j taylor's newsletter december 10 2010 - dynacor gold page 9-12

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    INTRODUCTION & DISCLAIMERS

    This is Jay Taylor speaking for Taylor Hard Money Advisors (THMA), publisher ofJ Taylors Gold, Energy & Tech Stocksnewsletter as ofDecember 10, 2010. Our weekly telephoneHotline messages are normally recorded after the close of business as early as Friday night or aslate as Saturday afternoons unless otherwise notified.

    As always, all monetary quotes mentioned in this Hotline message are in U.S. dollars unless otherwisenoted. The opinions expressed in this message are those of Jay Taylor only and they do not necessarilyrepresent the opinions of Taylor Hard Money Advisors, Inc., the publisher ofJ Taylors Gold, Energy

    & Tech Stocks. The management of THMA may, from time to time, buy and sell shares of thecompanies recommended inJ Taylors Gold, Energy & Tech Stocks newsletter and in this Hotlinemessage. No statement or expression of any opinion contained either in this Hotline or inJ TaylorsGold, Energy & Tech Stocks newsletter constitutes an offer to buy or sell the securities mentioned

    herein.

    Our Philosophical Approach to Investing, Business, & Life in General

    Come now, you who say, Today or tomorrow we will go to such and such a town and spend a year there, doing business and makin

    money. Yet you do not even know what tomorrow will bring. What is your life? For you are a mist that appears for a little while and

    then vanishes. Instead you ought to say, If the Lord wishes, we will live and do this or that. As it is, you boast in your arrogance; a

    such boasting is evil. Anyone, then, who knows the right thing to do and fails to do it, commits sin. (James 4:13-17)

    INDEX

    This week on Turning Hard Times into Good Times, Lt. General Boykin talks about evolving communism in America 2Feds QE Ponzi Scheme begins to Backfire by Gary Dorsch 3Gold and Silver could go Exponential Soon James Turk talks about what Backwardation means in these markets 4-5Our Inflation/Deflation Watch. Close to a new high while silver to Rogers ratio is amazinglystorong 5-6Watch the Long Bond for Inflation or Deflation Clues. Bull market still in place but for how long? 6-8Our Model Portfolios Up for the year, but our deflation hedges hurt for now. Will they in the future? 8SELL RECOMMENDATION North American Gem 9A New Mine Company Progress Grading System: 9DYNACORE GOLD MINES INC. Stock pick of the week. Growing cash flows and a shot at a major gold/copper deposit 9-12Headline News from Stockwatch: Allied Nevada, Goldrich Mining Co., Alexco, Barkerville, Paramount Gold, Xtra-Gold 12-14

    Takara, Niogold, Golden Hope, Clifton Star, Sphere Resources 14-16Trader Rogs Corner 16-17What is Chen Buying? What is Chen Selling? 18

    Ron Pauls Texas Straight Talk: Focus on the policy, not Wikileaks 19-20Brokers who can buy Canadian Stocks 20Portfolio Scorecard 21-22

    Jay Taylors Upcoming Speaking Events

    January 22-23 Vancouver Resource Investment ConferenceFebruary 18-19 Phoenix Investment ConferenceApril 9-10 Calgary Resource and Clean Energy Investment ConferenceApril 15 Chicago Resource Expo Rolling Meadows Holiday Inn, Rolling Meadows, Ill.April 22-23 Phoenix Wealth Protection Conference Sponsored by Pat GormanMay 16-17 - New York Hard Asset ConferenceJune 5-6 Vancouver World Resource Investment Conference

    Chen Lin has turned $5,400 in January 2003 into $1.3 million by Nov. 30,2010. Chen usually sends out two or more short, succinct and well reasonedbuy and sell recommendations per week to his paid subscribers. Call ClaudioBassi for more information at 718 457-1426

    TRADER ROG (Roger Wiegand) has had a red hot hand with winning commodity and financialmarket trades. Check out Rogers work at WWW.TRADERTRACKS.COM Call Claudio Bassi for moreinformation on Rogers letter at 718 457-1426.

    Go to http://goldmoney.com/?gmrefcode=jtgts for more information and to read James Turksfrequent essays on the gold and other key markets.

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    This Week on Turning Hard Times into Good Times

    Special guests in Turning HardTimes into Good Times thus far:Addison Wiggin, Adrian Day, AdrianDouglas, Al Korelin, Ambar Dakar,Andre Julian, Arch Crawford, Bill

    Lagner, Bill Murphy, Bill Rounds,Bob Hoye , Brent Cook, Brian Rich,Burton Folson, Jr., Catherine AustinFitts, Chen Lin, Christophe Nijdam,Chris Powell, Congressman J.DioGuardi, Congressman Ron Paul,Daniel Estulin, Dave Corsi, DavidFranklin, David Morgan, David Tice,Dick Bove, Dmitry Orlov, EllenBrown, Eric Sprott, Frank Holmes, G.Edward Griffin, Gijsbert

    Groenewegen, Howard Davidowitz,Hugh Ross, Ian Gordon, IanMacDonald, Ian McAvity, J.M.Schuler, James Perloff, James Turk,Jeff Deist, Joe Eskenazi, Joe Nuyten,John Hathaway, John Loftus, John F.McManus, John Perkins, JohnTruman Wolfe, John Williams, KathyFettke, Kevin Duffy, Larry Parks,Laurence Kotlikoff , Lou Scatigan,Marc Faber, Martin Gross, Matthew

    Simmons, Michael Panzner, MikeLarson, Mish Shedlock, Pat Gorman,Paul Michael Wihbey, Peter Grandich,Richard Maybury, Rick Rule, RobKirby, Robert Blumen, RobertMcHugh, Robert Prechter, Roger S.Conrad, Roger Wiegand, Ron Perry,Sean Brodrick, Trace Mayer, WendellCox, William Baker and WilliamHathaway.

    We have many more exciting guestscoming your way as well as someexciting gold mining companyexecutives every week.

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    Feds QE Ponzi Scheme begins to Backfire

    Gary DorschEditor Global Money Trends magazine

    Posted Dec 9, 2010

    Richard Russell pass the following explanation of the crime committed against the American people by theFederal Reserve and the other members of the ruling elite. I think this is a very accurate account of what hashappened and unfortunately what continues to happen.

    In a taped interview with CBS 60 Minutes that aired on December 5th, Federal Reserve chief BenBubbles Bernanke tried to brainwash the American public, into believing that Quantitative Easing (QE), isabsolutely necessary in order to prevent further losses of jobs, and tried to assure his listeners that he has theskills to keep inflation under control. The US-jobless rate would have risen far higher, something like it was inthe Depression, at 25%, -- had the Fed not provided tens of trillions in loans to Wall Street banks and otherfinancial companies, he said.

    Two-years ago, the Wall Street Oligarchs played the central role in the greatest financial scandal in the historyof the world, - one which wiped out tens of trillions of dollars in wealth, nearly bankrupted giant corporationsand entire countries, and plunged the world into the deepest slide in global trade since the Great Depression.Huge profits were made in sub-prime mortgages, based on a Ponzi scheme of exotic financial derivatives andsliced packages. When it came crashing down, the public treasury was looted to cover the financial aristocracyslosses.

    Since then, the Fed has carried out QE-1 between March 2009 and March 2010, in which it bought $1.45-trillion in mortgage-backed securities and $300-billion in Treasuries. Together with pegging interest rates atzero-percent, weakening the US-dollar, and flooding the stock markets with cheap credit, - the Fed enabled USbanks and S&P-500 companies to record bumper profits, even as they slashed jobs and capital spending, and

    suffered revenue declines.

    With QE-1, the Fed channeled interest free money into the coffers of the Wall Street Oligarchs, which in turn,was used to buy higher yielding Treasury bonds. In a single stroke, the Fed monetized the US-governmentsdebt, and at the same time, bankers earned double or triple the interest rate at which it was borrowed. Theypocketed billions under the scheme. Wall Street banks also bought high-grade corporate and junk bonds, andemerging market bonds, to fatten their profit margins. At the end of the day, QE-1 was utilized to recoup thegambling losses of the financial aristocracy, and created fertile conditions for driving-up equity markets.

    Because of the non sense from the Federal reserve in continuing to expect it can overcome the natural laws of

    economics, the gold and silver prices continue to rise very dramatically. But perhaps not nearly as dramaticallyas they might rise in the near future if James Turk is right.

    James notes that confidence in the futures markets because of rising doubts about counter party risks. People arewanting to hold the metal itself rather than buying a futures contract which is nothing more than a promise topay gold or silver (or whatever the commodity) at some future point in time. We also think you have to payclose attention to the Long dated U.S. Treasury markets. As we suggest below, a rise in long term rates may besuggesting a fears of rising inflation and thus a decline in confidence in the dollar by a growing number ofmarket participants. However, looking at the long term charts, the bull market in this fraudulent paper moneyscame appears to remain in place until at least two support lines are broken through. (see below)

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    Gold and Silver Could go Exponential Soon

    Could gold and silver go exponential any time soon? After reading James Turks excellent article titled, Thescramble for physical metal intensifies, I think we could be on the cusp of a dramatic rise in the price of

    gold. You can read this article at http://www.fgmr.com/scramble-for-physical-metal-intensifies.html . Turksbasic argument hinges on the unusually prolonged anomaly in the futures markets known as backwardation.That simply means the price of physical gold is higher than the futures price as determined in the futuresmarkets where buyers and seller come together to set prices for a promise to trade a commodity at some futuredate. During normal times, due to the time value of money, if you agree by way of a contract to buy gold in thefuture, you pay more than if you buy the physical metal immediately. As the charts above show, the same thingis taking place in that other wealth quantification metal, namely silver.

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    But these are not normal times as Ben Bernanke and other policy wonks are quick to admit. Not only arecurrencies being cheapened by their endless and infinite creation, but debt problems also continue to grow themore the policy makers seek to manipulate the markets. And that growing indebtedness is leading to fears thatcontractual sellers of gold might fail to deliver the physical metal when the futures contract calls for delivery.

    Most people who play the futures markets are speculating on one side or the other of the market. Up until now,most of these players simply sell their contracts for profits or losses. Only a small percentage of market playersactually call for delivery. But with a loss of confidence in the counterparties, a growing number of market

    players are saying they want the real thing rather than simply flipping into a new contract to buy gold or silverinto the future.

    The trouble is, there is not nearly enough gold or silver in the world to meet the potential demands of thesepaper speculators as has been well documented by GATA. Thats why, if there is a huge demand to takedelivery of the physical gold and silver, the prices of these metals may not have any ceiling, just as the quantityof Bernankes fiat money has not limits.

    If that happens, I would expect it to coincide with a massive loss of confidence in Ben Bernankes QE2 programas well as subsequent QE programs he may engage in. Once the masses lose confidence in uncle Ben, then Imguessing the precious metals markets go absolutely berserk. That would create instability for sure so its not at

    all what I want to see. But to be aware of the potential for this to happen is very important so you dont getcaught waiting for a significant correction to buy more gold, only to find its price skyrocketing out of control.

    One thing I do know is that there is such an enormous number of trillions of dollars worth of currencies floatingaround that when confidence is lost in governments and their currencies worldwide, we will see the mother ofall gold and silver markets. The very, very bullish chart shown at the start of this article, which plots the averagegold price each month, will look like a flat line when connected to the kind of move we could see. In my view ablow off in the nominal price of gold would be accompanied by a massive inflationary problem, which wouldalso be the worst of all worlds because, given the massive indebtedness, the economy and employment wouldremain in dire straits while the cost of everything would rise and the purchasing power of anyone who doesntown gold or silver will plunge. We want to be ready for this event, should our IDW continue to hit new highs as

    it currently appears ready to do.

    OUR INFLATION DEFLATION WATCH

    Our IDW closed the week at 146.21. Thats stilla hair under its all time high of 146.62 on June6, 2008. But Bernanke has his money printingmachines blazing hard and so far it is workingin the sense that it is driving basic commodityprices higher. There is virtually no evidence that

    all of this newly created debt money is leadingto real economic growth. Rather in my view, itis leading to more bubbles and excesses thatwill lead to an even greater depression when thesystem experiences the mother of alldeflationary implosions.

    We often talk about how the real price of gold has risen since the Lehman Brothers default in September of2008.

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    I make the point every week how the real price of gold is leading to rising gold mining profits and that I am surethis the buying opportunity of a lifetime for gold mining stocks.

    But what about silver? As you can quickly see from the charts above, silver has had an even more dramatic rise

    relative to the Rogers Raw Materials fund than gold has had, especially since our IDW began to rise from thebottom in March of 2009. Back in 2005 when we first started to calculate our IDW, an ounce of silver wouldhave purchased only slightly more than % of the Rogers Raw Materials Fund whereas an ounce of silver willnow buy nearly 2.5% of the fund. Stated differently, it took nearly 180 ounces of silver to buy one unit of theRogers Raw Materials Fund back in 2005. Now it takes only about 40 ounces to buy a unit of that fund. Thats a78% increase in the real price of silver relative to the Rogers Raw Materials Fund.

    By comparison, an ounce of gold would have purchased only about 15% of the Rogers Raw Materials fundback in 2005. It skyrocketed to 44% in March 2009 following the Lehman Brothers failure. An ounce of goldcurrently buys about 38% of the Rogers Fund. That is a very substantial rise in the purchasing power of gold tobe sure. But golds purchasing power from 2005 to now has risen only about 2.5 times compared to a 4.5

    times increase for silvers purchasing power.

    Will this trend continue? I believe as long as our IDW continues to rise, and thus measure an inflating system,silver will continue to outperform gold. However, if/when we get the next major deflationary implosionand Ithink that is only a matter of timegold will likely outperform silver as it did immediately following theLehman Brothers failure (note the sharp increase in Rogers/silver from about 65 oz. to 120 oz. from Sept. 2008through March 2009).

    This rise in silver during the inflationary expansion of the system compared to its contraction during thedeflation of the system illustrates why it makes sense to hold both of these wealth quantification metals. Andone of the best ways to own both is through the Central Fund of Canada which I personally own and hold in my

    IRA.

    Watch the Long Bond for Inflation or Deflation Clues

    I have not talked much recently about the Long Bond market, but if there is one clue that tells you people aregetting worried about inflation, it would be a tanking long dated U.S. Treasury market.

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    The 30-Year U.S. Treasury has displayed waterfall tendencies of late, as you can see in the chart on your left.Those who advocate that the Bernanke money pumping will result in inflation like to suggest thats what theaction in this huge and most important market is signaling.

    Perhaps they are right. But if you step back a bit and look at the long-term picture, I do not think you can saywith any clarity that the bull market in bonds, ridiculous as it may seem, is yet over.

    This longer-term chart of the 30-Year

    U.S. Treasury dates back to 1988.Actually the bull market in long datedU.S. Treasuries dates back to about1982 when the Volcker Fed pushedinterest rates well into double-digitterritory. My first mortgage in 1981, forexample, had a 17.5% interest rate priceon it. And we were not allowed to pre-pay for a number of years!

    Those rates rose during the time that

    Ian Gordon has identified as theKondratieff summer in the currentcycle that began in 1949. Then camethe Kondratieff fall, which is the feelgood time of the year. It was duringthat timeframe that the bull market inbonds and a secular decline in interestrates took place. Rates really fell hard,however, since the Kondratieff wintergot underway and especially in 2008,when bond prices surged (rates

    plunged) following the LehmanBrothers collapse.

    Plunging rates during a disinflationaryperiod or during a deflation makessense. I dont know how many times inthe past I felt like the bond markethad to tank. Yet it has not done so.Notice the base trend lines on the chartabove. The bull market acceleratedduring the credit problems of 2008 and

    2009 and then, with the announcementof quantitative easing (i.e., printing

    money), the bond market surged to new highs by midyear this year. But how can you say the bull market inbonds is over, based on the trend lines above? The 30-year bond has not yet even touched the accelerated trendline that began in 2007.

    There is talk about the bond vigilantes coming back, as they did in the 1970s. If they do, they will be sayingwith conviction what most gold bugs of the inflationary persuasion are saying, and that is that inflation isgetting out of hand. Now, I will be the first to admit that the governments inflation numbers are phony and areunderstating the real inflation. It is much, much higher than they are acknowledging. But also keep in mind that

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    J Taylor's Low Budget/Low Maintenance

    Portfolio (LBLMMP) from Jan 1, 2003 through 12/10/2010

    Category Weight YTD Gain Total Value

    World Prec Minerals Fund (UNWPX) 21.71% 25.32% 371.35$

    OCM Gold Fund 34.76% 32.70% 594.70$

    Prudent Bear Fund 21.18% -12.48% 362.30$

    Rydex Inverse Long UST RYJUX SOLD

    Gold & Silver Cash (CEF) 12.51% 44.44% 214.01$

    Van Eck Nuclear Energy ETF 9.84% 13.64% 168.37$J Taylor's LBLMMP Portfolio 100.00% 15.46% 1,710.73$

    S&P 500 11.24%

    GRAND TOTAL 10-Dec-10

    15.94% Equity Shorts (Bear +FAZ) BEARX

    14.67% Gold & Silver Bullion CEF

    46.45% Gold & Gold Shares

    77.06% Total Bear + Gold

    0.25% Base Metals, Energy ( Incl. coal)

    0.78% Medical Technology

    21.91% Cash

    100.00%

    J Taylor's Model Portfolio as of: 12/10/2010Category Weight YTD Gain Tot Gain

    Progress "A1" Gold Producers 24.79% 63.79% 181.53%

    Spec.Mining Shares A1,A2,A3 * 35.84% 61.79% 156.23%

    Uranium Stocks 4.38% 15.86% -0.79%

    Oil, Gas & Misc.Stocks 3.17% -16.12% -18.07%

    Prudent Bear Fund * 20.88% -12.48% -28.70%

    Gold & Silver Cash (CEF) 10.93% 44.44% 168.87%

    Rydex Inverse Long UST Fund * SOLDJ Taylor's Model Portfolio 100% 32.13% 335.29%

    S&P 500 11.24% -14.68%

    despite the enormous amount of money creation, we dont have anything like the levels of inflation we hadduring the 1970s. And frankly, I think that is because of the countervailing deflationary pressures that continueto build as a result of the exponential debt burden. Ironically, but totally logically, as Bernanke pumps moneyinto the system, he is also pumping more debt into the system.

    Yes, I know the risk trade has been back on, and it will stay on until the next major calamity gets underway thatthreatens to take the global money system down. And that calamity is, in my view, inevitable and more likely,not less likely, with each new installment of QE, because that nonsensical policy does not add wealth or even

    much, if any, cash flow . . . while the debt burden rises dramatically.

    OUR MODEL PORTFOLIOS

    Our model portfolio gain of 32.39% so far this year has clearly been bolstered by the strong showing of ourgold and silver mining stocks. Our Progress A1 stocks (producers) have collectively gained nearly 66% whilethe more junior companies are up 61.22%. The gain of 44.44% in CEF (gold and silver bullion fund) also addedto our average so far this year. In the miscellaneous section, our one coal stock and our one medical stock havebeen losers. And quite expectedly while the system is expanding the Prudent Bear Fund has cost a bit of upsidetoo, especially given a weighting that is still over 20%.

    Yet, how can anyone really believe the expansion of this system can be real and lasting when it is so artificial?

    Wealth is not being created by printing money. It is only being redistributed to Washington and Wall Street.Main Street continues to hurt big time. Luxury stores are doing well as a small upper class from the bankingcommunity and government do well as they continue to squeeze common folks who shop at Wal-Mart.Manipulation of markets cannot work. In fact the manipulation that is taking place I believe is deflationarybecause the raw material used to create fiat moneydebtcontinues to rise exponentially while the benefitsof its creation is resulting in only miniscule growth in GDP.

    Because I continue to believe another shoe will drop,most likely sometime before mid 2011, I continue tohold a fair amount of my retirement portfolio inshorting instruments (nearly 16% in BEARX and

    FAZ) and nearly 22% in cash. These strategies havehurt my performance this year to be sure. But in myview it is an insurance policy that doesnt look wiseuntil the next bubble burst brings everything down.And given the nature of limits for bubbles, its difficultfor me to perceive an endless expansion of the goodtimes, unless and until policy markets finally allow

    markets to allocate resources.

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    Sell Recommendation: This week I am recommending the sale ofNorth American Gem at $0.94 for a 17%loss. I have been looking at some very interesting energy and utility companies that provide great yields alongthe lines provided by Roger Conrad who was a guest on my radio show a few weeks ago. Roger has a couple ofexcellent newsletters that cover utility and energy stocks with strong yields. I feel many of these stocks arerelatively safe. I was about to recommend one this week, but they have risen in price to levels where I wouldrather wait for the next decline in the equity markets to begin naming a few of these income producers now. Iwould however, recommend that you go to http://www.voiceamerica.com/voiceamerica/vepisode.aspx?aid=50007to listento some great ideas from Roger Conrad.

    A New Mine Company Progress Grading System

    For years, we have used the following schematic to place mining companies into various roughly definedprogress categories. A = Currently Operating, B=Not in operation but with pre-feasibility or feasibility study inhand; C = No feasibility study but indications of a commercially viable mineral deposit. D= A mineral resourcenot yet delineated but based on size of mineral bearing structures and early geological work, potential foroutlining an ore body appears good.

    By this scheme we dont mean to imply companies that are C or D companies are failures. Those ratings

    have to do with their stage of development. But many companies never set out to become producers. Thus theywill never reach the A status and many wont even strive to reach B status.

    To help people who impulsively ignore companies with C or D ratings understand the message we aretrying to convey, I have chosen to begin using the following Schematic with definitions remaining the same:

    A1 = forProducers (Formerly A companies).A2 = for Economic Valuation. (formerly B companies).A3 = forResource Calculation (Formerly C companies).A4 = for Grass Roots Exploration (Formerly D companies).

    We have made adjustments to our Portfolio Scorecard according to this schematic in this weeks letter.Stock Pick of the Week

    Dynacor Gold Mines Inc.

    Business: Exploration and custom milling production of goldfrom Peru

    Traded TSX: DNGUS OTC: DNGDF

    Shares Outstanding: 30,214,285Fully Diluted (+ $960,000 cash) 33,314,285

    Institutional Holdings*: 59%Price 8/13/10: US$0.32Price 12/10/10: US$1.04Market Cap: US$31.4 Million2010 EPS (6 months): $0.03Gold Resource (Historical non 43-101): 858,000 oz.Progress Rating: A1Telephone: 514-288-3224Web Site: www.dynacorgold.com

    Trapeze Asset Mgmt 18%, Sprott 14%, Malaga Inc. 12%, AGF Mgmt 10%, The Caisse 5%

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    I love this stock. It is a sleeper in the truest sense of the word. The following factors make this my favorite goldstock at this time:

    The company has operating cash flows from custom milling in Peru, and those cash flows are growingwith the increase in the price of gold and increased gold production.

    The company the company has a couple of gold projects in Peru that, when mined and processedthrough its mill, should lead to dramatically higher cash flows and earnings.

    The company also has a gold-copper skarn deposit that has a real shot at evolving into a world-class

    gold deposit. If that proves to be the case, this companys market cap could easily rise by 10- to 50-foldfrom its current market cap of around $30 million.

    Minimum dilution risk owing to the companys internally generated cash flows from its custom millingactivities.

    The Acari Custom Milling Operation

    At present the company owns and operates a 130-ton-per-day mill on the Acari Gold Property. The head gradebeing delivered to the mill is 0.77 ounces per ton andrecovery rates are in excess of 95%. This year the

    company will produce more than 30,000 ounces of gold.That compares favorably to the companys guidance of25,000 to 28,000 ounces that they gave earlier in the year.On 30,000 ounces of production, the company willgenerate about $6 million in cash flow this year, or about$0.20 per share.

    Keeping in mind that the company has under promisedand over delivered in 2010, I think their projections ofincreasing production to 180 tons per day in 2011 and theproduction of 45,000 ounces during 2011 carries some

    weight. With that level of production, management issuggesting the potential to generate $9 million in 2011cash flow, or about $0.30 per share.

    For 2012, management is projecting an increase in its milling operation to 250 tons per day and a production of65,000 ounces. Given the same $200 per ounce of margin, Dynacor would generate $13 million in cash flow, orabout $0.43 per share of cash flow.

    As good as these numbers are, we think they could get better. Management has built in a $200-per-ouncemargin for this business. But in fact, margins rise with a higher gold price, because Dynacor gets a percentageof production for its own account. Hence, if you believe the gold price will continue to rise, you might

    anticipate a rising margin. Indeed we have seen the margin per ounce of gold produced on the Acari Mine risefrom $133 per ounce in 2008 to $228 per ounce in the third quarter of 2010. And in fact, management has set agoal of increasing its operating margin to $250 per ounce. Management is planning to mine some of its owngold from this property where it has a historical 606,000-ounce vein hosted resource. It seems possible to methat the company could improve its margins very considerably once it starts to partly feed the mill with its ownore, which I understand it plans to do in 2011.

    Management says that there is an abundance of high-grade gold ore available in Peru to continue feeding thismill, which is located 428 kilometers southeast of Lima. The project is accessible by road and has been inoperation since 1998.

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    Tumipampa The Flagship Property

    In my view, Dynacor is a very undervalued stock just on the basis of its Acari milling operations. But where thisstory gets really interesting and potentially very profitable for those who buy these shares now is in theTumipampa Property. Without a doubt, this is the companys flagship property.

    The Tumipampa is located between two other major mines, the Los Chancas held by Southern Copper and theLas Bambas held by Xstrata. The Los Chancas has 355 million tons grade 0.62% copper and 0.04 grams/tonnegold. The Las Bambas has 1.1 billion tonnes grading 0.77% copper and 0.06 grams/tonne gold. Note also the

    red block on your left, where Antares was offered $450 million for its 3.7-million-tonne copper project.

    What are the chances of Dynacor unlocking some greatvalue from its Tumipampa Skarn Deposit? Its hard to say,but the two diamond drill holes drilled in 2008 providesome reason for hope. One hole scored 15.28 grams of goldover 4.90 meters. A second hole graded 1.21 grams goldover 4.90 meters.

    Two drill holes does not make a mine. But two doesincrease the probability. Moreover, if the skarn isconsistently mineralized throughout, it could be big. I say

    that on the basis of the dimensions of this skarn, whichstretches 4.1 kilometers in length and 1.2 kilometers inwidth.

    Note that there is a western vein that is described as agold/copper skarn and an eastern section of the skarn that isdescribed as a copper/gold skarn, meaning that the westernportion appears to hold more value in gold and the eastern

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    more value in copper.

    Tumipampa Vein System

    In talking to management last summer when I first met with them, I was told that if this skarn deposit turns outto be something big, at some point the company will seek a major mining partner to help it advance the project.In any event, Dynacor has an advanced-stage gold vein deposit on this property. The property has a non 43-101compliant resource of 252,000 ounces here, grading 2.732 grams/tonne or (approximately 0.087 oz/gold/ton).Obviously these numbers could grow further with underground exploration. However, at the moment, theemphasis is on the major upside potential from the skarn deposit.

    It is my understanding that we could see some drill results from the skarn deposit before the end of the year. Forsure, we can expect to see results in the early part of 2011. If the markets begin to get a sense that something bigis being outlined here, I think we could see an explosion in this companys share price. Keep in mind that thefloat is very right. There are only 30 million shares outstanding to start with and 59% of those are held byinsiders, leaving only approximately 12.4 million shares in the float, if thatwhich is why when I talked aboutthis stock on BNN on Friday, its share price exploded. The stock is off its highs following my discussion onBNN, but the story just keeps getting better. And that is why I purchased a few more shares myself this weekand figured its high time to share this exciting news with my subscribers.

    Of course, I continue to urge caution when buying any stock. Stocks are risky. And as always, I think it wiseand prudent to cap your exposure to no more than 5% at time of purchase. However, I must say, based on what Iknow about this company, which provides both security of cash flows and production and massive upsideexploration potential, it is my No. 1 pick at the moment.

    Headline News from

    Your editor keeps up to date with press releases by way of a subscription to Stockwatch. I find this service to bereasonably priced and I know of none better for tracking Canadian stocks. You can build your own portfoliohere and prices are refreshed on an ongoing basis with a 15 minute delay. Go to www.stockwatch.com for moreinformation. Following are some of the more significant headlines for the companies we cover as presented atStockwatch this past week.

    A1 Companies

    Allied Nevada: Additional Metallurgical Test Results Continue to Confirm MillingRecoveries of 87.3% for Gold and 82.2% for Silver

    2010-12-02 06:30 ET - News Release - RENO, NEVADA -- (MARKET WIRE) -- 12/02/10

    Allied Nevada Gold Corp. ("Allied Nevada" or the "Company") (TSX: ANV)(NYSE Amex: ANV) is pleasedto announce that is has received additional metallurgical test results from 24 composite samples for its Hycroftmine located near Winnemucca, Nevada. The Company has compiled these new results in its metallurgicalmodel for milling oxide and sulfide mineralization. The model, which is comprised of 99 composites includingthese new results, indicates average recoveries of 87.3% for gold and 82.2% for silver through a grind-flotation(to create a concentrate)-cyanidation of tailings circuit.

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    EDITORS COMMENTS: The continued good news on not only gold but more importantly silver recoveriesis very, very good news for the long term value of these shares. I say that because this company may have thelargest silver deposit in the world. In fact its silver values are nearly equal to is gold values. However, withcurrent heap leaching operations, only around 10% silver recoveries are achieved. This is a company I believecan ultimately produce over 1 million gold equivalent ounces per year plus silver from the Hycroft Mine inNevada.

    A2 Companies

    Goldrich Reports Block Purchase of Stock

    2010-12-10 17:19 ET - News Release - SPOKANE, WA -- (MARKET WIRE) -- 12/10/10

    Goldrich Mining Company (OTCBB: GRMC) ("Goldrich") reports that Northland Capital Markets,headquartered in Minneapolis, Minnesota, successfully organized a group of investors to make a block purchaseof Goldrich shares held by a fund located in London. A total of approximately 6.4 million shares, representingapproximately 13% of the issued and outstanding shares of Goldrich, were purchased at a price of $0.23 centsper share.

    EDITORS REMARKS: The shares closed at $0.30 on this news. This is the best news this company has hadbecause a hedge fund that was forced to sell a large amount of stock has now been taken out of the picture. Ilike this stock for its enormous upside potential as I outlined two weeks ago in this weekly report.

    Alexco Completes Off-Take Agreements With Glencore, Initiates Concentrate ShipmentsFrom Bellekeno Mine

    2010-12-02 04:00 ET - News Release - VANCOUVER, BRITISH COLUMBIA -- (MARKET WIRE) --12/02/10

    Alexco Resource Corp. (TSX: AXR)(NYSE Amex: AXU) ("Alexco" or the "Company") is pleased to announce

    that it has entered into lead and zinc concentrate off-take agreements with Glencore Ltd., Stamford("Glencore"), a branch of a wholly owned subsidiary of the Swiss-based international natural resources groupGlencore International AG. The signing of these agreements with Glencore is coincident with the initiation ofconcentrate shipments from Alexco's newly commissioned Bellekeno silver-lead-zinc mine in the Keno HillSilver District, Yukon.

    Alexco Discovers Extension of Bellekeno Deposit, Further Underground Drilling Planned

    2010-11-30 08:16 ET - News Release - VANCOUVER, BRITISH COLUMBIA -- (MARKET WIRE) --11/30/10

    Alexco Resource Corp. (TSX: AXR)(NYSE Amex: AXU) ("Alexco" or the "Company") is pleased to announcethat step-out surface exploration drilling conducted to the southwest of the newly commissioned BellekenoMine has successfully located high grade lead-silver mineralization approximately 130 meters down plungefrom the existing Bellekeno resource. The Bellekeno deep drilling program was completed as part of Alexco'splanned 2010 25,000 meter drilling program in the Keno Hill Silver District in Canada's Yukon Territory. Theone drill hole for which assay results have been received targeted the silver rich "48" vein at depth and within astratigraphic sequence not previously tested at Bellekeno. For these reasons, the Company attaches considerablesignificance to this new discovery.

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    EDITORS REMARKS: This is Chen Lins favorite silver stock and one of his most favorite stocks in theworld. I believe it will be a huge winner in the years to come not only from successful production but also fromits enormous still untapped exploration potential.

    Barkerville signs Lhtako agreement for Bonanza Ledge

    2010-12-09 09:59 ET - News Release - Mr. Frank Callaghan reports

    BARKERVILLE AND LHTAKO DENE NATION SIGN PROJECT AGREEMENT TO DEVELOPBONANZA LEDGE GOLD PROPERTY

    Barkerville Gold Mines Ltd. has entered into a project agreement with the Lhtako Dene Nation (Red BluffIndian band) of Quesnel, B.C. The parties will mutually benefit in the development of Barkerville's 100-per-cent-owned Bonanza Ledge property located in the Cariboo mining district of British Columbia.

    A3 Companies

    Paramount Gold Discovers High Grade Strike Extension of Main Palmarejo Mine Vein atSan Miguel

    2010-12-09 09:51 ET - News Release

    CHIHUAHUA, MEXICO -- (MARKET WIRE) -- 12/09/10

    New drilling on the Don Esevein target on Paramount Gold and Silver Corp (NYSE Amex: PZG)(TSX:PZG)(FRANKFURT: P6G) San Miguel Project has discovered the south southeast strike extension of the mainPalmarejo structural corridor that hosts Coeur d`Alene Mines (NYSE: CDE)Palmarejo Mine. The structuralcorridor is partly obscured by younger volcanic rocks, but new drilling has intersected the target below this

    cover.

    Xtra-Gold Resources Corp.

    West Africa Drilling Highlights Include Granitoid-Hosted Gold Mineralization Intercepts of27.0 Metres Grading 4.03 Grams Per Tonne ("g/t") and 27.13 Metres Grading 2.12 g/t Gold

    2010-12-07 08:52 ET - News Release - TORONTO, ONTARIO -- (MARKET WIRE) -- 12/07/10

    Xtra-Gold Resources Corp. ("Xtra" or the "Company") (TSX: XTG)(TSX: XTG.S)(OTCBB: XTGR), ispleased to announce gold assay results for six diamond drill holes, totaling 737 m, from the recently completed

    Zone 2 drill program at its wholly-owned Kibi Gold Project, located in the Kibi Greenstone Belt ("Kibi GoldBelt"), in Ghana, West Africa.

    Takara completes phase I, II programs at Tassawini

    2010-12-07 10:34 ET - News Release - Ms. Jennifer Boyle reports

    TAKARA COMPLETES PHASE 2 FIELD PROGRAM CORE DRILLING TARGETS CONFIRMED FORTASSAWINI GOLD PROJECT

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    Takara Resources Inc. has completed its 2010 phase I and phase II exploration programs of prospecting,mapping and sampling on the Tassawini gold project in Guyana, South America. Seven of nine geochemicalanomalies outside of the main Tassawini deposit were assessed on a preliminary basis over both programs(August, 2010, and subsequently November/December, 2010) and initial assays have been received in part fromfive areas, the most favourable results being from the Clutch anomaly, which returned values of up to 3.54grams per tonne (g/t) Au (see table). Additionally, panned concentrates from mini-bulk samples were used as areal-time exploration tool to localize on-site targets at surface and in the saprolite, and 40 out of 49 mini-bulksamples returned visible gold ranging from one gold point to 217 gold points.

    Niogold and Aurizon drill 3.2 m of 20 g/t Au at Marban

    2010-12-07 09:28 ET - News Release - Also News Release (C-ARZ) Aurizon Mines Ltd - Mr. Dale Paruk ofNiogold reports

    NIOGOLD AND AURIZON REPORT 20.44 G/T AU OVER 3.2 METRES AT MARBAN

    Niogold Mining Corp. and Aurizon Mines Ltd. have released results from drill holes MB-10-108 and MB-10-109 at the Marban block property located in the Malartic gold camp, Abitibi region of Quebec.

    Golden Hope Mines starts drilling Laval's Mountain

    2010-12-06 09:33 ET - News Release - Mr. Frank Candido reports

    GOLDEN HOPE ANNOUNCES DRILLING AT LAVAL'S MOUNTAIN

    Golden Hope Mines Ltd. has begun drilling the Laval's Mountain target located approximately nine kilometresnorth of the Bellechasse-Timmins gold deposit. The company completed diamond drill hole BD2010-149, thefinal 2010 exploration drill hole at Bellechasse-Timmins and moved the drill to Laval's Mountain on Friday,Dec. 3.

    Laval's Mountain is one of four major targets selected for drilling along the Bellechasse belt. The primary targetis Bellechasse-Timmins, which has been the focus of most of the historical and current drilling. Since April 13,2010, the company has drilled 13,991 metres in 57 holes at Bellechasse-Timmins for which assay results from31 holes remain outstanding. In addition to these holes, the company has also drilled 633 metres in three holesat the Beland target also within the Bellchasse belt approximately six kilometres south of the Bellechasse-Timmins gold deposit.

    Osisko, Clifton drill 42 m of 3.38 g/t Au at Duparquet

    2010-12-06 09:20 ET - News Release - See News Release (C-OSK) Osisko Mining Corp

    Mr. John Burzynski of Osisko reports

    OSISKO AND CLIFTON STAR INTERSECT 42 METRES AVERAGING 3.38 G/T AU AT DUPARQUET

    Osisko Mining Corp. and Clifton Star Resources Inc. have released results from 21 additional holes from the2010 drill program at the Duparquet project, located in the Abitibi region of Quebec. Significant intersectionsfrom the new drill holes on the Beattie property include 41.6 metres averaging 3.38 grams per tonne (BD10-320), 33.0 metres averaging 2.93 grams per tonne gold (BD10-321), 48.5 metres averaging 1.98 grams pertonne gold (BD 10-316), 21.5 metres averaging 3.76 grams per tonne gold (BD10-312) and 68.7 metresaveraging 1.38 grams per tonne gold (BD10-319).

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    Clifton Star JV partner to spend $16.6-million in 2011

    2010-12-06 08:57 ET - News Release - Mr. Harry Miller reports

    CLIFTON STAR RECEIVES $16.6 MILLION BUDGET FOR 2011

    Clifton Star Resources Inc. has received a $16.6-million exploration and development budget for the Duparquet

    gold project in southwestern Quebec for year 2011 from Osisko Mining, its joint venture partner. Predicated onthe continuation of the attractive results from the 2010 campaign and a first quarter resource update, Osisko isplanning a 130,000-metre drill program along with metallurgical testing.

    A4 Companies

    Sphere to acquire McManus gold property in Ontario

    2010-12-06 11:27 ET - News Release - Mr. Malcolm Stevens reports - SPHERE RESOURCES INC. (THE"COMPANY") ENTERS INTO AGREEMENT TO ACQUIRE THE MCMANUS PROPERTY IN DOMETOWNSHIP, IN THE RED LAKE MINING DISTRICT OF ONTARIO

    Sphere Resources Inc. has entered into an agreement with Camp McMan Red Lake Gold Mines Ltd. of RedLake, Ont., to acquire 100-per-cent interest in 17 patented mineral claims and 11 licences of occupation,covering approximately 325 hectares located in Dome townships, in the Red Lake mining district of Ontario.

    Trader Rogs Corner

    Trader Roger Wiegand provides a weekly technical snapshot at key markets every week for this letter. Roger isthe editor of Trader Tracks newsletter, which you can subscribe to by going to www.Miningstocks.com

    Dow Jones Industrial Average: Closed at 11,410.32 +40.26 on normal volume,mildly rising momentum and a price effort to break through hard resistance at11,450. Usually, if price goes through it happens on the third or 4th try. Numberthree will be next week. We think it goes through and then new resistance is11,450. Support is 11,400, which is a very strong number. The last 18 days chartshows higher highs and higher lows. This coupled with the other patterns signalsmore buying on Monday. The only thing that can spoil the rally until January15th in our view is a congressional failure to pass the Bush tax cuts extensionbefore Christmas.

    S&P 500 Index: Closed at 1240.40 +7.40 after a decisive breakout above hardresistance at 1225. This index is faster than the Dow Average and when used withthe Nasdaq can offer some strong indicators. Volume is normal and momentum is

    up. New resistance is 1250 (very hard) and support is 1225 (also very hard). We can see another 50 pointsadded on to 1250 if and when a breakout happens, taking the price to 1300 quite easily this month . Watchfor a cycle price rally peak on or about 1-15-11.

    S&P 100 Index: Closed at 557.27 +3.33 and has decisively broken-up and through a bear double top. Volumeis normal and momentum is up. Price is above all moving averages, which is bullish. There are no lower tradinggaps and this is the third try on a breakout consistent with the pattern. We forecast the price can reach 575resistance before the end of December.

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    Nasdaq 100 Index: Closed at 2215.34 +13.77 on 90% of normal volume and mildly rising momentum. It tookfour tries to breakout of the 2200 hard resistance. The price bar close was high signaling more buying nextweek. Price is above all moving averages and resistance is 2250, which is hard. The former resistance at 2200 isnow support. Price has also broken out of a congestion point where support and resistance channels could havebeen a block. The intermediate price goal this month is a high of 2250 and we expect it to be there beforethe Christmas holiday.

    30-Year Treasury Bonds: Closed at 121.53 -0.53 as momentum continues to the cellar and price has been

    dropping in a waterfall since a peak at the first of October. Yields have moved up this week and the drop wasfrom a high near 135 just two months ago. Price is below all moving averages and far below the 200-dayaverage at 125.02. With stocks continuing to rise and bonds weakening world-wide, look for hard supportat 120.50 and lower nearby support at 118.50. Expect 120.50 by the end of December.

    Gold: Closed at 1386.00 -0.70 on flat to down momentum with a price remaining above all moving averages.There is very hard lower support at 1350 with intermediate support at 1365-1375. Gold is selling in a five wavecorrection on the daily chart instead of the usual ABC very mild correction. We could see a price drop nextweek to 1350 or higher and would forecast 1375 as most likely for a new base. The next rally starting justbefore Christmas time is expected to regain most of this months selling. We forecast gold to touch aminimum of $1,407 and in all probability go to $1,424.50 with a chance at $1,448.50. The 2011 longermain trend should be coming off a bottom in the first week of February with a steady rise toward June. Ifgold can make a full Fibonacci move higher in 2011, we forecast $2,253.07 about one year from now.

    Silver: Closed at 28.70 +0.01 as silver rallied from near $18 in August to over $30 this month. Momentum isflat for now as silver has peaked and pulled back. However, the buying pressures have increased in the last tendays and new support is 27.80 on the 20-day average, which I expect to hold-up. When silver begins the nextrally, watch for a breakout above 30.75 to $32.25. We have new silver forecasts all the way to $50.

    Gold & Silver Index XAU: Closed at 223.45 +1.24 as momentum remains higher and more importantly, themetal to shares ratio is rising but nearing a corrective peak at the top of the index. New support is 220 andresistance is 232.50. Expect this index to pull back after one more try at a double top near 230. There is a cycletop in the first ten days of January followed by selling into February. For next week, expect more buying with

    another try at 232.50 with resistance at 225.00.

    U.S. Dollar Index: Closed at 80.06 -0.01 on flat to sideways momentum. The price wants to stay near 80.00.Price fell out of and below a former rising bull channel. However, all the moving averages are clustered at 79-80 so we can expect little movement up or down next week. Expect the dollar to trade sideways in acontinuation triangle for a few days near 80.00. A recovery and move-up in the Euro would sell the dollarbut we expect the opposite and think the dollar will rise to 80.50 resistance with a chance at 81.50 forabout a week. This then would be followed by more selling back to 80.00.

    Crude Oil: Closed at 87.75 just under the former trading range of 88.50 to 92.50. Price touched above 90 thisweek but immediately dropped back to a lower support at 87.00. Momentum is flat to up and based upon newinflation, colder weather and the current cycle, look for a December rally to 92.50 resistance. Next year, we

    forecast unleaded gasoline could be $5 to $7.00 as a USA average. If so, oil would be $108-$110.

    CRB: Closed at 314.89 +1.20 as the CRB double-topped at 320 and then consolidated at 315.00. Oil is thedriver and when oil resumes its rally as we expect the CRB will not only go back up to 320, but pass through itto 340 on our forecast in about one month. Next year the entire commodity sector should bull and when thelarger markets within the group take-off, we are headed to new records. - Traderrog

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    en s ose os t onsNorth American Palladium N PAL One of two North American Palladium plays 3.50$ 11/16/09 2.98$ $3.50 0.00% 17.45%

    Apollo Gold Corp. N AGT Gold & Silver producer in Montana & other stage proje 0.44$ 2/3/09 0.21$ $0.44 0.00% 113.59%

    Garson Gold Corp. T GG Gold Exploration and Production in Canada 0.12$ 10/21/09 0.11$ $0.12 -2.78% 9.81%

    Golden Star Resources, Ltd N GSS Gold mines in Ghana 3.12$ 3/19/09 1.51$ $3.46 10.90% 129.14%

    Skygold Ventures LTD. T SKV Large gold discovery in B.C. - high risk/reward 0.21$ 12/23/09 0.21$ $0.32 50.99% 50.99%

    Uranium Energy Corp N UEC Low cost uranium producer 3.78$ 11/5/09 2.96$ $3.65 -3.44% 23.31%

    Legend International Holdings N LGDI Phosphate rock 1.31$ 1/4/10 1.31$ $1.48 12.98% 12.98%

    PMI Gold Corp T PMV develop high grade gold deposit in Ghana 0.15$ 10/21/09 0.13$ $0.13 -16.53% -2.16%

    Allana Resources Inc T AAA Canadian potash company 0.33$ 11/5/09 0.27$ $0.34 2.99% 25.68%

    North American Gem Inc. T NAG Coal exploration and production in Kentucky 0.16$ 1/8/10 0.16$ $0.12 -23.77% -23.77%

    Yamana Gold Inc N AUY Medium Sized Gold Producer in CA and SA 10.41$ 1/28/10 10.41$ $11.16 7.20% 7.20%

    ATP Oli & Gas Corp. N ATPG Deep water oil and gas driller-gulf of Mex & N. Sea 14.48$ 2/11/09 14.48$ $19.04 31.49% 31.49%

    Linear Gold Corp T LRR Cash rich near term produce in SK, Canada 1.88$ 12/4/09 2.00$ $1.96 4.51% -1.72%

    GigaMedia Limited N GIGM Provider of online entertainment software & services 2.90$ 2/2/10 2.90$ $3.18 9.66% 9.66%

    Canfor Pulp Income Fund T CFX.UN Pulp Producer 10.81$ 3/3/10 10.81$ $12.45 15.13% 15.13%

    Federal Agricultural Mortgage N AGM Federal Backed Lender to Agriculture 7.01$ 8/20/09 7.73$ $16.08 129.39% 108.02%

    SFK Pulp Fund Units T SFK.UN Pulp Fund 1.05$ 3/3/10 1.05$ $1.91 83.03% 83.03%

    Alexis Minerals Corp. T AMC Gold mining in Quebec province 0.42$ 6/19/09 0.39$ $0.32 -23.78% -18.47%

    ATP Oil & Gas Corp N ATPG Development & Production of Oil & Gas 18.90$ 4/6/10 18.90$ $20.98 11.01% 11.01%

    ATP Oil & Gas Corp (CALLS) N ATPG Sep Call 20 2.63$ 4/6/10 2.63$ $3.80 44.49% 44.49%

    ATP Oil & Gas Corp (CALLS) N ATPG Sept Calls 25 1.16$ 4/8/10 1.16$ $1.90 63.79% 63.79%

    ATP Oil & Gas Corp (CALLS) N ATPG Sept Calls 30 0.51$ 4/8/10 0.51$ $0.87 72.28% 72.28%

    Minemakers FPO AX MAK Mining phosphate rock 0.41$ 12/15/09 0.35$ $0.33 -18.74% -7.16%

    Canfor Pulp Income Fund T CFX.UN Pulp Producer 11.98$ 4/14/09 11.98$ $14.84 23.87% 23.87%Ithaca Energy Inc. T IAE Undervalued Canadian oil producer-North Sea wells 1.39$ 5/22/09 0.55$ $2.83 103.17% 419.96%

    Northstar Healthcare, Inc T NHC Houston healthcare centers-no debt-undervalued 0.91$ 2/9/09 0.52$ $0.88 -3.94% 66.98%

    North American Palladium Ltd. N PAL One of two North American Palladium plays 4.35$ 5/12/09 4.35$ $3.62 -16.78% -16.78%

    Pelangio Exploration Inc T PX Value Gold Miner 0.22$ 5/12/10 0.21$ $0.20 -10.91% -6.67%

    Resolute Mining Limited AX RSG Australian gold miner 0.93$ 12/8/09 0.91$ $0.85 -8.61% -6.53%

    Baidu, Inc (SHORT) A BIDU Chinese & Japanese search engine 66.49$ 7/1/10 66.49$ $75.64 -13.76% -13.8%

    Premium Exploration Inc T PEM Explore/Development in Idaho, Montana, Mexico 0.31$ 6/7/10 0.31$ $0.48 56.70% 56.7%

    Jaguar Mining Inc. N JAG Gold mining in Brazil 8.10$ 8/6/10 8.10$ $7.37 -9.01% -9.0%

    Rentech, Inc N RTK Alternative energy, fertilizer 0.93$ 7/26/10 0.93$ $0.83 -10.56% -10.6%

    Gold Wheaton Corp. T GLW purchases gold by-product streams existing mines 2.17$ 9/10/09 2.17$ $3.55 63.51% 63.5%

    Great Basin Gold T GBG Gold Prod. & explorat ion in Nevada & S. Africa 1.71$ 12/8/09 1.67$ $2.45 43.27% 46.7%

    Evolving Gold Corp T EVG Gold exploration in western U.S. 0.76$ 7/7/10 0.76$ $0.88 16.81% 16.8%

    Uranium Participation Corp. T U URPTF Uranium investment fund 5.69$ 7/19/10 5.69$ $6.20 8.96% 9.0%

    Uranium Energy Corp N UEC UEC Low cost uranium producer 2.61$ 7/26/10 2.61$ $3.26 24.90% 24.90%

    Allana Potash Corp. T AAA ALLRF Explore/Development of potash in Ethiopia 0.33$ 7/22/10 0.33$ $0.42 28.69% 28.7%

    Bullion Monarch Mining, Inc O BULM BULM Gold royality company 0.79$ 9/30/10 0.79$ $1.65 108.86% 108.9%

    ATP Oli & Gas Corp. (CALLS) N ATPG ATPG Nov 15 Calls 0.63$ 10/4/10 0.63$ $1.80 184.92% 184.9%

    Toreador Resources Corp N TRGL TRGL Oil driller with large land position in France 9.73$ 9/28/10 9.73$ $14.13 45.30% 45.30%

    Federal Ag. Mortg.(CALLS) N AGM AGM Federal Backed Lender to Agriculture 0.48$ 10/7/10 0.48$ $1.20 152.63% 152.6%Magindustries Corp. T MAA MAAFF Extensive mineral, energy and forestry resources 0.32$ 8/3/10 0.32$ $0.35 8.01% 8.0%

    Federal Ag. Mortg.(CALLS) N AGM AGM November Calls 0.48$ 10/7/10 0.48$ $2.09 340.00% 340.0%

    Ur-Energy N URG URG Low cost uranium producer 0.84$ 7/27/10 0.84$ $1.61 91.67% 91.67%

    Coeur d' Alene Mines (CALLS) N CDE CDE Jan 22.5 calls 0.65$ 9/24/10 0.65$ $2.40 269.23% 269.2%

    Coeur d' Alene Mines (CALLS) N CDE CDE Jan 25 calls 0.28$ 9/24/10 0.28$ $1.28 363.64% 363.6%

    ATP Oli & Gas Corp. (CALLS) N ATPG ATPG Dec 15 Calls 0.95$ 10/4/10 0.95$ $1.40 47.37% 47.4%& as orp. eep water o an gas r er-gu o ex & . ea 13.05 10/4/10 13.05 14.60 11.88% 11.9%

    What is Chen Buying? What is Chen Selling?

    Chen Lin is a brilliant trader. I challenge readers to find someone who isbetter. We use his wifes Roth Ira to measure Chens performance and it isspectacular enough. The value of that IRA has grown from around $5,400in on January 2003 to over $1.3 million by the end of November, 2010.

    But even that spectacular performance pales compared to Chens leveraged account which he trades for himself.Chen has privately told me that his personal leveraged account has grown by a factor of several fold over theperformance of his wifes account. But of course with the leverage comes additional risk. So far, Chen hasproven to be remarkably nimble in exiting leveraged positions before it is too late. For example during thedisastrous year of 2008, Chen limited his loss on his wifes IRA to a mere 5%.

    Following is a record of Chens closed positions this year.

    Please note, Chen does provide some leverage play suggestions for his subscribers. You can benefit fromChens expertise by subscribing to What is Chen Buying? What is Chen Selling. Go to www.Miningstocks.comto sign up. You may take advantage of one time only trial offers to Chens letter as outlined on this site.

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    JayTaylorMedia.com

    At www.JayTaylorMedia.com, Your editor contributes a daily blog on this site most of which is very muchrelated to the content of this newsletter. You can go to this site to: 1) Buy gold and silver throughGoldMoney.com; 2) Catch my daily blog; 3) Access my live and archived weekly radio shows; 4) To learn

    about new companies I am following via Jays Watch List; and 5) to see various videos of your editor on BNN,Fox and CNBC. COMING SOON: Yours truly will be quizzing CEOs of mining companies about the risksand rewards to investors on a new show titled Face the Investor.

    Focus on the policy, not Wikileaks

    We may never know the whole story behind the recent publicationof sensitive U.S. government documents by the Wikileaksorganization, but we certainly can draw some importantconclusions from the reaction of so many in government andmedia.

    At its core, the Wikileaks controversy serves as a diversion fromthe real issue of what our foreign policy should be. But themainstream media, along with neoconservatives from bothpolitical parties, insist on asking the wrong question. Whenpresented with embarrassing disclosures about U.S. spying and

    meddling, the policy that requires so much spying and meddling isnot questioned. Instead, the media focus on how so muchsensitive information could have been leaked, or how authorities

    might prosecute the publishers of such information.

    No one questions the status quo or suggests a wholesale rethinking of our foreign policy. No one suggests that the WhiteHouse or the State Department should be embarrassed that the U.S. engages in spying and meddling. The onlyembarrassment is that it was made public. This allows ordinary people to actually know and talk about what thegovernment does. But state secrecy is anathema to a free society. Why exactly should Americans be prevented fromknowing what their government is doing in their name?

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    In a free society, we are supposed to know the truth. In a society where truth becomes treason, however, we are in bigtrouble. The truth is that our foreign spying, meddling, and outright military intervention in the post-World War II era hasmade us less secure, not more. And we have lost countless lives and spent trillions of dollars for our trouble. Too often"official" government lies have provided justification for endless, illegal wars and hundreds of thousands of resultingdeaths and casualties.

    Take the recent hostilities in Korea as only one example. More than fifty years after the end of the Korean War,American taxpayers continue to spend billions for the U.S. military to defend a modern and wealthy South Korea. Thecontinued presence of the U.S. military places American lives between the two factions. The U.S. presence only serves

    to prolong the conflict, further drain our empty treasury, and place our military at risk.

    The neoconservative ethos, steeped in the teaching of Leo Strauss, cannot abide an America where individuals simplypursue their own happy, peaceful, prosperous lives. It cannot abide an America where society centers around family,religion, or civic and social institutions rather than an all powerful central state. There is always an enemy to slay,whether communist or terrorist. In the neoconservative vision, a constant state of alarm must be fostered among thepeople to keep them focused on something greater than themselves-- namely their great protector, the state. This is whythe neoconservative reaction to the Wikileaks revelations is so predictable: See, we told you the world was a dangerousplace, goes the story. They claim we must prosecute- or even assassinate- those responsible for publishing the leaks.And we must redouble our efforts to police the world by spying and meddling better, with no more leaks.

    We should view the Wikileaks controversy in the larger context of American foreign policy. Rather than worry about the

    disclosure of embarrassing secrets, we should focus on our delusional foreign policy. We are kidding ourselves when webelieve spying, intrigue, and outright military intervention can maintain our international status as a superpower while ourdomestic economy crumbles in an orgy of debt and monetary debasement.

    Brokers Who Can Buy Canadian Mining Stocks for American Investors

    Kevin Hudak - A U.S. broker who follows our investment strategies as well as the companies recommended in this letter is a friendof your editor, namely, Kevin Hudak. I believe Kevin will do a superb job for you. If you were to find out otherwise, I would verymuch want to hear about it. I rarely recommend brokers, but Kevin is one I feel can serve subscribers to this letter well. So, feel free toinquire of his services at 1-505-980-2809.

    Allen Green of Green Financial Group (www.agreenfinancialgroup.com) is located in Ypsilanti, Michigan. Our broker/dealer is

    Cullum & Burk Securities, Dallas, Texas, member NASD, MSRB, SIPC (www.cbsfinancial.com). This company offers freeconsultation to qualified investors. Call (800) AL-GREEN (254-7336) and ask for Allen Green. EDITORS NOTE: Alan Greensalso shares most of your editors views with respect to investing as well as moral and spiritual values.

    David Elliott - For Accredited Investors your editor suggests you consider using the services ofHaywood Securities (USA) Inc.,located in Vancouver, B.C. (An accredited investor under U.S. law is defined as a person along with spouse who has a net worth ofover $1 million or along with spouse has an annual income of over $300,000 over the past two years or longer. A single person alsoneeds a net worth of over $1 million but his/her annual income needs be only in excess of $200,000 over the past two years.)Though he is Canadian, Mr. Elliott and his staff is licensed to do business with American citizens and Haywood Securities (USA)Inc. which is the U.S. subsidiary of a Canadian company is well positioned to buy and sell Canadian securities. Call David Elliott inVancouver at (604) 697-7128

    Steve Miller Steve has been a broker nearly 48 years; his last stint was 28 years at Smith Barney; currently at Wachovia Securities.

    Has been heavily concentrated in the resource; Ag and Precious Metals area for quite some time; subscribes to many of the leadinginvestment services; has a vast network of contacts and resources developed over his lengthy career. Considers himself aCUSTOMERS MAN (which was the appeal when he originally became a broker in the early 60's). Steve is passionate about hisbusiness and is a student of the market (Stocks). He works very long hours (he doesn't play golf and the stock market is also hishobby) and is very proud of the results he's achieved for his clientele. In the past several years, Steve has taken on a partner, JustinGeller, who does all the things that Steve wants to offer to his clients, including, financial planning; estate planning; insurance; fixedincome; mortgages. Justin is extremely capable and helps Steve with his Equity effort as well. Their 800 number is (800) 654-7444and direct (212)205-2937. Their offices are in The Fox Building in Midtown Manhattan at 1211 Ave of The Americas New York,N.Y. 10036. Additionally, Steve espouses the "Mae West" school of investing and is patient.

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    PORTFOLIO SCORECARDGold Stocks Exch Ticker R Company Activity/Comments Price Initial Initial Price 2010 Overall Buy/Security 1/1/10 Date Price 12/10/10 % Gain Gain HOLD

    GOLD & SILVER PRODUCERS ("A" Progress Companies)Allied Nevada Gold Corp. * N ANV A1 Gold Producer in Nevada 15.08$ 1/30/09 4.95 $26.52 75.86% 435.8% HOLD

    Aurizon Mines Ltd. * A AZK A1 Gold production in Quebec 6.65$ 9/3/10 6.65 $7.36 10.68% 10.7% BUY

    Brigus Gold * A BRD A1 Gold production in Ontario 1.76$ 12/12/08 1.00 $1.79 1.70% 79.0% HOLD

    Crocodile Gold * T CRK A1 Gold production in northern Australia 1.56$ 4/23/10 1.56 $1.53 -1.61% -1.6% BUY

    Dynacor Gold Mines * T DNG A1 Gold exploration & custom milling in Peru 0.32$ 8/13/10 0.32 $1.09 240.41% 240.4% BUYGreat Panther Silver Ltd. T GPR A1 Silver mine exploration/development in Mexico 0.83$ 5/29/09 0.49 $2.44 191.76% 397.2% HOLD

    Metanor Resources Inc. * T MTO A1 Small Production & Exploration in Quebec 0.54$ 1/25/08 0.84 $0.44 -18.52% -47.2% BUY

    OceanaGold Corp. * T OGC A1 Gold Mining-New Zealand, project-Philippines 1.65$ 2/27/09 0.48 $3.37 103.94% 601% BUY

    San Gold Corporati on * T SGR A1 New, smaller gold producer in Manitoba, Ca. 3.46$ 9/30/06 1.27 $3.56 2.65% 179.9% HOLDSilverCrest Mines Inc T SVL A1 Exploration, Develop gold & silver in Mexico 0.87$ 1/22/10 0.87 $1.99 128.87% 128.9% BUY

    J Taylor's Average Gain (Loss) on Progress "A" Gold Stocks 73.57% 202.4% ---GOLD & SILVER EXPLORATION STOCKS ("B", "C" & "D" Progress companies)Alex co Resources Corp. * N AXE A2 Near term silver producer in Canada Yukon 3.76$ 12/23/09 3.44 $7.68 104.26% 123.3% BUY

    American Bonanza Gold T BZA A2 Gold mining, explore, development in N. America 0.18$ 3/19/10 0.18 $0.34 89.81% 89.8% BUY

    Baskervi lle Gold Mines Ltd. * T BUM A2 Gold mining, explore, development in central B C 0.81$ 1/29/10 0.81 $1.37 68.09% 68.1% BUY

    Golden Minerals Co. * O ALUMNI A2 Explore & develop mining/services Latin America 9.70$ 9/11/09 4.15 $26.80 176.29% 545.8% BUY

    Goodrich Mining Co. * O GERM A2 Gold mining and exploration in Alaska 0.38$ 8/31/09 0.35 $0.30 -21.05% -14.3% BUY

    Klondex Mines T KDX A2 Explore/Develop high grade gold in Nevada 2.29$ 12/5/10 2.29 $2.50 8.98% 9.0% BUY

    Luna Gold Corp. T LGC A2 Producing Gold Mines in Brazil 0.54$ 10/26/07 0.80 $0.77 42.82% -3.4% BUY

    Sandstorm Resources Ltd * T SSL A2 Gold royalty co. applies Silver Wheaton Model 0.53$ 5/22/09 0.36 $0.72 39.62% 107.2% BUY

    Adventure Gold Inc. * T AGE A3 Explore & develop gold projects in Quebec 0.19$ 9/17/10 0.19 $0.47 139.92% 139.9% Buy

    Animas Resources Ltd. T ANI A3 Gold exploration in Mexico 0.64$ 5/30/08 1.39 $0.33 -48.59% -76.5% Hold

    Cangold Ltd. * T CLD A3 Early Stage gold exploration project in Mexico 0.04$ 6/23/03 0.08 $0.04 17.41% -43.6% BUY

    Clifton Star Resources Inc. * T CFO A3 Explore & Develop of past gold prop. In Quebec 4.25$ 3/20/09 1.89 $5.04 18.58% 166.7% BUY

    Coral Gold T CLH A3 Gold Exploration and Production in Nevada 0.66$ 9/4/09 0.42 $0.76 14.80% 81.6% BUY

    Everton Resources Ltd. * T EVR A3 Gold Explore & Develop gold in Dominican & Can 0.27$ 5/14/10 0.27 $0.35 32.16% 32.2% BUY

    Golden Hope Mines Ltd. T GNH A3 Exploring gold in Beauce region of Quebec 0.53$ 7/30/10 0.53 $0.37 -31.38% -31.4% BUYGoldQuest Mines Corp. T QGC A3 Explore/Develop gold in Dom Republic/Spain 0.34$ 12/3/10 0.34 $0.38 11.01% 11.0% BUY

    Magellan Minerals Ltd. * T MNM A3 Explore/Develop large scale near surface in Brazil 0.72$ 4/10/09 0.49 $1.80 149.93% 268.6% BUY

    Maudore Minerals Ltd. * T MAO A3 High grade underground gold deposit Quebec 4.23$ 2/25/06 0.69 $6.00 41.81% 772.6% BUY

    Merrex Gold Inc T MXI A3 Exploring & Developing gold projects W Africa 0.59$ 4/2/10 0.59 $0.45 -23.87% -23.9% BUY

    Millrock Resources, Inc T MRO A3 Project generator in Alaska and Arizona 0.42$ 7/23/10 0.42 $0.92 119.28% 119.3% BUY

    Nautilus Minerals Inc. * T NUS A3 High grade gold & base metals mining ocean floo 1.65$ 5/26/06 2.85 $2.00 21.16% -29.8% Hold

    NioGold Mining Corp. T NOX A3 Develop ungrounded mines eastern Canada 0.32$ 12/8/06 0.21 $0.34 5.92% 64.2% BUY

    Northern Tiger Resources * T NTR A3 Exploring for Gold in the Yukon 0.70$ 10/4/10 0.70 $0.36 -49.07% -49.1% BUY

    Paramount Gold & Silver N PZG A3 Gold & Silver Exploration in Mexico & Nev. 1.69$ 2/5/10 1.69 $2.59 53.25% 53.3% BUY

    Premium Explorat ion, Inc * T PEM A3 Explore/Develop in Idaho, Montana, Mexico 0.37$ 6/5/09 0.17 $0.46 22.86% 179.1% BUY

    Richfield Ventures Corp. * T RVC A3 Gold Explore & develop in British Columbia 1.30$ 7/23/10 1.30 $4.56 250.41% 250.4% BUY

    Riverside Resources, Inc * T RRI A3 Gold Exploration in Yukon & Mexico 0.55$ 8/27/07 0.50 $1.03 87.14% 106.0% BUY

    Takara Resources, Inc T TKK A3 Explore & Develop gold in Guyana, S America 0.30$ 12/3/10 0.30 $0.24 -20.24% -20.2% BUY

    Trade Winds Ventures Inc T TWD A3 Exploring for gold in Ontario 0.15$ 6/18/10 0.15 $0.39 162.73% 162.7% BUY

    Typhoon Exploration Inc. T TYP A3 Explore & develop gold properties in Quebec 1.60$ 9/17/10 1.60 $0.84 -47.39% -47.4% BUY

    Yale Resources Ltd. * T YLL A3 Explore gold /silver in Mexico 0.05$ 2/26/10 0.05 $0.10 96.19% 96.2% BUY

    Golden Valley Mines Ltd. T GZZ A4 Project generator for gold & base metals 0.28$ 8/20/10 0.28 $0.53 89.63% 89.6% BUY

    Horseshoe Mining Co. * T HSX A4 Exploring for gold in Brazil and Columbia 0.11$ 5/28/10 0.11 $0.19 69.39% 69.4% BUYPelangio Explorat ion Inc. * T PX A4 Gold Explorat ion in Ghana & eastern Canada 0.55$ 9/26/08 0.11 $0.95 72.74% 805.4% BUY

    Renaissance Gold Inc. T REN A4 Explore for gold/metals. Project generator model 0.55$ 9/26/08 0.11 $1.84 234.69% 1654.2% BUY

    Sphere Resources Inc. T SPH.H A4 Exploration & Develop gold projects in Canada 0.02$ 4/16/10 0.02 $0.07 362.14% 362.1% BUYXtra-Gold Resources O XTGR A4 Exploration & developm ent of gold in Ghana 1.18$ 7/9/10 1.18 $2.32 96.61% 96.6% BUY

    J Taylor's Average Gain on Exploration and Development Gold Stocks 66.43% 167.2% --- - Uranium StocksVan Eck Nuclear Eng. ETF O NLR A1 Nuclear Energy ETF 22.66$ 1/1/09 19.67 $25.75 13.64% 30.9% Hold

    Uranium Energy Corp. A UEC A2 10.2 mill ion l bs. U3O8 Resource + Much more P 3.78$ 6/23/06 2.80 $5.94 57.14% 112.1% BUYWestern Uranium Corp. * T WUC A3 31 million pound historical U3O8 Resource 1.12$ 1/31/07 2.29 $1.24 11.46% -45.7% Hold

    J Taylor's Average Gain (Loss) on Outstanding Inflation Hedge Stocks 27.41% 32.5% ----Oil Gas & Misc.Acro Energy Technologies T ART A1 Sells & installs solar electric generating units 0.28$ 7/9/10 0.28 $0.23 -15.68% -15.7% BUY

    Diagnos Inc. * T AD A1 Own/Develop healthcare, mining, music software 0.44$ 4/19/10 0.44 $0.28 -37.55% -37.5% BUYNorth American Gem Inc. * T NAG A2 Coal exploration and production in Kentucky 0.11$ 12/7/09 0.11 $0.094 -17.37% -17.5% BUY

    Average Gain (Loss) on Oil and Gas Stocks > -23.53% -23.6% Precious Metals & Hed e Funds Gold * N/A N/A N/A The Best Money Ever Discovered by Humankind 1,096.40$ 12/3/90 390.00 $1,386.30 26.44% 255.5% BUYSilver * N/A N/A N/A 2nd Best Money Ever Discovered by Humankind 16.87$ 11/15/97 5.29 $28.70 70.12% 442.5% Hold

    Prudent Bear Fund * O BEAR A1 Shorts Equity Markets - Long Gold & Gold Eq. 5.45$ 1/1/09 6.69 $4.77 -12.48% -28.7% BUY

    World Prec. Metals Fund O UNWEPT A1 Frank Holmes - Produce. And Expel. Gold Stock 17.42$ 3/20/03 9.70 $21.83 25.32% 226.7% Hold

    OHM Gold Fund O COMMIX A1 Major and junior gold mining mutual fund 23.52$ 2/7/08 23.52 $31.21 32.70% 32.7% HoldCentral Fund of Canada * O CEF A1 Holds Gold and Silver Bullion 13.75$ 1/7/00 7.42 $19.86 44.44% 168.9% Hold

    SAP 500 Index N/A N/A N/A Broad based measure of U.S. Stocks 1,115.10$ 1/1/00 1,453.82 $1,240.40 11.24% -14.7% --

    CHART EXPLANATION|| Exch. A=American; N=New York; O=NASDAQ/Bulletin Board/PinkSheets; T= Canadian Exchanges ||P=PROGRESS RATING A1 = Currently Operating, A2=Not inoperation but with pre-feasibility or feasibility study in hand; A3 = No feasibility study but indications ofa commercially viable mineral deposit. A4= A mineral resource not yet delineated but based on size ofmineral bearing structures and early geological work, potential for outlining an ore body appears good.||

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    .2010 CLOSED POSITIONS: Piedmont Mining (-50%), Hawthorne Gold Corp, (-90.3%), Romarco MineralsInc. (+875.5%), Timmins Gold (+282.6%), Pediment Exploration (+75.3%), Spanish Mountain (+6.4%),Terra Ventures (+18,4%), Denison Mines (-66.2%), Uranerz Energy (-57.7%), ATPG Oil and Gas (-19.5%),Acro Energy Tech (+21%), Pan Orient Energy Corp (-44.4%), PMI Gold (+18.6%), Midlands MineralsCorp (-22.9%), Columbus Silver (-42.4%), Guyana Gold (+101.1%),AuEx Ventures (+245.7%), Canaco

    Resoruces (+403.2%), Bayfield Ventures (+141.4%).||J Taylors Gold, Energy & Tech Stocks, ispublished monthly as a copyright publication ofTaylor Hard Money Advisors, Inc. (THMA), Box780555, Maspeth, N.Y. 11378, Tel.: (718) 457-1426.|| * Represents companies in which the editor and/or

    his family hold a long position. Website: www.miningstocks.com. THMA provides investment ideassolely on a paid subscription basis. Companies are selected for presentation in this publication strictly onthe merits of the company. No fee is charged to the company for inclusion. The currency used in thispublication is the U.S. dollar unless otherwise noted. The material contained herein is solely forinformation purposes. Readers are encouraged to conduct their own research and due diligence, and/orobtain professional advice. The information contained herein is based on sources, which the publisherbelieves to be reliable, but is not guaranteed to be accurate, and does not purport to be a completestatement or summary of the available information. Any opinions expressed are subject to change withoutnotice. The editor, his family and associates and THMA are not responsible for errors or omissions. Theymay from time to time have a position in the securities of the companies mentioned herein. All suchpositions are denoted by an asterisk next to the name of the security in the chart above. No statement orexpression of any opinions contained in this publication constitutes an offer to buy or sell the securitiesmentioned herein. Under copyright law, and upon request companies mentioned herein, from time to timepay THMA a fee of $500 per page for the right to reprint articles that are otherwise restricted for thebenefit of paid subscribers. Subscription rates: One Year $198; Two Years - $360; Three Years $477.Foreign postal delivery -one-year -$200.