Hi All,

I just got back from my trip out west to San Fran. Caught a chest cold the second day I was there and watching the US financial markets crumble did not brighten my mood. That and I spent a couple of hours typing out a musing a week ago only to have the screen refresh and the content disappear.

Before you think all was lost, I did manage to salvage what will go down as being the most significant day of my investing life. And it all started with a road trip.

For those who have been out to San Francisco, there are only so many things to do just a week before, well, you run out of things to do. You have Alcatraz, the Golden Gate bridge, the cable cars, Fisherman’s Wharf, and the Winchester House with the stairways that lead to no-where. That and a Costco sized electronics store called “Fry’s” that is every geek’s paradise. A whole aisle dedicated to IPOD accessories and other’s with every electronic device known to man.

Since I had been out this way three previous times, most of my days where spent watching the markets crumble on CNN. First Lehman Bros. Then the sale of Morgan Stanley. Then AIG. And a line-up of insurance companies out of Hartford waiting to take there place in line. The only thing more annoying than seeing the price of Noront drop during this financial carnage was that annoying (in my opinion at least) Suzie Orman telling people not to invest in anything but money market accounts and to sell if they cannot wait 15 to 20 years for a recovery. She now ranks just below Nancy Grace on my list of top annoying TV personalities.

But I digress.

It was interesting being a Canadian junior mining investor (all in with Noront at the moment) in a country where all is going to hell financially. I am not sure how much coverage this got last week in Canada but it was on every channel in the US night and day. Those two 500 point drops in the Dow really shook San Fran as it is a banking centre out West. I managed to walk by the FED in the financial district where a guy in a smart suit asked me if the government should get involved in bailing out these companies. Being the self seeking Canadian junior mining company investor that I am, I thought “As long as it helps Noront”, then the more the better. The reality is that I know better. While we believe Noront has the real goods to make history in Canadian mining, Canadian mining amounts to a hill of beans at the moment in the US. So I declined to comment.

Fact #1: The Big Money does not care about Noront at the moment. They are trying to keep their jobs and pension funds afloat. They are fighting over the future survival of one of the largest economies in the world.

The situation in the US is serious. The hedge funds have finally started to cannibalize each other during a period of tightened credit conditions and very low liquidity. This should not have been a Domino effect. I call it instead the Vulture effect. With no sick and dying companies left to short out of existence, they instead turned on each other and started to short and dump shares of major financial institutions which in essence caused the demise of each one as a self fulfilling prophecy. Rather than supporting each other, they shorted everything in an effort to grab the last piece of wood supporting the foundation of a house, only hoping to get out before the house tumbles. And the creaking was heard around the world and even got the attention of the senators who have ignored the realities of naked shorting for years. I am not saying that bad mortgages had nothing to do with some of these problems, but the reality is that 150 year old investment houses were shorted and could not raise the capital they needed to stay afloat. A drop in share price of 90% ignited by shorting did not help the situation.

The house is starting to lean folks and it is truly scary. Investment banks that have been around 150 years or more are having their assets scooped up by foreign investment firms for pennies on the dollar. Barclay’s takeover of Lehman Bros is an example of this. Bernacke knows it and so does the Financial working group (the President’s emergency team for such situations). If this keeps going then every mortgage and every asset the used to domestically could end up in the hands of foreigners for pennies on the dollar. Forget about the war on terror in this case. You have handed the keys to your economy to others because of few safeguards within the current US investment system.

What is my point?

Musing #1: Last week’s financial meltdown showed me that I was lucky to still be in the game. I still had shares in a company that is still alive. Still has life. Still has a hope and a light at the end of the tunnel. There are many investors who cannot say the same. They invested in the 150 year old “Red Woods” of the financial industry and saw their investment vanish in a matter of days. Vanish to nothing but paper. Ask anybody a month ago whether they considered Pinetree Capital or Lehman Brothers to be a greater risk, and they would have chosen the former. But as of today Pinetree (once of Noront’s major holders) is still around, raising money, and Lehman’s is bankrupt).

We too hold paper. Paper that allows us to share in two very exciting projects called Windfall and the Ring of Fire.

Fact #2. You still have your shares. Noront is still drilling. Commodities are trading very low at the moment except for Gold. Nickel and Plat are half of what they were a year ago. Okay, this is more than one fact but you get the point.

Musing #2: There is nothing that you, I, and possibly Richard Nemis can do at this point to cause the share price to go dramatically up in the next couple of months. Let’s take the lamp shade off of the pink elephant in the living room and start to figure out how to live with the smell until such time as the elephant decides to leave. This is just the way it is. It has nothing to do with Chrome values, Chrome demand, Nickel, Gold, money in the bank, amazing assay results, average assay results, bashing, pumping, or even what one poster on here says at a given time. As many on here have said. The current price has nothing to do with true value as the market is broken.

The Canadian Junior market was primed for this free-fall over a year and a half ago. Please read an article which I consider to hit the nail on the head (link is at the bottom) and you will find two things that will put your mind at ease:

1) The cause of Noront’s current share price and free fall for the last six months.

2) The hope that will come as Noront is (in my mind anyway given the assay results, the money in the bank, and the industry connections) one of the elite in the Canadian junior mining industry. If I am not mistaken they were considered the #1 mining company on the TSX Venture in 2007 so we should top that list.

Being top of the elite list does not mean that we are immune to all of the other crap going on around us. What it does mean is that we are primed for the greatest return on risk percentages once the market recovers, commodities recover, and Noront actually starts to mine and sell the goods at a time when other companies have gone under.

Fact #3: This will take some time and it is not likely to happen anytime soon.

Musing #3: Our addiction to seeing action everyday needs to change to a well thought out strategy for holding until some very important pre-requisites line up.

First, the market needs to recover from its current emergency status. The bartender on the ship is unlikely to make sales when ship is sinking. The party has been postponed.

Second, investor confidence needs to return. Once the safe markets are saturated, investors will begin to take risks again in the junior markets. This will follow a commodities boom which should begin once the 2009 round of financing wipes out a majority of junior miners who had good intentions but hit bad timing. The juniors feed the majors and like baseball, no new kids means no future and more demand for those that can still throw. Only those, like Noront, who have something to produce will survive and feed the majors.

Finally, emerging markets need to consume current inventories which will dry up as the feeder systems that help to produce these inventories dry up. Lower inventories mean higher prices and higher prices mean increased profits for those in production until such time as new entrants equalize the market.

While this sounds daunting to those of us who thought we might be around for one or two years tops, a long term view and patience will bring rewards from this elite junior that many other investors will be envious of.

Noront has moved from explorer to one with proven reserves open at depth. In the two to three years it may take to become a producer, the inventory levels for these commodities may be so low due to industry attrition that a perfect storm erupts for us.

Musing #4: Read the article below and see this moment for what it is. Think big picture. Think beyond today’s price and what might happen next week. View the business sense this makes long term and hold on for the ride. Bad luck and bad timing for many of us in previous purchase price levels but an opportunity to acquire shares in a company that is solid at very discounted prices.

I purchased 1000 more last week at $1.60. I did so not knowing if the next day I could have bought more cheaper. The key is that I will continue to acquire more as money becomes available. It does not really matter at what price as I am not into this stock to make pennies or dimes. I am actually quite greedy with this one and want to see another 10X return.

Sorry for the long winded musing. I needed to set up the backdrop to my future musing called: “Misfit’s Big Adventure” which will tell exactly why last Saturday my road trip into the heart of California’s historic gold country was the most significant day of my investing life to date.

Here is the link to that excellent article:

http://www.kitco.com/ind/hamilton/se...

M1.