How to Play Commodities, Gold and Silver Market from this consolidation stage. CS

As usual here are only my thoughts - in order to convert them into money you need discipline, desire to learn and action. One small obstacle before you will proclaim yourself next Sir Warren - you need capital. If you are looking for bets to leverage your house upon these ideas are not for you. Never play with your house or even lunch money.

To read further you should buy my reinflation approach: all markets are oversold, managed devaluation of USD is the only cure from complete financial disaster in USA, in order to resolve dead freeze in the credit markets all central banks are pumping liquidity like crazy. Debase of USD will provide solid support for all Hard Assets; Gold and Silver as store of real value will benefit the most. The good news here are that now all governments joined the game after Canada's and Bank of England rate cut. People will realise that game of musical chairs: who will devalue most to protect the export trade will left no single "solid" FIAT currency, inflation is eroding value of currency, any increase in money supply is inflation. Now we are talking about bail out of the housing sector in USA, it means huge moral and financial hazard in form of easy credit one more time. I still think that China stock market will correct 20%-30% from here just to get to the solid uptrend line. But do not confuse yourself with crash in the market and China's economy. It is planed economy: all those bridges, roads, ports and power stations are planed. They will always punish foreigners and even domestic speculators by cooling the market, but will never let their Bull in Infrastructure to stop. It is the only defence against USA losing its World Power status and against poor rural people of China's upraise. If flag ship of "free trade" is talking and making bail out of poor Friends from Wall Street (I hope you are not seriously thinking that somebody is taking care about fox from Alabama, otherwise buy treasuries), what will prevent China from use its 1.5 trillion reserve mostly in paper USD nominated assets? I do not take End of The World approach here: before it will happen you will be able to lose your capital few times, so stay concentrated.

Next most exiting gains will be realised in Junior mining sector, which is extremely oversold now and providing very good Entry point. Junior mining is very small, risky and volatile sector, but it is exactly what you need to make money.

Junior mining cycle is well described in latest Sanu Resources SNU.v presentation visit their site. We need trusted management, initial resource base and their ability to rase money and extend resources. If it is exploration company without any NI 43-101 resources it is more risky play, but pay off in case of discovery will be handsome. To increase your chances go for management with proven track record, exploration on old mine camps closed due to low prices and historical resources, which hopefully could be confirmed. You have double leverage of rising underlining commodity price and increasing resources base. Recent problems with Nova Gold have shown that marginal economic projects will stay marginal, rising cost of building mine and of production will put them again on hold before higher commodity prices. It is a good thing if you do not own this stocks, it means that all that excess supply will never materialise, you can not switch your decision to build mine like traders are changing their mind: it is billions of dollars and 7-10 years of hard work. So this lesson teach us that we should always diversify in this field and go for political risk in order to reduce technical risk: not so many discoveries are made, not every one of them will become a mine. My own track record with Tenke Mining TNK.to is providing support for my educational efforts. I was blessed to accumulate starting from 0.9CAD and this last April it was bought out by Lundin Mining LUN.to LMC for 25CAD. Now I think Lundin Mining LUN.to LMC is presenting itself very interesting take over play. I will mention few companies here, disclosure: I have positions in all of them. Search my blog for more information availible. Almost all of the mentioned companies updated their presentation, study before making any move.

TNR Gold TNR.v - very risky long term hold position - call on Gold and Commodities upside without time decay: no resources yet other then historical, but recent developments are very interesting. Management has changed strategy and will explore most promising properties in Argentina by themselves: namely El Salto is under drill now, Eureka and El Tapau will be early in next year. Los Azules property is going into feasibility stage and operator Minera Andes MAI.v has started new drilling programme. Now they have found serious money supporting their new strategy, more institutions are coming on board via Pasific International. Management is buying themselves and new website is showing serious investment relations approach. Recent spike and going into accumulation stage is presenting very good Entry point and was due to unfolding 5mil shares position of Tenke Mining which was transfered into Lunding Mining. Lundin Mining has position in Suramina Resources SAX.to which is concentrating their efforts on Cerro Cuadrado project, more below. Hari Varshney has came on Board of TNR Gold, his family is behind Mantle Resources MTS.v backed by Lundins. Needless to say now after all words sad drill results will matter and mineralisation hit at El Salto could change the stock overnight.

Lundin Mining LUN.to LMC - take over play in basic metals sector. Very good Entry point now with Zinc, Lead and Copper under pressure due to world wide recession fears. Recent and coming Fed rate cuts will propel commodities prices further, resolving of Congo Tenke Fungurume will catalyst new Bull Leg Up here, new mine Aljustrel is coming into bottom line as well. It is best commodity mix in the Old world: Cu, Zn, Pb, Ni in Europe with huge calls on Cu-Co in Congo and Zn in Russia.

Silverstone Resources SST.v - new Silver Wheaton SLW in the making. Just recently PP of 50 million was done at 2.9 CAD almost overnight. Now you can buy below Big Guys who are trying not to miss second chance. Lundin Mining and Capstone Mining CS.to are holding 38% of the company between themselves. Call on Silver without time decay. Aljustrel put into production by Lundin Mining will ignite the new run and market is waiting what recent financing was made for: new silver stream is in the making for sure and this recent bearishness is the best time to strike a good deal.

Sterling Mining SRLM.ob SMQ.v - famous Sunshine mine is coming into production again. Impressive resources are now confirmed by NI 43-101 and management promise to start the mine by Xmas. It did not came without the price: few recent financings put Fully Diluted float into over 50 mil shares and put stock under pressure - it is now very good Entry point to play this metamorphose into Silver producing company. Watch the video on site.

Suramina Resources SAX.to - another Lindin play on South America this time. The company took all SA assets after Lundin Mining take over of Tenke Mining. Recently resources at Jose Maria were increased. Company now is very active on the border of Argentina and Chile on new Cerro Cuadrado discovery silver-lead-zinc. Vicuna is a copper-gold porphyry and third major project at the moment. Go to http://www.caseyresearch.com/freeResearch.php

register for Exploration league and read interview with CEO Patricio Jones. The guy was behind Bajo de la Alumbrera and Veladero discovery and development. He is talking about Argentina and "Cerro Cuadrado is going to be a mine"

Avino Silver and Gold Mines ASM.v - Regarding AVINO Silver ASM.v I am still holding the position, this is the long shot: I am dissapointed with their progress, looks like they need new blood to get the full potential. Now at this level only their infrastructure cost more then market cap: all resources are "free". Problem here is that they never reported new resource estimations: results are good, grade is OK, but we need resources and final push out in this company. General for Silver December will be ignited month in new Leg up according to my charts.

Continuum Resources CNU.v - has took a hit recently when they was not able to establish J/V on their optioned property Natividad in Mexico. Now stock is traded at level below latest PP and only value in San Jose property where Fortuna Silver is operator accounted for. Among shareholders are Sprott with 19%, Agnico-Eagle with 15.3% and Fortuna Silver with 8%. Any positive change in Natividad status will push stock higher. Market is not giving any value to their other properties in Mexico.

Sunridge Gold SGC.v - is a Lundin Mining strategic investment in Eritrea Africa. Lundin Mining owns 16% of the company. Just recently company issued encouraging "Sunridge Gold Announces Indicated Resource Estimate For Emba Derho Vms Deposit"

"Sunridge Gold Corp. (SGC/TSX.V) announces an initial NI 43-101 compliant independent resource estimate for the Emba Derho zinc-copper-gold volcanogenic massive sulphide (VMS) deposit, on its 100% owned Asmara Project, Eritrea. This estimate is almost entirely in the "Indicated" category, with the total combined Indicated resources in the primary zinc and copper zones containing 1.7 billion pounds of zinc, 735 million pounds of copper, 402,000 ounces of gold and 15 million ounces of silver. The deposit is still open, particularly to the northwest. The estimate meets the Company's stated objectives in terms of size, average grade and the potential for a large open-pit operation."

Mantle resources MTS.v - another Lundin Mining strategic investment with just under 10% participation.

“Mantle Resources Inc.’s Akie deposit is a sedimentary exhalative (“SEDEX”) zinc-lead-silver deposit formed during one of the great ages of zinc mineralization. Another SEDEX zinc-lead-silver deposit of the same age that formed under very similar geological conditions to Akie is the 'Giant' Red Dog deposit, operated by Teck-Cominco and located in the Brooks Range of northern Alaska. Red Dog is the largest zinc mine in the world and is one of the largest accumulations of zinc+lead mineralization – more than 32 Mt contained zinc+lead metal.”
- Neil O’ Brien, Senior Vice-President of Exploration and Business Development, Lundin Mining Corp.

Lawrence Roulstone:

http://www.mantleresources.com/032006/files/en/asp/ir/pdfs/Mantle%20May%2007.pdf