Pescod States...

HATHOR EXPLORATION
FISSION ENERGY
BELO SUN MINING

(T-HAT)
(V-FIS)
(V-BSX)

$4.40 +0.37
$0.75 +0.13
$1.16 -0.01

Silly us for taking some easy money in an ugly market. We
had been talking about Hathor Exploration for months because
Eric Zaunscherb, analyst now with Pacific International
thought sooner or later they became a take-over target...and
he was right!

One only wondered what the bidding war would have
started at had it happened in better markets, or before Fuku-
shima.

Zaunscherb had been suggesting for people to hang on,
but again, silly us, there is nothing like taking nice profits in a
bad market.

Today, Rio Tinto enters the bidding war and Zaunscherb
writes in a published report to his followers, “Mega-miner Rio
Tinto and Hathor have announced a friendly agreement for
Rio Tinto to acquire all of the common shares of Hathor for
$4.15 in cash, or approximately $578 million on a fully-diluted
basis.”

He notes, “Directors and senior management have signed
a support agreement locking up their shares (approximately
4.6%, fully diluted) subject to a reasonable break fee of $20
million; their support agreement may be terminated in favor
of an unsolicited superior bid.”

Zaunscherb adds, “This is not capitulation on the part of
Hathor. We expect Cameco to come back with a minimum
10% raise to Rio Tinto’s offer to approximately $4.50 per
share. Further, we surmise that Rio Tinto is seriously inter-
ested in this world-class asset, having acquired a 5.7% inter-
est in Hathor (fully diluted basis), and we expect the senior to
counter with a further 10% lift to approximately $5.00 per
share.”

Zaunscherb continues, “It would not be surprising to see a
third party (i.e. not Cameco or Rio Tinto) enter into the bid-
ding war for this world-class uranium asset.”
Once upon a time it looked like it might be had in an ugly
market for a couple of nickels more, now looks like it’s going
to be attracting a lot more attention than one had expected.
Zaunscherb is one of the few analysts out there that has
made anybody any money, what with the Hathor take-over
and a huge performance of his former favorite gold stock—
Avion Gold (AVR). So needless to say, today we ask him
again if you wanted to buy only one stock in the market to-
day, what would it be?

He answers Belo Sun Mining for their gold play in Brazil which should have some new resource numbers in the com-
ing months and he expects a big increase.

As far as the poor performance in gold of late? He suggests he expects the American dollar to start trending down
again sooner or later and suggests that gold is still in an uptrend which he expects to continue.

GRAYD RESOURCES
AGNICO-EAGLE

To take the easy money and run...or to wait around for
a better offer? We’ve just talked about the Hathor take-
over and how those who have hung on are probably go-
ing to benefit from the developing bidding war that is
finally taking place. Obviously, it was better to hang on.
But then, there are other stories. Take a look at
what’s happening to Agnico-Eagle Mines today as their
Goldex mine in Quebec is watered out and there is some
debate as to whether that mine will ever be producing
again. If it is, for sure it’s a long way down the road...a
long, long way.

Agnico-Eagle which owns many mines, still gets
drubbed today. This affects Grayd Resources and Agnico-
Eagle had an offer in to buy out Grayd many weeks ago,
but the offer was $2.80 cash or a combination of cash
and shares of Agnico-Eagle.

All of a sudden, that paper offer isn’t looking nearly as
good and Grayd shares are getting clobbered. All of a
sudden, that $2.80 price on Grayd of a few weeks ago is
looking awfully tasty and the answer is, one never knows
what happens on these bidding situations.
Congratulations to those who hung on in the Hathor
deal, but punishment for those who were hoping for
something better on Grayd Resources.

(V-GYD)
(T-AEM)

$2.30 -0.19
$47.35 -10.62