The KonLin Letter - Featured Stock of the Month

With rising interest rates, inflation creeping back into world economies, the re-emergence of trade wars with crypto-currencies, and cannabis beginning to falter, investor uncertainty increases. This is also apparent in gold on the verge of a new 5-yr. high, but the recent short-term dollar strength keeps gold and silver &om an imminent breakout. Silver is on the launching pad and appears poised for a blast- off, making an even bigger move once gold breaks out of the ridiculous 80- l Gold to Silver Ratio that is unheard of-a revision to the historical norm could be huge gains for silver bugs.

VLMGF, which I am a shareholder of and technical market consultant to, is a project generator and an exploration company, with, a portfolio of silver and gold properties in the Western U. S., including Silver Cliff in Colorado and Cherry Creek in Nevada. The Silver Cliff property (year-around paved access) lies within the historic Hardscrabble Silver District in which historical assays (not NI 43- l0l) indicated there could be more than 40-50 mil. ounces of silver. It also consists of 96 lode claims on approx. 2,297 acres where high grade silver, gold and base metal production came from numerous mines from 1878 to early 1900s. The property underwent substantial exploration between 1967-1984 for defining mineral inventories by major companies such as Freeport, Hecla, Homestake, Moly Corp., CoCa Mines and Tenneco Minerals. Drilling by Tenneco resulted in a historical prefeasibility study on which it was planned to bring the property to production. The plan was halted when Tenneco was bought out by a huge Belgium conglomerate not interested in mine development.

The property lay dormant until Pres./CEO Jim MacKenzie led an astute mining team in the acquisition of projects, maps and data to conduct a new round of test drillings at Silver Cliff. In mid.-Nov,'16, VLMGF commenced test drillings with the primary objective to confirm information in reports on historical drilling on one of the Silver Cliff deposits-the Kate Silver Resource (KSR), by twinning historical holes. The results confirmed the property had some of the highest grades of silver ever measured in North America. In fact, the mineralization at KSR is generally a flat lying bed and one hole property assayed 57 .2 oz/t silver over a 20-ft. interval with a 50-ft mineralized intersection averaging 25.9 oz/t silver and was the basis for the Phase 2 drill program using a state-of-the-art coring drill rig. Most exciting, results show additional significant rich silver blue gray mineralization, formed during a volcanic hiatus with deep seeded epithermal veins, may lie in an abundance of rich undiscovered silver stacked in layers in combination with high grade epithermal veins.

Furthermore, the nearby Passiflora deposit has resources estimated by CoCa Mines of 37.8 mil. ounces of silver in the ground. VLMGF controls approx. 40% of the Passiflora deposit and is in negotiations for the remaining portion. VLMGF's Cherry Creek, a valuable mining property consisting of over 400 unpatented and patented claims as well as mill rights, is composed of more than 8,000 acres. For the first time, most of Cherry Creek's past producing mines are assembled under one ownership group, which includes more than 2O past producing silver/gold mines all on patented property. The Phase 2 High Quality (HQ) drilling program has ended, totalling 20 holes during the past drill campaigns showing 83%-100% true thickness. Silver Cliff core drilling samples are more accurate hole-for-hole than Tenneco's abhor drilling of holes, with many showing 2-3 times higher grade and longer length. The strategic two drill programs demonstrated a significant rich silver mineralization occurred at shallow depth and that high grade silver deposits existed from surface to about 175 ft. lt also indicates the potential for open-pit mining with low extraction costs.

Meanwhile, in the midst of an ongoing active drilling/exploration program, the stock has been making higher lows, confirming its July'17 bottom, surging 89% into a bullish Flag Pattern. With the highest silver grade results in the U.S. ever seen, the stock should have no problem reclaiming its 50-Day SMA (0.26) and close above 0.31, with momentum increasing causing a break above 0.32 before rising into a moderate zone of overhead resistance at 0.36-0.40. VLMGF has no debt, and of the 50,513,000 shares outstanding, insiders own 60%. Management is establishing proof of concept, updating the historical mineral resource defined by Tenneco in the '80s, to acquire a NI 43- I0I mineral resource and is just days away from being released,

We would continue to Add/Buy for a first target of 1.50-l .75 as VLMGF reported additional significant high-grade silver intersections (cross-cutting to determine width of deposit). The HG core drilling at the historic KSR deposit drilled into what seems to be significant veins or zones based on the 20 drilled holes, and appear to be more than the Tenneco find. Expanding the resource potential by much greater value and beginning in the reclassifying of the historical Tenneco resource to a current NI 43-101 mineral resource will be the catalyst propelling the stock, squeezing the shorts. Management is reviewing the data to further expand HG core drill programs. At the rate they are going, VLMGF could have the largest silver resource in the U.S. by year-end, significantly increasing shareholder value. Ultimate target 2,50-3.00.


Kon-Lin Research & Analyst Corp., 5 Waterford Rd, Rocky Point, N.Y. 11778, (631) 744-8536


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