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from the Editor;

"Clifton Star Resources (TSXV: CFO). Shares: 25M issued, 38M fully diluted. Recent price: C$4.89

The recent price action of Quebec-based gold explorer CFO justifies a comment. CFO was up strongly on both Monday and Tuesday of this week in parallel with substantial sector-wide weakness, and then gained some additional ground on Wednesday. The stock has gained 20% this week is up by 130% since being added to the TSI Stocks List about 6 weeks ago.

There is little doubt that the recent price action stems from the large financing announced in mid November. As we noted at the time, equity financings are generally bearish for the share price, but the nature of CFO's financing was perceived as a big plus because it brought Osisko (TSX: OSK) in as a 50/50 partner. Due to OSK's involvement, three things are now happening. First, the stockbrokers that follow OSK have been forced to discuss the potential of CFO's projects, thus enhancing CFO's profile within the investing community. Second, the OSK deal has brought CFO to the attention of investment funds that had previously never heard of the company. Third, OSK has been discussing its plans for CFO's projects, and these plans apparently involve a phenomenal 20,000m per month of drilling during 2010 and a total of 300,000m of drilling within the next 18 months. OSK's senior managers would not be making this level of financial commitment unless they were very confident that they could prove-up at least 10M ounces of gold, and if OSK were to prove-up a 10M+ ounce resource then CFO shares would likely be worth C$10-$15.

CFO has run up too far too fast to be suitable for new buying at this time. It will naturally pull back at some point, hopefully by enough to create another buying opportunity. Due to its remaining upside potential and the fact that it has only just broken out of a very large basing pattern (see chart below), it is also not a good candidate for profit taking unless the profit-taking were required for money-management purposes (meaning: it would only be appropriate to take some money off the table at this time if one's exposure to the stock had moved beyond a predetermined threshold).

A drop back to former resistance (now support) in the C$3.70s would create a new buying opportunity."

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