Issue 31, July 23, 2010

Hathor Exploration (HAT, TSXV)

Hathor is now well into their summer drill program with three rigs on site. One rig is on a barge positioned over the Roughrider deposit and will conduct infill drilling and test the gap between Roughrider and the new Roughrider East deposit.

A second rig will further test Roughrider East while the third tests an anomaly running southwest from Roughrider East which runs some 700 meters.

This $6 million, three month program will end in late September.

With the uranium market the way it is right now I doubt if a successful summer drill campaign will do much for Hathor stock. However at some point in the future HAT’s value will be realized once this deposit gets mined – perhaps with Chinese money.

Hathor's Chairman of the Board, John Currie seems to see the light at the end of the tunnel. He recently bought 105,000 Hathor shares in the open market for a total cost of approximately $163,000 ($1.55/share). That’s putting money where your mouth is Johnny boy!

Now as far as the lackluster price of uranium is concerned, some analysts are now saying we are at the bottom of the cycle and can look forward to substantial medium to long term demand growth driven by, who else, China.

China is leading the world in construction of nuclear powered electrical generation plants that at some future point will need to be feed. As one analyst put it, “it’s not a question of if, it’s a question of when.”

Hathor remains our number one uranium stock pick.

Orsu Metals (OSU, TSXV) Kyrgyzstan Projects Updates

This week Orsu updated the market on their metallurgical studies from the Kyrgyzstan Projects.

Talas Update

The results of a recent metallurgical study conducted at the Dawson Metallurgical Laboratories in Salt Lake City concluded that a potentially sellable copper-gold-molybdenum concentrate grading 19%Cu, 1.30% Mo and 102g/t Au with respective recoveries of 88%, 89% and 85% can be produced from the Taldybulak sulphide ore material.

Additional testing will focus on leaching of the floatation tailings fraction and floatation of oxidized material is planned for Q3&4 2010.

Tohktazan Update

Orsu also conducted a smaller metallurgical testing at the Stewart Assayers Laboratory in Kyrgyzstan. The goal was to determine if the Tokhtazan ores could utilize the heap leaching method to extract gold and apparently it can.

Taldybulak-Talas Project

Orsu owns 40% of the Taldybulak-Talas gold-copper-molybdenum project in Kyrgyzstan which had an NI 43-101 update in March. Total gold resources came in at 6.2 million ounces at 0.66 grams per ton with 1,033 million pounds of copper with a grade of 0.16%. This is one of the world’s largest copper-gold porphyry projects yet few people seem to know about it.

Gold Fields Ltd is the operator of the project which is expected to be a large scale, low grade open pit mine.

Karchiga Copper Deposit – Fast Tracked Toward Full Feasibility

In a separate report by New Fuel Now, Peter Cole points out that OSU’s deep discount in terms of their Net Present Value will reverse once the project nears production. The Karchiga scping study base case economic analysis indicates a discounted cash flow NPV of US $138.53 million with copper at $3. Even if copper should fall to $2.40, Orsu would still have an NPV of $59 million with Karchiga.

With the copper price currently at $3.14 I would say the likelyhood of a much higher NPV is in the cards.

Currently copper stockpiles followed by the London Metal Exchange have dropped over the past few weeks to the lowest level since November 18th – already down 17% this year and headed for the first annual drop since 2004.

China of course is the big driver behind this trend. As their economy continues to grow their need for copper to build out China’s infrastructure and consumer demand has also skyrocketed. Currently China consumes about one-third of the world’s copper and about 40% of the base metals.

Many analysts don’t see this trend changing and as such we as investors can benefit given company’s like Orsu can get into production to take advantage of this strong demand.

It’s estimated that Karchiga has 29 million pounds of copper which could be open pit mined for US $1.13 per pound over 10 years. At $3 copper the net revenue would be $765 million with an IRR of 40.5%.

As a further benefit, Karchiga is strategically located on the Chinese border making it reasonably easy to off-take ore to Chinese smelters.

Orsu is our bottom fishing pick for July at 16 cents.

Petromanas Energy (PMI, TSXV) Seismic Work Begins in Albania

This week Petromanas announced they have started their seismic testing on Blocks D-E and Blocks 2-3 in Albania with the completion date of October 2010. The seismic survey is intended to improve the quality of the data they already have which will lead to a hopefully successful exploration drill campaign in the months ahead. The first well is expected to be drilled early in 2011.

Petromanas is our number one green explo