GOLD

SILVER

URANIUM

PLATINUM

PALLADIUM

OIL & GAS

BASE METALSFebruary 2014

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INSIDE...

Commodities: Light at the End of the Tunnel

Commodities investors may be forgiven for feeling a little glum. After all, the broad-based Dow Jones-UBS Commodity Index is down 11 percent over the past year. But Credit Suisse analysts think investors have reason to be somewhat hopeful going into 2014: While the asset class is unlikely to regain that lost ground in 2014, neither should it slump that much further. The performances of individual commodities are diverging, too, creating clearer bright spots and danger zones within each asset class. In such an environment, say Credit Suisse analysts, understanding specific supply and demand pressures will prove more important in 2014 than it has been in several years.

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Will Your Gold Juniors Make it to Summer?There has been a collective exhale as the mining sector began 2014, marching into the New Year with a strong up move in gold and high hopes of a recovery. Although there have been a few bright spots as gold reached $1,275 by January 26, the ‘bonfire of the juniors’ has yet to occur. Endangered companies fight tooth and nail merely to survive.

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Barkerville Gold Mines: To Commence Full Gold Production at QR Mill

$15 Million Financing Jump-Starts Expected 25,000 Oz. Au Annual Yield

...Page 7GOLD: Bad Year, Good Decade

Gold and silver prices dropped significantly in 2013. At the same time, most stock indices, especially in the United States, rose markedly. If an investor were to make decisions on the basis of only one year’s results, he or she would probably be in trouble. When analyzing trends over time, the time frame you pick can give you sharply different results... so, what will precious metals prices actually do in 2014?

...Page 15Commodities to Outperform StocksShawn Hackett: This is a time to allocate more capital to the commodities complex as it is almost certain that commodities will outperform stocks in 2014 by a large margin and should also outperform stocks over the next 3 years by a large margin.

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Resource Investor’s Investment Newsletter Digest

The wor ld ’s most success-fu l inves tment exper ts and analysts give their Top Stock P icks for Oi l & Natura l Gas stocks, Gold & Silver. Precious Metals Trends and Market Sea-sonalities.

...Page 6

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By Henry BonnnerSprott Global ResourceInvestments Ltd.

“These are sobering times,” Michael Kosowan told a Cambridge House audience in Vancouver on January 20th. Michael has worked for Rick Rule at Sprott Global Resource Investments Ltd. for 13 years and is now located in Sprott’s Toronto office. Like Rick, he has made a fortune for himself betting on contrarian ideas in bear markets… But Michael has a warning about 2014 in his speech below…

There has been a collective exhale as the mining sector began 2014, marching into the New Year with a strong up move in gold and high hopes of a recovery.

Although there have been a few bright spots as gold reached $1,275 by January 26, the ‘bonfire of the juniors’ has yet to occur. Endangered companies fight tooth and nail merely to survive.

There are just too many compa-nies out there with too little cash. According to John Kaiser, a mining analyst who has been following the sector for over 25 years, 1,025 companies out of a possible 1,770 trade below 10 cents a share while 817 of these companies have less than $200,000 left in capital.

So What’s Coming?The big crisis point could come

in April and May of this year when the audited financials must be filed with SEDAR. Credit that was extended in 2013 is unlikely to be extended in 2014, forcing management to dig into their own pockets which could precipitate a flurry of de-listings.

The current economic reality has fashioned a quality-control system, albeit somewhat crude and often brutal. The inherently weak or flawed juniors will likely be removed, leaving a leaner and fitter sector that will be easier to navigate. The very first to go will be the ones that never should have made it to the party in the first place - those built on dreams of a get rich quick scheme, usually by ambitious but misguided geologists

without enough experience.They will not be easily saved

through mergers and acquisitions either. Most seniors have frozen their M&A activity following an abysmal year of heart-wrenching write-downs and impairments.

The seniors remain timid and many will be licking their wounds for a while, even though the damage to their balance sheets is self-inflicted. Overall, they are not taking advantage of the lower prices to buy juniors; they are cautious and unaggressive this time around and are being decidedly more discerning when it comes to acquisitions.

The New Reality for Exploration

New finds are going to become ever more critical for the industry’s future, but exploration is becoming both more complex and costly. A combination of decreased funding and more difficult exploration targets makes it unlikely that we will see many new legitimate discoveries this year.

Should one occur, the resulting localized success will surely serve to baffle and confuse investors, who might interpret one exploration win as a signal that all juniors are moving up. In fact, some companies can be headed higher while most of the remaining companies continue their descent.

Get ‘Something for Nothing’

Nonetheless, some miners have taken advantage of this situation by extracting favorable terms from junior companies at extremely

competitive prices. We are seeing acquisitions made ‘at cost’ and not accounting for the expenses, headaches or risks that the company has overcome.

For example, B2Gold Corp. signed an agreement in October of 2013 to acquire Volta Resources Inc. The deal valued Volta at $63 million, which is approximately what the company spent on its drilling program that led to the discovery of a significant resource. B2Gold received the value of Volta’s success ‘at cost’ of drilling, not taking into account the risk taken on by Volta’s shareholders prior to the drilling program and the intellectual capital that went into the success.

Because investment in explora-tion was relatively low over the past two decades, there are few high-grade projects out there to be ‘scooped up’ by a major. As a result, there are buying opportunities in companies that are not glaringly obvious in terms of grade, size, and ease of extraction.

This also puts a higher premium on the ability to scrutinize and assess these projects. Even the better-looking projects, for that matter, need to be held to stringent scrutiny as the whether they make financial sense!

2014 will be the year of sobriety and bifurcation. The weak will simply not survive; many companies will disappear. These are very sobering times.

The sector is still being culled and a rise in the price of gold will not necessarily save them; do not bet on a high tide floating all ships this time around.

Selectivity is key, which means having the best information and keeping a close eye on developments in the sector. We should expect a lot fewer companies in the space after 2014, and even by the summer, so the months ahead could prove to be a highly determinant period for investors in the sector.

Editor’s Note: Michael Kosowan has recently moved to Toronto Ontario, where he has joined the Sprott Private Wealth team. Having worked alongside Rick Rule since 2000, he will now lead the investment advisory initiative for resource equities in the Toronto office.

Will Your Gold Juniors Make it to Summer?

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Commodities investors may be forgiven for feeling a little glum. After all, the broad-based Dow Jones-UBS Commodity Index is down 11 percent over the past year. But Credit Suisse analysts think investors have reason to be somewhat hopeful going into 2014: While the asset class is unlikely to regain that lost ground in 2014, neither should it slump that much further, says Ashley Kindergan writing in The Financialist, a publication by Credit Suisse.

Historically, it is the pace of global economic growth that has and should continue to be the most important driver of the price of metals, energy products and other commodities. And from mid-2012 until the middle of last year – when commodities were in critical condition – annualized GDP growth was running below its long-run average of 3.5 percent. But growth began reverting to its long-term average in the second half of 2013, and the year ended with an estimated 3.3 percent GDP increase in the fourth quarter. Commodity prices began stabilizing in the latter part of the year, too. In 2014, Credit Suisse’s economists expect continued, albeit modest, improvement in global GDP growth, with a forecasted increase of 3.8 percent. And that, they say, should result in flat commodity prices. “Over the course of this year, demand is unlikely to be either strong enough to push many prices materially higher, or to suggest a clear short,” the bank’s commodity analysts note in their most recent forecast of Jan. 6.

The first quarter could be a little rough going, as industrial production in resource-hungry emerging markets slowed at the end of last year. That has been particularly notable in China, where Credit Suisse’s own estimates show that the boost from a government stimu-lus program implemented last summer appeared to be waning by year-end. But by the second

Commodities: Light at the End of the Tunnel

half of 2014, the picture should start to improve. “Prices of many base metals in particular will come under pressure in the first quarter,” Credit Suisse Global Head of Product Research Ric Deverell said on a client call last week. “But then as we move into the second quarter, and certainly into the second half of the year, prices will stabilize and then move higher.”

One notable recent change is that the prices of commodities and equities have begun to move somewhat independently again, this after hanging together for much of the Great Recession. That temporary union was not an unusual one: During and after the biggest macroeconomic shocks in modern history – the Depression in the 1930s, or the oil shortages of the 1970s, for example – investors have tended to sell equities and commodities at the same time, for the same reasons. Fearing the knock-on effects of sluggish demand, they shed any relatively risky assets in favor of “risk off” assets, including cash. But as markets ease out of that panicked mindset, an asset class whose prices no longer correlate tightly with equities may once again start to look like a viable component of a diversified portfolio, Deverell

noted.The performances of individual

commodities are diverging, too, creating clearer bright spots and danger zones within each asset class. In such an environment, say Credit Suisse analysts, un-derstanding specific supply and demand pressures will prove more important in 2014 than it has been in several years. With that in mind, Kindergan reviews Credit Suisse’s forecasts for several commodities.

Oil: Bearish Outlook, But a Lot Depends

on GeopoliticsAnalysts are pessimistic about

oil prices in the coming year, and recently reduced their 2014 forecast on Brent crude prices by 8 percent to $102 per barrel. In the third quarter, they expect the price to break through the $100- to $120-per-barrel range it’s traded since mid-2010, to an average of $95 per barrel.

Much will depend on what happens in two countries that defy easy forecasting: Iran and Libya, both members of OPEC. Right now, the Iranian embargo is keeping 1.2 million barrels of crude out of the market, while nearly 1 million barrels are offline due to ongoing protests in Libya. Credit Suisse Head of Global Energy Research

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Jan Stuart forecasts that Libyan oil production could normalize by the end of this year, especially if a Feb. 14 meeting in Tripoli to draw up a new constitution goes well. Earlier this month, armed protesters at the El Sharara oilfield, which produces about 20 percent of Libya’s crude oil, agreed to call off disruptive demonstrations. Meanwhile, if Iranian leaders and the so-called P5+1 group – China, France, Russia, the United States, the United Kingdom and Germany – successfully negotiate a deal on Iran’s nuclear program this year, sanctions could conceivably relax enough to return 500,000 barrels per day of Persian oil to global markets.

Strong production in non-OPEC countries should put additional pressure on prices later this year. Stuart expects producers outside the cartel to ramp up production by 1.5 million barrels per day, with 1.16 million of those extra barrels coming from the United States.

Precious Metals: No Hope For Gold Bugs, But

Palladium a Bright SpotGold: Is anybody a gold bull

anymore? Prices of the yellow metal, after all, fell some 25 percent over the past year from $1,668 to $1,249 per ounce. And it’s probably not over yet, cautions Credit Suisse Head of Precious Metals Research Tom Kendall, who forecasts that prices will drop even further, to an average of $1,080 in 2014. Several different factors are at play here, too. With complete economic meltdowns sidestepped both in Europe and the United States, fewer investors are rushing into gold in preparation for a financial apocalypse. Nor, for that matter, is there much current interest in gold as a hedge against rising prices, since the inflation outlook in much of the developed world is extremely low. In addition, with interest rates rising in the U.S., yield-bearing investments are starting to look more attractive.

Some 85 percent of the demand for gold is either for jewelry or investment purposes – gold bars,

coins and gold-linked exchange-traded funds – as opposed to industrial use, Credit Suisse says. But Credit Suisse’s Kendall sees softening demand there as well, predicting falling demand for gold bars and coins, as well as a continuing selloff in gold-linked exchange-traded funds Restrictions on gold imports enacted last year in India, the world’s largest gold buyer, should also serve to constrain demand. Taking those factors into account, Credit Suisse forecasts an oversupply of 100

metric tons of the shiny stuff in 2014.

Palladium: The near-term future looks good for this precious metal, not because of any huge increase in demand among mak-ers and buyers of fine jewelry, but because of its more practical in-dustrial applications. Palladium is used in catalytic converters for gas-oline-powered vehicles and should benefit from rising demand for new cars in emerging markets, particularly China, and North America. Palladium prices should also get a supply-side boost, as Russia is reportedly running down its huge stockpiles of the precious metal and selling less into the market. All told, Credit Suisse expects the metal to sell at $760 an ounce on average in 2014, a 4 percent increase over the 2013 average.

Base Metals: Winners and Losers

Zinc : Credit Suisse expects this metal, which

is used primarily to galvanize steel, to be one of the key winners among industrial commodities this year. But that outlook is based less on an overall bullish outlook for steel demand than it is on zinc’s own supply/demand dynamics. In the coming year, the zinc supply should only grow by 1.5 percent, while Credit Suisse expects global demand to grow between 4 and 4.5 percent in both 2014 and 2015 – the result, the analyst says, will be an increase in zinc prices by some 8.9 percent

in 2014 to $2,100 per ton. Over the medium term, zinc prices should also enjoy some support from the mid-2015 closure of the largest zinc mine in the world, the Chinese-controlled MMG Century mine in Aus-tralia.

Iron ore: Iron ore, the main ingredient in steel, enjoyed strong demand in the second half of 2013, as steel production in China grew dramatically thanks to a government stimu-lus that included money for building railroads. But they don’t call them cyclical metals for nothing: with global supply

of iron ore expected to increase by 12 percent this year, Credit Suisse predicts that average 2014 prices will end up 18 percent lower than their 2013 levels at $111 per ton. Surprisingly strong demand out of China could save the day, but it would take another year of 9 percent growth in Chinese steel de-mand to keep the market balanced. Credit Suisse does not foresee that happening.

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ResouRce stocks: Gold, silveR & oil & Gas shaRes

Harloff’s THE INTELLIGENT FUND INVESTOR26106 Tallwood Dr., N Olmsted, OH 44070. Monthly, 1 year, $279. www.harloffcapital.com.

Gold prices to increase 20% in 2014Dr. Gary Harloff: “We are bullish on the S&P 500

and Nasdaq indexes. We are short bonds at this time. We have a new buy on gold. Now that the economy is growing and workers get wage increases, inflation will rise and so will go. We expect gold prices to increase by 20% in 2014.

In our portfolios we like Internet, semiconductors, wireless, Japan and technology.”

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KAPITALL WIRE, a division of Kapitall, Inc. 241 Centre St., New York, NY 10013. www.Kapitall.com.

These 3 gold stocks are gaining momentum but still look cheapJames Dennin: “Gold stocks are starting to

rebound after hitting a 30 year low, so we screened for growth plays in the sector.

Gold prices are falling again today, calling into question some analysts who argued that a rebound was all but assured given the metal’s 30-year low in terms of prices. However the US dollar has performed unexpectedly well this week, and the brief rise in gold prices last week dampened some demand in Asia.

As tapering begins, the dollar will (ideally) rise relative to other currencies, and traditionally this works against gold stocks. However, since tapering was expected to begin as early as last fall, it is possible that an end to the policy has already been factored into the price of gold.

So for investors who are assuming that the stock market isn’t about to make record-breaking gains again in 2014, gold could become a much more desirable asset class.

Investing IdeasWe decided to find gold stocks that might be

starting to rally. Gold and mining stocks often pursue other ventures, but the earnings of these stocks are still heavily tied to the price of gold worldwide. With that in mind we developed a screen on gold mining stocks looking for signs of momentum.

First, we didn’t want to include penny-stocks, micro-caps, or anything priced below $5. Already this made the list rather small, as many gold stocks have lost over 50% of their value this year.

Then, to look for signs of momentum we screened for stocks that are trading above their simple moving averages for the last 20 days (MA).

These are stocks whose current price is above the average price for the stock in the last 20 days. While all of these gains are modest, below 10%, they are still a possible sign that the company is recovering. And since we also wanted to make sure that these stocks were still cheap, we further limited our list to stocks

with a price-to-equity ratio below 20.Just three gold mining stocks remained on our list.Do you see investing opportunities in gold? Use

the list below to begin your own analysis.1. Alamos Gold Inc. (AGI): A gold mining

company, engages in the development, exploration, mining, and extraction of precious metals, primarily gold in Mexico and Turkey. Market cap at $1.54B, most recent closing price at $12.31. Trading 0.37% above its 20 day MA. P/E: 18.94.

2. Compania de Minas Buenaventura SA (BVN): Engages in the exploration, mining, processing, and development of gold, silver, and other metals in Peru. Market cap at $2.88B, most recent closing price at $11.39. Trading 2.06% above its 20 day MA. P/E: 8.9.

3. New Gold, Inc. (NGD): Engages in the acquisition, exploration, extraction, processing, and reclamation of mineral properties. Market cap at $2.66B, most recent closing price at $5.30. Trading at 4.82% above its 20 day MA. P/E: 13.25.”

Editor’s Note: Kapitall Wire is a division of Kapitall Inc. For more information visit www.kapitall.com.

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BI RESEARCHP.O. Box 133, Redding, CT 068751 year, every 6 weeks, $120. www.biresearch.com.

Palladium: Odds for increasing prices remain favorable

Thomas Bishop: “ETFs Physical Palladium (PALL) holds palladium in physical form, with the goal of tracking the price of the metal. Historically 70% of palladium usage goes to catalytic converters and auto sales are doing very well in the US and globally. Furthermore, in countries closer to the emerging end of the scale, now choking with pollution, like China, demand is also growing as the attempt to tackle this problem. However on the supply side, Russian stockpiles they have been feeding out for years are believed to have dwindled to almost nothing. Russia and South Africa supply approximately 80% of the world’s mined palladium, but almost always as a byproduct of mining either nickel or platinum. Each has its own set of issues, but the main point is that there are few if any sizeable primary palladium mines, so there is nowhere to turn to produce more palladium except to mine more platinum and nickel. So this is a very unique situation. Not much has changed here. The price of palladium has crept up from $717 last time to $735 currently as the price continues to defy what appear to be the factors that should make it rise. With auto demand strong around the globe, Europe coming out of its dark days, China growing at 7.7% (and choking in pollution), catalytic converter demand is only stronger, for now. However, rising interest rates could come into play with regard to auto demand. Meanwhile those supply issues remain. Overall the odds for increasing prices remain favorable – Buy.”

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Barkerville Gold Mines to Commence Full Gold Production at QR Mill this Spring

$15 Million Financing Jump-Starts Expected 25,000 Oz. Au Annual YieldChampagne corks will be popping

this spring when Barkerville Gold Mines (TSX.V: BGM; OTC BB Pink Sheets: BGMZF; Germany: IWUB) begins full-fledged gold production from its high-grade Bonanza Ledge open pit deposit, a major milestone that has been long in coming and is due in no small part to the perseverance of this British Columbia-based gold mining company’s stellar management team.

Completion within the next few months of an updated resource estimate on the company’s poten-tially massive gold deposit at Cow Mountain will likely produce even more celebration.

One thing about this junior mining company is becoming abundantly clear – Barkerville Gold has established a solid foundation for potentially spectacular growth as a mid-tier gold explorer and producer. Consider:

• Barkerville operates in British Columbia’s famed Cariboo Mining District that has two operating open pit mines (Taseko’s Gibralter Mine and Imperial Metals’ Mt. Polley deposit) and recently has attracted the New Gold exploration team. The district hosted a major gold rush in the mid-1800s and historically has produced more than 3.8 million ounces of gold.

• Barkerville’s holdings total nearly 500 square miles of leases and claims on four prolific gold-bearing belts, including the entire Barkerville Gold Belt with over 100 placer-producing creeks and seven past-producing mines.

• Gold mineralization targets controlled by Barkerville stretch along a 60-by-20 kilometer contigu-ous land package that encompasses several mountains with proven gold mineralization.

• The company has a resource of about 5 million ounces of gold, a number the company believes has the potential to be expand s igni f i cant ly with updated technical analysis and further exploration.

“Perseverance and lots of hard work can really pay off. After years of exploration and development, Barkerville is poised to move into the ranks of gold producers,” says Barkerville Gold Mines President and CEO Frank Callaghan. “We expect to continue to report major developments and exploration advances throughout the coming year.”

Bonanza Ledge Project to Lead Production Pipeline

The Bonanza Ledge high-grade gold deposit, which hosts a unique style of gold mineralization, is one of British Columbia’s newest permitted open pit mine deposits

and will become the first project discovered and brought into production by Barkerville Gold.

The Bonanza deposit is char-acterized by pyrite replacement within rock formations that previ-ously were not believed to host gold mineralization, a sharp contrast to the quartz vein-style gold deposits that occur more frequently in the area. Drilling assays confirm that gold is present to depths of 350 feet. Significantly, an NI 43-101 resource estimate calculates min-eralization to only half that depth. Given that grades range to as much as well over 1.0 oz of gold per tonne, Barkerville’s geologists un-derstandably now have a watchful

Barkerville Gold Mines’ QR Mine & Mill will begin processing ore in March from the Bonanza Ledge

gold deposit in British Columbia, ramping up to

an annual production rate of 25,000 ounces of

gold doré bars by the end of 2014.

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eye out for similar Bonanza-style deposits.

“The discovery of the Bonanza Ledge style of gold mineraliza-tion has broad implications for future exploration on Barkerville Mountain as well as within our other land holdings,” confirms Callaghan.

The project is fully permitted for production as an open pit mine, but because Bonanza Ledge is located on Barkerville Mountain’s southwest flank, mined ore must be transported 110 km to the company’s QR mill by truck.

The QR mill has a production capacity of 900 tones per day. The mill operated briefly 3 years ago, producing about 20,000 ounces of gold, but was subsequently shut down, largely because of declining gold prices. It was briefly put back into trial operation in 2013, processing ore stockpiled on site from the adjacent QR mine. Ore from the Bonanza Ledge project is expected to keep the mill operating for about four years. That mine life could be extended as additional gold mineralization is identified at Bonanza Ledge

Barkerville expects to produce gold initially at an all-in cost of approximately US$810 an ounce, leaving a comfortable margin for profit, even at today’s gold prices. Cash flow from the operation will be used to pay back a $15 million loan and offset future operating

and exploration costs.

Cow Mountain Drilling Program To Update Resource Estimate

Barkerville already is preparing to bring a second potentially massive project to production. Cow Mountain, located just to west of Barkerville Mountain, has an indicated resource updated in June 2013 of 1.04 million ounces of gold with an additional inferred resource of 3.94 million ounces of gold. The indicated resource estimate was based on 17.7 million tonnes grading 2.0 g/t, while the inferred resource total was based on 49.2 million tonnes grading at 2.74 g/t.

Additional exploration could significantly sweeten Cow Moun-tain’s profit potential. Barkerville is in the midst of planning a major drilling program. To date, more than 25,000 core samples have been sent to the independent AcmeLabs for analysis. Results will be used to update the Cow Mountain project database, upgrade the existing NI 43-101 resource and will play a part in developing a full economic assessment. Further drilling cover-ing another part of the proposed open pit mine is also planned.

Evidence of gold mineralization continues to the southwest, accord-ing to the Cow Mountain technical report. At nearby Island Mountain, Barkerville has identified explora-

tion targets where previous drill result grades suggest the promise of yielding yet more millions of ounces of gold. The company is quick, however, to stress that such estimates of potential resources are “conceptual in nature” and are subject to definitive exploration results.

Management Team Has Strong Exploration and Production ExperienceBarkervi l le Gold , led by

Frank Callaghan since 1991, is a recognized gold exploration and development company with proven assets and clear potential for growth. Over the past few decades, Callaghan’s team assembled and analyzed historic mining data, accumulated a massive property position, drilled over 600 holes to establish the presence of multiple deposits with significant potential, and conducted two pre-feasibility studies (QR Mine and Bonanza Ledge Mine).

Barkerville Gold’s management team includes highly experienced exploration and mining profession-als: Chairman Norm Anderson, a professional engineer and former President and CEO of Teck Comin-

Barkerville Gold Mines crew constructing haul road to QR Mill.

Barkerville President & CEO Frank Callaghan holds gold bar from 2013 trial production at QR Mill.

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co; Chief Geologist Jian-Zhao Yin, who has more than 22 years re-source sector experience including serving as mine manager, general manager, chief geologist and proj-ect manager for several Canadian, American and Australian mining companies; and Mine Manager Kevin McMurren, who has over 30 years of mining operations experi-ence, including as underground mines manager for Avion Gold in Mali where he brought two un-derground mines into production and started development of a third mine.

Investment Considerations

Barkerville Gold is about to enter the rarified ranks of gold producers, an achievement that few junior mining companies reach. It is impressive that Barkerville not only has a multi-million ounce gold project ready to be actively mined, but several other highly prospective mineralized deposits that could significantly expand the company’s bottom line.

Resource sector analyst Law-rence Roulston, believes Barkerville has “considerable investor appeal”

because of its “near-term gold pro-duction potential and large-scale resource potential”. He compares

the Barkerville resource to Osis-ko’s Canadian Malartic deposit in Quebec that is now profitably producing about 500,000 ounces of gold annually from a 10-million ounce deposit resource based on 310 million tonnes grading 1.01 g/t. Roulston notes that since Barker-ville has a grade “roughly twice the Osisko grade...” and says the resulting value “would make the BDG deposit an extremely attrac-tive ... for a large mining company.”

Intriguingly, Barkerville’s potential was also noticed by high-profile mining investor Eric Sprott, who recently loaned the company $15 million of his own money – enabling Barkerville Gold to complete the infrastructure renovations at its QR mill complex required to bring the plant up to full production status.

“It is exciting to see our efforts coming to fruition,” says Cal-laghan. “There’s lots going on. In addition to starting production, we’re planning an aggressive drill-ing program in 2014 to continue to develop more ounces of gold. We are confident we will reach our goal of Barkerville Gold becoming a mid-tier producer.”

Disclaimer: This material is for distribution only under such circumstances as may be permitted by applicable law. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. It is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. References made to third parties are based on information obtained from sources believed to be reliable but are not guaranteed as being accurate. Recipients should not regard it as a substitute for the exercise of their own judgment. The opinions and recommendations are those of the writers and are not necessary endorsed by The Bull & Bear Financial Report. Any opinions expressed in this material are subject to change without notice and The Bull and Bear Financial Report is not under any obligation to update or keep current the information contained herein. All information is correct at the time of publication, additional information may be available upon request. The company featured has paid The Bull & Bear Financial Report a fee to provide an investor awareness program. Management of the company has approved and signed off as “approved for public dissemination” all statements made herein. The directors and employees of The Bull & Bear Financial Report do not own any stock in the securities referred to in this report. The information contained herein may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding expected continual growth of the featured company and/or industry. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the publisher notes that statements contained herein that look forward in time, which includes everything other than historical information, involve risks and uncertainties that may affect the company’s actual results, developments, and business decisions to differ materially from those contemplated by any forward-looking statements. Factors that could cause actual results to differ include the size and growth of the market for the company’s products or services, the company’s ability to fund its capital requirements in the near term and long term, pricing pressures, etc. The Bull & Bear Financial Report is not a registered investment advisor or affiliated with any brokerage or financial company.

Barkerville Gold Mines Nearing Production

Left: Construction of Cross Dyke

Right:Decline Ramp

BARKERVILLE GOLD MINES, LTD.

TSX.V: BGM OTC BB Pink Sheets: BGMZF

Germany: IWUBContact: Investor Relations

15th Floor - 675 West Hastings St. Vancouver, BC V6B 1N2 Canada

Toll-Free: 800-663-9688 Phone: (604) 669-6463

Fax: (604) 669-3041E-Mail: info@barkervillegold.com

www.barkervillegold.comShares Outstanding: 109.8 million

52 Week Trading Range: Canada: Hi: C$1.00 • Low: C$0.39

U.S.: Hi: $1.64 • Low: $0.35

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ResouRce stocks: Gold, silveR & oil & Gas shaRes

THE DINES LETTERP.O. Box 22, Belvedere, CA 949201 year, 14 issues, $295. www.dinesletter.com.

Dines on Gold, Silver and BitcoinsJames Dines: “As “The Original Goldbug” we

have always favored the inclusion of some precious metals in long-term portfolios, to hedge against governmental debasement of paper currencies and/or a currency upheaval that is inevitable given the world’s current economic path. Owning gold and silver affects humans on such a deeply primal level that investing in those metals makes them exceptionally vulnerable to Mass Psychological cycles. Gold bullion rose for 12 consecutive years, from 2000 to 2012, an investment feat that was unique in the world.

Our view was that gold’s sustained strength was due to the fanatics at the Fed suppressing interest rates to virtually zero, so investors choosing between bonds or gold could choose the yellow metal despite its lack of income. We have been predicting that interest rates were going to rise, and even the Fed is finally giving up in the fifth year of its failed policy. Money is thus flowing out of gold and silver metals to the stock market because the latter’s dividends appear to be increasingly secure these days. An ocean of capital is also flushing out of the bond markets into common stocks, due to historically low bond yields.

When we foresaw the above changes in recent years, we lightened up on gold and silver substantially. The exception is gold coins, tangible, beautiful, family heirlooms, and held in the high investment esteem once reserved for owning a home. Someday there will be an investment buying stampede into gold coins.

Gold and silver mining shares are a separate category, and have not been doing well, obviously because of lower gold and silver metal prices. Especially gold miners, despite out insistence we are at “peak gold,” believe the unbelievable or not. The yellow metal has been hunted by humans for millenniums and, when the Siberian tundra melts, there will surely be additional discoveries there. Nonetheless, our view is that the bulk of this planet’s gold has already been found. Indeed, miners must already process 2,000 pounds of earth from which to extract one gram (a paper clip) of the yellow metal. Considering the high cost of processing all that soil, many mining companies have been slashing expenses and going into hibernation to await the next gold and silver cyclical upturn.

Yes, cyclical, but not exactly. Therefore the proper approach to the current gold bear market is not to get demoralized, but to prepare to buy golds and silvers from those who are. Ever deceptive, gold’s flying leap last summer was a bull trap. We identified it as such at the time and refused to take the bait. We are still

on a near-term “Sell,” but groping for the real Bottom Formation. We give no guarantees, but we will try to get back in near its nadir. We suspect, but are by no means certain, it would be camouflaged by a general rise in the entire Raw Materials Sector.

Gold’s premier investment attraction is its unique status as money without any counterparty risk, with portability, leaving no tracks, fungibility, and – above all – its historic integrity over paper lasting many centuries. Gold’s only weakness was the annoying habit of ancient emperors rubbing a bit off the edges of gold coins for themselves, so that designs had to be etched around their edges that would promptly

reveal such embezzlement.Another factor that might be

affecting gold is bitcoins. As “The Original Restructuring Bug,” we perceive bitcoins as a restructuring of the worlds corrupt paper money system, a novel use of digital technology. Incorruptible, beyond the reach of government taxes and embezzlement, avoiding numerous fees from credit cards and banks, bitcoins represent pure commerce replacing barter the way money was original intended. Governments are aghast at this bitcoin upstart, unable to grab a piece of its action, and

are reduced to blaming it for money laundering by criminals and drug traffickers. The so-called “War on Drugs” is why President Obama has refused to have the federal government legalize marijuana, even though he himself has admitted to having tried it. Why? In our view governments need a so-called War on Drugs to get more power, even though Colorado’s citizens began legally buying marijuana just this month. Illegal to federal, but legal to states, the overlay of hypocrisy cannot long stand.

The War on Drugs is also needed as the excuse to tighten borders so as to someday block escape while increasing its intrusive powers toward a police state in America and elsewhere. Same for the so-called “War on Poverty,” begun by Lyndon Johnson on 8 Jan 1964 and which 50 years and $20 trillion later, with the percentage of those living in poverty remaining around 15%, has failed to bring the self-supporting of the poor to fruition. They should try capitalism by slashing taxes.

We doubt governments have fully realized yet how bitcoins menace their greedy power. Even ex-Fedhead Greenspan, the single worst official in all of American economic history, declared the bitcoin has “no intrinsic value,” overlooking the paper money without intrinsic value he overprinted that got him knighted in England. Gold and silver alone have intrinsic monetary value, covered in depth in our Goldbug! book.

So, are bitcoins a good investment? They sure have been in the past. Our chart shows their mind-blowing rise of 12,420,000%! But we have two hesitations about

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them. First, computer geniuses and bitcoin enthusiasts insist their code is “unbreakable,” but batteries of supercomputers have already been broken by China’s cyber army to steal heavily-guarded American military secrets. (Perhaps also perpetrated by some kid snowbound in a Ukrainian village?) Were we not assured about the security of our data, until Edward Snowden whistle-blew that snooping governments had broken into everything we do? A quantum computer might be trustable, but that technology has not yet been developed. We don’t truly know how safe bitcoins are, but they are the world’s biggest honeypot, and in an age where robbers have switched from banks to taking over entire countries, bitcoins are surely being studied by drooling geeks worldwide.

Our second question concerns government suppression against “counterfeiters.” Personally, with their jealously-guarded currency monopoly at risk, we’re amazed that governments have left bitcoins relatively unscathed. But we would be shocked if they kept allowing them to become meaningfully larger, and could make using bitcoin a felony. Or, for example, last month China stopped its main financial institutions from using virtual currencies – sending the bitcoin price plunging. Other countries are considering doing likewise, including the European Banking Authority. We are not yet convinced that bitcoin acceptability is certain.

While we still favor gold and silver for the safety portion of your assets, perhaps use an appropriately small enough amount of your “Las Vegas Money,”

depending on your risk profile, to buy a small amount of bitcoins to see what happens as the situation unfolds. Adding it to your gold holdings as another currency hedge.”

Editor’s Note: Goldbug! is Mr. Dines’ third and final book on gold since he became “The Original Goldbug” at $35/oz. It’s everything you always wanted to know about gold, but didn’t know whom to ask. $88 plus shipping and handling, $6 US, $20 Canada, or $24 International. Available at www.dinesletter.com.

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The Peter Dag PORTFOLIO STRATEGY & MAN-AGEMENT, 65 Lakefront Dr., Akron, OH 44319. 1 year, 24 issues, $389. www.peterdag.com.

Market is negotiating a topGeorge Dagnino: “It is important to recognize

that commodity futures indices includes precious metals and energy. One index we follow closely is the CRB industrial commodities index (spot prices). The first one is influenced by the trend in energy and precious metals. The second one reflects only those commodities most needed to manufacture goods.

The reason we mention this difference is because the CRB raw material spot index has been increasing quite sharply, confirming the manufacturing sector has been improving. The futures index, instead, remains in a downtrend.

Gold and the dollar. Gold remains in a bear market. The dollar is strong relative to the Yen but weak relative to the Euro.”

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INCOME PERFORMANCE LETTERP.O. Box 383, Williamsport, PA 17703. Monthly, 1 year, $199. www.leebincomeperformance.com.

Targa benefits from NGL strengthGenia Turanova: “IN December, we heard from

Targa Resources Partners (NGLS) that, in a joint venture with Kinder Morgan Energy Partners, it plans to construct a new NGL (natural gas liquids) fractionation facilities at Mont Belvieu, Texas. This is good news and indicates new avenues of growth for Targa as new facilities would provide services for producers in the Utica and Marcellus Shale resource plays in Ohio, West Virginia and Pennsylvania.

We think Targa will benefit from this and other new investments, including its recent expansion into the Bakken Shale via its Badlands acquisition, aided by improving NGL prices and margins which should ultimately be reflected in its distribution growth. The Badlands acquisition, completed a year ago, is of approximately 155 miles of crude oil pipelines, and located in the heart of the oil-rich Bakken Shale play. The business also has combined crude oil operation storage capacity of 70,000 barrels, approximately 95 miles of natural gas gathering pipelines and a natural gas processing plant.

Back in August, Targa Resource Partners reported somewhat disappointing second-quarter results, with adjusted EBITDA declining from the first quarter because of lower NGL prices and some operational issues. But these problems have since been resolved, and NGL prices have recovered. Consequently, third quarter results reported in November were better, a positive indication. The MLP commissioned two large expansion projects, and seen strong volumes and margins.

Targa is an MLP poised for growth, and its recent strong record of distribution growth demonstrates its leverage to the economy.

Targa Resources Partners LP is poised to benefit from strong NGL and propane environment and remains a buy.”

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KITCO NEWS, Market Nuggets, a daily column providing up to the minute coverage on the pre-cious metals sector at www.kitco.com.

CIBC: Better days ahead for goldNeils Christensen: “Analysts at CIBC are expecting

long-term U.S. real interest rates to revert to their 50-year average of 2.5%, which could be good for gold prices in the long term. “Rate increases in early 2014 could put pressure on gold, but once stable, we believe the prospects for gold prices improve considerably with bullion historically gaining (about) 2% per quarter (in) this type of environment,” the bank says. “The market appears to have priced in significant

downside to the gold sector, ignoring potential positives, such as strong physical demand (such as) consumer and central bank buying, continued stabilization in gold ETF (exchange-traded fund) demand, and tighter supply.”

BMO Lowers 2014 Gold Forecast To $1,250, Cites Stronger Dollar

Debbie Carlson: “A stronger U.S. dollar will weigh on gold values in 2014, BMO Capital Markets said in a recent research note, lowering its average gold forecast price to $1,250 an ounce from $1,275.

BMO left its 2014 forecasts for silver and platinum unchanged. For 2015, it raised its forecasts for silver and palladium, but left gold and platinum unchanged. The firm said it hiked its 2015 silver forecast “to reflect stronger (industrial) demand expectations from the U.S., as well as further cuts to mine supply forecasts from primary operations.” BMO upwardly revised its 2014 palladium forecast, saying mid- to long-term prices reflect a significant deficit market and it wants to retain a two times platinum to palladium ratio. BMO is also positive on longer-term platinum prices because of a strengthening South African rand.

In addition to forecasting average 2014 prices for gold at $1,250, BMO forecast an average silver price of $20.50 and platinum at $1,400. For palladium, the new forecast is $750, up from $700. Their 2015 forecasts for gold and platinum are unchanged at $1,200 and $1,500, respectively. Silver’s 2015 forecast is now $20.50, up from $20, and palladium’s forecast is now $750 versus $700.

Although gold and silver prices seemed to have a “tumultuous” year in 2013, BMO said the intra-year price range was not particularly wide when looking at a 20-year historical average. Additionally, the firm said the platinum and palladium price fluctuations appear to have abated.

“Event risk always remains, but given the prospect for synchronized global growth – precarious as it is – in 2014, BMO Research expects precious metal prices to remain within a tighter range than historically. However, for gold and silver, a downward trend is forecast due to expectations for a strengthening U.S. dollar,” they said.

BMO said they expect 10-year U.S. Treasury note rates to rise, but inflation to stay muted and added that gold-price declines were most notable when real rates are rising from negative areas. Silver values could remain under pressure from a strengthening U.S. dollar, but the metal could outperform gold toward the end of the year if industrial demand improves as expected, they said. PGMs are expected to perform well in 2014 as both platinum and palladium are in a supply deficit.”

UBS Sees Floor For Platinum Around $1,300/Ounce

Allen Sykora: “UBS sees a floor around $1,300 an ounce for platinum, which has tumbled on investor liquidation lately despite a continuing strike against

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South African producers. “Given the degree of selling that has already besieged platinum over the past week, positioning is now much cleaner and so we expect limited longevity to the current mood,” the bank says. “Additionally, there is no South African premium built into the current platinum price – most likely due to producers estimated six to eight weeks of inventory – so the metal should be unresponsive to any resolution. Indeed, the risk of an escalation exists should threatened strike action at Amplats’ refining and smelting operations escalate. Wider market risk appetite over the next few days will do a lot to determine platinum’s next $50 move. We suspect that direction will be up, rather than down.”

HSBC: Gold May Have To Rely On Equities For Near-Term Support

Allen Sykora: “Gold may have to rely on equities for support since recent Federal Reserve comments hinted at more tapering of quantitative easing, says HSBC. The near-term outlook for gold looks uninspiring. HSBC cites comments by Chicago Fed President Charles Evans saying that only a sharp downturn or unexpected rise in inflation could force the Fed to pause or speed up tapering. Analysts say these comments were similar to those made by Richmond Fed President Jeffery Lacker, who indicated the Fed will probably keep reducing asset purchases at its current pace and that it would be hard to make the case for a pause in tapering. “This apparent Fed reaffirmation of tapering is at the least a mild negative for gold,” HSBC says. “Also with China still out of the market due to the Lunar New Year holidays, there is not much to support gold prices, unless equities resume a downtrend.

Based on light volume and few other influences, we believe equity direction and in particular U.S. equity direction may be the main influence on gold until the next U.S. monthly unemployment release. Any significant drop in equities could trigger renewed gold purchases. This is gold’s best chance for a near-term rally, we believe.”

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THE COMPLETE INVESTORP.O. Box 248, Williamsport, PA 17703. Monthly, 1 year, $199. www.completeinvestor.com.

Commodities, unrevisedStephen Leeb: “One problem common to many

economic indicators, from unemployment data to GDP growth, is that they’re frequently revised. That’s not the case, though, with one of the oldest sets of data published by the Bureau of Labor Statistics: the crude materials core producer price index.

This broad-based commodity index, which we follow closely but which generally receives scant attention, measures the average price U.S. producers have received at home and abroad for their output of unprocessed commodities. Because it summarizes actual prices paid on the market, revisions are not an issue. And since prices depend largely on how available the commodities are, the index provides one of the best ways to assess the supply side of the resource equation, with high prices indicating growing scarcities.

Like many other indices, crude materials core PPI dropped sharply in the wake of the financial crisis, shedding more than 42 percent of its value from its peak in July 2008 through March 2009. But though the index fell below its pre-crisis level, the 12-month moving average dipped only slightly since rallying to an all-time high in 2010, and it remains above 2008 levels. Using the moving average smoothes out seasonal swings and shorter-term volatility to reveal the longer-term trends.

The strong post-crisis recovery in the index came despite considerable headwinds in Europe, which is still struggling with high unemployment, and in the U.S., where the recovery has just recently started to pick up some steam. This suggests that the modest dip since 2010 reflects sluggish demand rather than an end to the long-term uptrend in commodity prices. As growth continues to pick up – in Japan and China as well as Europe and the U.S. – rising demand for manufactured goods should translate into renewed uptrends in commodity prices.

One major beneficiary of a scarcity-driven bull market in commodities should be Income/Value Portfolio’s BHP Billiton (BHP), which offers investors diversified exposure to aluminum, base metals, iron ore, and coal. And its healthy 3.7 percent dividend yield is a nice safeguard in the meantime.”

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S. A. ADVISORY4700 S Holladay Blvd, Salt Lake City, UT 84117. 1 year, 8-12 issues, $250. Phone Service, 1 year, $2500, (801) 272-4761.

Stock Pick 2014: Marquee EnergyWilliam Velmer: “Marquee Energy (CVE: MQL).

A small and rapidly growing light oil and gas E&P drilling in southern Alberta, Canada. The company recently purchased additional acreage and production within their core “Michichi” holdings. The current exit estimates for 2013 are 4500 BOE/D and early estimates for 2014 exit rate is a round 5100 BOE/D. After the recent asset purchase and “Flow Thru” there are 84 million shares fully diluted and outstanding. Management has issued cash flow estimates of .46/share or 1.6x CF/Share for 2014 (very cheap valuation).

At present P1+P2 (NPV 10%) equals around $254 million and exit debt for 2013 or around $64 million. At present MQL trades @ only 1/3 NAV (very cheap metric). MQL for it’s size has a huge stable of drill sites with very seasoned management. The core acreage has over drill 160 sites!

We believe that management will engage the investment community during early 2014 in order to expand market awareness in all of North America,, which in our opinion, will dramatically enhance the share price!

Another cheap metric based on Marquee’s exit rate of 4500 BOE/D id the “price/flowing barrel of only $28K/barrel. This value when compared to its peers indicate another example of just how cheap Marquee Energy shares are trading and just how undervalued it is!

We believe that Marquee Energy (www.marquee-energy.com) could easily double or triple from current levels just based upon greater awareness because of the company’s very cheap metrics. The company could be a candidate for a “Big Fish” looking for cheap assets and production. If you are looking for a super cheap junior oil with huge upside potential and limited downside risk you came to the right place.”

Editor’s Note: This service is for the serious investor. Sign up for free email alerts at www.saadvisory.com. Subscription information, (949) 922-9986.

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ENERGY & INCOME ADVISOR, Capitalist Times, LLC 717 King St., Ste., 205 Alexandria, VA 22314. A semi-monthly online newsletter, 1 year, 24 issues, $999. Quarterly, $299. See Special Offer below.

“Buy” on Canadian Energy stocks ARC Resources and Enerplus Corp.

Elliott Gue: “Canadian producers have shifted their drilling activity to liquids-rich basins that produce meaningful volumes of NGLs and crude oil-products that offer superior margins. In fact,

several upstream operators that we cover have ceased sinking new wells in plays that primarily produce natural gas.

Albeit unsustainable, this seasonal improvement in natural-gas prices represents a welcome development for exploration and production companies.”

In his International Portfolio, Elliott Gue lists current buy targets and assessments of more than 70 dividend-paying Canadian energy stocks. Below is commentary on ARC Resources and Enerplus Corp.

“ARC Resources (TSX: ARX, OTC: AETUF) has allocated 77 percent of its planned CA$915 million in 2014 capital expenditures to growing its output of high-value NGLs and crude oil.

Through the first three quarters of 2013, natural gas accounted for more than 60 percent of the company’s total production, with the majority of these volumes coming from its prolific resource base in British Columbia.

Low production costs mean that ARC Resources has turned a profit consistently, despite the precipitous decline in natural-gas prices over the past five years. Management expects output from the fields to increase by 20 percent over the next 12 months.

ARC Resources’ stock rallied almost 14 percent in the fourth quarter, fueled by improving natural-gas prices. Buy ARC Resources up to US$28.00 per share.

Enerplus Corp (TSX: ERF, NYSE: ERF) issued an encouraging production forecast that calls for the firm to increase its hydrocarbon output by 10 percent in 2014 while trimming its operating and administrative costs for the second consecutive year.

In June 2012, Enerplus slashed its dividend in half because of depressed natural-gas prices and cumbersome debt levels. Since this unpopular but necessary move, the company has reduced its borrowings, opting to fund capital expenditures from cash flow and asset sales

Management’s guidance calls for Enerplus to achieve an adjusted payout ratio (dividend obligations and capital spending as a percentage of cash flow) of 120 percent in 2014.

This conservative projection assumes average WTI prices of $92.80 per barrel, Western Canada Select prices of $67.80 per barrel and Clearbrook prices of $82.80 per barrel for crude oil from the Bakken Shale.

The company has hedged about 51 percent of its anticipated oil output in 2014 and 29 percent of its natural-gas production.

Although energy prices can shift dramatically in a short time frame, the company’s guidance for an all-in payout ratio of 120 percent appears to be overly conservative – a good sign for dividend sustainability. Buy Enerplus Corp up to US$18.00 per share.”

Editor’s Note: Energy & Income Advisor is dedicated to uncovering the most profitable opportunities in the energy sector, from growth stocks to high-yielding utilities, royalty trusts, master limited partnerships and other income-oriented fare. Editor Elliott is offering readers, for a limited time, a one year subscription for $649, a savings of $350. A quarterly subscription for $194, a savings of $105. To subscribe, call 1-888-960-2759 or visit the website at www.EnergyandIncomeAdvisor.com.

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“A number of major global banks have released their 2014 precious metals price forecasts. In near unanimity, they proclaim that prices will be weak or, at best, largely unchanged,” says Patrick Heller writing in Numismaster.com.

“On the other hand, demand for physical gold exceeds global mine output and recycled supplies – even before some mines cut output because current low prices do not cover production costs.

So, what will precious metals prices actually do in 2014? The one thing I can say with 100 percent certainty is that they will – fluctuate.

There are several of what I call financial oxymorons that might or might not have significant impact on the overall economy this year, which would then have impact (or not) on precious metals prices. Here are just a few of the confusing financial statistics.

1. The U.S. government keeps trying to pretend that the U.S. economy is recovering. If so, then why did the U.S. Bureau of Labor Statistics report last Friday that the percentage of working age Americans who actually had a job was at the lowest percentage (62.8 percent) since 1978?

2. In the same jobs report, the BLS claimed that the unemploy-ment rate in the U.S. had fallen dramatically from the previous month, to the lowest level since before President Obama assumed office. At the same time the BLS also reported the highest number of working age Americans, more than 90 million, who did not have a job.

3. Further, if the lower unem-ployment rate were accurate, there should be no need to advocate for an increase in the minimum wage law or for a renewal of the extension of federal unemploy-ment benefits. Yet many members of Congress are pushing for one or both of these measures.

4. During an economic recovery, interest rates normally rise as businesses compete for funding. Yet the Federal Open Market Committee claims that interest rates must be kept low at least

through at least the end of 2015 because the economic recovery isn’t really happening.

5. More than one news com-mentator recently claimed that Federal Reserve Board Chair Ben Bernanke’s program of inflation of the money supply (disguised by calling it “quantitative easing”) is largely responsible for the alleged economic recovery. At the same time, commodity guru Jim Rogers this month called it a probability that the Federal Reserve will dis-appear in the next decade because “People will realize that these guys have led us down a terrible path.”

6. If America’s banking system was so strong then why is the U.S. government planning to seize funds out of the accounts of a bank’s customers, even those covered by “FDIC insurance,” should that bank get into financial difficulty?

I could go on, but I think you get the idea. Many in the media report contradictory news without asking any probing questions. Yet the true state of the economy, whether it is good, bad, or indifferent, will eventually affect precious metals prices, no matter how the current

news coverage is slanted.Gold and silver prices dropped

significantly in 2013. At the same time, most stock indices, especially in the United States, rose markedly. If an investor were to make decisions on the basis of only one year’s results, he or she would probably be in trouble. When analyzing trends over time, the time frame you pick can give you sharply different results. Here is a stark example:

Asset or Index Change Change for 1 year for 14 years ended ended 12/31/13 12/31/13

Gold -28.2% +317.0%Palladium +0.9% +61.4%Platinum -11.4% +220.2%Silver -35.9% +257.5%DJIA +26.5% +44.2%Nasdaq +38.3% +2.6%Russell 2000 +37.0% +130.5%Standard & Poor’s 500 +29.6% +25.8

Editor’s Note: Patrick Heller is editor of Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects, published by Liberty Coin Service, 400 Frandor Ave., Lansing, MI 48912, 1 year, $159. For more information visit www.libertycoinservice.com.

Gold: Bad Year, Good Decade

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Conrad’s UTILITY FORECASTER, Capitalist Times, LLC 717 King St., Ste. 205 Alexandria, VA 22314. Monthly, online, 1 year, $199. See Special Offer below.

ONE gas and ONEOK: Dividing to conquer

Roger Conrad: “Oklahoma Natural Gas Company has provided regulated gas distribution service to Tulsa, Oklahoma since 1906. Today, successor company ONEOK (NYSE: OKE) serves 2.1 million customers as the largest gas utility in Kansas and Oklahoma, and third biggest in Texas.

ONEOK’s real growth, however, is in highly profitable gathering, processing, storage and transportation assets. These it owns primarily as general partner of ONEOK Partners (NYSE: OKS), of which it also owns 41.3 percent of the common units.

ONEOK is up 20 percent since becoming a charter member of the Conservative Holdings last July 31. And it’s made roughly 520 percent since November 2004, when I first recommended it in my former publication. Only now, however, will investors begin to get the real payoff from management’s success over the years.

The key catalyst is the spinoff of regulated utility operations into ONE Gas (NYSE: OGS), a move now blessed by regulators and set to close in the next few weeks. Shareholders will receive one share of ONE Gas for every four of ONEOK in a tax-free transaction. The ONE spinoff will take place on Jan 31 to shareholders of record Jan 21.

Coupled with the windup of remaining energy services operations in April, ONEOK will then become a pure play GP. The dividend will jump 53 percent to an annual rate of $2.33 per share, with 10 percent boosts in 2015 and 2016. That’s funded by capital spending at ONEOK Partners through 2016.

One Gas starts out with an extremely strong balance sheet, including virtually full funding of pensions and cash flow coverage of projected capital spending. Regulation is quite supportive. Revenue is 92 percent residential with 70 percent based on fixed charges. That strictly limits the risk to competition, commodity price swings, rate case filings and even weather.

Management projects 5-6 percent annual rate base growth from efficiency spending and customer additions. That’s conservative but it’s plenty for 4-6 percent profit growth to fund 5 percent annual dividend increases.

ONE Gas fits the perfect profile for a Conservative Holding, and will be when the spinoff closes. ONEOK is a buy on dips to 60 or lower, as well as any time through its dividend reinvestment plan.”

Editor’s Note: Roger Conrad has provided in-depth analysis of the utility sector to individual and institutional investors for more than 20 years. Conrad’s Utility Investor is your complete guide to building a lifelong income stream from stocks that provide essential services.

For a limited time, Roger Conrad is offering readers a 1 year subscription for $89 – a savings of $110.

GOLD COMMENTARY, Kenneth J. Gerbino & Co., 9595 Wilshire Blvd., Ste. 303, Beverly Hills, CA 90212. www.kengerbino.com

Positive indicators for gold and gold mining shares rally

Ken Gerbino: “Currently the mining shares are still selling at near record discounted values with the gold price in the $1220 range. At this point, even a sideways gold price could support a major rally in the gold mining shares.

North American gold shares are 43% undervalued based on the current gold price vs. the value of proven and probable reserves. Since 2001, any discount below 30% has signaled a major rally in the mining shares. Higher gold prices will then be another important driver to force values higher. Mining companies that have strong growth patterns and lower cost production profiles will have these items also as positive drivers of their share price.

Sea Change in the Mining IndustryAs investment funds flooded the industry in the

2004-2008 period, many companies made a strategic choice and became growth conscious in terms of ounces produced and not profit conscious. Therefore there was a big push towards large tonnage deposits that had lower grade (richness per tonne) gold. These massive capital intensive projects sometimes requiring $2-5 billion in starting capital became the main focus of the larger companies. As many of my articles in the past have stated, the most important item to look at in a mining deal besides the management is the grade of the ore.

Low grade deposits create an environment where if anything goes wrong the project can be in trouble. High grade deposits make even bad management look good because the rock is so rich in gold (and profitability) that cost overruns in the engineering of the mine plan and processing plants are absorbed by so much more gold being recovered per tonne. Some of these mega projects have been put on hold in various parts of the world and many are basically on stand-by until the gold price recovers.

Today it now takes 9-12 years from discovery to production of a typical large mining project. This is much longer than years ago when I can remember a 6-7 year ramp up. What this means is that a significant sea change has occurred in the precious metal industry. During a period of time when the global money supply has exploded (when compared to historical averages) and banks are more overleveraged than in any previous decade, the availability of real money (gold and silver) is going to be curtailed dramatically in the future by a slowdown in mine supply. At the same time the forces at play that make investors and savers want to own precious metals continue to march onwards unabated.

AsiaThe Shanghai Gold Exchange is now in full gear

and in just the first six months of 2013 physically

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delivered more gold than all the U.S Commodity markets combined. The amount equaled almost 40% of the entire world’s mine supply!

This is a sign of growing Asian demand that is expected to continue.

Bullion Dealers Hustling For GoldAnother major underlying fundamental to the gold

supply and demand equation is something called the Gold Forward Offered Rate.

This is not understood by many but it is an essential part of the trillion dollar gold industry. In simple terms it means the following: If someone wants to borrow $1 million from a bullion bank, the bank lending the person money will charge interest on the loan as is customary. But in this loan scenario if the borrower would put up gold as collateral for the loan the bullion bank will actually pay the person some small interest rate (sort of like a rebate) on his/her gold. This interest rate is called the Gold Forward Offered Rate or GOFO. This means the bullion banks need current gold to satisfy obligations they have to deliver to the physical market. The last two times this happened GOFO rate was positive (2000 and 2008) a major rally occurred in the gold price and the mining shares. So look for this when you are online. It is a reliable indicator of a gold rally.

Global gold production is about 2400 tonnes annually. The London Bullion Market Association Precious Metals Clearing Company reports that every day, 9,020 tonnes of gold is traded. That’s about a trillion dollars every three days. The gold market is a robust and vibrant global market and most of the players are all circling around the same thought process regarding money. “Paper and ink under the control of governments or a gold bar?”

Portfolio WatchMining shares are extremely undervalued. What

is commonplace on Wall Street when extremes are pervasive is a counter-trend materializes. The counter trend is usually a powerful reversal.

This reversal is primarily because of two reasons: 1) there are few if any sellers left and most of the shares are now in strong hands that realize that their downside is limited but their upside is well above average. This makes these investors continue to add to their position as well when the reverse trend starts; 2) Value and momentum investors are a large part of Wall Street. Value players are constantly searching for situations that show lots of value at a discount and eventually will find industries that may not have been on their radar screens in the past but are now flashing a green light. Mining shares are certainly in this category. Momentum players understand that the longer momentum cycles return the most rewards. Extremely discounted sectors on Wall Street usually last a long time since the natural return to normal values from such a steep discount would logically happen over an extended period of time.

There is also a third aspect to the above as well. Since we live in a world of economic uncertainty and

a world where debt outweighs the money supply by a wide margin, there will always be a period in the future when gold and the mining stocks become once again front and center as an important part of an investment portfolio.

Market Vane is an important Wall Street sentiment research group. Regarding the gold mining shares the percent of bulls to bears is at an extreme. The level is at 45% bullish. For gold, this is at the lowest end of bullishness. The last time the bullish consensus was this low was mid-2001, the beginning of the major seven year bull market in mining stocks.

There are enough indicators to allow one to feel confident that the mining stocks are going to move significantly higher in the future.

Editor’s Note: Ken Gerbino is head of Kenneth J. Gerbino & Company, an investment management firm now in its 37th year. The company manages private equity accounts and the Gerbino Gold Group, LLC, (GGG) a private fund that invests in precious metal mining stocks.

***************

HACKETT MONEY FLOW COMMODITY REPORT, 9259 Equus Cir., Boynton Beach, FL 33472. 1 year, 24 issues, $300. www.HackettAdvisors.com.

Time to allocate more capital to the commodities complex

Shawn Hackett: “This is a time to allocate more capital to the commodities complex as it is almost certain that commodities will outperform stocks in 2014 by a large margin and should also outperform stocks over the next 3 years by a large margin.

I am most bullish the SOFT’s complex for 2014 in the Ag space.

My long term forecast for grains is that 2015 will be the year for another large bull market advance that should she see the 4th quarter of 2014 as the major inflection point for this. Until then, I do not see any sustainable upward momentum in the grains other than typical short fused weather rallies and overreactions to the typically variant and at times puzzling USDA reports that seem to lack credible thought at times.

The live stock complex which includes live cattle, lean hogs and class III milk is nearing a major blow off top with class III being the epicenter of this late stage parabolic advance. Nearby contracts in class III milk crossed over $22/hwt this past week setting all time new highs. As most of you know, this is consistent with my long term milk forecast than I made some 18 months ago calling for record high prices to be seen around this time. Now we will see if my well publicized $25/hwt target can be reached in the weeks ahead that I projected back then.

Hence, I am very bearish the livestock complex in 2014 and expect to see a major bear market begin that could take the complex down a minimum of 30% once the blow off highs are seen in the first half of 2014. This will offer an incredible shorting opportunity.”

18

ResouRce stocks: Gold, silveR & oil & Gas shaRes

MONEY MORNING published by MoneyWeek Ltd., 7th Floor Sea Containers House, 20 Upper Ground, London, England SE1 9JD

Gold to end 2014 higher than we startedDominic Frisby: “I am rather encouraged by gold’s

recent action. There’s a very real possibility that’s it’s made a double bottom at $1,180 an ounce, and that the last two years have been its 1975-76 moment. (Between 1971 and 1980 gold went from $35 to $850, but there was a shake-out in 1975-76 when the price halved.)

But it’s too early to say this for sure. So I’ll stick with my New Year prediction in MoneyWeek magazine and suggest that gold’s bear market continues into 2014. $1,050 is the low for the year; $1,425 the high. But 2014 is also the year that the bear ends and we finish the year higher than we started ($1,205 was the price at the opening bell).

Editor’s Note: Follow Dominic Frisby @dominicfrisby on Twitter. Money Morning is the free daily email service brought to you by London-based MoneyWeek.

***************INVESTOR’S EDGE, published by Stanford Wealth Management LLC, 774 Mays Blvd, Ste. 10, Incline Village, NV 89451. Monthly, 1 year, $199. E-subscription, 1 year, $169. www.stanfordwealth.com.

An energy-independent North AmericaJoseph Shaefer: “40 years ago, I remember my

president, wearing long sleeves and a cardigan sweater, telling America during his weekly television address that we needed to turn our thermostats down in winter and up in summer, stop driving our cars and take buses instead, and grow our own food, since the world was running out of oil. I was a young stockbroker who, two years later when discounted commissions became a long-overdue opportunity for individual investors, left to start my own discount firm. For the rest of the 1970s and 1980s, in disagreement with that president, I bought energy companies for our clients: explorers, producers, drillers, service firms, whatever, left and right and with both hands.

When the time is right, I’m still buying them. The time is once more right. The grease that keeps the machinery of progress moving forward is – well, grease. And oil and natural gas and gasoline and chemicals and plastics and everything else we use for transportation, heating, air conditioning, electricity and industrial production. We currently own Keppel Corp., ProSafe, Natural Resource Partners, EV Energy, Statoil and Penn Virginia (likely to be taken over by Regency Energy this quarter.) Whenever I see a quality driller, producer, manufacturer of oilfield equipment, or supplier/servicer that looks cheap, I research them in depth. Today, my research indicates that while most companies are fairly priced, there are some absolute steals in the transmission, storage and distribution

sector: think “pipelines.” Pipelines are the safest and surest way to get gas and oil distributed to your house and mine from faraway North Dakota, Canada or Mexico.

I think our EV Energy and Penn Virginia are two of the three biggest bargains in the pipeline business. The third is a company I first bought back when it was called Lakehead Pipelines. It’s now called Enbridge Energy Partners (EEP). It focuses mostly on transporting oil, but has been expanding its natural gas liquids capabilities as well. In November spun off its natural gas pipeline efforts into a new company. I also find quite desirable, Midcoast Energy Partners (MEP), We’ll buy EEP.”

***************

THE KONLIN LETTER5 Water Rd., Rocky Point, NY 11778. Monthly, 1 year, $95. www.konlin.com.

Management has swiftly repositioned LEI for growth and new opportunities

Konrad Kuhn: “Lucas Energy, Inc. (NYSE Mkt: LEI; $0.99) is an asset-rich, independent oil and gas company focused on developing its low-risk revenue base, which is largely oil in the state of Texas. LEI has interests in over 15,000 net acres in South and East Texas, with proved reserves valued at $132.6 mil. (SEC PV-10), plus probable reserves valued at $35.9 mil. Its acreage encompasses the Eagle Ford shale, one of the most active plays in the U.S., in addition to the Austin Chalk, Buda and Glen Rose formations.

During the past year, the current management team swiftly repositioned LEI for growth and new opportunities by resolving Legacy legal matters, sold non-strategic properties, reduced corporate overhead, significantly improved its balance sheet and increased the efficiency of field operations. LEI’s strategy is to develop its lower cost opportunities as it moves toward higher producing development targets. To finance its growth through the drill bit, LEI has taken a serial approach to obtaining capital and developing its reserves. As LEI exhibits a progressively stronger financial position, its cost of capital should decline and availability increase. Near-term efforts to enhance production began with low-cost well clean-outs, recompletions and work overs, and the recently completed drilling of an extended lateral from an existing horizontal well to a deeper zone in the Austin Chalk. LEI began developing certain Austin Chalk properties in order to increase production and generate positive operating cash flow, with the ultimate objective increasing shareholder value.

Revenue for FY’13 increased 57% to $8.3 mil., with the net loss improving 11%, or (.27) per share vs. (.41) for the prior year. Revenues for the 1st half of FY’14 declined to $2.7 mil., with the net loss narrowings to (.09) per share vs. (.15) for the same period in the prior year. The decline in Q2 revenue was partially related to the downtime of one of the large wells

19

ResouRce stocks: Gold, silveR & oil & Gas shaRes

offline for about 3-wks. and also did not reflect the incremental production from Sept.’s workovers, which average 51BOPD, net to LEI’s interest. LEI had $4.2 mil. in cash ending 9/30/13 and of the 29,903,083 shares outstanding, 34% are closely held and 5% by institutions. The stock pulled back on top of long-term support just below 1.00, where we would Reenter/Add/Buy for a 1st target of 4.50-5.00, especially as LEI is rapidly moving toward a position of strength while operating in known productive areas in order to decrease geological risk.

Drilling activities by other companies using technological innovation of hydraulic fracturing and horizontal drilling caused the Eagle Ford Shale oil boom, which has the potential to fuel America for decades. Recent significant decisions in Gonzales County adjacent to LEI’s acreage lowered the estimated risk of their position in the Eagle Ford and increased the value of LEI’s undeveloped reserves. The Eagle Ford formation is one of the most actively drilled targets for oil and gas in the U.S. directly beneath the Austin Chalk formation and is believed to be the primary source of oil and natural gas produced from the Austin Chalk. LEI had approx. 4,000 net acres of Eagle Ford interest in their core area, with an affiliate of Marathon Oil Corp. operating the only two Eagle Ford horizontal wells in LEI’s Gonzales leases, of which LEI has a 15% working interest in each well. LEI’s production sales totaled 26,820 barrels of oil equivalent net to their interest for the 6-mos. ended Sept. 30, ’13. The drilling activity near LEI’s Eagle Ford and Buda and Glen Rose acreage appeared to provide tremendous opportunity for LEI and its investors. Ultimate target 7-8.”

***************

MontrealAnalyst.coma daily blog on junior mining companies.

Richmont Mines: Bottoming occurring“Our research suggests that a bottoming in price

is occurring on Richmont Mines (NYSE, TSE: RIC). A miner friend of ours from northern Quebec alerted us to the situation a month ago. Of course, we are constantly analyzing Canadian mining stocks such as Richmont trying to determine which ones are undervalued. Today, we find many that are very undervalued. Here are some key points in this overview:

1. The 2011 to 2014 price range is high of Richmont at $12.60 to a low of .94 cents. We are at $1.61 in Toronto and $1.60 on the NYSE.

2. The Richmont stock’s price had been hammered down by the price of gold as have been all of the gold mining stocks. For example, if it costs gold mining companies on average $1200 to $1500 an ounce to move their gold production into the market with all the costs, i.e. insurance, transportation, administration, milling etc. (not just pull a “it out of the ground “cost which can be about $850 for most) when the price of gold is at the $1240 level it is

generally unprofitable for the mining companies and their share prices plunge. $1240 is the price of gold bullion for now-but in our view, not for much longer! We see it moving higher.

3. In the latest annual report for 2012, Richmont produced 60,471 ounces of gold at their two mines. 2013 results will be out shortly.

4. Richmont presently operates two mines, one in Quebec, another in Ontario with a third mine potentially to come on line when gold bullion prices are higher. Why is the company delaying the third mine? Because it would have a higher cost of production there due to the grade being lower, so it requires a higher price for gold bullion.

5. Richmont has 39.6 million shares outstanding. That is small by most gauges of all mining companies. It has $5,000,000 in long-term debt and $20,344,916 in cash. The balance sheet is fine.

6. And! The new deeper zone at the operating Island mine has 771,000 ounces at a high grade already. Usually such valuations run from a $30 low to $120 for “in ground” valuation. We will be doing an article on in ground valuations for mines later.

7. Richmont has mined 1,400,000 ounces of gold since 1991, a solid history of production.

8. Institutions own 31% of the Richmont shares, one of the largest public funds in Quebec owns 6.3% of Richmont as well as an investment fund in New York at 5.3% at last count. Insiders own 9% of the shares.

9. Things may change and Richmont could probably move to $5 to $6 a share if gold bullion can hit the $1450+ level. Keep in mind that Richmont Mines is not an exploration company, it has been producer for many years.

10. No Guarantees but our low-end target for the stock price is $3 by May-June. It sold at $6 in 2012. Again, to hit the $3 target, we feel that it may need a $1350 gold price. Higher gold prices and the whole situation changes for most miners.”

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20

U.S. Silver & Gold Inc. is a silver and gold mining company focused on growth from its existing asset base and execution of targeted accretive acquisitions. The company generates 85% of its revenue from silver production and has 23.2 million ounces of proven and probable silver reserves. As the second largest primary silver producer in the United States, the company owns and operates two key assets: the Galena Mine Complex, located in the heart

of the Silver Valley/Coeur d’Alene Mining District, Shoshone County, Idaho which produces high-grade silver ore, delivering over 200 million ounces to date; and the Drumlummon mine, which has an historic production of 1 million gold-equivalent ounces, is currently on care and maintenance. The Drumlummon Mine is located 25 miles from Helena, Montana and is reported to have produced $29,000,000 (US) of gold and silver at historical prices (US $20 per ounce Gold). Underground workings include a decline from surface to the 650 elevation and internal ramps to access various underground levels. U.S. Silver & Gold had a year-end cash balance of approximately $7.2 million as at December 31, 2013. In 2013, the Galena Complex produced 2.12 million silver ounces at a silver cash cost of $17.75 and all-in sustaining costs of $24.25. Year-over-year silver production was down 6%, while cash costs per silver ounce were reduced 7% and all-in sustaining costs decreased 20%. The Small Mine Plan implemented early in the third quarter of 2013 delivered significant cost reductions and increased silver cut-off grade by 33% to over 15 ounces per ton silver equivalent. Silver head grade for the quarter rose 34% to 14.38 ounces per ton and increased 12% for the year to 11.31 ounces per ton. Silver production of between 2.2 and 2.4 million ounces is expected for 2014. This represents an 8 percent increase over silver production in 2013. Cash costs are projected to be between $14.50 and $15.50 per ounce which represents a 15 percent reduction over 2013, and all-in sustaining cash costs are projected to be between $18.00 and $19.00 per ounce, a 24 percent decrease over 2013. U.S. Silver & Gold expects to produce 5 million ounces of silver by the end of 2015. In the near term, increased production is expected from development of assets within the Galena Complex. Over the long term, accretive growth is expected through a targeted acquisition strategy. Excess hoisting and milling capacity allows US Silver & Gold to easily increase future production as reserves are discovered and developed.

US SILVER & GOLD INCTSX: USA • OTCQX: USGIF

Investor Relations–Canada: Nicole Richard

Tel: 416-848-9503

Corporate Office: 2870-145 King Street West

Toronto, ON M5H 1J8 Tel: 416-848-9503

Galena Mine Complex: P.O. Box 440, 1041 Lake Gulch

Road Wallace, ID 83873 Tel: 208-752-1116

info@us-silver.com

www.us-silver.com

U.S. Silver & Gold: Low Risk, Low Capital Needs, High Growth

DTS8 Coffee Company Ltd (OTC BB: BKCT) is a growing purveyor of fresh artisan roasted, gourmet coffee. DTS8 roasts, markets and sells superior quality roasted coffee in China, one of the world’s fastest growing coffee markets – and where DTS8 is well positioned to participate in the growth of the Chinese coffee market. DTS8 coffees are well regarded by Chinese consumers for their uniqueness, consistency and special flavor characteristics. Don Manuel® coffee is artisan

roasted by DTS8 under strict standards, ensuring that every cup offers a rich, full bodied coffee with chocolate flavours, sweet-toned syrupy notes, and a smooth, clean finish. This has resulted in year-over-year revenue increases. Revenues for the fiscal year ending April 2013 increased for $253,790, from $220,421 reported in 2012 and $43,074 reported in 2011 – representing three consecutive years of growth. DTS8 Coffee’s management team, all experienced Canadian businessmen, spent six years developing business relationships in China and now is integrated into the Shanghai coffee culture – giving DTS8 an advantage in reaching new coffee consumers in other parts of China as well as in other targeted geographic areas. In April 2012, DTS8 acquired Hong Kong-based DTS8 Holdings Co., Ltd., for $4 million. DTS8 Holdings sells its signature coffees and other blends through its wholly owned operating subsidiary DTS8 Coffee (Shanghai) Ltd. In March 2013, DTS8 completed the addition of new roasting and offices facilities in Huzhou, Zhejiang Province, China. DTS8’s sales office is located in Shanghai which comprises the largest concentration of premium coffee consumers in China. DTS8’s roasting facility is now located in Huzhou, a relatively short distance away. Localized operations provide DTS8 with a significant service advantage over foreign competitors with only satellite operations in China. DTS8 expects to sustain controlled growth, increased revenues, through targeted marketing and sales efforts to meet the forecasted overall growth of the demand for coffee in China, the Pacific Rim and now in the United States. DTS8’s market strategy remains to grow in a controlled manner by developing and enhancing both its brand image and quality reputation. The combination of DTS8’s own brands, Don Manuel® and Yunnan coffee, provides a differentiated coffee positioning based on superior quality. Strategic expansion into select channels of distribution in different geographic territories creates significant opportunities for growth. DTS8’s commitment to quality and service establishes a high degree of repeat business and customer loyalty.

DTS8 COFFEE COMPANY, LTD.

OTC QB: BKCTContact: Doug Thomas

Investor Relations

1685 H Street, Suite 405 Blaine, WA, 98230-5110

Phone: 775-360- 3031

info@dts8coffee.com

www.dts8coffee.com

DTS8 Coffee Co. Ltd. Roasting and Selling Coffee in China Market

21

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