Robin Bromby / The Australian / 27/7/09Sino braveheart. HERE at...

Robin Bromby / The Australian / 27/7/09

Sino braveheart.

HERE at Pure Speculation we've always been a little chary about putting our money (figuratively speaking) on companies that operate in China. Stern Hu's plight has raised that concern to scared witless.

But we got chatting to one investor who does not suffer such weak-kneed moments and has been buying Sinovus Mining (SNV) with his ears pinned back. This company was formed almost three years ago with the intent of picking up projects in China that had remained unexploited because of lack of capital. It has a gold project in the far north and 10 days ago announced it had bought two coal mines in Henan province.

But while the coal clearly provides some near-term cashflow, it is a third project owned by SNV that has got our man wading into this stock. He -- an unabashed gold bug, or "goldtimer" as they call them now -- is dazzled by the Xiangguang deposit just west of the Greater Beijing area. The deposit is described as silver-manganese, but this investor is myopic about precious metals and just loves the sound of the project's 5.35 million ounces of silver at an average grade of 167 grams/tonne. Silver, in his view, is the only other game in town after you've filled your portfolio with gold stocks. Maybe. And if it was west of Sydney, and not Beijing, we might buy the story.

http://www.theaustralian.news.com.au/business/story/0,28124,25838151-5018034,00.html