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HIGHLIGHTS

- Off market, all scrip (share) offer comprising 1 fully paid ordinary Paladin share for every 3.16 fully paid ordinary Valhalla shares.

- Valhalla's directors have unanimously recommended acceptance of the offer in the absence of a superior offer.

- Represents a significant step forward in Paladin's growth strategy.

Paladin Resources Ltd ("Paladin" or "the Company") (TSX:PDN - News; ASX:PDN - News) is pleased to announce an A$174 million takeover offer for Australian Stock Exchange-listed mining company Valhalla Uranium Limited (ASX:VUL - News; "Valhalla"). The off market, all scrip offer will comprise 1 fully paid ordinary Paladin share for every 3.16 fully paid ordinary Valhalla shares, implying a price of A$1.45 per Valhalla share, based on the last traded price of Paladin shares on Thursday 6th July 2006 (prior to Paladin shares being placed in a trading halt).

Just when you thought Strateco might just break out after closing at its daily high yesterday, the professionals easily brang the price back down to their comfortable accumulation range.

And the longer this sideways price trend continues, the more certain I am that it will break out when the professionals have accumulated as much of the loose shares as possible.

Then they get the promo machine going and all of a sudden everyone will think this company is so hot. People will try to buy shares hand over fist.

But the pros know how to play this and they will only slowly sell their to euphoric crowds. There will be several gap ups to excite the crowds even more.

But after a nice run, the pros decide that they don't have much more to give as far as promotion and they will unload the rest of their shares in just a few abnormally high volume distribution days.

The pros then watch with smiles on their faces as the share price slowly slides down until a level where the pros feel comfortable to begin accumulation again.

As you know I recommend BVE as a speculative buy on Monday. Since then it has dropped about 15%.

All is not over yet but I wouldn't add to my position until we get another breakout.

However, there is a chance that the breakout we say was actually a clever all at once distribution of stock by the pros.

We won't know for sure but just in case make sure to set your stops at around $0.74. That is the 30 day moving average and a drop below that would signal a trend reversal for the time being.

This could be temporary or it could be permanent. Once again, I don't know but the secret to successful speculating is to keep losses small and let winners fly.

BVE has the potential to be a homerun but if it's not we have to sell at a small loss and perhaps wait for a better time to get back into the stock. 

Looking at the RSC chart below, I think the stock may be undergoing accumulation again.

If my analysis is correct, this is the 5th accumulation period for this stock. After every time period like this except one, the stock has broken out and reached new highs. The gains ended with a big volume spike (distribution) that signalled the peak for that particular rally.

The stock then gave back some gains and began a new accumulation period. These can be identified by low volume and very tight trading ranges. These characteristics usually signify that there is some professional buying and controlling going on.  

I myself might establish a small speculative position in RSC because it really seems to be setting itself for a breakout soon. I have no idea exactly when, but I think it will coincide with a very positive news release.

The only thing I have to decide on before buying in is a stop loss point. Usually I simply let the 30 day moving average be my stop loss but this price is below that figure.

I just finished reading a tiny little 100 page book by the title of "The Story Behind Canadian Mining Speculation". It was written about 50 years ago by T.H. Mitchell and it should be a must read for any current mining speculator. If you can get your hands on it that is. Try searching for it at your university library because that is where I found this copy. Anyways, here are some great bits of information that I got from the book:

It should be clearly understood by the Canadian investor that the majority of the "penny" stock companies are worthless and always will be worthless. This has been proven time and time again. Yet their stocks have a definite value as a speculative trading medium; in other words, the stocks themselves are not worthless so long as somebody is willing to buy them. Thus, one has to be pessimistic about the possibilities of the companies, yet optimistic about the profit opportunities which their stocks present. And these are the sentiments which guide the professional traders.