(from 10/24/09)

"Canplats Resources (CPQ-TSX-V) was purchased in the EI portfolio earlier this week with a limit of C$2.40. This is a stock we have been in and out of a few times. We made good money early on but took a loss in June of 2009, after becoming frustrated with a lack of progress at the Camino Rojo gold discovery. When we sold on June 21, I pointed out that there were no fatal flaws with the deposit and that we would reassess the situation in the future.

The release of the Preliminary Economic Assessment report (PEA) this week confirms my earlier NAV calculations (see EI May 20, 2008) and belief that Camino Rojo is one of the best gold deposits available in Mexico. More importantly, the PEA now provides the rest of the finance and research side of the industry with hard numbers they can shop around Bay and Howe Street. It should also attract the attention of the management at companies actively mining or exploring in Mexico. The increased market awareness is the catalyst that I believe will narrow the valuation gap and take CPQ higher (assuming a steady gold price)."