good car modification

The real drama is here above, It is Long Treasuries daily chart and it looks nervous, nobody even talks here about cuts, fiscal discipline and austerity measures. Once Europe is engaged in QE and ECB starts buying sovereign bonds from banks, attention will come back home. Recent spike in prices can be very short lived in a big picture frame.

Nothing is for certain in these days, but that candle on the chart above can mean reversal and that Green Buck Party is over. Less bad in the end is still bad. Market is ready to forget the Greece and remember California. With all investment banks discounting euro and providing parity forecast, counter rally can be very sharp. Euro below 1.2 means Europe disintegration, there are means to prevent it and intervention is already in the cards.

On the weekly chart US Dollar looks tired as well and with intervention in Japan and Europe reversal can easily tip the scales - remember in the end it is game to debase all FIAT currencies.

The real drama is here above, It is Long Treasuries daily chart and it looks nervous, nobody even talks here about cuts, fiscal discipline and austerity measures. Once Europe is engaged in QE and ECB starts buying sovereign bonds from banks, attention will come back home. Recent spike in prices can be very short lived in a big picture frame.

Nothing is for certain in these days, but that candle on the chart above can mean reversal and that Green Buck Party is over. Less bad in the end is still bad. Market is ready to forget the Greece and remember California. With all investment banks discounting euro and providing parity forecast, counter rally can be very sharp. Euro below 1.2 means Europe disintegration, there are means to prevent it and intervention is already in the cards.

On the weekly chart US Dollar looks tired as well and with intervention in Japan and Europe reversal can easily tip the scales - remember in the end it is game to debase all FIAT currencies.

We will leave the situation on how technically stock like P&G could drop 50% in fifteen minutes to be investigated by the mass media, but will confirm here one more time: it was second Deflationary Test with sudden drop in liquidity this time driven by sovereign debt crisis. Call it Run On The Bank among Big Guys. (Next Bull Lithium: Crash of the Markets, Gold and the Price of Oil for Helicopters) Fifteen minutes made no mistake about the state of the market and economy in deflationary environment - we have seen the future and it is ugly. Deflation spiral means death of financial market by thousand cuts - financial system is insolvent and the only way to run it is to keep liquidity high enough that nobody is testing it to deliver. QE will provide flood of money, debt will be rolled over and by destroying the value of FIAT currencies Debt will be Inflated out in the end. This time it is different - it is not only our theory, but confirmed market action. This time the most important here is that Gold was at almost all time high at the moment of test, Gold was moving up against all currencies and this time in a sharp contrast to the events of 2008 it was sharply up and over 1200 on the day of Market Crash. This new round of QE (when Europe has not even started!) will be going already from this very high base in Gold value and rising Inflation in Commodity and Growth driven economies. We will not go into the debt issue today in details and will only point out that it is a notch under 13 Trillion and in dangerously close proximity to 100% of GDP of U.S.
After pictures from Greece we do not think that anybody will go there in U.S. Corp. Deflation will be prevented by any means, it is easy and price to pay is not so obvious. Newly printed US Dollars are "free", but price to drop them is not: you need Oil to keep you helicopters flying and here will be our first conundrum: At what point price of Oil becomes prohibitive to use Helicopters by Ben Bernanke in his open market operations?
Here is time to move to practical implications of the new Inflation round to fight Deflation Scare this time created by sovereign default. How Lithium, Gold and price of Oil are connected and what it means to be grounded? We will start with Gold and will give you few observations:
1. We are in a new Bull market territory with Gold moving up against all FIAT currencies.
2. Corporate default was exchanged on sovereign one, all bailouts were not more than transferring obligations from failed banks and other Corporations to the public finance. Bonuses were left with bankers, losses were privatised with public. Now we have on outskirts of Europe with less than 4% of EU GDP fireworks which suppose to end Euro legacy in wain. Do not rush to trash the Euro yet. Sovereign default is very different from corporate one. If the debt is issued in local currency it could be always printed more in order to repay it. U.S. Corp. is living in this space for years, UK is there and Europe will have to decide and move in support of Greece to prevent the run on the bank and collapse of the following PIIGS members.
3. Expect shakeouts, but the direction in Gold market is clear: further Up - driven by run from all FIAT currencies, rising interest rates, generational Bear market in Treasuries, negative real rates and expansion in monetary base (QE) with inevitable by definition Inflation. And we have to pray for it - we do not know how to survive in Deflation Spiral should anybody made a crucial mistake.
4. First Gold will make new all time high, second will be M&A play: Majors will shop for Juniors with resources in the ground. Here is the double game - Gold is moving up and Majors' production and Reserve Base is going down. If you like more leverage you are welcome to Silver market. Place to be is in stories will strong management, growing resources and stable political situations. markets will be volatile by all means and political tensions will be driving this Gold Bull as well.
We are running Gold Bull for nearly ten years now: Gold first, than Majors and follow up on Junior side. We were always wondering about Future of Energy and have collected some great memories on Uranium Run, Solar and Water plays. Gold Bull has years to run, but we are searching constantly for new Macro trends - it is very interesting to find out what will be the next Bull which will come out of these rubbles in case we are right and Inflation will be the answer to deflation war scenario. It is time for Lithium to come into picture.

We will leave the situation on how technically stock like P&G could drop 50% in fifteen minutes to be investigated by the mass media, but will confirm here one more time: it was second Deflationary Test with sudden drop in liquidity this time driven by sovereign debt crisis. Call it Run On The Bank among Big Guys. (Next Bull Lithium: Crash of the Markets, Gold and the Price of Oil for Helicopters) Fifteen minutes made no mistake about the state of the market and economy in deflationary environment - we have seen the future and it is ugly. Deflation spiral means death of financial market by thousand cuts - financial system is insolvent and the only way to run it is to keep liquidity high enough that nobody is testing it to deliver. QE will provide flood of money, debt will be rolled over and by destroying the value of FIAT currencies Debt will be Inflated out in the end. This time it is different - it is not only our theory, but confirmed market action. This time the most important here is that Gold was at almost all time high at the moment of test, Gold was moving up against all currencies and this time in a sharp contrast to the events of 2008 it was sharply up and over 1200 on the day of Market Crash. This new round of QE (when Europe has not even started!) will be going already from this very high base in Gold value and rising Inflation in Commodity and Growth driven economies. We will not go into the debt issue today in details and will only point out that it is a notch under 13 Trillion and in dangerously close proximity to 100% of GDP of U.S.
After pictures from Greece we do not think that anybody will go there in U.S. Corp. Deflation will be prevented by any means, it is easy and price to pay is not so obvious. Newly printed US Dollars are "free", but price to drop them is not: you need Oil to keep you helicopters flying and here will be our first conundrum: At what point price of Oil becomes prohibitive to use Helicopters by Ben Bernanke in his open market operations?
Here is time to move to practical implications of the new Inflation round to fight Deflation Scare this time created by sovereign default. How Lithium, Gold and price of Oil are connected and what it means to be grounded? We will start with Gold and will give you few observations:
1. We are in a new Bull market territory with Gold moving up against all FIAT currencies.
2. Corporate default was exchanged on sovereign one, all bailouts were not more than transferring obligations from failed banks and other Corporations to the public finance. Bonuses were left with bankers, losses were privatised with public. Now we have on outskirts of Europe with less than 4% of EU GDP fireworks which suppose to end Euro legacy in wain. Do not rush to trash the Euro yet. Sovereign default is very different from corporate one. If the debt is issued in local currency it could be always printed more in order to repay it. U.S. Corp. is living in this space for years, UK is there and Europe will have to decide and move in support of Greece to prevent the run on the bank and collapse of the following PIIGS members.
3. Expect shakeouts, but the direction in Gold market is clear: further Up - driven by run from all FIAT currencies, rising interest rates, generational Bear market in Treasuries, negative real rates and expansion in monetary base (QE) with inevitable by definition Inflation. And we have to pray for it - we do not know how to survive in Deflation Spiral should anybody made a crucial mistake.
4. First Gold will make new all time high, second will be M&A play: Majors will shop for Juniors with resources in the ground. Here is the double game - Gold is moving up and Majors' production and Reserve Base is going down. If you like more leverage you are welcome to Silver market. Place to be is in stories will strong management, growing resources and stable political situations. markets will be volatile by all means and political tensions will be driving this Gold Bull as well.
We are running Gold Bull for nearly ten years now: Gold first, than Majors and follow up on Junior side. We were always wondering about Future of Energy and have collected some great memories on Uranium Run, Solar and Water plays. Gold Bull has years to run, but we are searching constantly for new Macro trends - it is very interesting to find out what will be the next Bull which will come out of these rubbles in case we are right and Inflation will be the answer to deflation war scenario. It is time for Lithium to come into picture.

We have a giant Bullish Cup and handle formation in Silver now, Gold move to the new high must be confirmed by new high in Silver.

"First Gold will make new all time high, second will be M&A play: Majors will shop for Juniors with resources in the ground. Here is the double game - Gold is moving up and Majors' production and Reserve Base is going down. If you like more leverage you are welcome to Silver market. Place to be is in stories will strong management, growing resources and stable political situations. markets will be volatile by all means and political tensions will be driving this Gold Bull as well."

Joe Weisenthal May. 9, 2010, 4:43 PM 2,920 19
See Also:


The New York Post has an explosive exclusive, if true:
Federal agents have launched parallel criminal and civil probes of JPMorgan Chase and its trading activity in the precious metals market, The Post has learned.
The probes are centering on whether or not JPMorgan, a top derivatives holder in precious metals, acted improperly to depress the price of silver, sources said.
The Commodities Futures Trade Commission is looking into civil charges, and the Department of Justice's Antitrust Division is handling the criminal probe, according to sources, who did not wish to be identified due to the sensitive nature of the information.
That JPMorgan (JPM) has somehow been involved in silver market manipulation has been the source of rumor and speculation for a long time.
Things really heated up on this front in March, when a whistleblower was due to speak in Congress about commodity market manipulation, but was scrubbed from the list at the last second. That sent of all kinds of red flags. The New York Post was on the story then too, citing an outspoken trader named Andrew Maguire who claimed that JPMorgan and HSBC were doing the Fed's work in ceaselessly selling silver (nakedly) on behalf of the Fed in order to keep prices down.
If today's report is true, it would clearly indicate that at least at the regulatory level (if not the political level, where any financial reform is bound to be toothless), there's been a major shift in attitude. Add this to the civil charges against Goldman Sachs (GS), and the Moody's (MCO) Wells notice, and you're starting to see a trend."

We have a giant Bullish Cup and handle formation in Silver now, Gold move to the new high must be confirmed by new high in Silver.

"First Gold will make new all time high, second will be M&A play: Majors will shop for Juniors with resources in the ground. Here is the double game - Gold is moving up and Majors' production and Reserve Base is going down. If you like more leverage you are welcome to Silver market. Place to be is in stories will strong management, growing resources and stable political situations. markets will be volatile by all means and political tensions will be driving this Gold Bull as well."

Joe Weisenthal May. 9, 2010, 4:43 PM 2,920 19
See Also:


The New York Post has an explosive exclusive, if true:
Federal agents have launched parallel criminal and civil probes of JPMorgan Chase and its trading activity in the precious metals market, The Post has learned.
The probes are centering on whether or not JPMorgan, a top derivatives holder in precious metals, acted improperly to depress the price of silver, sources said.
The Commodities Futures Trade Commission is looking into civil charges, and the Department of Justice's Antitrust Division is handling the criminal probe, according to sources, who did not wish to be identified due to the sensitive nature of the information.
That JPMorgan (JPM) has somehow been involved in silver market manipulation has been the source of rumor and speculation for a long time.
Things really heated up on this front in March, when a whistleblower was due to speak in Congress about commodity market manipulation, but was scrubbed from the list at the last second. That sent of all kinds of red flags. The New York Post was on the story then too, citing an outspoken trader named Andrew Maguire who claimed that JPMorgan and HSBC were doing the Fed's work in ceaselessly selling silver (nakedly) on behalf of the Fed in order to keep prices down.
If today's report is true, it would clearly indicate that at least at the regulatory level (if not the political level, where any financial reform is bound to be toothless), there's been a major shift in attitude. Add this to the civil charges against Goldman Sachs (GS), and the Moody's (MCO) Wells notice, and you're starting to see a trend."

"Corporate default was exchanged on sovereign one, all bailouts were not more than transferring obligations from failed banks and other Corporations to the public finance. Bonuses were left with bankers, losses were privatised with public. Now we have on outskirts of Europe with less than 4% of EU GDP fireworks which suppose to end Euro legacy in wain. Do not rush to trash the Euro yet. Sovereign default is very different from corporate one. If the debt is issued in local currency it could be always printed more in order to repay it. U.S. Corp. is living in this space for years, UK is there and Europe will have to decide and move in support of Greece to prevent the run on the bank and collapse of the following PIIGS members."

European Union finance ministers moved toward agreement on an unprecedented loan package worth at least $645 billion to prevent Greece’s fiscal woes from triggering a broader sovereign-debt crisis and shattering confidence in the euro.

"Corporate default was exchanged on sovereign one, all bailouts were not more than transferring obligations from failed banks and other Corporations to the public finance. Bonuses were left with bankers, losses were privatised with public. Now we have on outskirts of Europe with less than 4% of EU GDP fireworks which suppose to end Euro legacy in wain. Do not rush to trash the Euro yet. Sovereign default is very different from corporate one. If the debt is issued in local currency it could be always printed more in order to repay it. U.S. Corp. is living in this space for years, UK is there and Europe will have to decide and move in support of Greece to prevent the run on the bank and collapse of the following PIIGS members."

European Union finance ministers moved toward agreement on an unprecedented loan package worth at least $645 billion to prevent Greece’s fiscal woes from triggering a broader sovereign-debt crisis and shattering confidence in the euro.

Everybody is scared by Greece and rightfully so, but do not miss the big picture with all worries about PIIGS and their health. PIIGS: Portugal, Italy, Ireland, Greece and Spain are on the front pages and everybody is buying Treasuries again, US Dollar has surged to the new highs and Euro has hit the 1.28 Our contrarian soul can not help, but to put a few charts for review. The main message is in the chart above: P&F is not the ultimate Crystal Ball, but works very good defining reversal in trends and recent trend for US Dollar was up. US Dollar destiny now is to be "less bad" - as Jim Puplava has put it. Austerity measures are not very popular as Greece has shown to the world today, US Corp. will not even dare to go there - the only other way out is to inflate your debts out. US Dollar destiny is to go down and Treasury Bubble is unfolding already from late 2008 as shown on the chart below. We have a lower highs and scared public is rushing to the "safety" of Treasuries exactly at the wrong time. And by the way Inflation is already here: China is tightening, Australia is hiking rates, Brazil, Norway...have you noticed - all Commodities and Growth related countries. The irony is that Greece is the prelude of what could come to the US shore: can you imagine to lose California? In Euro zone idea of its breaking up does not work exactly with the opposite reason to Euro move these days: take out PIIGS out and you will get the strongest Euro possible. Competition is now - who will debase its currency faster and everybody are in for orderly decline of US Dollar: Euro below 1.2 is a threat to stability and rising borrowing cost, above 1.5 makes export less competitive - the winner will be Gold, against which all currencies will depreciate. Second best will be commodity based Canadian and Australian dollars. Have you noticed that CAD was on parity with USD again? Canada talks about tightening and rate differentiation will put further pressure onto US Dollar. Financial system was tested with Lehman - it is insolvent, another run on the bank will break it beyond repair. Our take is that Greece will be bailed out, crisis contained and ECB has not even started QE, the fastest move could be to purchase sovereign debt from the banks to provide liquidity and support the prices. Wait until attention will be back to the homeland issues and mention the difference: Europe talks about Austerity, Cuts and Budget deficit before they start to print money by QE, U.S. use helicopters first and talks about deficit later. Regarding Swine Flu we will refer to our older post and will remind ourselves how many worries we had about unavoidable pandemic, which will spare only the Wall Street with inherited immunity. It finally strikes at unexpected location and Goldman Sachs is the first victim. Its omnipresence is understandable, they are doing the "God's job" after all...but who knew that they helped to cook the books even in Greece to get it the ticket into the Euro zone?

Treasury Bubble is still unfolding from late 2008, we have lower highs and recent PIIGS scare has brought more volume.

US Dollar is overbought, particularly after today's trading session, MACD shows lower highs with new highs - points to potential reversal to be confirmed.

Please notice that Gold recently was rising with US Dollar rising as well, Gold was rising against all currencies and it is a very important new development in the Gold bull market. Seasonality is against strong upside move in Gold, but after our signal Sell in December, Gold has perform reversal and has all technical strength to break to the new highs from Cup and Handle formation.

On a longer term chart we can tell that US Dollar is ready to produce Sell signal with counter move in Euro from oversold position with solid bail out news on Greece this week.

Everybody is scared by Greece and rightfully so, but do not miss the big picture with all worries about PIIGS and their health. PIIGS: Portugal, Italy, Ireland, Greece and Spain are on the front pages and everybody is buying Treasuries again, US Dollar has surged to the new highs and Euro has hit the 1.28 Our contrarian soul can not help, but to put a few charts for review. The main message is in the chart above: P&F is not the ultimate Crystal Ball, but works very good defining reversal in trends and recent trend for US Dollar was up. US Dollar destiny now is to be "less bad" - as Jim Puplava has put it. Austerity measures are not very popular as Greece has shown to the world today, US Corp. will not even dare to go there - the only other way out is to inflate your debts out. US Dollar destiny is to go down and Treasury Bubble is unfolding already from late 2008 as shown on the chart below. We have a lower highs and scared public is rushing to the "safety" of Treasuries exactly at the wrong time. And by the way Inflation is already here: China is tightening, Australia is hiking rates, Brazil, Norway...have you noticed - all Commodities and Growth related countries. The irony is that Greece is the prelude of what could come to the US shore: can you imagine to lose California? In Euro zone idea of its breaking up does not work exactly with the opposite reason to Euro move these days: take out PIIGS out and you will get the strongest Euro possible. Competition is now - who will debase its currency faster and everybody are in for orderly decline of US Dollar: Euro below 1.2 is a threat to stability and rising borrowing cost, above 1.5 makes export less competitive - the winner will be Gold, against which all currencies will depreciate. Second best will be commodity based Canadian and Australian dollars. Have you noticed that CAD was on parity with USD again? Canada talks about tightening and rate differentiation will put further pressure onto US Dollar. Financial system was tested with Lehman - it is insolvent, another run on the bank will break it beyond repair. Our take is that Greece will be bailed out, crisis contained and ECB has not even started QE, the fastest move could be to purchase sovereign debt from the banks to provide liquidity and support the prices. Wait until attention will be back to the homeland issues and mention the difference: Europe talks about Austerity, Cuts and Budget deficit before they start to print money by QE, U.S. use helicopters first and talks about deficit later. Regarding Swine Flu we will refer to our older post and will remind ourselves how many worries we had about unavoidable pandemic, which will spare only the Wall Street with inherited immunity. It finally strikes at unexpected location and Goldman Sachs is the first victim. Its omnipresence is understandable, they are doing the "God's job" after all...but who knew that they helped to cook the books even in Greece to get it the ticket into the Euro zone?

Treasury Bubble is still unfolding from late 2008, we have lower highs and recent PIIGS scare has brought more volume.

US Dollar is overbought, particularly after today's trading session, MACD shows lower highs with new highs - points to potential reversal to be confirmed.

Please notice that Gold recently was rising with US Dollar rising as well, Gold was rising against all currencies and it is a very important new development in the Gold bull market. Seasonality is against strong upside move in Gold, but after our signal Sell in December, Gold has perform reversal and has all technical strength to break to the new highs from Cup and Handle formation.

On a longer term chart we can tell that US Dollar is ready to produce Sell signal with counter move in Euro from oversold position with solid bail out news on Greece this week.

US Dollar is still on Sell signal daily. It is the key to Gold market and to Juniors performance.





Gold is at short term Buy signal and is building the base for reversal with a Double Bottom.

China's response to stupidity (or calculated situation?) will be asymmetrical, unexpected and unusual: when you have more than a billion people and more than a pile of cash - you have brains and options to chose from. In U.S., on another hand, there are just a few options to go from here (war will be the calculated one) to avoid Depression and Burden of Debt: one will be to inflate it out and destroy the US Dollar, but start transition of economy into post oil dimension with Electric Cars and trans national train system. This approach will involve honesty, budget cuts and severe constrain on military complex. And you will have to keep your lenders happy: open the markets and not annoy them every minute. If military complex will get its upper hand over Obama we can expect another option: U.S. falling years behind China in Electric Space. War now is always economic. While U.S. spend billions to protect oil communication lines all over the world, China is moving fast into post oil environment dramatically cutting cost of it manufacturing base. China understands that low wage cost advantage will have to give up with time - they need to keep work force happy, but transition in Energy Space will bring China Energy Security, undermine U.S. military machine focused on Oil routes ocean domination and will bring another economic advantage in the form of much lower transportation cost. Nuclear Power developments in China support our point of view. What will be the response from Obama? We all have counted on the banks Too Big to Fail - they have failed and financial system is still in rubbles, now some are counting on "they will lose more if they sell" - is it another Big If in the making? Who can be sure?

We have a small surprise from our lenders:

After last week's sovereign debt scare Gold still tries to build a potential Double Bottom reversal at 1065: buyers quickly snap all orders last Friday making a potential bullish candle. Next level of support will be 1025 with MA200 drifting in that area.

Speaking on the Mineweb Gold Weekly Podcast, Sprott Asset Management's chief investment strategist says while the yellow metal is likely to continue to consolidate over the next few weeks, the next major move will be up.

Author: Geoff CandyPosted: Wednesday , 03 Feb 2010
GRONINGEN -
Gold should continue to consolidate over the next few weeks but, the next big move is likely to be up.
This is the view of Sprott Asset Management's chief investment strategist John Embry, who says he is looking for the price of the yellow metal to hit around $1,350 to $1,400 by late spring.
Speaking on the inaugural Mineweb Gold Weekly Podcast, Embry says the recent downward trend seen in the gold price is nothing more than a healthy correction.
"Gold had a 300 dollar plus run in US dollars from July into the early part of December and it has come under heavy pressure subsequently. It certainly has engendered immense bearishness amongst the commentators which is actually good from my perspective. I think the fundamentals are undisturbed and as a result it is setting up for another strong buy."
Asked about the link between gold and the US dollar, especially the recent strengthening of the dollar against the euro, Embry, says, while there is often a very clear link, the problems in the US and, by extension, the US dollar, are everywhere - especially given the huge budget deficit it is sitting with - so "the idea that one should run away from gold and into the US dollar because it is strengthening against the euro and several other currencies to me is actually preposterous.
"The idea that the US dollar is a safe haven today is flat out wrong," he added, "and that is going to be one of the major factors that are going to change the perceptions in the gold market going forward."
Another reason for Embry's conviction about bullion's next move, is the increasing role gold will play as a protection against monetary debasement.
"I think a lot of the world's wealth is figuring out that we have little choice given the debt problems in the world and the resultant unlimited creation of money and so I think there is a solid investment bid in the market for gold."
He adds, that concerns that have been raised about the possible impact the jewellery market is likely to have on the long term rise of gold because, he says, "all great bull markets in precious metals come from their reestablishment as money."

A lot of things could be pointed out as a contribution to markets crash today. We will pick one, distant to Wall Street and not so apparent for the investors in North American markets. A lot of tools from today's FED arsenal were tested out in UK first, be it bail out of banks or QE. King - BOE Governor, always speaks with more clarity in English than other gentlemen here across the pond:

"U.K. policy makers paused their 200 billion-pound ($317 billion) bond-buying program, matching the median forecast in a survey of economists by Bloomberg. The central bank may resume purchases “should the outlook warrant” it, the Bank of England said."

In plane English they have tested the patient ability to live without life support - test failed and we can expect QE continued in all of its forms further. We do not expect End of The History again and this reaction will provide a good entry points in a number of markets which will benefit with coming inevitable consequence of this medical shock - Inflation. Money supply will be extended further and when you hear cry about European monetary union collapse: euro, think again. Monetary authorities at home are walking the edge with Budget Deficit well above 10% of GDP now - Europe was shaking today with 6% threshold.

After today's shake up we would expect a lot of hysterical cry about coming collapse of economy and then even most prudent lawmakers will look like an Enemy of the Sate should they oppose another Thanks giving in a form of Jobs Program or what ever it will be called. And we are not even trying to be clever here - another option will be a total break of society as we know it. System is insolvent. The only way to run it is by multiplying liquidity to keep assets valuation afloat in terms of FIAT currencies.

Company has a great advance during the last year representing its improved fundamentals with production coming online. New discovery will provide new opportunities after price will settle from recent top in a consolidation stage. Bought financing will provide some floor for the stock at the 2.3CAD level. This story is another indication that strong players are able to finance their projects even in current market conditions.

Wed Feb 3, 2010 6:20pm EST


* Says to issue 13.1 mln shrs at C$2.30/shr
* Offer at 11.5 pct discount to Tuesday's close
Feb 3 (Reuters) - Canada's Fortuna Silver Mines Inc (FVI.TO) said it will raise C$30 million ($28.3 million) in a bought deal financing to partly fund the construction of its San Jose project in the state of Oaxaca, Mexico.
The company said it will issue 13.1 million shares at C$2.30 apiece, a 12 percent discount to their closing price Tuesday, to a syndicate of underwriters, co-led by CIBC and Canaccord Financial Ltd.
The underwriters will have an over-allotment option of 15 percent of the offering, Fortuna said in a statement.
The offering is expected to close on or about March 2. Shares of the Vancouver, British Columbia-based company closed at C$2.49 Wednesday on the Toronto Stock Exchange. ($1=1.060 Canadian Dollar) (Reporting by Koustav Samanta in Bangalore; Editing by Gopakumar Warrier)"

Press Release Source: Fortuna Silver Mines Inc. On Tuesday February 2, 2010, 12:25 pm EST
VANCOUVER, Feb. 2 /CNW/ - Fortuna Silver Mines Inc. (TSX: FVI / Lima Exchange: FVI) is pleased to announce the discovery of high-grade silver-gold mineralization in the upper portion of the Animas Vein at the Caylloma Mine in southern Peru. A series of exploration raises and cross-cuts recently developed along the Animas structure cut Bonanza-style silver-gold mineralization above level 6 (production to date from the Animas Vein has all been derived from below the 6th level.)
Mr. Jorge Ganoza, President and CEO, commented: "This is an exciting discovery of high grade silver-gold mineralization in the Animas vein, traditionally a polymetallic vein, that is the source of 85% per cent of production at our Caylloma mine. We're currently investigating the full significance of the new discovery and our exploration and mine planning teams are working to define resources to be included in our mine plan".
Highlights of sampling on the new zone include: Raise CH 418N: 41 channel samples taken every two meters along 84m of vertical extent on the raise returned an average of 1,890 g/t Ag and 5.4 g/t Au over an average sample width of 1.35m. Cross-Cut 418N: Averaged 2110 g/t Ag and 13.27 g/t Au over a true width of 4.36m. Raise CH412N: 30 channel samples taken every two meters along 60m of vertical extent on the raise returned an average of 404 g/t Ag and 1.26 g/t Au over an average sample width of 1.55m. The high-grade silver-gold zone is open laterally over a strike distanceof 400m and vertically to the surface, a distance of 150 to 200m along theinclination of the vein. The significance of these results still needs to befully quantified and built into the current mine plan.
Results of the systematic channel sampling every two meters of the raises are summarized in the following table. Silver and gold values range up to 13,202 g/t and 181.95 g/t, respectively.

Table.

To-date, only one drill hole has been completed above level 6 in theAnimas vein. Drill hole ANIS007506 intersected the Animas vein just abovelevel 6, approximately 200m north-northwest of raise CH418N, and assayed 116g/t Ag, 1.03 g/t Au, 3.74% Pb, 5.43% Zn and 0.29% Cu over an interval of 5.2m.The drill hole was oriented perpendicular to the mineralized structure. Thelocation of the underground workings and the single existing drill hole areillustrated in the attached longitudinal section of the Animas Vein. Pleaseclick on the following thumbnail to view the section:
http://www.fortunasilver.com/i/maps/caylloma/FortunaSilver_AnimasVein_Lv6 _21jan2010.pdf
A 1,300m, 15 hole diamond drill program has been developed to test the lateral and vertical continuity of this Bonanza-style mineralization. Drilling should start in mid-February.
Other High-Grade Targets
Initial exploration drilling will also be carried out at the Don Luis II and Vilafro prospects where surface sampling and mapping have identified mineralized structures with strong silver and gold mineralization. Surface channel samples collected over a strike length of 400m at the Don Luis II vein include 9.89 g/t Au and 347 g/t Ag (sample 251778), 10.0 g/t Au and 93.5 g/t Ag (sample 251740) and 1.16 g/t Au and 1250 g/t Ag (sample 251751). In the Vilafro area, high grade silver mineralization ranging to 3,132 g/t Ag in rock chip samples is associated with a northwest-trending fracture zone.
QA/QC
Sample results reported for the underground workings, including raises and cross-cuts, are based on channel samples systematically collected perpendicular to the orientation of the vein. Samples are dried, prepared and analyzed at company-owned sample preparation and laboratory facilities at the Caylloma property. Silver and base metals are assayed by atomic absorption methods utilizing an aqua regia digestion. Gold is assayed by standard fire assay methods with an atomic absorption finish. Certified reference standards are blindly inserted into the sample stream at a frequency of 1 per 20 normal samples. Assay blanks are blindly inserted at a frequency of 1 per 30 samples and field duplicates are collected and analyzed at a frequency of 1 per 80 normal samples. Check assay samples and preparation duplicate samples are routinely submitted to ALS Chemex facilities in Lima to verify sample preparation and assay quality.
Qualified Person
Mr. Miroslav Kalinaj, P. Geo., is the Company's Qualified Person as defined by National Instrument 43-101 and is responsible for the accuracy of the technical information in this news release.
Fortuna Silver Mines Inc.
Fortuna is a growth oriented, silver and base metal producer focused on mining opportunities in Latin America. Our primary assets are the Caylloma Silver Mine in southern Peru and the San Jose Silver-Gold Project in Mexico. The Company is selectively pursuing additional acquisition opportunities. For more information, please visit our website at http://www.fortunasilver.com/.
ON BEHALF OF THE BOARD Jorge Ganoza President, CEO and Director"