Mexican silver and gold miners/explorers to followTGR: In Part I, you mentioned adding Oro Gold Resources Ltd.(TSX-V:OGR) and Rochester Resources Ltd. (TSX-V:RCT) to the model. Whatstage are these companies in? Early Explorers, Advanced Explorers orProducing Explorers?
TW: I added Oro Gold to the EarlyExplorers category, and have Rochester in the Advanced Explorerscategory. If you look at the model itself, there are stated criteriathat can move a company from one category to another. To some degree,though, a bit of it is subjective. For instance, I don't move an EarlyExplorer up just based on the resource and having a 43-101 resource.Those are among the criteria, but if I see some stumbling blocks in thedevelopment or feel they aren't making enough progress moving a projecttoward economic feasibility I won't move them up. For example, if theystill have a lot to do in the way of metallurgical testing, dealingwith access and surface rights issues and water issues and otherpotential permitting problems, I may keep them in the Early categoryeven if they have a bigger resource than some Advanced Explorers.
TGR: You say Rochester is an Advanced Explorer? Aren't they producing?
TW:Rochester does have some production, but it's very small so far. Theyhave had issues with feeding their mill from narrow underground veins.They have just raised some capital and have a new mine plan andexploration program. I look for the company to move up to the ProducingExplorers category as their story unfolds this year when they reallyramp up production and start showing earnings or at least cash flow. Sothis was a bit of a selective placement on my part, but it allows me tomove them up and alert my clients that they are executing. One of theexciting things at Rochester is that Eduardo Luna is now President andCEO. He was Goldcorp's president of Mexican operations (Luismin) and isone of the most respected mining names in Mexico. He could have pickedfrom many companies in Mexico to run. He chose Rochester and put hisown money in the deal. I always like management with "skin in thegame." Eduardo's goal is to grow production and resources at Mina Real,which is in Nayarit State, in the same way he built mines for Luismin.
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