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Weekly Update

Last updated: 10:33 30 Apr 2012 BST, First published: 14:33 30 Apr 2012 BST

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Gold
Gold rose $20 or 1.2% for the week to close at $1,662.80.
Silver actually lost 1.35% but that was not reflected in some of the silver juniors, especially in Aurcana which climbed 19%. Silver closed the week at $31.27 and the gold to silver ratio came in at 53.2 on Friday's close.

Last week we wrote: "Gold and silver mining shares are beaten down to what we think are extreme levels. The shares are now so cheap that we see very little downside risk in the high quality producers first and foremost (strong balance sheets, profitable, growth in the pipeline etc)."
It's of course too early to tell if we have seen the absolute bottom or if the bounce late in the week is just that, a bounce. What is encouraging to see, is that when Agnico-Eagle surprised the market with strong Q1 earnings, the market reacted accordingly and pushed AEM 10% higher on Friday for a total weekly gain of 17%, quite remarkable for a major. This was a $70 stock as late as September, now $39.
If we continue to see the larger miners come in with strong earnings, this will spill over on the sector and could/should improve sentiment.


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When gold made the run to its all-time-high of $1,920, the distance down to its MA200 was huge (see the green arrow) and a consolidation and pullback was nothing but normal. If we break out from here and if get a similar run, that could indicate gold to go pass its old ATH to perhaps around $2,000-2,100. Fundamentally, it's most certainly in the works.

Aurcana and Atna - currently our two largest holdings
The charts for these two companies looks almost the same:


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The stars are lining up for both companies and we hope that those of you who share our enthusiasm loaded up on the recent pullbacks. Being able to pick up Aurcana below 80c and Atna at 90c is truly an opportunity we were not able to ignore. We deployed some new cash but also lowered our exposure elsewhere.

We urge readers to listen/look at the links we sent out on Friday (Aurcana and Atna Resources), the presentations are sometimes a great source to get a small advantage on other investors. A great example is that Lenic Rodriguez, CEO of Aurcana, basically revealed that two new acquisitions are already made. One which will extend the La Negra mine (where infrastructure is already in place) and one more Au/Ag project in Mexico. Cost for both project, a mere US$2.5 million. We are a bit caught off guard by this as one would expect a news release before this is spoken about. Probably and hopefully this will be released to the public shortly.

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