Pennaluna Prospector™
Ground Hog Edition

Tom Wobker
Feb 2, 2012

Silver Valley and Northwest Mining Stock News -- Coeur d'Alene, Idaho

Punxsutawney Phil, the well-known meteorologist, saw his shadow today and that portends six more weeks of winter. But we're not concerned, because we have bread and circuses to keep us happy -- the Fed prints the bread and the Super Bowl is Sunday.

While we kill time 'til kickoff, we have news for you from out here:

1. Hecla's Lucky Friday Mine - MSHA closing stirs up hornet nest
2. Canadian National Stock Exchange - new kid makes a mark
3. Shoshone Silver/Gold - Silver Strand deal closes
4. Sunshine IPO - no news
5. Midas Gold - spends big on Golden Meadows Project
6. U.S. Silver - important changes
7. Thunder Mountain - leases gold/cobalt claims in Idaho
8. Safety of Accounts - factoid
9. United Silver - gets $$$

* * * Hecla Mining of Coeur d'Alene (NYSE: HL) took a hit two weeks ago, when MSHA closed the Lucky Friday Mine at Mullan until debris is removed from the main shaft -- which the company says will take a year.

Shares plunged over 20% on the news, and Hecla cut expected 2012 silver production from about 9.5 million ounces down to 7 million, this to come from the Green's Creek Mine in Alaska. However, the shutdown shouldn't slow Hecla's promising exploration efforts in the vicinity of the Lucky Friday. HL is now trading at around $5.25, down from a 12-month high just over $11.00.
(www.hecla-mining.com)

The government action followed two fatalities at the mine last year, after a quarter century without a deadly accident. Suspension of operations threw about 200 employees and contractors out of work at one of the Silver Valley's largest private employers. State officials say the shut down could cost the Valley $25 million or more, and some local schools fear funding cuts.

A storm of criticism erupted. Some locals saw the shut down as heavy handed and politically motivated by an agency under fire for lax coal mining enforcement back East. Governor Butch Otter attended a town hall meeting in Wallace on January 24 and afterwards called on MSHA officials to meet with the Silver Valley public to explain their decision.

Some laid off miners are already working in other Valley mines. Others have taken jobs in Nevada, Montana, and elsewhere. Reporter Becky Kramer of the Spokane Spokesman-Review has covered the Valley for years. She writes on the local impact of the closure in articles you can read here.

* * * The Canadian National Stock Exchange (CNSX) recently reported on its 2011 trading and listing activity. Our customers like Canadian stocks and we've noted an increase in the number they trade that are listed on the CSNX . So we weren't surprised by the results: the volume of shares traded rose 45%... the value of trading was up 27%... the number of trades grew 32%... and the number of listings increased by 35.

CNSX is the new kid on the block among Canadian exchanges. When it got the OK to open in 2004 it was the first full stock market approved by the Ontario Securities Commission in 70 years. With a streamlined listing process, low fees, and other benefits that especially appeal to smaller firms, it has added listings every year since.
(www.cnsx.ca)

* * * Shoshone Silver/Gold of Coeur d'Alene (OTCQB:SHSH) in early January closed its deal to buy the Silver Strand Mine from Kellogg-based New Jersey Mining (OTCBB:NJMC). Near Coeur d'Alene, the mine is a past producer of silver, gold, lead and zinc.

The Strand is about 15 miles from Shoshone's permitted Lakeview Mill. Shoshone's new management says the mine offers immediate feed for the mill and should allow production this spring. SHSH is trading lately at about 17 cents.
(www.shoshonesilvermining.com)

* * * Sunshine Silver Mines IPO? - There's no new word on the planned IPO by Sunshine Silver Mines Corporation -- the Denver-based firm affiliated with billionaire investor Thomas Kaplan, who bought the 'Shine two years ago. We'll pass news along when we have it.

* * * Midas Gold of Vancouver (TSX:MAX) reports it spent nearly $ 24 million last year on drilling, exploration and related work at its Golden Meadows Project down in the Stibnite - Yellow Pine Mining District of central Idaho. It plans to spend another $ 17 million there in the first half of this year.

Midas, which has its exploration office in the Spokane Valley, is consolidating ownership of the 90-year old district and has already defined a multi-million ounce gold mineral resource. MAX has a 52-week high-low of US$ 3.00 and 4.90 and is trading lately at about 4.50.
(www.midasgoldcorp.com)

* * * U.S. Silver Corporation of Toronto (TSX:USA/OTCQX:USSIF) recently released a flurry of news. On Tuesday it said it expects 2012 production at the Galena Mine near Wallace to be 2.4 million ounces of silver... along with 6.5 million pounds of lead... and 1.2 million pounds of copper. It also said it intends to have the nearby Coeur Mine reopened and producing by year end, and plans about 100,000 feet of exploration drilling in 2012, a 30% increase from last year.

Last week, there was also important news: USA said it was in the process of listing its stock on the AMEX... and reversing the shares one for five. The company also reported that CEO Tom Parker would retire January 31... and that it has so far hired over a dozen laid off Lucky Friday employees while "working cooperatively" with Hecla.

USA controls around 14,000 acres in the District -- including mines like the Galena, Coeur, Caladay and Dayrock. Together they have produced over 200 million ounces of silver during the past sixty years. Post reverse, USA is trading now at about CDN$ 2.45.
(www.us-silver.com)

* * * Thunder Mountain Gold of Boise (TSX-V:THM/OTCQB:THMG) reports it has leased with an option to buy the 46 claims of the CAS gold/cobalt group in the Iron Creek Mining District of the Idaho Cobalt Belt. This is down in central Idaho. The outfit plans to begin exploration later this year when snow conditions allow.

The claims are about 15 miles from the cobalt mine owned by Vancouver-based Formation Metals (TSX:FCO). (Formation also owns the Big Creek Hydrometallurgical Complex in the Valley outside Kellogg.) THMG has been as high as 40 cents in the past year, and is trading now at about a dime.
(www.thundermountaingold.com)

* * * Is your account safe? -- Factoid: there's no hypothecation at Pennaluna, because we don't allow the margin accounts that brokers need to lend out your stock. For more security facts, read our recent letter to customers about account safety. Click here [pdf]

* * * United Silver Corporation of Vancouver (TSX: USC.TO/OTCQX: USCZF.PK ) -- 80% owner of the Silver Valley's Crescent Mine -- announced yesterday it's closed a $6.3 million financing deal with Hale Capital Partners, a New York private equity firm. The agreement is subject to final blessing by the TSX.

USC says it will now be in a position to begin its four-year exploration and development plan at the Crescent to test mineralization of the South and Alhambra Veins at depth and along their east/west strike extensions. USC had started on the project before it began to run out of cash last summer.

The Crescent over several decades produced about 25 million ounces of silver at an average grade above 27 opt... said to be highest in the District. You can read more about it in one of our Update Editions from last summer, archived here. (While you're there, you can also get a free subscription to this newsletter.)

USC stock within the past year rose well above a dollar, but the shares are hovering now at around 35 cents.
(www.unitedsilvercorp.com)

Thanks for reading. We'll see you next time.

"The difference between genius and stupidity is that genius has its limits"
Albert Einstein (1879-1955)

Editor Tom Wobker

###

Founded in 1926, Pennaluna trades stocks on all U.S. and Canadian exchanges, Nasdaq, OTCBB and Pink Sheets.

Phone 800-535-5329 or visit www.pennaluna.com.

For online trading see www.penntrade.com.

For a free subscription to this newsletter, click here and enter your email address in the little box at the top of the right-hand column.

Disclosure: Pennaluna & Company is a FINRA broker-dealer and market maker. As such, it frequently buys or sells stocks for its own account, or in order to make a market. Consequently, Pennaluna may at any time buy or sell or make a market in any stock mentioned herein, and associated persons may also buy, sell or hold such stock at any time. The firm and/or associated persons may also engage in private placements or other investment banking activities with any company mentioned. Some securities mentioned may be small-cap stocks and subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information; some may be foreign securities and subject in addition to currency, political and other risks. Mention of a security does not imply an endorsement. Comments and opinions are solely those of the writer. This publication is not investment advice; is not a research report and provides insufficient information upon which to base investment decisions; is intended solely to provide readers with information; is not a solicitation for the purchase or sale of any security; and is not intended to be nor should it be used as tax advice, which should be sought from a professional familiar with your individual financial situation. Mention of a company or stock does not in any manner constitute a recommendation, unless specifically so stated. Information is believed accurate but accuracy is not guaranteed. Any websites mentioned other than www.pennaluna.com and www.penntrade.com are not under the control of the firm and it can take no responsibility for information found on such sites.

321gold Ltd