher grade ore is at the base, so its not great exactly shallow, but typical.

I do have some questions about this development:

1. For mineral sands, 'low radiation', does that simply entail higher thorium rather than uranium, or its low in thorium? What are the absolute concentrations? The reason I ask is, I think the half-life for thorium is lower. The response from the company:

• Zircon product is significantly less than 500ppm U + Th (300-350 ppm likely)
• Titanium minerals all display low U + Th levels relative to industry benchmarks.

2. What is the anticipated 20-year overburden ratio? It seems around 25m, no better than Victorian producers...yet a railway link is required.

Ten (10) year mine plan has an overburden to ore ratio equal to 0.9, with a low of 0.6 in the first years of mining.

3. Does it have a high chrome concentration, which I understand was problem for East Coast producers years ago.

Chrome levels in ilmenite/leucoxene ore are very low (less than 0.1% Cr₂O₃) but the Cyclone Deposit is a zircon rich resource.

4. Will the ore require blasting? Crushing is a big cost. I suspect its amenable to backhoe, but these rocks are a few million years old, and I don't know the extent of burial.

The ore is unconsolidated free-flowing sand. There is some induration in the overburden but expected to be dozer rippable. Slimes are low at 4%.

My concern is the capital cost and long development lead time for a rail link. The Chinese partner will be looking long term. They can truck in the short term, but its a capital cost I don't think they need in Victoria's Murray Basin, and I think this ore is not sufficiently advantageous given the number of Ti/Zr projects floating around. They are in a pretty competitive market I think, and a long way from the coast.

You can see the presentation here. You can follow this stock at Google Finance, and their latest news releases at the ASX website.

I am not so impressed by this story, and particularly not during a recession.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Union Resources (UCL.ASX) - making a move

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Union Resources (UCL.ASX) will probably make a move upwards tomorrow. The reasons to expect this are:

1. The simple moving average is about to cross the share price - see chart

2. The company is probably ready/due to make some promising announcements about its offshore Namibian phosphate project. i.e. Finance or feasibility study.

3. A block of stock was placed on-market today, which might auger for a push up in this stock

I expect a short term run up to previous resistance of 1.2c, then consolidation, and an eventual breakout taking them at least to 1.8c. I must say though, I am expecting a takeover bid for this stock by Minemakers Ltd (MAK.ASX). That company seems to be in the process of a restructuring, so perhaps that will take some time...or maybe its simply a precursor to it. They have shed some Tasmanian assets.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

MIL Resources (MGK.ASX) - awaiting results

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Expect MIL Resources (MGK.ASX) to push up from 3.5c today. The stock has an upward momentum, but it has still to establish a support level above 3.7c, which is previous resistance based on the year chart. Check out the month chart here. The stock is trading above its simple moving average, so expect that trend to hold until the 3.7c support is breached. I therefore expect a move up to 4c, with some resistance at 4c and 4.5c. The rest of the story will depend upon trenching or drilling results. A 5-year chart will provide clues to the next move I suggest, with a rally to 10.5c....subject to good drilling results, which I expect. This will capitalise the company in the vicinity of $30 million, which is about right given the stage of project advancement.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Azure Minerals (AZS.ASX) - good entry

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Azure Minerals (AZS.ASX) fell off to 6.7c in trading today. They closed at 7c. This stock can be expected to recover. The disappointing results from the Japanese JV is a peripheral issue. The company is drilling its flagship project, which can be expected to increase resources, and has a JV with OZ Minerals which might yield some upside. You would expect an Australian explorer to be more judicious than a Japanese government-funded explorer with respect to throwing money around. The copper price is holding well at $US4.30/lb, so AZS has good prospects with its main project. I therefore expect them to recover quickly from 7c.

I would have bought them at 6.9c today, but they simply make less sense than gold stocks like MIL Resources (MGK.ASX) and Vital Metals (VML.ASX). I might need to start scratching around for some more gold stocks soon. I like to have a few up my sleeve.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Partial switch from Vital (VML) to MIL Resources (MGK)

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Gold is approaching its previous high, and with strong oil and a buoyant Dow, we can expect gold to break its historic levels. We also have some other positives for gold in the background. There remains tensions in North Korea, and the spectre of troubles with Iran, and a oil supply bottlenecks. Expect higher oil and gold prices. There is a crisis in the making here.

After a recent issue, Vital Metals (VML.ASX) has recovered from 8c to 11.5c. The 12c level is resistance, so I would expect the stock to hover in the 10-12c range for a week or two before moving higher on the basis of successful drilling for gold in Burkina Faso, West Africa. This company is not cheap considering its lack of resources. However, successful drilling will justify a premium. For this reason, I sold some stock today at 11.5c, and seeing that someone was buying MIL Resources (MGK.ASX), I switched into this stock. I am less concerned about the weight of new stock given the outlook for gold and the small size of the placement/issue.

MIL Resources has not announced any drilling program, though I suspect they have ramped up trenching, and will have some nice results to report in this quarter, as well as the prospect of some drilling results in the March quarter. In this quarter I expect them to be building roads for access, and drill pads for drilling rigs. They have a Chinese JV partner, which they will need to cover costs. This stock has a great target, so I am only too pleased to buy more of this stock at 3.3c.

Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com