Southern Cross Gold Ltd V.SXG

FYI... Samex Investors

[TREV16]

Juniors are a screaming BUY ! I expect 2005 the year of the Junior Exploration companies again just as 2003. Remember that 2004 was a consolidation year in a multi year bull market in Gold, and shook out many nervous investors but the uptrend will resume anytime now. Insider selling Samex before last News release of Nov 18 is NONSENSE Now I want to take the opportunity to address some key-fears of many SAMEX shareholders. I received several inquiries about possible insider selling front running the Exploration Update of Nov 18. Just look at the chart below : People argue : A huge sudden spike in volume caused by selling pressure prior to the release of the November 18 Exploration Update most probably mean that insiders knew of the results and started selling. Although I can imagine this kind of reasoning nothing could be further from the truth. Insider selling is a NON-ISSUE within this company or they‘re lying to me. If that’s the case I don’t know myself. When I confronted Jeff Dahl with these share holder remarks he exploded, he said : I have laboured alongside the SAMEX exploration team for over ten years now …and I believe that they are some of the most honourable people our industry has to offer. To suggest that we’re disingenuously jumping ship now, after all we’ve been through and all we believe is potentially ahead of us is simply speculation of an absurd order and must originate from those who have not done their fiduciary responsibility of getting to know us. END. Furthermore I asked Jeff to find out if the selling pressure could have been generated by an institutional investor. After three days Jeff came back to me and found out who the seller was. It was an institutional investor getting rid of its junior shares. Samex wasn’t the only Junior suffering from this institutional selling. When SAMEX released their Exploration Update for Target Area I on November 18, the stock went up from 74 cents to 85 cents, so the whole idea of insider selling prior to potential bad Exploration Updates is NONSENSE ! But after a slight recovery the stock resumed its downtrend from early December. Again people are wondering what is going on ? Why didn’t they come up with the drill results of Target Area II and III ? As usual price action makes commentary and people start to think that upcoming news must be bad otherwise the stock wouldn’t tank. This kind of thinking only exaggerates the overall weakness witnessed in this sector and therefore pushes the stock into an extreme oversold condition which makes it just from a technical point of view already a screaming BUY, see chart below : So what do we see : RSI/MACD in deep oversold area Extreme RSI/MACD lows usually followed by sharp re-bounce. Conclusion : Samex shares are dirt cheap, they are trading at the same price level as with Gold at $375. So could this be a good BUY opportunity ? Yes it certainly could be. Of course you can chase it for a penny lower but we saw that can turn out to be an expensive decision. Another reason why I think it is anyhow a good BUY right now is that there is a good short term opportunity involved here. Now please digest this carefully : Samex has a huge discovery potential on their 50 square km Los Zoros property. Los Zoros is divided into 7 different Target Areas, each of them could be regarded as a separate project. Samex reported similar geology to the 12$ billion Candelaria Copper mine 50 km north. Top class geologists are assigned to this project. One consultant is considered a world expert in Chilean copper exploration. In July they started drilling Target Areas I, II and III. During drilling Target Area II and III the Samex geologists decided to expand the drill program by approximately 2000 meter which means that they almost doubled the amount of drill holes. That’s why it is taking the company more months to complete its drilling program. Drill results from Target Area II and III can be expected early next year. I don’t know the reason for the drill extension but my common sense tells me that you don’t expand a drill program over night without good reason. If Samex can live up to its expectations then we could have a run. Highlights : Insider selling prior to November press release is nonsense No drill results yet from Target Area II and III is more likely a consequence of good news. (Extension of both Drill programs) Panic selling is way overdone Technical rebound is due anytime Good short term opportunity. Very Important Drill results of Target Area II are expected soon. Hope to have clarified some blurry thoughts and wish you all a golden investment year 2005. Eric Hommelberg [e-mail] December 16, 2004