Hi MajorD!

I am thinking the set up for the entire sector is changing. It looks for the time being like the bullion banks are going long the metal, covering shorts, and putting up less resistance on upside moves. This is after they have screwed longs for years, and have been able to close out a very large net short in the process.

Meanwhile the shorts have been pounding the mining stocks for quite a while on the expectation that the metals would be prevented from running away, and that a regular smackdown would hit the sector to allow them to cover at a profit along the way.

I think the upside traction in the mining stocks lately is a sign that some short covering is pushing the stocks back up even on relatively low volume. I think the smart money has figured out most of the juice has been squeezed from this lemon and they are going neutral or net long. Many of the retail longs have given up hope and left the market, which is also sadly very bullish. Strong hands are buying now, IMO.

Eventually AUM will participate in the upside for the sector. At least having a huge cash cushion gives the company the luxury of moving ahead with its plan no matter how weak the market may be. I am sure the choice to complete a large financing so cheaply is part of the reason why the stock has been a weak performer, but that is done and not worth complaining about. I can also think of a few other companies that have a good potential to achieve success, yet a high net short interest and awful market performance lately. I already did my bargain hunting and have no spare cash left, so I am just resolved to ride it out and see how things settle down into the new year.

If gold breaks out yet again to a new higher trading range, I do expect most of the juniors to trend higher too.

cheers!

mike