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8/8/08

Trading Post (depressing edition)

It's a jungle out there. Spot silver off nearly 6% is the gruesome headline to beat all gruesome headlines, but there's plenty of horror stories out there to choose from.

Jaguar Mining (JAG) at $7.12. I puked the trade I tried at $8.00 for a 10% loss. Back to the drawing board there. I jumped in too early, that's clear. Now waiting for the bottom to truly show itself.

Capstone Mining (CS.to) at $3.00. The company reports record profits, growth and good forward guidance. It's rewarded by a 20% PPS slump. Gimme a break...this is a profit making animal! 2q08 EPS was 0.15c. That's a 5X PE just on direct projection and doesn't take into account production growth. And they're selling this like it's going Chap11.....Utter madness and sheeple stock trading. My four year old daughter has more financial sense, frankly.

Minera Andes (MAI.to) at $1.03. This week's good news on a solid company has been discarded like yesterday's newspaper. But apparently the 26,500 Californian home foreclosures worth $12.5Bn in July, and the 2q08 $2.3Bn loss at Fannie Mae is GOOD news, cos the Dow is up 2.6%.

There are plenty more of the above, and the war zone that is my trading screen is boringly red. But let's just note three happier stories, yeah?

Vena Resources (VEM.to) at $0.50. The light of optimism today. Up 4% again, and I note the chunky 147,000 shares traded in Frankfurt today. Any green on my sign stands out on a day like this, so let's mention it here, yeah? Because contrary to market expectation, Otto can gently but firmly assure you that the world is not coming to an end. Whatever, but in this case it looks like the good news on Vena is not far away now.....

Gold Hawk Resources (CGK.v) up 10%. I got two mails from CGK's IR dept yesterday (can't fault them for sharp eyes). The company wants to make something clear about the options deal and how it's mainly aimed at maintaining key personnel on board, as well as rewarding the loyalty of employees in Peru.

So here we go:

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- As should be expected of companies that are not CF+, CGK has never paid cash bonuses

- Approximately 1/3 of the options can be attributed to our new CFO who had signed a contract and joined CGK at the beginning of May (yeah that’s right, nine days before we stopped production).

- Neither the Chairman nor President/CEO received options

- The focus of the Company since May 9 has been on the necessary steps to return to production; getting the Emergency Decree on July 18 was critical as it shows public, formal recognition that there was a problem, that Gold Hawk discovered it and proved it, and that the cause was a third-party. It involved a lot of effort on behalf of many, particularly our team in Peru .

- Our team in Lima (not just the couple of expats but the people who do the day-to-day work, assistants, legal, environmental control, HR, accounting, etc.) received more options than ever before, and deservedly so.

One other thing that any shareholder should be concerned about with options is timing. Under normal circumstances, and in this case, issuing options is something that would have been done in May soon after our new (and fantastic) CFO joined us. However, with a national emergency at hand, issuing options got moved down the list of priorities. I think rightly so. While the hard work and progress made to finance and get a restart timeline together has yet to be reflected in our share price, the Company is now making positive steps after three months of tough sledding.

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Which is all fair and good Gold Hawk, thank you. I'm very happy to be able to diffuse these details, but might I suggest that you explain this in your official press release next time, and not wait for the market to turn its back on your stock and then get the word out via a humble little blog like this one? Thanks in advance.

UPDATE: As for Fannie, Freddie, Californian foreclosures and the Dow, an e-mail pal just sent me this. He's right, of course:

A spike in foreclosures is bullish as it indicates capitulation, the last stage of the process.

Flat foreclosures is bullish, as it shows the situation has stabilized, the penultimate stage (before recovery).

Falling foreclosures is uber-bullish.

That's logic!