Breathing new life into Ratel Group RTG.TO

Directors of CGA Mining are wasting no time in their next career move post B2Gold takeover, getting Ratel Group up and running.

I have followed Ratel Group since the split of Ratel Gold and Saint Augustine Gold back in December 2010.

http://vancouverventure.blogspot.ca/2010/12/ratel-gold-finalizes-spin-out-rtlt-and.html

When Ratel Group was spun out they kept some African properties and cashed up the treasury with $15 million at $0.10/share. Today most of that money is gone and Ratel Group is basically a TSX shell.

Along with the addition of the management of CGA  there will be 160,000,000 shares issued at $0.13/share for approximately $19.5 million after fees. By my calculations there will be 310,000,000 shares (the Aussies love big floats) with an average cost around $0.115/share.

So it looks like there is a ground floor opportunity here as Ratel Group has never had a run up and distribution of paper. 

Ratel Group Ltd. plans to seek, at a special shareholders meeting scheduled for late February, 2013, shareholder approval of a proposed restructuring transaction involving the merger of the company with a wholly owned subsidiary of RTG Mining Inc.
Additional information regarding these transactions is set out below and will also be described in detail in a management information circular to be issued to shareholders of Ratel Group (a copy of which will be available on the company's profile on SEDAR). The merger and related transactions set out herein are subject to shareholder approval and regulatory approval, including approval of the Toronto Stock Exchange.
The board of directors of the company will be reconstituted at the effective time of the merger, with a focus on identifying new development or operating gold opportunities. The board of directors and management team of RTG upon completion of the merger is expected to be:

• Michael J. Carrick -- chairman, former president and chief executive officer of CGA Mining Ltd.;
• Justine A. Magee -- CEO, former executive director and chief financial officer of CGA;
• Mark Turner -- chief operating officer, former COO of CGA;
• Hannah Hudson -- CFO, former company secretary of CGA;
• Robert N. Scott -- non-executive director, former non-executive director of CGA;
• Phil C. Lockyer -- non-executive director, former non-executive director of CGA;
• David A. Cruse -- non-executive director, former non-executive director of CGA.

The merger
Ratel Group plans to merge with Ratel Merger Ltd., a wholly owned subsidiary of RTG Mining, which was recently incorporated in the BVI. As a result of the proposed merger, shareholders of the company will exchange their current ordinary shares in the company for new ordinary shares of RTG.
On the effective date of the merger:

• The company and MergCo will merge to form one corporate entity, with the surviving corporation being the company;
• Each issued and outstanding Ratel share will be transferred to RTG in exchange for one RTG share.

Shareholders will exchange their current Ratel shares for RTG shares and will thereby become shareholders of RTG and will cease to be a holder of Ratel shares. The RTG shares will be identical in every respect to the Ratel shares. The 1-for-1 exchange ratio to be applied was determined so as to ensure that, immediately after the effective date of the merger, Ratel Group shareholders will have the same proportionate interests in RTG as they presently have in the company, except as may be altered by the private placement (as described in more detail below).
It is expected that a total of 164 million Ratel shares will be exchanged for RTG shares upon the approval and implementation of the merger. Upon completion of the merger, New Ratel will, on a consolidated basis, continue to hold the African exploration assets, being the company's interests in the Segilola gold project and the Mkushi copper project, plus approximately $19.5-million in cash (assuming the release from escrow of the net proceeds of the private placement upon satisfaction of the escrow release conditions).
The board of directors believe the merger will enhance the ability of the New Ratel group (which includes the company) to pursue new growth.

Haywood Securities was a big backer of this deal originally in 2010 and I take cues from which side of the market they are on.

I was long 555 shares an added 1445 to round out one position. I will look to add some more in and around the $0.15/share range to see what the new management comes up with.

Taipan Resources TPN.V market activity

Taipan Resources has seen a pick up in volume the last few trading sessions and a quick look to this activity indicates something is coming down the pipeline. One thing I missed was the this news release on January 22nd. Setting options can be seen as a harbinger to an event, especially this amount of options.

 Taipan Resources Inc. has granted incentive stock options to certain directors, officers and consultants of the company, entitling them to purchase up to 5.55 million common shares of the capital stock in the company at an exercise price of 32.5 cents per share for the next four years.

A purely promotional article was posted over on Stockhouse and was paid for by Taipan but worth the read.

Click here for the article

Goldquest Mining GQC.V Double Dip

Goldquest Mining is double dipping here at the $0.50-$0.53 range, I would expect resistance back at $0.60 until further news warrants a pushing the stock back near the $0.80/share range.

I have started to trade Goldquest accordingly, buying at $0.51/share and leaving open sell orders at or near $0.60/share.

 

Good Morning Atico Mining

Nothing better than waking up to see a 33% jump in one of your stock positions.With mining infrastructure in place and continued impressive drill results, my bet Atico will follow through with exercising their option $14 million option to purchase this project.
 

Atico Mining Corp.'s underground drilling at its El Roble mine project in Colombia has discovered a significant new massive sulphide body at the north end of known mineralization, which now extends 360 metres along strike and 250 metres below level 2000, the lowest production level at the mine. The company also reports results of seven new diamond drill core holes (ATDHR-20 through ATDHR-26), which included 119 metres of 6.9 per cent copper and 6.3 grams per tonne gold.
Fernando E. Ganoza, chief executive officer, commented: "Drilling continues to discover new and extend high-grade massive sulphide copper and gold bodies in the immediate vicinity of the El Roble mine. The discovery of a major new mineralized lens at the north end of the operating mine not only adds significantly to the mineralization, but also increases the potential to discover additional mineralization below and beyond the current mine limits. I am very encouraged by results to date, as El Roble presents a significant opportunity to quickly bring newly discovered resources to production using the existing mine and mill infrastructure."

                           EL ROBLE DRILLING HIGHLIGHTS

                                   Interval                                 
Hole          From (m)     To (m)        (m)     Cu (%)   Au (g/t)   Ag (g/t)

ATDHR-26        144.0      263.7     119.70       6.89       6.26      16.50
Including       145.8      156.3      10.43      11.68      14.14      33.83
                161.2      169.6       8.40      10.81      12.41      37.74
                176.7      182.5       5.82       8.06      14.03      18.32
                193.1      200.3       7.20      15.46       3.83       7.26
                217.6      222.3       4.75       7.53      25.94      66.31
ATDHR-25         88.5       93.0       4.50       3.23       6.40      20.75
ATDHR-20        128.0      148.4      20.40       5.25       1.28       6.16

The full news release can be read here.

Update: I have opted to de-risk my positions by selling enough shares to cover my costs in one account, this result is pretty good and to drill another just like it will be difficult. All one has to to is turn to Goldquest Mining GQC.V to see how one hole got to far ahead of itself.

I am not saying that this is going to happen with Atico but these are junior deals that go up and quicker than a hookers skirt and you are never ever wrong to take a profit.
 

Santacruz Silver Mining raising $35 million

Once again as stated on this blog that quality deals with proven management will still attract money.

Santacruz Silver Mining Ltd., in connection with its previously announced short-form offering led by Canaccord Genuity Corp., and including Raymond James Ltd. and Cormark Securities Inc., has increased the underwritten offering from $30,062,500 to $35.15-million. The company has granted the underwriters an option to purchase up to an additional 15 per cent of the offering, exercisable for a period of up to 30 days after the closing date; if the overallotment option is fully exercised, the total gross proceeds from the offering will be $40,422,500.
The proceeds from the offering are expected to be used by the company for exploration and development of its projects in Mexico, and for general working capital and corporate purposes.

 

Tax implications and employee option exercise 101

During the Cambridge Show I came across a conversation about the exercise and hold strategy of employee options. This conversation happened in the Corvus booth with a screen shot of recent SEDI filings. There was some conversation around the price slide and the 310,000 options at $0.82 that expired on January 21st.

I was told that the options were exercised and held onto, which I believe some of them probably were. Only Directors and Officers are obligated to file insider trading reports, the balance of employees/consultants are not.

A convenient story of a fund selling the stock at the same time the options expire seems coincidental but never the less it was an opportunity to buy some shares at $1.35.

So here is an example of the process. To simplify thing I wrote this in the first person.



For this example lets use the the recent 310,000 options at $0.82 that expired this week and lets say I owned 50,000 of these and I am at a 30% tax bracket.
First off I need to buck up 50,000 * $0.82= $41,000 next I need the past 5 days weighted price for the stock to capture a capital gain for CRA (Canada Revenue Agency).
The weighted average price of KOR was $1.39 for 5 days before Jan 21.
$1.39-$-0.82=$0.57/share capital gain.
$0.57X50,000 shares = $28,500 capital gain
The Company has an obligation to CRA in regards to employees to withold and remit the portion of capital gains at my given tax rate.
Only half of taxable gains are taxed in Canada, so $28,500/2= $14,250
$14,250x30% (tax rate)=$4275 taxes owing to CRA

So to summarize to exercise 50,000 @ $0.82/share option one has to pay $45275.00

Now since I have paid taxes at $1.39 value of the option I would be wise to capture that gain as opposed to hold the stock on the risk if the price goes down I would have paid to much in taxes on it.

Unless I am a multi millionaire and don't need the cash I would never employ a exercise and hold strategy.
Foolish me, I did that once with $0.90 options and ended up selling for a significant lose years later.

View from the Cambridge Snow

A few notes from the Cambridge Show that I visited yesterday.

The crowds did not seem as busy as years before but I was told Sunday was much better attended.

The booth babe count was way down from previous years indicating a harder time for many of the juniors out there.

Booths I visited and chatted with was Timmins Gold TMM.TO and the basic questions was eat or be eaten and Timmins are looking to be the eater.

Korvus Gold KOR.TO was also on the list, it seems they were trying to explain the recent downturn in the share price. (option exercise vs. fund selling). Doesn't really matter as it gave the market an opportunity to pick up some shares at $1.35. General feeling is that someone will be taking them over in the future.

Fire River Gold FAU.V seems to be trying to get back on track, it seems the Nixon Fork mine needed a little house cleaning. They think they may be cash flow positive in the coming months.

Saint Augustine Gold SAU.TO set the stage correct in regards to Queensberry Mining involvement. The Company has around $7 million in the bank and will be coming to the market to raise more money.
No comment was made in regards to B2Gold's takeover of CGA Mining as CGA Mining has a stake in St.Augustine. $2.2 billion in Cap-Ex is kicked around as needed to get this deposit producing so it will be a tough slog going with their current partner or they will have to find a bigger suitor.

I did not get  a chance to chat with Santacruz Silver Mining SCZ.V, as they seemed to be engaged every time I went by.

I thanked Goldquest GQC.V and Unigold UGD.V for the recent wins in both stocks, both companies seemed upbeat on their prospects. These two deals will trade in tandem to each other for the most part and will go up and down on drill results.

My feeling is these big trade shows seem to be having a lesser impact every year and talk was that shows done in some major US cities seem to be a bust.

Looks like I might give next years shaw a miss.

Vancouver Curb Exchange

Surfing around last night got me going down memory lane when I came across this site of the Vancouver Stock Exchange from 1976. (Also known as the Vancouver Curb Exchange)  This is when the exchange was at 475 Howe Street and 10 years before I started on the floor at 609 Granville St.

http://johndenniston.ca/blogwp5/?p=14

There are 121 photos all captured in black & white with this classic quote

" The Vancouver Stock Exchange doesn’t exist anymore but during the 1950’s until the 1990’s it was one of the most notorious stock exchanges in the world.
It had few rules and most of these were ignored, making millions for insiders while leaving everyone else with a tax loss. Its specialty was mining stocks, especially gold and copper. The stocks thrived on rumor and dived on news. In a 1989 exposé Forbes magazine called it the “scam capital of the world”.

Fast forward 60 years, stocks still thrive on rumor and dive on news with insiders making millions and everyone else with a tax loss.

Somethings never change.

Taipan Resources TPN.V Starts Their 2D survey

I would have thought Taipan would have a farm in partner by now on their 2B block as the Company previously guided.

TAIPAN RESOURCES INC. ANNOUNCES COMMENCEMENT OF 2D SEISMIC DATA RECORDING ON BLOCK 2B ONSHORE KENYA
Taipan Resources Inc. commenced 2-D seismic data recording on block 2B onshore Kenya on Jan. 13, 2013.
As previously announced, Taipan's wholly owned subsidiary Lion Petroleum Corp. awarded a contract to BGP to acquire the 2-D seismic data on Nov. 15, 2012. BGP mobilized its crew No. 8638 E and started camp construction on Nov. 29, 2012. A number of sensitization meetings have also been held with the local community in regards to the 2-D seismic survey on block 2B.
Line surveying of block 2B commenced on Dec. 28, 2012, and recording of 2-D seismic data commenced on Jan. 13, 2013. Taipan expects to acquire a minimum of 400 kilometres of 2-D seismic data during the first quarter of 2013. The data from the survey will be processed and interpreted, in conjunction with the FTG survey and existing data, to determine the location of Taipan's first exploration well on block 2B. Taipan expects to drill its first well on block 2B in late 2013 or early 2014.
Maxwell Birley, chief executive officer, commented: "The Anza basin is one of the largest Tertiary-age rift-basins of the East African rift system which contains multibillion-barrel oil discoveries. We continue to believe based on existing gravity, magnetic and seismic data that the 'sweet spot' of the Anza basin is located on block 2B. Recent proprietary geochemistry work completed by Taipan also demonstrates that there is excellent-quality Tertiary oil-prone source rock present in the Anza basin in the region of block 2B. Initial stack 2-D seismic data on block 2B also looks very encouraging."

Fortunate Sun concedes it needs "proven" management

 BTW I did not need that investment capital in the first place.

Fortunate Sun Mining Company Ltd. will hold a special general meeting on Feb. 8, 2013. Resolutions to be considered are as follows:

1. To grant the board of directors discretionary authority to amend the notice of articles of the company to change the company's name from Fortunate Sun Mining to such name as may be deemed appropriate by the board of directors;
2. To grant the board of directors discretionary authority to complete a share consolidation of the company's common shares on the basis of up to five preconsolidation shares for every one postconsolidation share (5:1) to occur at some time prior to the next annual general meeting, with the exact consolidation ratio and time of the consolidation to be determined by the board of directors;
3. To approve and adopt an advance notice policy.

The board of directors feels that, given the current venture market conditions, it is imperative to restructure the company in order to attract new projects along with proven management and financing. The board also feels that this will give all shareholders the opportunity to participate in the future of the company and asks for the support of the shareholders in voting in favour of these resolutions.

Goldquest Mining GQC.V releases more assays and the market yawns

The Goldquest mania seems to have grown tiresome on the market as the latest news managed to trade the stock sideways.

GOLDQUEST RELEASES DRILL RESULTS AT LAS TRES PALMAS, DOMINICAN REPUBLIC; INCLUDES 57 METRES GRADING 2.16 G/T GOLD AND 0.85% COPPER (3.35 G/T GOLD EQUIVALENT)
Goldquest Mining Corp. has provided an exploration update, including assay results from nine additional holes from its drill program at the Romero gold/copper discovery on the company's 100-per-cent-owned Las Tres Palmas trend in the Dominican Republic.
Drilling highlights include:

• LTP-116, which contained 85.0 metres grading 0.79 gram per tonne gold and 0.89 per cent copper (2.24 grams per tonne gold equivalent);
• LTP-118, which contained 48.78 metres grading 2.06 grams per tonne gold and 0.71 per cent copper (3.32 grams per tonne gold equivalent) within a mineralized envelope of 217.5 metres grading 0.74 gram per tonne gold and 0.4 per cent copper (1.39 grams per tonne gold equivalent);
• LTP-120, which contained 57.0 metres grading 2.16 grams per tonne gold and 0.85 per cent copper (3.35 grams per tonne gold equivalent) within a mineralized envelope of 237.0 metres grading 0.67 gram per tonne gold and 0.43 per cent copper (1.37 grams per tonne gold equivalent).

"We continue to test a large geophysical anomaly which has been the best method for us to date and will continue to do so moving forward," commented Julio Espaillat, Goldquest's chief executive officer. "Recent drilling continues to validate our interpretation of a northwest-to-southeast mineralized corridor and we are encouraged that our ongoing deep induced polarization survey will generate sufficient targets for our 2013 drill program."

Pre Cambridge Show News Pump Corvus Gold KOR.TO

With the Cambridge show around the corner the most asked question is going to be " Did you see our news release this week?" We all need something to break the ice.

So here is Corvus pick up line:

CORVUS GOLD FINAL LEACH GOLD RECOVERY RESULTS AVERAGE 88% FOR MAYFLOWER DEPOSIT, NORTH BULLFROG PROJECT, NEVADA
Corvus Gold Inc. has provided the final results of a series of column leach tests on large diameter core sample composites from the Mayflower deposit at the North Bullfrog project, Nevada. The final results averaged 88-per-cent gold recovery at a crush size of nominally 80 per cent passing 19 millimetres (minus-3/4ths-inch), which represents a 10-per-cent greater gold recovery than the 78-per-ccent gold recovery assumed in the Dec. 6, 2012, preliminary economic assessment (PEA). These encouraging results suggest that the potential exists to operate the Mayflower project on a run-of-mine (ROM) basis, although at lower recoveries than would be achieved by crushing.
The impact of ROM processing could significantly reduce both capital and operating costs per tonne for the Mayflower deposit where gold production is anticipated for late 2014. The company is currently conducting large ROM testing on large diameter material and working with mining consultants on optimizing blasting configurations to maximize fragmentation to assess this option.

Cambridge House Vancouver Show

Once again the Cambridge House show is upcoming and I plan an popping down on Monday to get my investing ideas by who has the hottest booth babes!

Seriously, I want to talk with a few of the guys that I own and see what kind of smoke they can blow up my ass.

http://cambridgehouse.com/event/vancouver-resource-investment-conference-1


I will make a route to the following companies:

Balmoral Resources
B2Gold
Corvus gold
Fire River Gold
Focus Ventures
Great Panther Silver
Gran Colombia Mining
Hecla
Premier Gold
Red Eagle Mining
Revett Minerals
San Gold
Santa Cruz Silver
Scorpion Gold
 Silver Crest Mines
Saint Augustine Gold
Unigold
US Silver and Gold

I will miss the usual new letter shills that can't get a call right on any stock. (oh that's because most are paid pumpers).

I would only recommend attending Brent Cook seminar.

On a last note what the hell is Peter Schiff doing at this show, for him to attend he must be hitting rock bottom. I always considered him a step above a show like this.

Atico Mining ATY.V Raises $8 Million

In keeping with my earlier posts about juniors on the Venture Exchange, deals with good projects and good management will have no problem raising money in this environment.

December 18, 2012 Atico Mining announced an $8 million private placement.

Atico Mining Corp. intends to undertake a non-brokered private placement financing. The private placement provides for the issuance of up to 12,307,693 units at 65 cents per unit for aggregate proceeds of up to $8-million. Each unit shall consist of one common share and one-half of one non-transferable common share purchase warrant. Each whole warrant will entitle the holder to purchase an additional share at 90 cents for a period of 18 months from the date of issuance. The private placement is expected to close in January, 2013.

Given the fact that management worked on this over the Christmas break when it is hard to get investors on the same page, I am impressed that they have closed this financing on January 11, 2013.

The TSX Venture Exchange has accepted for filing documentation with respect to a brokered private placement for Atico Mining Corp. announced Dec. 19, 2012:
Number of shares:  12,307,694 shares
Purchase price:  65 cents per share
Warrants:  6,153,847 share purchase warrants to purchase 6,153,847 shares.

Risk capital is still available on the Venture Exchange, it is just going to the deals that are real.

(Disclosure: I am long 11,000 shares and think this will be a home run deal.)



 

The future for hundreds of Venture Exchange companies?

I came across this news release yesterday that sums up the life support statements that most Venture Exchange will be issuing in the next year. This one is from NV Gold.

NV Gold Corp. is undertaking a non-brokered private placement financing of up to 4.5 million units at 5.5 cents per unit, for gross proceeds of up to $247,500. Each unit will consist of one common share of the company and one-half of one non-transferable common share purchase warrant. Each whole warrant will entitle the holder to purchase one additional common share of the company at 10 cents for a period of two years. The expiry date of each warrant is subject to acceleration, such that, should the volume-weighted average price of the common shares of the company exceeds 20 cents for 20 consecutive trading days, the company may notify the holder in writing that the warrants will expire 20 trading days from receipt of such notice unless exercised by the holder before such date.
The company has also agreed to complete a share-for-debt transaction with its president and chief executive officer, under which he will acquire 1,125,670 common shares of the company at a deemed price of 7.5 U.S. cents per share in settlement of $84,425 (U.S.) in debts of the company payable to him.

The important part of the news release is the last paragraph.....

Proceeds of the private placement will be used for property maintenance expenditures and for general corporate purposes.

In other words we are on life support and if we can't raise the money expect to be kicked off the Venture Exchange.
 
Unless President John Watson has an impeccable track record there would be no reason to be a shareholder of this deal.

Market observations on Royce Resources ROY.V

I am bidding for 50,000 shares of Royce Resources at $0.03/share as my dark horse pick for 2013. I am long a boat load of shares at much higher prices and $0.03/share represents a good place to load up.

A few things to note is Royce still has $1,000,000 in the kitty with a quarterly burn rate of $50K.

December saw a large block being traded that resulted in a one day volume of 4,000,000 shares, I filed this  as a year end tax loss shuffle and paid no more attention to it. According to Canadian Insider, Gordon Keep bought 3,141,000 in this cross.

Jan 8/13	Jan 7/13	Keep, Gordon	Direct Ownership	Options	50 - Grant of options	100,000
Jan 8/13	Jan 7/13	Liland, Geir L.	Direct Ownership	Options	50 - Grant of options	100,000
Jan 8/13	Jan 7/13	Shiffman, Tom	Direct Ownership	Options	50 - Grant of options	100,000
Jan 8/13	Jan 7/13	Rennie, Julie Elizabeth	Direct Ownership	Options	50 - Grant of options	100,000
Dec 5/12	Dec 3/12	Keep, Gordon	Direct Ownership	Common Shares	10 - Acquisition in the public market	3,141,000	$0.02

Last week Royce decided set another 400,000 options at $0.10 which I find interesting. There would be no need to set options if nothing was on the plate, in my opinion. It is not like these are replacement options in a rolling stock option plan. The Company has set 4,100,000 options at $0.10/share.

Perhaps Royce is closer to striking a deal or maybe the management is beginning to cherry pick some deals from other juniors that have hit the wall.

2013 "The year of Change"

Like Lord Keynes once said "When the facts change, I change: What do you do sir?"

The focus of this blog is changing for 2013 as the Venture Exchange quietly withers away in this era of risk off. It has been well noted by Brent Cook and more recently by John Kaiser that out of the 1800 listed juniors 632 have less than $200,000 in working capital. Read the report here.

$200,000 is the minimum a company needs to keep the lights on. In the past 2 years plenty of promoters raised public funds, stocked their wine cellars and lived a good life at the PDAC. Times have changed.

Entitled CEO's of juniors that pull $100K+ a year in salary to run a 4 cent deal will be looking for work.

2013 will be the year the herd gets culled by at least 500 companies. Marginal players need to move along, next stop for these individuals will be the US OTC market.

This of course is healthy for the balance of Venture Exchange deals as risk capital will still flow, only to better quality deals.

If you are trading, than swinging for the fences with the juniors will result in significant losses, one has to be nimble and expect selling on news.
 
In 2013 I will be focusing on a handful of Venture Exchange companies with my main focus on TSX deals and ETF's.

To start with the Venture Exchange, I am out of most of my tax loss bounce stocks including San Gold SGR.TO, Goldquest Mining GQC.V Aroway Energy ARW.V, Unigold UGD.V.

Another theme for 2013 is to de-risk any junior position. The theory behind this is to buy a position and sell enough of it when it goes up to cover your initial cost, keeping the balance as free shares. It is like playing poker on the casino's money once you have a win.

I have been doing this with Taipan Resources TPN. V, Unigold UGD.V and Goldquest GQC.V for quite some time now.

My list of juniors that I like going into 2013 are as follows:

Atico Mining ATY.V, Management from Fortuna Silver FVI.TO with an option to purchase the past producing El Roble Minein Colombia for $14 million. To date results look good, Canaccord has coverage, the share structure is tightly held and they are raising another $8 million here at $0.65/share. (I own 6000 shares that are de-risked and I am bidding for 5000 shares at $0.64)

Goldquest Mining GQC.V and Unigold UGD.V have results that will attract risk capital going forward. Recent price swings have handicapped the upside and selling will occur upon news releases. I am down to 1000 Unigold de-risked and 8000 Goldquest de-risked shares.

Taipan Resources TPN.V is another 2013 pick as the next Kenyan oil and gas play, I have 21,000 shares for sale at $0.38-0.39, once sold I will retain 18,000 that have my risk capital extracted.

Loyalist Group LOY.V is another Venture deal that has legs, Loyalist falls outside of the resource sector and is in the business of consolidating ESL schools. It has some pretty heavy shareholders behind it. (current position 5000 shares at $0.50.)

SantaCruz Silver SCZ.V will be another winner for 2013 as this deal is well financed and moving along to production. SantaCruz has strong support from investors that have been very successful in creating a $2 billion mining company. (current position of 2700 shares and buying on dips)

Manitok Energy MEI.V has been on my watch list for some time and I finally took a small position at $3.13. Some of the players in Manitok are from Talisman Energy. Real growth story with real management.

 MEI is an "oily" natural gas story whose success in the conventional Cardium oil play at Stolberg is complemented with nearby liquids rich natural gas in the deeper foothills regions of Alberta. The company will soon be producing 60 percent oil and natural gas liquids (NGLs). The production growth curve is up 500 percent year-over-year to the end of Q3 2012 (2,500 boed vs 400 boed) and will exit 2012 with 3,800 boed (60 percent oil/NGLs). With corporate natural gas prices averaging $2.50 /mcf, annualized cash flow in Q3 was still over $28 million, but by the end of December 2012 annualized cash flow is in excess of $50 million. The growth at Stolberg from the 9 wells drilled to date have seen IP rates up to 1,500 boed, with at least 6 wells over 500 boed. The company has very little debt, 90 conventional locations across 260 net sections of undeveloped land, and the running room to reach over 10,000 boed in the next couple years.

Courtesy of Equedia Weekly I am long Korvus Gold KOR.TO (7000 shares) and Timmins Gold TMM.TO (3500 shares) Both these deals could easily be take over targets in 2013. Korvus Gold would take very little Cap-Ex to go into production in Nevada and Timmins Gold is a low cost Mexican gold producer that is spinning out free cash flow.

Premier Gold PG.TO and Brigus Gold BRD.TO will be added to my list this year as a trader and a possible take over candidates. Any positions in these two will be traders only.

Element Financial EFN.TO continues to propel higher, this is Steve Hudson's second round at building Canada's largest non bank leasing lender. His last win was Newcourt Financial that was eventually sold to Tyco and subsequently to CIT Group, expect this deal to go higher in 2013.

My high dividend deals are as follows BMO Covered Call Utilities ETF ZWU.TO, Canexus CUS.TO, Health Lease Properties HLP-UN.TO, True North Apartment REIT TN-UN.TO, Renegade Petroleum RPL.V and Argent Energy Trust AET-UN.TO.






Since the new year I have opened a position with two iShare ETF's, XSU is the Russell 2000 CAD$ hedged ETF and the XSP S&P 500 CAD$ hedged ETF. I will add to these 2 positions when more volatility rocks the US markets lower.

2012 was a decent year with a 9.4% return with the bulk of my capital coming into play since October.

Fiscal cliff and debt ceilings will keep 2013 volatile so keep cash on hand for opportunities and remember to take profits when they are on the table.