International Paper's earnings were stronger than expected, and we raised our earnings estimates.  While we stayed at Underweight in expectation of some weakening of containerboard operating rates with winter seasonality and due to a windup of restocking, our conclusions were not robust.  We estimated a $19 price target at an 8% discount rate, but a $26 target if we used a 7% discount rate.  The contribution of $1.15 billion to the pension plan, pension plan returns from bonds and stocks, land sales, earnings retention, debt paydowns and refinancings combine to strengthen IP's finances this year.  You may note our uncharacteristic "wishy washy" conclusion.

Mickey Foley in our team visited Timmons yesterday to see VG Gold, whose properties lie near Goldcorp's Porcupine division in the Timmons area.  All but one of VG Gold's land packages were past gold producers, including the 1+ mm oz Paymaster property operated a decade ago by Placer Dome and the Davidson Tisdale mine.  I had visited Timmons on September 13th to see Goldcorp's Porcupine division, whose plans to expand the Dome pit may swallow the Shania Twain visitor center or other important Timmons landmarks.  A former Goldcorp CEO will acquire a 28% stake in VG Gold.

Separately, we will host three companies with lands near the Goldcorp Red Lake division at our November 9-10 conference, including Premier Gold, Claude Resources and Mega Precious Metals.  Our studies of neighboring properties complements our knowledge of the core mines of the large companies we follow.

Faithfully,

John C. Tumazos, CFA