after the meeting

Tues March 9, 2010
The invitation-only reception by JIN Beijing-based management at the Intercontinental Hotel in Toronto Sunday evening was interesting. It was held prior to the commencement of the annual Prospectors & Developers Mining Conference, which is the biggest in the world. No announcements were made in light of the formal release last Thursday, but questioning executives provided some insights. In the press release I had been especially taken aback by by the 5-year gold price projections (which would absolutely impact earnings per share, based on actual production in those future years at actual prices, vs those projections). I stated that I found the figures surprising, as being too low, and asked if they were provided by themselves or China National Gold as government expectations. The answer: the figures were primarily an average provided by US banks. I commented that the figures could then be considered partly as political statements, to which he replied "we would prefer always to be conservative in our estimates." (Xinhua News Agency was taking notes.) This is an important future guideline as the entire 5 years of projections are below the current international market price for gold.

There was also an indirect confirmation that at or after the planned company name change - expected shortly - a listing on the Hong Kong market is likely. This will likely take the form of a secondary offering from the treasury and probably from management options as well (my words). According to the Toronto Star, on Monday (yesterday) a presentation was made at the conference by KC Chan, Hong Kong's secretary for financial services. It described his audience as consisting of Canadian executives considering listing on the HKSE. Such an event would be a significant stimulus to the stock by increasing the depth of the market due to the greatly increased number of investor participants. I would expect that at higher prices, the stock could attract some new institutional and fund investors whose rules prevent them from participating in the stock at present.

The stock performed very well in the current new week, actually stronger than my expectations and set new portfolio records. I lightened my position slightly, rebalancing towards the more conservative and revenue-generating Vermilion Energy Trust (VET.UN). In our seconday account, I had recently sold most VET, using the proceeds to buy JIN. Monday afternoon I reversed the process, sold all JIN, and replaced the proceeds with a larger position in VET on a dip than had just been sold. This was be accomplished with no net addition of cash. VET has continued to move up today, magnified by the larger position than was held last week.

I am now referring to the investment technique I am developing during this experiment as "Focused Wave". Today, March 9, is the first anniversary of the financial panic low of 2009. The combined portfolio has grown 634% in that time.