Categories: Precious Metals
Topics: General Precious Metals

Small Cap Overview and 2012 Watch List: Ethos Capital Corp.

Dec. 21, 2011

Junior Mining Weekly Excerpt

• We provide an overview of the small cap mining sector and our year-end list of exploration/development/mining companies that we believe could provide above-average speculative potential in 2012.
   
• It’s difficult to keep a positive demeanour in a junior mining market that has performed so poorly over the last year. While we expected periods of market volatility in 2011, the unrelenting, high risk aversion led to few opportunities in the sector. While we remain cautious in our outlook for 2012, our experience tells us a contrarian approach to investing in junior mining can offer investors the best opportunities for upside potential in the current market. We continue to stress that risk-tolerant investors should consider accumulating equity positions during corrective market phases (now) and take profits in upturn rallies.
   
• While macro economic/political issues in Europe, the US, and China are key to market stability or instability moving forward, we remain cautiously optimistic given the underlying conditions important to the mining sector. Low interest rates, above-average metal prices, well funded junior programs, and M&A potential driven by balance sheet strength of the major mining companies are positive underlying factors supporting the junior mining sector. A shift in market sentiment should open the opportunity for a junior mining rebound.
   
• Companies on our 2012 Watch List have been selected based on a wide variety of criteria, including capable company management, 2012 work programs, project potential, and leverage to metal price movement (ideally, upward leverage). Our primary goal is to identify companies that offer above-average opportunity based on successful project advancement/development potential in 2012. Although our list considers balance sheet strength in these difficult times, our primary focus is to identify companies that provide above-average opportunity should the junior sector find life in 2012.

 
ETHOS CAPITAL CORP.
(ECC : TSX-V : C$0.70 | NOT RATED)

Wendell Zerb, P. Geol 1.604.643.7485
Gabriel Gonzalez 1.604.643.7529

Figure 32: ECC : TSX-V Figure 33: ECC : TSX-V

Shares O/S (M): 40.8
Shares FD (M): 52.2
Working Cap. (M): C$14.5
Market Cap. (M): C$28.6
Co. Website: www.ethoscapitalcorp.com

Source: Company reports Source: StockCharts.com

Ethos is a junior exploration and development company concentrating on precious metals resource properties in Yukon Territory, Canada. Ethos has 5,089 claims covering an area of 1,063 square kilometres in the emerging White Gold District. Gary Freeman is the President and CEO of Ethos. Mr. Freeman was previously President and CEO of Pediment Gold Corp., which was acquired by Argonaut Gold Inc. in January 2011. The Ethos property package was optioned from Ryanwood Exploration, which is operated by Yukon Prospector, Shawn Ryan.

• The company recently reported final gold soil geochemical results and follow-up trench sampling from the 2011 exploration program on its mineral properties in the White Gold District, west-central Yukon Territory, Canada. The highlight results were from initial pit trench rock samples from the Mascot Creek soil grid area on the Betty Property (856 claims covering 179 square kilometres), which is located east of Kaminak Gold Corporation's Coffee discovery. Ethos interprets the Coffee Fault, an east-west trending lineament that is associated with Au mineralization in the area, to transect the Betty property.

• Ethos suggests that results have delineated a large gold soil anomaly measuring 5.0 by 3.5 kilometres on the Mascot Creek grid, which returned six soil values above 1,000 ppb Au to a maximum of 7,288 ppb Au. Overall, 105 sites with values above 100 ppb Au were identified, along with 462 sites with values above 25 ppb Au.

• Trench sampling was conducted on the Mercedes zone, one of nine on the Mascot Creek grid (Thornton, Spitz, Miller, Perrault, Bond, Marshall, Koona, Teek, and Mercedes). For Line 1, a total of 52 trench pits were excavated along a 270-metre length. According to Ethos, nine samples from a 50-metre, mineralized interval within Line 1 averaged 7.3 g/t gold over the 50-metre length. Line 2, which tested mineralization over 370 metres, parallel to and spaced between 5-10 metres from Line 1, returned a 45-metre sub-section of Line 2 averaging 2.9 g/t gold over a 45-metre length.

• Other recent trench results also followed from the Bond zone, which included a total of 575 metres length over three lines, and returned a best value of 0.9 g/t gold over the 27-metre length, within a longer interval of 0.5 g/t gold over an 80-metre length. The company indicates that the Bond gold-soil anomaly is up to 2,000 metres in length with soil values up to 1.14 g/t gold and is associated with a fault interpreted from a north-south oriented magnetic 'break' feature.

• The company is planning for an initial mid May 2012, $5 million, 5,000 to 7,500 metre drill program that will focus largely on targets associated with the Betty Property. An analyst has not visited the properties held by Ethos Capital Corp.

Investment risks & disclaimer
The commercialization risks associated with mineral exploration and development are high. We are not providing estimates, an investment rating, or target price for Ethos Capital Corp.