on my WTF?-o-meter is starting to twitch.

It has to do with the shorts. It just doesnt make much sense to me why we have this camapaign directed at Largo.

A brief, recent history. In June the price of V spikes and the investment world discovers our little Largo. My guess is that an analyst at Sprott gets wind of Lurks work on the economics of the project and suddenly its high on the agenda of the SAM morning meeting. Plenty of buying followed by a media blitz on BNN that really stokes the fire.

Now the funds start to pour in and volume explodes. (BTW, we unloaded 18M warrants in June - bodes well for less paper around next time we run). They are very enthusiastic once they check into the companies prospects. We go vertical and hit 1.60 or so. Then the V price reverses despite the earthquake in China as supply is not as impacted as originally thought. The price rolls over and the funds start going short now believing the hockey stick chart is due for a reverse.

Selling ensues, funds who had jumped on board as well as momentum traders start to bail causing the price to fall. Additionally, the positive news catalysts(BFS and scoping study) are delayed several times putting an air pocket into the price and selling acclerates.

Enter July - the worst month for commodities in 8 years. Everthing is hit as the US government engineers a collapse in the commod markets in order to unwind the short $/ long commod trade. Addtionally, the banks are in trouble and need to raise more capital. The only way that is going to happen is to get the SP's higher so that foreigners will be willing to step in for another round of capital raising. They begin a concentrated global effort to buy dollars and increase the value of the USD simultaneously spreading the word that Europe is even worse and global growth is grinding to a halt. Traders start to pitch everything commod related and jump on the emerging 'strong' dollar trend. Oil craters(obvious benefits to economy), gold and silver crater(allowing the bullion banks who have the largest concentrated short positions in the history of the comex to cover and add some newly stolen captial to their ailing balance sheets). Win win win.

August now sees all the hedge funds loaded up with a trade that has worked for years suddenly offside. They all run for the same exit in a seasonally slow period and we have the chart of the Venture looking like it does. Large positions cannot be unwound in illiquid and increasingly weak markets...but they have to be because the funds are levered and are facing margin calls and client redemptions forcing them to sell at any price.

Now on top of all that, we get the financial armaggedon scenario starting to play out with bank failures, municipality bankrupcies, Fannie/Freddie getting nationilized putting the Feds balancesheet at risk, the collapse of ailing Lehman with hundreds of billions of debt on the books of institutions world wide and now AIG with as much as 1T$ of counterparty risk threatening whats left of the markets, the juniors and our poor little Largo - a cork floating on the waves of this cat 5 storm.


Now we sit revisiting our 52 week lows. The bashers on the bullboards have turned pumpers indicating their employers have switched from short to long. You can certainly argue the price rise to 1.60 was too far too fast and therefore justified a short position especially in the context of the above.

We've seen a declartion that Mckenzie has increased from 10% to 15% and plenty of buying continues as new margin calls force yet more sales. I see entities loading up daily. Management themselves are buying. Who better to judge the companies worth than they who are privy to info the market is not?

The newest short campaign is what doesnt figure here. I'm seeing more shorting today(thats propeitary in case you're wondering) and as with any campaign, the 'internet rats'(Puplova's term) are out in full force on our board.

As one or two have pointed out already, shorting here makes no sense. Fundamentals are incredible and continue to improve. Granted the future hinges on completing a large financing deal - something almost unheard of in the juniors at the moment but Investec has agreed to 75% and the company has said that nothing has changed. Certainly there is risk of the deal not going thru but at this valuation, the downside risk seems minute against the upside reward. That type of risk/reward ratio is not the kind of thing that draws shorts who have unlimited losses if they guess wrong.

Shorts are well aware of this. My point is that it makes no sense for them to be here at this price if their only motivation is to be able to buy back lower. They could be a real hack, boiler, Vancouver outfit I suppose but just because their public mouthpiece has that sound doesnt neccesarily mean anything about those behind the call.

I mean, with markets where they are today think of the opportunities for a shorting organization. The world is their oyster right now with everything in freefall - as I said before, just throw a dart - its all going down and fast. So why on earth focus on a junior with extraordinary fundamentals that has gone down as far as it has?

Needle is twitching. I'm beginning to think we' re in play.