Chapter 8 - Part 2: Gold and Gold Mining Stocks

By Reginald W. Ogden       Dec 19 2008 2:24PM www.ultimategold.ca

“Gold is where you find it. Explains all.” – Klondike

proverb “If you have to ride a horse and carry a gun that is where to go.”

• Rio Tinto Exploration Director

Mining booms and gold rushes generate patterns of behavior that, in many aspects, have a way of repeating themselves. Although the scale and magnitude may vary, they display similar tendencies.

Most booms end in busts and most gold rushes end ugly, but they will always form a large part of the economic and financial landscape as long as the world has a need to consume minerals and a need to speculate. At the end of each boom, a new mining province usually emerges, whether it is gold in Nevada or diamonds in the Canadian North.

The Comstock Lode led to the growth of San Francisco and several railroads that, in turn, opened up California for settlement. We should not be surprised by the fact that San Francisco and San Jose is today the hub of Silicon Valley. As the majority of participants in gold rushes fail in their endeavors to become rich, many European prospectors rather than return home to admit failure, which bore a stig- ma in Europe, stayed on. As most people there had failed, there was no shame or stigma attached to them. The willingness to take risks and suffer failure became the essence of entrepreneurship and venture capital in California.

Whitaker Wright referred to the frenzied finance of “guinea pig companies” which dominated the promotion of Australian mining deals in London in the 1890s. At the end of the Australian mining booms, 780 mining companies were registered in London. Five years later only 140 remained.

In most gold rushes and regional plays, companies were formed overnight, then listed and promoted on several exchanges. Today, almost all exchanges require a property of merit, such as the TSX Venture Exchange’s 43-101 requirement. This puts a damper on closology companies, whose only asset is proximity to a discovery and the ability to promote their shares.

THE MINING GOLD RUSHES

“There is no rush like a gold rush and no run like a bank run.”
– Adage
“There are strange things done in the midnight sun
By the men who moil for gold;
The Arctic trails have their secret tales
That would make your blood run cold.”

• Robert Service

Gold rushes have played a key role in the colonization of America, Canada, South Africa and Australia and were often the cause of rapid population growth and the opening up of many isolated areas to modern civilization.

The first gold rush in the US was triggered in 1799 by a 12 year old boy who was playing truant from Sunday school to go fishing and found a 17 pound nugget in a North Carolina Creek. His father, not recognizing it for what it was, became fascinated with its appearance and used it for a door stop for three years. Later on, upon being advised by a visitor who recognized it as gold, the father revisited the creek and found a 28 pound nugget, which led to the first U.S. gold rush and the creation of the Reed mine.

The various gold rushes led to a rapid increase in gold production. Annual output from the American gold rushes caused a four-fold increase to nearly 300 tons, which in turn led to the establishment of gold mining stock exchanges, such as the Pacific Stock Exchange in 1862, to facilitate the trading of gold mining shares.
Herbert Hoover, Oppenheimer, the Guggenheim Brothers and Mark Twain all worked the mining camps of Nevada in one capacity or another.

Gold Fever in 1853 opened up British Columbia to settlement. Prior to that, it was regarded merely as a settlement to protect the fur trade for the Hudson’s Bay Company.

Gold mining, in the modern sense, developed with the discovery of the Witwatersrand, in South Africa, in the 1880s. As a result, South Africa overtook the
U.S.A. in1898 to become the world’s leading gold producer. Even though production peaked in 1970 at close to 1,000 tonnes, South Africa still remains the world’s largest gold producer.

MINING STOCK BOOMS AND BUSTS

Probably, the mother of all mining booms took place in the summer of 1969. In six months, Poseidon stock, in London and Australia, went from one pound/sterling to 120 pounds/sterling before collapsing.As with all mining booms, other than genuine new discoveries in new mining areas, the scenario that allowed this to occur was due to the convergence of several economic and political trends:

• A boom in industrial equities had just finished, which often precedes a mining share boom.
• Nickel was in a bull phase, partly due to demand for the Vietnam War.
• Nickel was discovered south of Kalgoorlie.
• Inco’s Canadian operation went on a long strike.
• Many investors in mining shares could still remember the enormous profits made in the late 1940s in South Africa gold mining juniors.
• The United Kingdom had a capital gains tax on all capital gains profits made in less than 12 months.

REGIONAL EXPLORATION PLAYS

A new discovery in a previously unmined area made by a junior or independent mining company is often all that is needed to spark a new regional play. The stock of the original discovery company becomes the flagpole and the surrounding junior companies become the flags. The impact on the marketplace of a discovery made by a junior company is many times that of one made by a senior company. A Stikine, Hemlo or Voisey’s Bay discovery can take over and dominate the exploration market. Regional exploration plays do not alter the overall course of the market so much as they draw funds from it. In 1989, the then Vancouver Stock Exchange set new volume records due to the Eskay Creek gold/silver discovery. The price action on stocks involved in the area play caused the index to gain 120 points in a single month,while there were two new lows for every new high during the same month as investors and speculators dumped stocks not in the play to buy Stikine area stocks.

NEVADA’S REGIONAL BOOMS

Nevada, which today is responsible for 85% of US gold production, has seen at least four major mining booms; primarily as a result of new exploration techniques, new information technology and fresh and more scientific geological interpretation. Those four phases of renewed exploration ran from the Comstock Lode discovery in 1859, through to Newmont’s Carlin discovery in 1961.

Prior to the discovery of Carlin, very few exploration companies in the U.S. explored exclusively for gold, then in the mid-1990s, Newmont Gold, Freeport
Mcmoran and St. Jude were spun off from their parent companies to create pure gold mining and exploration companies.

The Carlin Trend, a mere 45 miles long and three miles wide, is rated second only to the Witwatersrand belt in South Africa.

In the late1980s,Newmont at its Post Mine pulled a drill hole that assayed at 470 feet of 0.93 ounces of gold and in 1987 Barrick had a drill hole that assayed at 620 feet of 0.30 ounces of gold. Prior to these discoveries, the Carlin Belt was known primarily for large, shallow low-grade oxide ore that was amenable to heap leaching.

GOLD AND PRECIOUS METALS WINNERS

“Euro Nevada is an owner operated company dedicated to the maximization of shareholder value.”

– Euro Nevada1991 Annual Report

To every stock market rule, there is an exception.Anybody following the conventional wisdom that all stocks in the gold and precious metals sectors should be avoided during a secular bullion precious metals market would have missed out on Barrick Gold, Franco-Nevada, Euro-Nevada and Goldcorp. An investment of $1,000 in Franco-Nevada in 1983 would be worth $1,250,000 by March 2004. Barrick Gold, in the past 15 years, is up over 100 times. It does, however, prove the value of the old investment maxim – that in a sector secular bear market one should “visit with the rest, but buy only the best”.

TRADING GOLD, PRECIOUS METALS AND MINING COMPANY WARRANTS

Like all call options, warrants are derivatives and therefore derive their value from an underlying instrument; in most cases this is a stock. Warrants are a fringe element amongst securities. They are essentially a form of call option with limited flexibility and varying degrees of liquidity and owe their origins to an issue underwriting of a stock or bond. They are also often used with an IPO or new bond issue to sweeten the pot so as to make the issue more attractive to investors.
As with all options, the name of the game is leverage; the opportunity to magnify profits beyond that of merely owning the stock outright. Leverage is, however, a double-edged sword, exaggerating the price movement of the underlying stock.Most warrants have very limited time frames; hence the risk of losing or receiving only part of your money back is far greater than if you bought the stock outright.  The best time to trade warrants is during the funding phase.

THE HISTORY AND TRACK RECORD OF CANADIAN TSE LISTED WARRANTS

Due to the fact that all warrants have a limited time frame or duration to expiry, their records survive only in the stock market archives. In the1980s and1990s, a mining secular bear market for precious metals, there were only a dozen gold and precious metals warrants listed on the TSE: one gold bullion warrant and a handful of base metal company warrants.

From their price performance records, we can derive several rules and guidelines for trading and investing in this extremely volatile sector.

One generalization we can make is that they either “go up or blow up”. Warrants can quite tidily be divided into successes or failures with few, if any, moderate gainers or losers.

TSE (1985 – 1995) GOLD, PRECIOUS METALS AND MINING WARRANTS

Total number of successes:          4 (Avg. gain from low to subsequent high: +1080%)

Total number that were flat:       1 (Avg. gain from low to subsequent high: 0%)

Total number of failures:            9 (Avg. decline from high to subsequent low: -83%)

Similar ratios of winners and losers have prevailed since the secular bull market in gold securities began eight years ago, but with more winners than losers.

The usual advice given to investors when a sector such as gold mining, biotech or warrants displays strong “binary action” is to invest in a diversified portfolio (“binary action” occurs when a few large winners or losers affect the overall average).

The essence of this strategy is to have one or two winners compensate for a large number of losers.

A more realistic strategy for sectors that display strong “binary action” is to limit purchases to those securities making new, initial all-time highs. New highs for warrants are almost always also new all time highs due to the short history of the investment instrument.

During the “funding phase” of the current secular gold bull market, there were a large number of underwritings and several IPOs with warrants attached.

SYNTHETIC DERIVATES EQUATION

As a leveraged alternative to straight bullion, equities, etf’s and royalty companies investors now have another viable option.

Derivatives equities such as Silver Wheaton give the investor the full leverage of commodity price increases combined with stable costs.

Many of the advantages of higher bullion prices for mining stocks over the past 5 years have been eroded by the escalation of capital and operating costs which problem many derivative securities avoid.

Base Metal stocks in a bull market can profit by vending off their precious metal revenues to raise capital by optioning them to companies such as Silver Wheaton and Gold Wheaton.

RULES FOR TRADING GOLD AND PRECIOUS METAL STOCK WARRANTS

• The warrants do not necessarily have to be liquid as long as the underlying security is liquid.
  
  
• Differentiate between institutionally placed warrants and those placed with individual investors. Many institutional investors and mutual funds do not offer their warrants for sale after a placement, regarding them as a way of reducing the cost basis and book value of the underlying securities. Large numbers of warrants in the hands of individual investors can place an upper lid or stall capital appreciation of the underlying security as investors sell the stock to finance the exercise of the warrants.
  
  
• A strategy of limiting purchases to those warrants breaking all-time highs has invariably been more rewarding than that of diversifying throughout a group of warrants. This is due to the fact that, overall, there are more losers than winners. By diversifying, the investor hopes to gain “more on the roundabouts than he loses on the swings”. As Peter Lynch describes it, diversification leads in reality to “diworsification”, or watering the weeds as well as the flowers.
  
  
• Almost all of the warrants that show large capital appreciation tend to appear, at first sight, to be trading at a substantial premium to their theoretical or underlying option value at the point of breakout. This characteristic is not always true on the Venture Exchange, where during the two most spectacular price appreciations of warrants during the “funding phase” of 2002, Canico Resource Corp. and Abington Ventures made 90% of their net appreciation after setting their initial all-time highs.
  
  
• Some of the best long-term warrants (e.g. Goldcorp) have been issued in gold bear markets.When considering purchases of such warrants in bear markets, one needs to look for time durations of at least two years.
  
  
• The vast majority of warrants issued on the Venture Exchange with large issue,
low priced units and large floats tend to expire worthless.

Funding Market PhaseCanadian Listed Warrants – December 2001 to August 2004
Volatility and Performance of TSX Listed Gold, Precious Metals and Mining Security Warrants

(Note: In the Liquidity column, T = Thin, M = Medium and L = Liquid)

(Note: The following warrants did not break out technically: Agnico-Eagle, Kinross, Newmont, Metalore, Thistle and Tournigan.)

BUYING AND SELLING GOLD AND PRECIOUS METAL STOCKS

“Buy on the cannons and sell on the trumpets.”
– Anonymous
“The buyer needs a hundred eyes, the seller but one.”

• Jacula Prudentum,1651

Most trading and investing can be broken down into two basic functions: First you buy (the easy part) and later you sell (the hard part). It is primarily about selection and election. You choose from an almost unlimited universe of potential stocks and then you elect whether to purchase, or alternatively, to sell an existing stock position to take advantage of a new opportunity.

Nearly all buys are made in a mood of optimism about the potential outcome.

Unfortunately, not all sells are made with the same emotion. When we sell at a loss, sales can be construed as a confession of error. There is a large body of traders and investors who would rather lose than reassess a purchase decision. If, on a regular and systematic basis, we reassess our reasons for purchasing a stock because new information is made available or we develop good reasons to doubt our original premise, then it behooves us to change our opinions and analysis by selling.

Many of us would prefer to buy at the bottom of a declining market and sell at the peaks but that is unrealistic and results in our buying too hastily and selling too
slowly. If precision and perfection are the standards, then almost every stock purchase and sale is flawed. In the market, close enough is good enough, or as Keynes expressed “it is better to be roughly right than precisely wrong.”

Publiliud Syrus, in the 1st century BC, advised us when entering into any enterprise “consider where you would come out.”

The buy and hold investor attempts to “buy right and then sit tight”. The trader/speculator’s philosophy is to “buy right and sell right.”

One trading axiom that applies very strongly to gold and precious metals stocks is to buy scarcity and sell surplus. In the early phases of a secular bull market for precious metals, there is only a small universe of active exploration, development and producing stocks.

Fresh demand is channeled into this limited universe and as the market progresses, the universe of stocks expands to dilute the potential buying.

The strategy we suggest for volatile gold stocks is to be a reactionary buyer (buy on a technical breakout) and to be an anticipatory seller. The logic of this strategy is based on the fact that most small cap gold stocks break out on an individual basis at different phases of the market, but almost all gold sector corrections affect the whole group. One rule of thumb is to sell on “sheet highs” – i.e. when a rash of new highs is followed by three or four trading days without new highs. As corrections tend to correct all gold stocks at once and can be very sudden and sharp, waiting for a technical sell signal can be very expensive. It is as though in the words of the nursery rhyme Ring around the Roses – “we all fall down together”.

Falling commodity prices can be a very useful signal of when to sell commodity based shares, such as gold mining securities, but are less useful as guides for bargain hunting or “bottom fishing” for value.

The failure of a market to follow through in the expected direction on major bullish or bearish news can be a useful sign of the end or termination of a trend and also a useful indicator of the risk for buying or selling a specific security. After all, nobody wants to wait to be a seller until the stock is in the cellar.

STRATEGY AND SELLING RULES FOR PRECIOUS METALS STOCKS

“Take care to sell your horse before it dies; the art of life is passing losses on.”
– Robert Frost
“If we are riding a dying horse, it pays to dismount.”
– Anonymous

The only way to both survive and thrive as a trader/speculator and to pursue as well as end the game profitably, is to “sell”. Almost every security bought will eventually be sold.

The gold stock trader needs to develop his own exit strategy, whether it is a prictarget or specific time duration, primarily based on the following criteria:

• Time frame duration
• Profit target attained
• Technical buy or sell signal generated
• Attainment of pivotal decision juncture
• Money management constraints
• Change in volatility
• Sector phase, rotation or events
• Greener pastures elsewhere
• Change in risk/reward ratios

In trading securities, sometimes the best moves are the ones that exit losses.After all, every 50% loss began with a 10% loss. A paper loss is still a loss, whether or not the trader recognizes it with a sale.More money has been lost by investors holding a stock they did not want until they could at least come out even, than for any other reason.

Selling too soon and overstaying a winner is the flip side of the coin. Selling too soon can be likened to pulling on the reins as the horse is leaping across a fence. There are worse things than leaving early, as the former residents of Pompeii would attest to. There are times when a good scare can lead to a good score. It is better to be “wrong and gone” than “long and wrong”.

• A good sale of a stock can be defined as one that:
• Avoids a decline
• Avoids the time/loss of money
• Exits underperforming stocks, sectors or countries
• Avoids a churning or sideways market
• Creates more funds for a better investment

SELLING RULES FOR GOLD AND PRECIOUS METALS STOCKS

Selling rules should be written in pencil, be flexible and be subject to change as markets change and develop.

• Always have an exit strategy plan backed up by a “what if” strategy.
  
  
• All sectors eventually become over-owned, over-loved and over-priced.When this occurs, “sell one, sell all”, to avoid overstaying the market sector.
  
  
• If overcommitted, sell down to a “sleeping point”.
  
  
• A good sale can be a good sale whether it gives you a small or large profit, breaks even or suffers a loss. It depends upon what happens to the stock after you sold it and to what use the proceeds of the sale are put and bears no relation to the original purchase price.
  
  
• Sell when you can, not when you have to – “He who will not, when he may, may not be able to when he must someday”.
  
  
• Never answer a margin call; the first call is never the last one. In other words, sell out the margin element of the account to cut your losses.
  
  
• When the gold sector shows signs of a temporary peak or seasonal correction, sell the “tall cotton” or speculative, overpriced stocks first. Strong winds tend to blow hard on high hills.
  
  
• Never sell merely because you think a particular stock is overpriced. Go against your own psychological makeup and sell your losses first.Most of the market’s biggest winners are stocks, such as silver stocks, that in a bull phase appreciate to several times any semblance of logic or fundamental value.Many sector bull markets are characterized by increasing price/earnings multiples and higher valuations.
  
  
• If key managers or geologists/engineers leave a company, consider leaving with them.
  
  
• Sell if the stock is not keeping up with its peer group within the sector. Whenever there is a large difference between the median and the mean appreciation in a given sector, it is more important to “ride the leaders” than to avoid the laggards.
  
  
• “Pigs at the trough”. When sitting on a large portfolio of gold stocks, in order to make way for new discoveries and rapidly growing gold companies, we sometimes have to push away some of the hogs feeding at the trough to make way for new entrants.
  
  
• Sell on the boundaries of technical trend patterns and take potential profits on rallies, so as to provide funds to take advantage of reactions.
  
  
• Never sell merely for fear that the market will take away a profit.
  
  
• Sell when there is no response to good news of exploration and expansion of reserves. Be prepared to go back into the same exited stocks once the market sector turns.

SELLING RULES AND EXIT STRATEGIES FOR JUNIOR GOLD AND PRECIOUS METALS STOCKS

In volatile resource markets, entrances tend to be wide and exits narrow in time.

Always keep an eye on the leader(s) for each phase of the market. When there is no money to be made from leaders, there is very little money to be made at all. In periods when gold stocks are volatile, market corrections can be extremely large and fast. In June 2002, when the first sell-off in the secular bull market in gold stocks occurred, many dropped as much as 40% in 5 to 10 trading sessions.

The trader /speculator needs to watch for selling clues, such as:

86 | Chapter Eight: Gold and Mining Stocks THE ULTIMATE GOLD STOCK TRADER

• Excessive or sub-contracted promotion.
• The company blames external factors for delays or cost overruns.
• Late filings and delinquency in financial reporting.
• Heavy insider selling.
• Decreasing reserves and grades.

There is an old mining maxim that holds true in practice, “good mines get better, bad ones get worse”. Goldcorp and Barrick Gold, for several consecutive years,
became better while Pegasos, TVX and Royal Oak went in the opposite direction. When it comes to bad news, the “Cockroach Theory” states that if you see one, there are sure to be more behind it and the “Centipede Rule” states that if one shoe falls, the others are likely to follow.

Throughout the secular gold stock bull market in the 1970s, each price/volume breakout of the index saw a retracement of 50% to 65% of the index gains. For this reason, we should aim to be reactionary buyers but anticipatory sellers of gold stocks.

JUNIOR AND SPECULATIVE MINING STOCKS

Small mining company shares have been likened to slot machines emptying the pockets of individual investors. Many of them have a short or fast history consisting of “up the staircase than down the elevator shaft”; up like a rocket and down like a stick.

While senior mining equities have historically been able to enjoy a life of their own with a reasonable level of independence from short-term commodity price
swings, junior stocks owe their very survival to metal prices. When commodity prices are low or declining, exploration funding dries up and few discoveries are
made. Unlike the oil business, many major mining discoveries are made by small and junior companies and, in the process, often open up new regions to exploration.

In a rational world, a discovery made by a senior company would be expected to have the same impact as one made by a junior. In the real world, a junior discovery has several times the impact on the mine financing and underwriting scene as a similar one made by a senior company. The discovery of diamonds by the Canadian junior company Diamet triggered not only a series of regional plays but revived diamond exploration on a worldwide basis. In a similar fashion, Diamondfield’s Voisey’s Bay discovery revived nickel exploration in Australia and South East Asia. There are several strategies that speculators pursue in choosing and timing the trading of junior mining securities.

• Buy structure, sell story. This is an especially boring, time consuming strategy but it can be very rewarding. It involves analyzing the insider share positions and their costs, the history of the stock, shares outstanding and float and the track record of management. If the management controls a large group of companies, the investor needs to determine where that company lies in the priority ratings of management.
  
  
• Although management is important, unlike the oil business, lightning does not always strike twice. Many good geologists and engineers spend their entire careers never finding or developing a deposit to successful production.
  
  
• Assessing the company’s track record of promotion. Many speculators will buy shares of a group merely on the basis that management has the ability to promote the shares.
  
  
• “Penny Arena” or “Penny Arcade” strategy. This strategy consists of buying a collection of low priced junior mining stocks that have declined substantially from their year highs, this is especially applicable to year-end seasonal trading. Many such securities decline in price as the exploration programs close down and then move up in price as the exploration programs draw near. This is a form of “bottom fishing”. The main aim of this strategy is to buy potential price appreciation, so that you make more on the swings than you lose on the roundabouts.
  
  
• In selecting such stocks, one should make sure that the stock is going to be a survivor. The attrition rate of de-listings and share consolidations can make “bottom fishing” very costly in money and time unless it is done with extensive
  due diligence.

PROMOTION AND STOCK SPONSORSHIP

“A promoter, a century ago, was defined as the person who smelled out deals and possibilities, cobbled them together and brought the package to investors for financing.”

• Robert Sobel, Market Historian

Every successful mining deal has to have a promoter or sponsor, just as every concert has to have an impresario; every movie, a producer. He is the individual responsible for coordinating and structuring the financing for the projects and cultivating a shareholder base. The promoter is sometimes the prospector, geologist, or at other times the mining engineer or financier. In most cases, he is the founder of the original company.

The basic raison d’etre or modus operandi of the junior resource market is the creation of value, not the trading of established value, as on senior exchanges. Even more important than to have ideas, is the ability to promote them.

In a universe of over a thousand resource stocks, information easily gets lost; the forest can overwhelm the individual trees. Unless a stock is able to trade volume on a regular basis, it is likely to go unnoticed by the majority of traders, speculators and investors. Most individual traders are unwilling to buy shares in a financing when there is no attempt, or management lacks the ability, to cultivate an aftermarket following with investors.

It is estimated that two-thirds of all individual stocks purchases are induced – i.e. the buyer is sold on the idea, as opposed to the purchase decision originating with the buyer. In the junior resource market, this figure is probably closer to 80% to 90%. Many junior stocks are formed with the basic intention of promotion, for its own sake. Like politicians, they create visions and dreams, but lack the ability and credibility to realize them. When investors have money to burn there will always be plenty of promoters with matches ready.

In the critical early stages of exploration activity, junior companies often lack formal brokerage sponsorship and a following by mining analysts. These companies have to rely upon promotion in order cultivate a following and an individual shareholder base.

Whenever an individual or company has a major exploration success, they are often able to capitalize on that success by forming a promotional organization or umbrella company to sponsor junior exploration companies on a steady, ongoing basis – e.g. The Hunter Dickinson Group and the late Murray Pezim’s Pezim Organization.

These can be classified as “mini-mining houses”; a sort of quasi partnership of promoter/financier /geologist, mining engineer and investor relations group, all under one roof.

The ultimate objective of these “mini-mining houses” is to be able to take a mining project from the grass roots exploration stage through to an advanced development stage, through to the point that the brokerage mining analysts follow the companies’ progress and to obtain institutional funding for project development. In North American junior markets, there are four basic types of successful stock sponsorship formats:

• Organizations headed by a promoter or promotional group, with technical staff working as employees of the company or as consultants.
• Organizations headed by technical staff, with the promoters as full-time
• employees.
• Organizations headed by fund raisers (financiers), with technical staff as employees or consultants and the promotion subcontracted out to a public relations media firm.
• Promotion by subcontract. Many companies are formed especially by technical people, who lack the personality or inclination to develop an investor following.

Such companies subcontract the promotion out to Investor Relations Media companies. The problem with this is that such contracts are of limited duration and can prove to be expensive. Once the media contract expires, the shares drift into illiquidity and oblivion.

Most successes have come from the organization headed by promoters. For many successful resource companies, the format has been to develop a following
among individual clients after having done the original financing and distribution through its own network of brokers.

Once a stock has achieved a certain degree of success in the field, it is then picked up by Canadian mining analysts (there are only a very few U.S. mining analysts). The stock, at this juncture, is then recommended to retail clients or to institutional accounts.

Reginald W. Ogden The Ultimate Gold Stock Trader

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This article is solely the work of the author for the private information of readers. Although the author is a registered investment advisor at Canaccord Capital Corporation ("Canaccord Capital"), this is not an official publication of Canaccord Capital and the author is not a Canaccord Capital analyst. The views (including any recommendations) expressed in this article are those of the author alone, and are not necessarily those of Canaccord Capital.

The information contained in this article is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it does the author or Canaccord Capital assume any liability. This information is given as of the date appearing on the article, and neither the author nor Canaccord Capital assume any obligation to update the information or advise on further developments relating to the information provided herein. This article is intended for distribution in those jurisdictions where both the author and Canaccord Capital are registered to do business in securities.  Any distribution or dissemination of this article in any other jurisdiction is strictly prohibited. The holdings of the author, Canaccord Capital, its affiliated companies and holdings of their respective directors, officers and employees and companies with which they are associated may, from time to time, include the securities mentioned in this article.