under performing, page-139

Afternoon Guys,

Michael Oliver from MSA has been a long time follower of the gold (and other) markets, using a proprietary momentum analysis tool.

He has a solid track record of making big calls over market cycles, the success of which is due to his analysis of momentum trends vs. price trends - the former establishing themselves before the later.

Michael has made a big call (from a career perspective) that gold and gold miners were/ are poised for a very solid uptrend in the coming couple of months (a few weeks ago).

One of his inflection points to watch was if gold moved through $1,280.

Gold has done that as of Friday on the Cash Market (US$1,280.83) and the Front Month Futures Contract ($1,283.40). It is through these points that Michael Oliver believes the price moves will accelerate.

We will see soon enough whether this was a good call or not - however, in an interview I listened to last week, he was the most bullish on a particular subject that I have ever heard him (usually he is quite reserved).

On another topic, Q3 numbers were particularly bad for the USD reporting gold miners, in part due to high oil prices. Q4 numbers, which will be released in late January may be improved materially due to the fall in oil prices (for unhedged producers) and especially so for those with higher AISC and large volumes of earth moving required. Coupled with the improved average gold price in Q4 vs. Q3 this may provide a little kicker for the sector from late January all else being equal.

Additionally, from Exploration Insights, they have noted that in 5 of the last 7 years, gold miners have performed very well from late December through to PDAC (end of Q1).

So ... it would seem that we MAY have a confluence of tailwinds to support the miners for the next few months ... it would be a good time for RSG to prove that it has successfully executed its mine development at Syama.

Cheers
John