Gold Rush Fall

YOUR GUIDE T O PROFI T ING FROM N AT UR A L RES OURCES

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A Wall Street Reporter® Publication

Fall 2007 CEO INTERVIEWS GOLD

Fast-tracking to be mid-tier nickel producer

Minefinders Corp., Ltd. AMEX/MFN

4

Banro Amex/BAA TSX/BAA

7

Mark H. Bailey, M.Sc., P. Geo, Director, President & CEO Peter Cowley, CEO

Gryphon Gold Corp. TSX/GGN OTCBB/GYPH

11

Tony Ker, President & CEO

E N E R GY Continental Resources Inc. NYSE/CLR

13

Alternate Energy Holdings, Inc. OTC/AEHI

16

CityView Corporation Limited OTCBB/CTVWF

19

Index Oil & Gas OTCB/IXOG

21

Burleson Energy Limited ASX/BUR

24

Felix Resources Limited ASX/FLX

27

Sydney Gas Ltd ASX/SGL

29

Renewable Energy Holdings PLC LSE/REH

31

Essential Energy Services Trust TSX/ESN.UN

33

Petro Andina Resources Inc. TSX/PAR

35

Anterra Corporation TSX-V/ATR

39

Dejour Enterprises Ltd. TSX-V/DJE

41

Run of River Power Inc. TSX-V/ROR

43

West Siberian Resources Ltd OMX/WSIB

45

Harold Hamm, Chairman & CEO Donald Gillispie, President

Skye Resources Inc. Ian G. Austin, President & CEO

Mark Smyth, Chief Executive

P 70

Constructing open pit mine

Daniel L. Murphy, Chairman

Michael Sandy, Executive Director

Brian Flannery, Managing Director

Dr. Philip Moore, CEO & Managing Director Michael J. Proffitt, CEO

James Burns, President and CEO Wayne Foo, President & CEO

Owen C. Pinnell, P.Eng., Chairman & CEO

Minefinders Corporation, Ltd. Mark H. Bailey, M.Sc., P. Geo, Director, President & CEO P4

Robert L. Hodgkinson, Chairman of the Board and CEO Jako Krushnisky, President & CEO

Leveraging 11 million ounces of gold Building impressive track record

Maxim Barski, Director & Managing Director

M E TA L A N D M I N I N G Southern Copper Corporation NYSE/PCU

47

Oscar Gonzalez Rocha, President & CEO

Allegiance Mining NL ASX/AGM

49

Homeland Precious Metals Corp OTCBB/HPMEF

51

Arafura Resources Ltd ASX/ARU

53

Monarch Gold Mining Company Ltd ASX/MON

56

Range Resources Ltd. ASX/RRS

58

DiamondCorp plc AIM/DCP

60

Candorado Operating Company Ltd TSX/CDO

62

Ian Levy, CEO

Bruce Johnstone, CEO, President & Director

Alistair James Stephens , Managing Director & CEO Michael Kiernan, Executive Chairman

Banro, Peter Cowley, CEO

P7

Peter Landau, Executive Director & Company Secretary

Paul R. Loudon, Managing Director & CEO

Rene Bernard, President & CEO

Duluth Metals Limited TSX/DM

65

Khan Resources Inc. TSX/KRI

68

Skye Resources Inc. TSX/SKR

70

Henry (Rick) Sandri, President and CEO

Martin Quick, President, CEO & Director Ian G. Austin, President & CEO

Brazauro Resources TSX-V/BZO Leendert G. Krol, Mark E. Jones, III

Index Oil & Gas, Daniel L. Murphy, Chairman

75

Nayarit Gold Inc. TSX-V/NYG

77

Peter F. Tegart, Director, President and CEO

P 21

72

Frontier Pacific Mining Corp. TSX-V/FRP

Michael A. Dehn, President, CEO & Director

gold rush!

Yo u r g u i d e t o f i n d i n g t h e n e x t b i G

THING

I

n a world where the price of crude contin-

Issue N º4 20 07

ues to scale new peaks

and the vice-chairman of

Publisher Jack Marks

Newmont

Mining

Corp.

is telling people to expect

Business Operations Lisa Gutierrez

bullion to break $1,000 an Senior Analysts

ounce, you don’t need us to

Kilian Brandon Todd Santorelli John Ortel Design Director Irving Grunbaum

make the bullish case for hard commodity producers. And there are plenty of companies out there, from established giants like Newmont and ExxonMobil to the new generation of lean but ambitious prospectors—each with a story to tell and a unique

Contributing Editor

value proposition to prove.

Robert Scott Martin Research Analysts Harald Hendriks

That’s where Wall Street Reporter comes in. We drill down into the mining and energy sectors to find companies that

Nicholas Casella

have already distinguished themselves and, more impor-

Priya Kumar

tantly, have substantial upside potential ahead. Are these

Simone Thompson

the giants of the future? That’s for history to decide, but

Johanna Kocab

in the exclusive CEO interviews we’ve assembled in this

Lauren Pilon Internet Group Chima Dillon

(and every) issue of Gold Rush, top management will take you on a personal tour of their prospects, resources, and, in several cases, actively producing projects.

Administrative Support Angela Shapovalova

Whether you’re looking for opportunities in oil, gas, alter-

Stephanie Perez

native energy, copper, nickel, iron, uranium, diamonds or gold, you’ll find plenty of ideas here. And if you want more, it might pay to monitor our Web site wallstreetreporter. com, where we break news on a daily basis with all the

Published by Wall Street Reporter Magazine, Inc. Eleven Hanover Square, 10th floor, New York, NY 10005 Phone: 212-363-2600 Fax: 212-635-5555 E-mail: [email protected] To Subscribe: [email protected] Important notice and terms of use Copyright© 1998-2007 Gold Rush!, a Wall Street Reporter Publication. ALL RIGHTS RESERVED. Reproduction in whole or in part is prohibited without written permission. By using the information contained in this publication you are agreeing to be bound by the following terms of use: This Magazine is published with the understanding that the publisher is not engaged in rendering business, investment advice and/or services. Nothing contained herein is a solicitation to buy or sell securities, and shall not be deemed to offer any securities. Gold Rush! relies upon information received from companies and individuals, which although believed to be reliable cannot be guaranteed as to completeness or accuracy. Certain companies have paid a fee for inclusion in this publication. The publisher does not endorse any company or advertiser featured, and is not responsible for any claims made by the companies or individuals. Companies participating in features or interviews in this magazine have purchased an Investor Relations Program from Wall Street Reporter Magazine, Inc. in compliance with SEC’s Rule 17-B. Details of compensation are provided as follows:Minefinders Corporation – $12,500; Banro – $12,500; Gryphon Gold – $9,850; Continental Resources – $12,500; Alternate Energy Holdings – $9,850; Cityview Corporation Limited – $12,500; Index Oil & Gas – $9,850; Burleson Energy Limited – $12,500; Felix Resources Limited – $12,500; Sydney Gas Ltd – $12,500; Renewable Energy Holdings PLC – $9,850; Essential Energy Services Trust – $12,500; Petro Andina Resources – $12,500; Anterra Corporation – $9,850; Dejour Enterprises Ltd – $9,850; Run Of River Inc – $9,850; West Siberian Resources Ltd – $9,850; Southern Copper Corporation – $12,500; Allegiance Mining NL – $9,850; Homeland Precious Metals Corp. – $9,850; Arafura Resources Ltd – $11,800; Monarch Gold Mining Company Limited – $12,500; Range Resources Ltd – $9,850; DiamondCorp PLC –$ 9,850; Candorado Operating Company Ltd – $9,850; Duluth Metals Limited – $12,500; Khan Resources Inc. – $12,500; Skye Resources Inc. – $12,500; Brazauro Resources – $12,500; Frontier Pacific Mining Corporation – $9,850; Nayarit Gold Inc. – $12,500.

latest one-on-one discussions with CEOs, analysts, and professional investors with their fingers on the pulse of the hottest sectors. You can also meet many of these business leaders yourself at any of our discovery conferences; check the site for details and registration information. They say real value is created through the drill bit. We’ve done some drilling for you here and uncovered what we think is a wealth of prospects, many of which have been overlooked by Wall Street so far. I’d say that these are market diamonds in the rough, though there’s nothing “rough” about them—but I’ll let the CEOs speak for themselves.

Jack Marks Publisher

A WALL STREET REPORTER PUBLICATION • Gold rush! • 

TABLE OF CONTENTS

GOLD 4

45

Minefinders Corporation, Ltd. • AMEX/MFN



Mark H. Bailey, M.Sc., P. Geo, Director, President & CEO



Maxim Barski, Director & Managing Director

Metal & mining 47 49 51 53

7

Banro • AMEX/BAA TSX/BAA





11

Gryphon Gold • TSX/GGN OTCBB/GYPH



Continental Resources Inc. • NYSE/CLR



Harold Hamm, Chairman & CEO



Alternate Energy Holdings, Inc. • OTC/AEHI



Donald Gillispie, President



CityView Corporation Limited • OTCBB/CTVWF



Mark Smyth, Chief Executive



Index Oil & Gas • OTCBB/IXOG



Daniel L. Murphy, Chairman



Burleson Energy Limited • ASX/BUR

Michael Sandy,Executive Director



Felix Resources Limited • ASX/FLX

Brian Flannery, Managing Director

Sydney Gas Ltd • ASX/SGL

Dr. Philip Moore, CEO & Managing Director



Renewable Energy Holdings PLC • LSE/REH



Michael J. Proffitt, CEO



Essential Energy Services Trust • TSX/ESN.UN

James Burns, President and CEO



Petro Andina Resources Inc. • TSX/PAR

Allegiance Mining NL • ASX/AGM

Ian Levy, CEO

Tony Ker, President & CEO

ENERGY 13 16 19 21 24 27 29 31 33 35 39 41

Southern Copper Corporation • NYSE/PCU

Oscar Gonzalez Rocha, President & CEO

Peter Cowley, CEO

West Siberian Resources Ltd • OMX/WSIB

Homeland Precious Metals Corp. • OTCBB/HPMEF



Bruce Johnstone, CEO, President & Director





Arafura Resources Ltd • ASX/ARU Alistair James Stephens,

Managing Director & CEO

56 58



Monarch Gold Mining Company Limited • ASX/MON Michael Kiernan, Executive Chairman



Range Resources Ltd. • ASX/RRS Peter Landau, Executive Director & Company Secretary

60

DiamondCorp plc • AIM/DCP

62

Paul R. Loudon, Managing Director & CEO



Candorado Operating Company Ltd. • TSX/CDO



Rene Bernard, President & CEO

65



Duluth Metals Limited • TSX/DM Henry (Rick) Sandri, President & CEO

68



70



72



Khan Resources Inc. • TSX/KRI Martin Quick, President, CEO & Director Skye Resources Inc. • TSX/SKR Ian G. Austin, President & CEO Brazauro Resources • TSX-V/BZO Mark E. Jones, III, Chairman Leendert G. Krol,Director and Advisor

Wayne Foo, President & CEO



Anterra Corporation • TSX-V/ATR

Owen C. Pinnell, P.Eng., Chairman & CEO Dejour Enterprises Ltd. • TSX-V/DJE



Robert L. Hodgkinson,

Chairman of the Board and CEO

43



Run of River Power Inc. • TSX-V/ROR

Jako Krushnisky, President & CEO

75



77

Frontier Pacific Mining Corporation • TSX-V/FRP Peter F. Tegart, Director, President and CEO



Nayarit Gold Inc. • TSX-V/NYG Michael A. Dehn, President, CEO & Director

 • Gold rush! • A WALL STREET REPORTER PUBLICATION

C E O I N T ER V I E W M inefinders C orporation , Ltd. • A M E X /M F N

Near-term gold producer combines value with strong upside Minefinders is a highly successful precious metals exploration company with advanced projects in Mexico and the United States. The company is currently developing an open pit mine on a large gold and silver reserve at its Dolores project and has several excellent exploration projects in its pipeline.

Minefinders has taken a substantial precious metals project in Mexico from discovery to the verge of production. CEO Mark H. Bailey tells us why his company brings everything in terms of both growth and value to the table. (Interview of January 3, 2007.) WSR: Bring us up to speed on the company’s assets and operations. MFN: Our main focus for the last several years has been bringing our Dolores gold and silver deposit in Mexico into production. We are currently in the construction phase on the property, which is fully financed. We completed a convertible debt financing this past October and now have more than significant funding to complete the construction of the mine, which is scheduled to go into production in the summer of 2007. While we have been focused on that, we are also expanding our exploration activities on our other properties in Sonora, Mexico with drilling underway at our Planchas de Plata silver prospect, and continued drilling at Dolores to expand the underground resources for future development. We have been active in bringing Dolores up to production, and we are on track to be in production in the summer of 2007 at a level of 18,000 tons per day from the open pit. WSR: Expand on the Dolores play, and give us a feel for where you are in terms of reserves and resources. MFN: Dolores currently has a proven and probable reserve base of more than 2.4 million ounces of gold and 128 million ounces of silver. We have a total measured and indicated resource base at Dolores of 3.1 million ounces of gold and 149 million ounces of silver. This is in our current block model and does not include the peripheral underground mineralization or deep mineralization below the open pit mine plan. The current mine plan is that the proven and probable reserves of 2.4 million ounces of gold and 128 million ounces of silver be put on the leach pad. It has a 15–year mine life, averaging between 200,000 ounces to 250,000 ounces of gold equivalent per year. We also look forward to adding a mill to Dolores in the third year of production. We will start collectively mining the high−grade from the open pit and running that through a flotation mill with leach circuit, which substantially increases our recovery in both gold

A WALL STREET REPORTER PUBLICATION • Gold rush! • 

A M E X /M F N • M inefinders C orporation , Ltd. C E O I N T ER V I E W

and silver. The mill will then be available for the underground production, which we anticipate commencing in years four or five of the open pit mine life. Again, Dolores is well on track and budgeted to be in production this summer. We are looking at a total cash cost of approximately $237 an ounce of gold equivalent, which obviously under current market conditions should be a very profitable operation. WSR: Educate us in terms of the infrastructure in place within this region. MFN: There is nothing out there; we are building everything. The capital cost is $132 million to build the mine, including the purchase of all new mining and processing equipment, which we are taking delivery of now and have been for the last several months. We have to build the infrastructure; it will run from a 300−person camp that is in construction now. Everything will be supported through the camp. We are 90 kilometers from pavement, and it’s a bit remote, but it is not inaccessible, and we have already put in a new mine road. We are now building the mine itself. WSR: What is so unique about Minefinders that defines and differentiates this company from others in this industry?

MFN: We are a huge success story. We are a company that made the grassroots discovery at Dolores and brought it to the point of production. There are very few companies that are able to do that. We discovered Dolores in 1996 and have fully financed it ourselves and brought it to this point. We currently have US$130 million in the bank; of that, we will have to spend approximately $90 million more to complete construction. We will have approximately US$40 million left over, which is enough cash to do further exploration on the Dolores property and our other assets. We’ve already raised in excess of CDN$250 million, and still only have 48 million shares outstanding. I don’t think there is any other company in our peer group that will have that few a number of shares outstanding with a project of this size and economics. We have a lot of leverage to the price of gold and silver. Dolores is a gold and silver deposit and will produce both commodities at a very costeffective price, which produces very good return to our capital. That is what makes us unique to a lot of our peers, which have a lot more shares outstanding and deposits that aren’t nearly as advanced or as robust as Dolores. In addition, we still have excellent open– ended upside at Dolores. We’ve not seen the

SUMMARY: Minefinders (AMEX: MFN) has taken its lead project, a significant precious metals deposit in Mexico, all the way from discovery to open pit mine construction. Goal is to be in production by summer, generating an estimated 200,000 to 250,000 ounces of gold equivalent per year for at least 15 years. Current reserves represent 2.4 million ounces of gold and 128 million ounces of silver, with additional indicated resources and excellent high-grade peripheral and deep extension potential. At a cash cost of US$237 per ounce of gold equivalent, the project should generate substantial profits. The company is fully funded to finish construction and has an additional US$40 million for additional exploration. Drilling on other projects, primarily silver plays, continues. www.minefinders.com

Phone: 604-687-6263

bottom of the mineralization. High-grade has been extended at depth below the pit bottom at least another 150 meters. In the past, we have drilled numerous high-grade gold and silver zones peripheral to the current Dolores mine plan and will be following up on these over the next year. We are also drilling our other projects in Northern Sonora, particularly Planchas de Plata and Real Viejo, which are both silver properties. WSR: Tell us about the present Board and management team. MFN: Minefinders is composed of all mining professionals. I have been in the exploration business for over 30 years and have a Masters degree in Geology. Our Board of Directors is composed of senior mining engineers and geologists and two senior mining executives. Bob Leclerc, our Chairman of the Board, was the CEO and Chairman of Echo Bay Mines before coming on at Minefinders. Our exploration team is composed of a seasoned group of explorationists and development people, all of whom have 25 to 30 years experience in the business. Again, this company is comprised of mining professionals, not people from other industries who decided that mining was the place to be. We have all been in this business a long time and understand both the risks and rewards. This makes us also unique to some of the other companies out there that don’t have the same group of seasoned professionals at both the Board and management levels. WSR: Does the investment community understand this company and the direction it’s going in? MFN: I don’t think it has been fully understood. I think the investment community has looked past us. I believe they feel that

“Dolores is well on track and budgeted to be in production this summer. We are looking at a total cash cost of approximately $237 an ounce of gold equivalent, which obviously under current market conditions should be a very profitable operation.”

we have been working at Dolores longer than we should have. They seemed to have lost sight of the fact that we discovered the Dolores project and that we did all the work to bring it to production. We didn’t purchase a property that had drilling or any other work done. We had to do everything ourselves, including obtaining the financing to do that work. This was during

 • Gold rush! • A WALL STREET REPORTER PUBLICATION

C E O I N T ER V I E W M inefinders C orporation , Ltd. • A M E X /M F N

“We are a company that made the grassroots discovery at Dolores and brought it to the point of production. There are very few companies that are able to do that. We discovered Dolores in 1996 and have fully financed it ourselves and brought it to this point.” the years 1998 to 2001 – when the markets made it difficult to raise funds, and when gold was heading to US$250 an ounce. I made the decision not to raise money and dilute our shareholders during that period. We have only 48 million shares outstanding, but we lost several years of development due to lack of funds and that set us back, but that’s par for the course in this business. Still in terms of timeline, we have been very successful in taking a grassroots discovery to

production. The market has misunderstood that. We are still rated as an explorer, even though we are in construction now and fully permitted, and we’ll be in production this coming summer. We are still getting evaluation of approximately 0.8 times our NAV, or Net Asset Value, for the Dolores property alone, and intermediate size producers are trading between 1.5 and 2 times their NAV. We should see that re−rating for our stock this year, which should be beneficial for

our shareholders. WSR: In closing, why should investors consider Minefinders as a long−term investment opportunity? MFN: A couple of points. One, we are a value play in the sense that we are building a very significant gold and silver mine in a mining friendly country. We have a well−defined deposit, spent the money, and drilled over 170,000 meters in 700 drill

holes to develop the deposit. We have had it engineered by numerous outside engineering firms. It is not something we have designed ourselves but was done by outside engineers from very reputable firms. The deposit has a 15–year mine life for the open pit mine. It also has openended exploration potential for an underground high grade mine. By itself, Dolores is a very robust deposit and excellent value. We also have a portfolio of other projects to bring along. With our other properties and the upside at Dolores, we have growth potential. We have value in the Dolores mine, currently in construction. As an investment vehicle, Minefinders brings everything to the table, in terms of both growth and value, and I don’t think there are a lot of opportunities out there to better track it.

A M E X /B A A

A WALL STREET REPORTER PUBLICATION • Gold rush! • 

T S X /B A A • B A N R O C E O I N T ER V I E W

Leveraging 11 million ounces of gold in the rejuvenated DRC Banro is a Canadian-based gold exploration company focused on the development of four major, wholly owned gold projects along the 210–kilometer Twangiza–Namoya gold belt in the South Kivu and Maniema provinces of the DRC.

Banro has put together a commanding land position on one of the Democratic Republic of Congo’s two remaining undeveloped gold belts. CEO Peter Cowley gives us a sense of his timetable for getting 11 million ounces of known resource into production. (Interview of June 20, 2007.) WSR: Banro Corporation. Let’s start off today, if we can, by bringing our audience up−to−date on the assets and operations for Banro. COWLEY: We’re a Canadian−based junior exploration and development company that is focused on one country, the Democratic Republic of Congo in central Africa. Now, within that country, there are probably two remaining, major undeveloped goldfields, which have been prolific producers in the past. We have a commanding position on one of them, the Twangiza–Namoya gold belt. We’ve picked up four major concessions along the gold belt, which gives Banro a very commanding land position with a very large resource base. We have over 4 million ounces of measured and indicated resources and 7.36 million ounces of inferred resources. That’s in total over 11 million ounces of gold. These resources are close to the surface, so we are talking about low−cost open pit mining operations. Certainly, I can think of no more than half a dozen junior gold explorers in the world today who have such a significant resource. To appreciate the potential of these projects you should know that in the past they produced 2.4 million ounces of gold, which is significant. I was involved in the discovery and development of the Geita mine in Tanzania, which is East Africa’s largest open–pit gold mine. Historically, this area produced under 1 million ounces, much less than what has been produced in Twangiza–Namoya. Today, the current resource base in Geita is 18 million ounces, thanks to the application of modern–day exploration and mine development methods. That demonstrates the potential of modern–day exploration methods, which we are using on our projects in the DRC. The company is listed on the TSX and the AMEX exchanges, our market cap is approximately US$400 million. WSR: Banro actually acquired these assets during the mid–90s when there was a pretty low level of interest. COWLEY: Exactly. We’ve got such a commanding land position mainly because we obtained that acreage in the mid–90s at a time when the political, social and security position in the country was a no−go area for most companies. That is how we were able to obtain such an outstanding land position on a major gold belt. This doesn’t happen very often. Usually a large gold belt will host several junior explorers in the early days. Then gradually, as the projects grow into sizeable projects, these juniors are taken out by the majors.

 • Gold rush! • A WALL STREET REPORTER PUBLICATION

C E O I N T ER V I E W B anro • T S X /B A A

WSR: You referred to the resource base; perhaps you can give us a better idea as to where the company is in terms of sampling, studies, drilling, and so on. COWLEY: We’ve got four major concessions plus much of the intervening ground, giving us a contiguous piece of ground with a strike length of over 100 kilometers. At the moment, we’re busy exploring on three of these concessions. Twangiza is the most advanced project, followed by Namoya and Lugushwa; we’ve yet to start to work on the fourth project, Kamituga. Banro has been really busy there for the last 2 to 2.5 years on these projects. We have drilled in excess of 150 holes, and based on that work, we’ve been able to build our resource base to just over 11 million ounces of gold. In July, we announced the results of independent scoping studies for Twangiza and Namoya. Combined projects show annual production of 512,000 ounces of gold at average total cost of $216 per ounce and a combined NPV of $715 million. With Namoya, which is the smaller of the two projects, the study indicates average annual production of 194,000 ounces of gold per annum over the first five years of operation; operating total cash costs of US$217 per ounce for the first five years; a net present value of US$204 based on a discount rate of 5%; a gold price of $600 per ounce; and an internal rate of return of 37%. These very promising results, which were developed by outside consultants, are based on the current Namoya resource of 938,800 indicated ounces and 621,500 inferred ounces, which is expected to increase with further exploration. Twangiza is a much larger project, with measured and Indicated Resources of 3.15 million ounces and Inferred Resources of 3.1 million ounces. Our consultants have projected average production of 317,500 ounces of gold per annum during the initial 7 years of operations with operating total cash costs of US$215 per ounce;

A M E X /B A A

a net present value of US$511 million based on a 5% discount rate and a gold price of US$600 per ounce; and an internal rate of return of 33%, with a 2.6 year payback on project capital expenditures from the start of production. So, as you can see, we’re not just drilling holes in the ground, we’re coming up with resources and then taking these resources to the next step of development. WSR: Do the strong gold prices now in the markets today really enhance the economic viability of the play?

“We’ve picked up four major concessions along the gold belt, which gives Banro a very commanding land position with a very large resource base. We have over 4 million ounces of measured and indicated resources and 7.36 million ounces of inferred resources.”

COWLEY: Yes, overall, I am sure a lot of the listeners know there has been dramatic change in the gold price. A few years back it was less than $300 an ounce, and it’s now holding steady above $600. Certainly, the gold market has significantly changed. There are fewer discoveries, an increasing demand for gold worldwide, and at the same time, production is decreasing. So, you have a supply and demand situation that is reflected in a significantly increased gold price, which I think analysts agree, is going to be with us for quite a while. WSR: Earlier, you also mentioned the improved political environment. Perhaps you can bring us up−to−date on the current situation. COWLEY: When we got the ground in the mid−90s, there was a President, Mobutu, who had been in power for three decades, and the country really wasn’t going anywhere. There was a good deal of internal strife until 2002. Then the international community got together and said to the country, “Look, we will help you get out of your demise, but you need to do certain things, i.e., you need to improve the investment climate and you need to begin putting in place democratic institutions.” From that, a new mining code was introduced in 2003, combining features of the most progressive mining codes from across Af-

Additional exploration potential north along the trend at Banro’s Twangiza project.

A WALL STREET REPORTER PUBLICATION • Gold rush! • 

A M E X /B A A

T S X /B A A • B A N R O C E O I N T ER V I E W

the Twangiza–Namoya gold belt. This is a significant infrastructure improvement and one that will benefit communities up and down the belt as well as Banro. There are also other projects in the pipeline, including hydroelectric schemes. The Congo still has a long way to go, but there are definitely many signs of improvement.

rica. There was, and still is, a major UN presence in the country, which along with other elements of the international community, helped to organize the democratic elections that were held last year. These were free elections; they went well, and the international community was happy. This is a very large country, the size of Western Europe, so it costs a lot to organize the elections, in excess of $400 million, which was paid for by the international community. As a result of this progress, there is today a democratically elected President, Joseph Kabila, and the country has an elected parliament and senate, as well as autonomous provisional governors in place. So, certainly last year, there was considerable progress, and now the new government is getting on with the business of running the country. A strong indication of the improved situation is the dramatic increase in

investment in the country. Last year, for instance, there was a ten−fold increase in equity investment in the Congo with over $1 billion raised, primarily for mining projects, including gold, copper, cobalt and diamonds. Finally, I think the proof of the pudding is that, besides for the juniors who usually lead the way in new mining frontiers, there are now a number of major international multinationals who have become active in the DRC over the past couple of years. These include companies such as Phelps Dodge, BHP Billiton, AngloGold and First Quantum. This demonstrates that the recent developments are very positive from an investment point of view. WSR: Perhaps you can give us a better understanding for the level of infrastructure in place. You mentioned that investment has increased considerably in recent years, but

SUMMARY: Banro (AMEX: BAA) is focused on developing the mineral wealth of the Democratic Republic of Congo. The company put together a commanding land position on one of the country’s previously prolific gold belts before the local political situation improved; today, it controls over 100 kilometers of strike. Total current resource tops 11 million ounces of gold across four advanced project areas. Feasibility work on two projects should progress through the next year, after which point a mining call and potential production as early as mid−2010 should follow. Initial annual production could be in the 500,000−ounce range. Additional exploration and land acquisition continue. Management notes that the investment climate in the DRC has dramatically improved over the past year. www.banro.com

Phone: 416-366-2221

what is the infrastructure surrounding these plays? COWLEY: The country has come through difficult times, so for several years the infrastructure has been largely in disrepair. This is now beginning to change. Where we are in the eastern Congo, things are certainly improving. We’re based in Bukavu, the capital of South Kivu province. We’ve seen a mini boom going on in that city with new construction throughout the city, new jobs being created and a dramatic increase in the numbers of cars and motorcycles on the road. There are also a number of new infrastructure projects coming along, including one that is very advantageous for Banro. This is a new road, currently under construction by the Chinese, and funded by the World Bank. This road, which will be over 200 kilometers in length, will cut right through

WSR: One difficulty that many companies are experiencing in the current market is accessing rigs, equipments, and indeed, skilled field personnel. What is the situation within Congo at the moment there? COWLEY: There is an exploration boom going on in the Congo. We currently have four rigs on one of our main properties, Twangiza. We’ve got another two rigs on two of the other properties. We’ve had those for the last two years. It’s not easy sourcing rigs, but we’ve managed. In terms of personnel, we have a very experienced exploration group, which came with me from my previous company, Ashanti Goldfields. They’ve been with us for almost three years. These are exciting projects, and our field exploration geologists are very pleased to be working on them. WSR: You made reference to your own background. Perhaps you could introduce us here in fact to the Board and the current management team.

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C E O I N T ER V I E W B anro • T S X /B A A

COWLEY: We have a very strong Board with a great deal of experience in Africa and in gold. Our Chairman, Simon Village, joined the company in late 2004. Simon is quite well known in the gold fraternity, mainly because he was the Managing Director of the World Gold Council until he joined Banro, and was also a principal of Exchange Traded Gold, the company responsible for developing and managing a series of direct gold investment projects, which have revolutionized the dynamics of the gold industry. Previous to that, he was the Managing Director of Global Mining at HSBC Bank. Clearly, he has a lot of experience. I have over 35 years of experience, mainly in Africa with a number of companies. I have discovered and developed a number of gold mines in Ghana, Tanzania, Zimbabwe, and also as things go, probably in the DRC as well. Another person on the Board is John Clarke who is President and CEO of a Canadian junior company called Nevsun Resources. They have got pretty exciting exploration and development projects in Mail and Eritrea. Bernard van Rooyen, a director of the Company, is also very well known in the gold industry and a director of a number of South African based mining companies. We have a very experienced Board and a very experienced exploration team on the ground in the Congo. WSR: You mentioned earlier some of the major players operating in the region. Will Banro look to enter into any joint ventures or partnerships now to further these plays? COWLEY: Our strategy is to maximize shareholder value, and there are two ways we can do it. We can develop these projects ourselves. We certainly believe we’ve got assets that can be developed into profitable gold mines. However, we are mainly an exploration group and would need to bring in new engineering and technical skills to develop these assets. We are looking into that.

A M E X /B A A

“In July, we announced the results of independent scoping studies for Twangiza and Namoya. Combined projects show annual production of 512,000 ounces of gold at an average total cost of $216 per ounce and a combined NPV of $715 million.” However, one way of bringing in new people and expertise is to do some kind of joint venture or gain the involvement of a major mining company, which already has these skills. With our assets, we have a very large resource base by global standards for a junior company and there is considerable interest in Banro by the majors. We’ve already signed a number of confidentiality agreements with some of the majors; they’ve visited our sites, and there is an ongoing dialogue. We are keeping an open mind on doing it ourselves, or, if we believe there is better shareholder value, we will pursue some sort of joint venture. WSR: As you mentioned, the political situation has changed, and the variables are coming into alignment here for the company considerably. Do you think the investment community has yet to fully really appreciate the potential now? COWLEY: I think they are starting to see it. It still has a way to go, but as more major companies and juniors come into the country and the political, social and economic climate improves, I think that the investment view will change accordingly. WSR: Looking ahead to the company’s strategic plans, maybe you could just outline for us the major objectives lying ahead over the next 12 to 18 months. COWLEY: We are currently completing scoping studies on two of our projects. We will take those then to pre –feasibility and feasibility studies. We hope to complete

the feasibility studies in just over a year’s time, likely in the second half of 2008. The development and construction decision will probably come by the end of 2008. Construction for the gold projects would be at the order of 12 to 15 months. We are looking at the first half of 2010 for initial production. Our scoping studies are demonstrating the production profile we are dealing with. Between the two projects, Namoya and Twangiza, we are looking at over 500,000 ounces a year, and that is significant. Meanwhile, we will continue exploration and drilling on our projects with the goal of increasing the total resource base. Recently, we completed an airborne magnetic and radiometric geophysical survey of all four of our projects – a total of 2,600 square kilometers that will help us identify new gold targets. In March 2007, we were awarded over 3,130 square kilometers of additional ground contiguous to our current properties, which creates a whole new set of exploration opportunities for the Company. WSR: Just before we conclude today, perhaps in summary you could give our listeners and indeed potential investors now looking forward to play in this sector some of the reasons as to why Banro represents a good long−term investment. COWLEY: I think there are a number of reasons. Firstl we have tremendous assets, which we picked up at a time when we had no competition in the Democratic Republic of Congo. These are major assets, which are only in the early stages of exploration, and we are

confident that they will continue to grow. However, we are not just sitting on them, we are moving forward with the necessary studies to demonstrate their economic viability. We also believe that there has been a fundamental change in the Democratic Republic of Congo in that it will continue to stabilize and become a rewarding country to invest in, particularly in the mining sector. Investors should also know that Banro has put in place one of the best Corporate Social Responsibility programs in Africa. Among other things, we’ve established the Banro Foundation, which is a registered charity committed to improving education, health and infrastructure in the communities where we have our operations. The Foundation has completed a number of valuable projects – building a new facility at a local hospital, improving medical clinics, providing educational equipment to schools and constructing much−needed roads and bridges and so on. We are now talking to leading NGOs who can partner with us to bring a whole new level of professionalism and progress to local social and economic development. We have also been successful in creating jobs for almost 1000 Congolese nationals. Early on, we put in place an advanced and intensive industry training program for our 32 young Congolese graduate geologists that is now bearing fruit. Banro and its people are very proud to be associated with all oh these initiatives. I think our assets, the new climate in the Democratic Republic of Congo and out approach to doing business bodes well for Banro and its projects.

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T S X /G G N O T C B B/GY P H • G ryphon G old C orporation C E O I N T ER V I E W

Near-term gold production and big extension potential Gryphon Gold (TSX: GGN/OTCBB: GYPH) is a U.S.− based mine development company whose principal asset is the 27.5 square−mile (1.33 million-ounce M&I gold resource) Borealis property located in the Walker Lane gold belt of Western Nevada. WSR: Gryphon Gold Corporation. Perhaps you could begin by bringing us up to speed on the company’s project and property portfolio. KER: We have a property called the Borealis property in Nevada. It’s about a two−and−a−half hour drive south of Reno, and it’s in the area consistent with a lot of gold exploration and development properties called the Walker Lane. We have one of the largest properties in that section with, I believe, one of the largest potential areas to find more ounces. We already have measured and indicated of 1.2 million ounces and inferred of 600,000 ounces, which is a substantial base for a junior mining company. But, what we really believe is, we have the opportunity to add to that with our exploration program on that property. The other things that we are working on, because we are an exploration company in Nevada and have a very good compliment of geologists very familiar with Nevada, is the ability to attract other properties to us. So, we are continually looking for new opportunities to increase our land base and ounces count in that part of the world. That’s a brief update on it. I can give you a bit more, if you are looking for some more specifics. WSR: Please expand a bit more, if you would, on the main plays here and give us a better feel for where you are in terms of drilling, development, resources, etcetera. KER: The Borealis property is one that was actually in production 15 years ago, and they mined 600,000 ounces. But, the reason we were interested in going back to that property is because in the years past, like 15 or 20 years ago, they only looked for oxide ounces near surface. A large part of this property was not explored. Most of the drill holes never went below 300 feet. The resource we are currently developing is called the Graben deposit, you can see it referenced on our Web site; it’s approximately a million ounces at this stage. We think we can expand that. But, more importantly, we think we have the opportunity to add additional Graben type deposits that may in fact be bigger than a million ounces. We think the Graben could grow bigger than the million ounces. How big, we don’t know at this stage. But, if you have a look at our news release that went out on the 26th of June, we added a couple of drill holes, one in particular that was 75 meters of 3 grams. Now, this is over 400 feet away from the other nearest drill hole in the Graben. So, we believe we have either the potential for an extension to the Graben, which means we’ll get additional tons and grow the resource there, or more exciting, we have a potential for a parallel system. Now, only additional drilling will help that, but it’s a pretty big step−out, over 400 feet. So, that’s an area we are pretty excited about on the Graben. But, again, if you look at our Web site and you have a look at the maps, you’ll hear us talk in our news release, and see on our Web site, the Central Pediment and Western Pediment, those are areas – the Central Pediment is around 3 kilometers away from the Graben. We think that area has the potential to find another

Gryphon Gold is moving into the financing stage on a Nevada project with a 1.8 million– ounce gold resource and plenty of extension potential. CEO Tony Ker tells us about the property and why recent drilling has delivered such exciting results. (Interview of June 27, 2007.)

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C E O I N T ER V I E W G ryphon G old C orporation • T S X /G G N O T C B B/GY P H

deposit. Initial preliminary drilling in that area indicated a permissible horizon of over 1,450 feet in one drill hole with detectable gold. Now, do we know exactly where the gold is? No; we know we’ve got gold in the system, we just have to find an area where it has concentrated, sometimes into the areas where there are fractures or faults, and those are the areas we are trying to find through geophysical systems and through geophysical analysis of the property. We do geochem and we do down−hole analysis of the holes to help determine what part of the system we are in. By the middle of July, we’ll be back out drilling the Western Pediment. People should realize that although we have a very good exploration potential, this type of property is going to take a fair amount of time to develop to its full extent. We may be lucky and get some particularly good results right away, but typically these types of properties take a series of many months to fully develop because it’s large a property, 27 square miles. So, in that end of things, the drilling is going well. We have cash in our treasury. We will always be looking, as an exploration company, at doing additional financings down the road. At this stage, we are well set, and we can explore for a while longer. The interesting thing about why people in the past dropped this kind of property, and I alluded to it, is that they talked about near surface oxide ounces, and what

we are looking for is deeper down sulfide type. In Nevada at this stage, most of the ore processed in Nevada is sulfide type ore in the northeast section of Nevada. Historically, there wasn’t a method for processing it. Today, most of the ore processed in Nevada is sulfide ore. We acquired the property about three years ago, and we’ve been stepping off from the old areas where they had outcrops and oxide ounces; we are doing the exploration in areas that are a little bit more difficult. They are difficult because they are covered with a few hundred feet of gravel, so you can’t do what the old timers did, which is look at that outcrop and drill around it. What we have to do is use newer technology, such as geophysics, to try and identify potential deposits below the surface and then we go and drill to validate it, that’s the process we are going through right now. I think the geologists we have, on average, have around 30 years of experience in that part of the world. So, they have a pretty good handle on the type of techniques we need to do, but at the end of the day, the drill bit is the one that’s going to determine what kind of deposit we have down there. WSR: What can you tell us about this present Board and management team in place here at Gryphon Gold?

“The Borealis property is one that was actually in production 15 years ago and they mined 600,000 ounces. But, the reason we were interested in going back to that property is because in the years past, they only looked for oxide ounces near surface.”

KER: I believe for a junior mining

SUMMARY: Gryphon Gold (TSX: GGN) has completed feasibility work on its Nevada project and is now moving into the financing and construction phases. The property represents 27.5 square miles on the highly prospective Walker Lane trend and produced 600,000 ounces of gold in the 1980s before the previous owner shut it down due to low prices and corporate distress. About US$15.4 million is budgeted for construction and initial production should come within 8 months of financing completion. Current resource is in the 1.8 million−ounce range and management believes the property has the potential to contain additional million−ounce deposits. One new drill hole in particular may represent an entire new mineralization system. Sulfide potential at depth also exists. www.gryphongold.com

company, we have a fairly excellent Board. We have Albert Matter and myself who started a company called National Gold. We bought a property in Mexico and merged with another company after doing some development work. That company today is producing over 100,000 ounces a year; it’s called Alamos. We have Rohan Hazelton who is the CFO for one of the largest gold companies in the world, GoldCorp; he is on our Board. We have Don Ranta who had a lot of experience with Phelp Dodge and Echo Bay, finding resource deposits around the world; he has a lot of experience in exploration. We have Richard Hughes who was involved with Hemlo, one of the largest gold mines found in Canada. Currently, he is on several other Boards of really topnotch exploration companies. Richard, again, was with us when we were at National Gold. Don Gentry, another board member, is a mining engineer. He is a Professor Emeritus from Colorado School of Mines, and he has also been a Board member of Newmont in Santa Fe. So, we have some very experienced Board members who can give us the advice and direction to help us build this company. On the other side of management, our CFO, Mike Longinotti, was with Cominco for 10 years, as their Secretary and Treasurer. So, we have a composite of some experienced people for a company our size as a junior.

Phone: 888-261-2229

WSR: Very briefly, in closing, let’s just recap a bit. Why should investors consider Gryphon Gold as a long-term investment opportunity? KER: The first main reason is, I believe, you are in the right cycle for gold. But, particularly you should invest in Gryphon Gold because we have the right location, which is a very safe, well−positioned place for a mining company to be, that’s in Nevada. We, also, already have a base of close to 1.8 million ounces, 1.2 million of measured and indicated, 600,000 of inferred. A lot of ju-

niors are pure exploration and don’t have any base on which to value the company. We have a management that is experienced and are being presented with some very interesting acquisition opportunities that can grow the company on multiple fronts. So, again, we have gold resources in Nevada; we are in the right cycle for gold, and we have management talent that can get the most value out of that.

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N YS E/C L R • C ontinental R esources I nc . C E O I N T ER V I E W

A four-decade history of lowcost production and growth Continental Resources is an independent oil and natural gas exploration and production company with operations in the Rocky Mountain, Mid–Continent and Gulf Coast regions of the United States. The Company focuses its operations in large new or developing plays where horizontal drilling, advanced fracture stimulation and enhanced recovery technologies provide the means to economically develop and produce oil and natural gas reserves from unconventional formations. WSR: Continental Resources has very recently been listed on the New York Stock Exchange, but the company has a fairly long and successful history. Perhaps you can bring us up−to−date on the assets and operations there? CLR: Continental is an exploration and production company. We were incorporated in 1967 and will have been in business 40 years in November. We have a high−quality proved reserve base of 118.3 million barrels, primarily crude oil concentrated, long−life production. We have no oil or gas hedges in place. We’ve got a long track record of growth at a very low cost with low−risk production growth in the Red River units in North Dakota and significant future production and reserve growth in two developing plays and about 1,500 unbooked locations. Our assets are essentially based in the Rocky Mountains. We’re principally crude oil, about 83% of our proved reserves are crude oil and about 86% of those reserves are in the Rocky Mountains, where we have two very large unconventional development resource plays: the horizontal Red River units and the Montana Bakken Shale play. We have significant unbooked locations in two emerging unconventional plays, the North Dakota Bakken Shale and the Oklahoma Woodford Shale play in southeastern Oklahoma. WSR: Perhaps we could take a closer look at the principal properties there. Where are you in terms of drilling, production and so on? CLR: Today our company has 18 drilling rigs running. Most of that operation activity is in Montana and North Dakota. We have four rigs running in the Montana Bakken Shale play. We have a 50% interest in three rigs operated by ConocoPhillips and we have two company−operated rigs running in the Bakken Shale play in North Dakota. Plus we have five rigs drilling increased density wells in the Red River units in North and South Dakota. We have four rigs running in southeastern Oklahoma in the Woodford Shale project. We have a drilling budget this year of $437 million. We project to drill about 275 wells. About half of our budget will be going to development plays,

Continental Resources is continuing a four–decade tradition of growing its hydrocarbon reserves and production at an extremely low cash cost. CEO Harold Hamm tells us how he’s keeping his company balanced between development drilling and emerging plays. (Interview of June 14, 2007.)

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C E O I N T ER V I E W C ontinental R esources I nc . • N YS E/C L R

“Last year, we grew production 25% through the drill bit. We’re unlike any other company out there. We’re able to grow our business organically, and if you can do that lowcost, that’s much more attractive than trying to compete in acquisitions.” principally the Red River units and the Montana Bakken Shale. Most of the balance will be going toward the emerging plays, the North Dakota Bakken shale and the Oklahoma Woodford shale. WSR: One particular difficulty that many companies have in the current market is securing sufficient access to rigs and equipment and indeed skilled field personnel. Where exactly are you regarding those particular assets? CLR: We’ve been doing this a long time and we’ve had very close relationships with some drilling contractors in the Rockies and also here in Oklahoma. All the rigs are contracted from third parties, but, through the relationships, we’ve not really had much difficulty securing drilling rigs or other services. We’ve built a long−term relationship with those people. They know what we’re doing and we share the information with those people about what we’re doing this year, next year and the year after. So

we depend on them, they depend on us, and it works very well. Back when rigs were tight, a lot of companies went out and entered into long−term contracts at really, really high prices. We were able to avoid doing that because of our relationships, and as a result today enjoy in some of our plays, much lower rig day rates than our competition, which gives us a competitive advantage in terms of finding and development costs. WSR: So would you say the company’s track record (spanning some 40 years) is a really strong unique factor for the company that differentiates you from some of the newer players? CLR: There were a lot of people in start−ups in the last two or three years that basically have just been left out when it came to the drilling rigs. Either they overpaid or they had to wait an awfully long time to get rigs. That hasn’t occurred here. We put off a location or two now and then, but overall, we’ve

SUMMARY: Continental Resources (NYSE: CLR) has built a four-decade track record of reserve and production growth, largely through the drill bit. The company currently has 118.3 million barrels of reserves, 83% weighted toward conventional oil. Operations are centered in the Rocky Mountains, with significant unconventional projects ranging as far south as Oklahoma. The company is aggressively drilling its inventory of over 1,700 well targets; production grew 25% in 2006 and capex budget is increasing to continue the trend. Management attributes the company’s long-term reputation as a competitive factor when it comes to contracting drilling equipment. Discovery cost is under $9 per barrel and total cash cost is under $11. Assets tend to be long-life; several fields have yet to peak. Production is unhedged. www.contres.com

had the equipment to do what we needed to do. WSR: Looking at each of the principal plays you mentioned, perhaps you could give us a better understanding of the level of infrastructure involved here? CLR: We have a lot of infrastructure in the Montana Bakken Shale field in eastern Montana. We’ve been there now about four years, and that’s developed pretty nicely. We’re drilling a third well on some of those units and have pipelines to gather the gas. We also have a gathering system that gathers our crude oil and takes it to market. So, good infrastructure exists there. Our largest field, our Cedar Hills field in Bowman County, North Dakota also has good infrastructure. Our company, in conjunction with Hiland Partners, has just built a new gas plant there that has just come online that’ll be serving that entire field. In the Woodford Shale, which is one of the emerging plays, the infrastructure is growing significantly. There’s a lot of competition to get in there and build gathering and processing systems. We’ve been bidding out some of our packages of dedicated acreage and getting some very attractive gathering and processing rates because several gathering and processing companies want to have a foothold in one of the most exciting unconventional plays in the United States. WSR: What is your attitude toward joint ventures and partnerships?

Phone: 580-233-8955

CLR: We have one in the North

Dakota Bakken area. We have a very large acreage position there, over 400,000 gross acres. We started acquiring that position back in 2003 and recognized that we were not going to be able to exploit that acreage very rapidly on our own, so we entered into a joint venture with ConocoPhillips. We have a 50% interest in a certain part of our play with them, and they have brought three rigs into the play to help us really explore in this emerging area, adding reserves and production more rapidly than we could on our own. So that’s been very nice. We also have a joint venture with Samson Resources in another unconventional play called the Lewis Shale in the Green River basin in Wyoming. We wanted into that play; they saw what we were doing in North Dakota Bakken and wanted into our play, and we essentially did a swap of some acreage. Now we have a 40% interest in their play, and they’ve got a 40% interest in a small portion of our North Dakota Bakken play. All of this helps us really do quite a bit more quickly and also lowers our risk through diversification. WSR: Perhaps we can change direction here and look to the leadership team in place. What can you tell us about the background of your board and management team? CLR: Our company has about 300 employees. We have very strong technical and management teams with an average of 20+ years of experience on the job. Obviously, we built this up over a long period of time. We have a very strong ex-

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N YS E/C L R • C ontinental R esources I nc . C E O I N T ER V I E W

ploration staff. When everyone else was laying folks off in the 1980s, we were picking those people up; many have been with us from 15 to 20 years. That’s very important in what we do. We have a very knowledgeable board. We think that our board helps us by giving a lot of direction to what we do and guides us in a manner such that our company’s run very effectively. H.R. Sanders, one of our board members, was with Devon through a lot of their most active growth period. George Littell of Groppe, Long & Littell is also on our Board. His firm is highly noted for forecasting commodity prices. Bob Grant, retired audit partner with Deloitte & Touche who headed up the Dallas office for many years with that firm, serves as chairman of our Audit Committee. Lon McCain, who was CFO of Westport Resources and also was with Petrie Parkman for a number of years, is also on our Board. Some of those have been on the company board since 2001, when the company was private. As far as the company’s executive team, I (Harold Hamm) founded the company 40 years ago. Mark Monroe joined the company in October 2005 as President, but became associated with the company back in 2001 when he joined the board of the company. He was the CEO of Louis Dreyfus Natural Gas, a large NYSE−traded E&P company that merged with Dominion Resources in 2001. Other senior members include: John Hart, who was an audit member at Ernst & Young, joined the company in November of 2005. Jeff Hume, who has been with the company for some 23 years, is a

petroleum engineer and heads up our operations and drilling group and has been with me for the bulk of the growth of the company. Jack Stark, who heads up the exploration group, has been with the company for some 15 years and has also been with the company for a large part of its growth. We could name a number of other people who are key employees − we’ve got a good strong, deep group of experienced people.

five rigs operating in that play. So I think that the best is yet to come with our company. We’re proven oil and gas finders. We have several emerging plays that we’re looking at as we speak that’s on the drawing board that we can’t talk about today but will be talking about in the future.

WSR: As you mentioned earlier, Continental Resources is now publicly traded. What are the key objectives of the company going forward over the next 12 to 18 months?

CLR: We’ve built this company almost exclusively organically through the drill bit, and it’s kind of hard for us to shift gears and go into an acquisition mode. We’re used to finding oil at less than $9 a barrel, and it’s kind of hard for us to think about going out here and acquiring oil at about $25 or $30 per barrel. There’s just a lot of difference there that we kind of find unnecessary. Sure, if there was something – and we have on occasion bought small piecemeal acquisitions that were very strategic to what we were doing. We’ve done those, but right now I don’t see us pursuing those real heavily with what we have on our plate. We’ve got an expanding capex program in the future. This year our capex budget will incrase about 34% over last year. Last year, we grew production 25% through the drill bit. We’re unlike any other company out there. We’re able to grow our business organically, and if you can do that low−cost, that’s much more attractive than trying to compete in acquisitions, which is very competitive, particularly with the advent of the master limited partnerships. It’s very difficult in to-

CLR: Clearly number one is to get the stock price up. Backing up from that, how do we do that? That’s to grow shareholder value, grow reserves, grow production, grow cash flow, EBITDA. We’re in a very fine position for growth. Our largest field is the Cedar Hills field. There are very few companies that can say that their largest field won’t peak for another two years. At our Cedar Hills field, we’re drilling increased density wells to accelerate and enhance sweep efficiency – this field is under enhanced oil recovery operations. The Cedar Hills field and surrounding fields comprising our Red River Units will not peak until late 2008, early 2009 at about 19,000 barrels per day. We’re just now starting in the Woodford Shale to develop our acreage over there. We have about 45,000 undeveloped acres within that play. We will soon have

WSR: Will you also look around for acquisitions to help expand the portfolio?

day’s climate, in my view, to make accretive acquisitions. WSR: So Continental is really going to stick to the track record it’s established to date? CLR: That’s correct. WSR: Perhaps in summary, we could give our listeners just a few of the key reasons why Continental Resources represents a good longterm investment? CLR: I think they need to look back at our track record, what we’ve done historically and the growth rate, both in production and also reserve growth. We’ve had 10%-12% reserve growth historically, year after year. Sometimes if you’re drilling all PUDs, you don’t have too much growth at that point, but if you find a new field you may have tremendous growth that year. Over the course of time we’ve added a great deal of wealth through the drill bit. I think that’s what they should look at. The company is well positioned with over 1,700 drilling locations that have been identified and over 1,500 of those are unbooked as of year−end. We’ve got a long−life, high−quality reserve base, and I think one thing we did not talk about today is we’ve got one of the highest operating margins in the industry. We’ve got a very low−cost operation, both production costs and G&A. Our cash costs per barrel are under $11, which is one of the lowest in our industry. With crude oil in the $60 range, there’s a lot of cash flow generated by this company.

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C E O I N T ER V I E W A lternate E nergy H oldings , I nc . • O T C/A E H I

Incubating a full range of alternative power technologies Alternate Energy Holdings develops and markets innovative clean energy sources to reduce dependence on foreign energy sources. Current projects include nuclear construction, a fuel additive to reduce the cost of natural gas energy production, lightning harvesting technology, carbon dioxide removal from gas turbine exhaust and urban mini−reactors.

Alternate Energy Holdings is incubating a portfolio of clean energy projects ranging from nuclear power to emissions control and a technology that harnesses lightning. Donald Gillispie, the company’s president, tells us alternative energy is “here to stay.” (Interview of April 4, 2007.)

WSR: A few beginning questions − for instance, how large is the overall market you’re targeting, and what is its potential growth? AEHI: A little background first − the company was formed by a group of energy industry executives with over 40 years in this business. These executives also make up my Board and principal leadership team. We decided to do so when we thought about the energy issue going on, about energy prices going up, particularly money being sent to the people who wanted to do harm to us, and the fact that the global warming issue was coming on the radar screen pretty strong. We thought we had some skill sets, particularly running nuclear power plants that we could bring to the market and do something that most people can’t do, which was to create a nuclear generating company. When we get this thing running, we will be the only unregulated nuclear generating company in the country. The rest of the people that sell power are mostly regulated utilities selling other things like coal power and natural gas as well; we are unique in that respect. WSR: Tell us about some of the company’s projects and product offerings. AEHI: Like most alternate energy companies, we are capital– intensive upfront because you don’t start up energy companies on a shoestring. When we started this company last fall and went public through a

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O T C/A E H I • A lternate E nergy H oldings , I nc . C E O I N T ER V I E W

reverse merger, we decided we would name the company Alternate Energy Holdings and try to broaden the alternate energy idea beyond nuclear power, go into other alternate energy areas such as solar and wind that we could help manage and control to bring to the marketplace. What we’re trying to do is garner a company that has already started up and add to our holdings with the idea that we will bring them professional expertise and management. For the most part, they will be standalone entities. The biggest project we have going on right now is the Idaho Energy Complex; over the past week, we announced that we plan to build a nuclear power plant in a state that does not have one, and because there is such a shortage of power in that region that most of the states are importing half of their electricity. We’re all aware of the recent Supreme Court ruling on the CO2 emission. We see both coal and natural gas plants coming under strong regulation to reduce CO2 emissions, which will make nuclear power even more advantageous. In addition we want to use the excess heat from the plant, which, to our knowledge, has not been done anywhere in the world, to produce ethanol from the local agricultural sources. As we all know, the biggest cost in ethanol is the energy that goes into it, which is mostly natural gas.

We believe we can use the excess heat, to make ethanol at a very competitive price, if not the lowest price in the country. In addition, there are some feedlots in the area where there is a large amount of cattle, which produce waste; we believe we can also produce methane from that waste. We are looking to produce three sources of energy out of the plant, which has never been done anywhere in the United States, let alone the world. That is our major project. We are also working on something that would remove carbon diox-

sion available – you can drive it around on a tractor trailer truck – it produces a small amount of power and a larger permanent version. It’s an innovative product that may be very useful in third world countries, particularly in the Southern Hemisphere where there’s quite a bit of lightning activity. Those are some of the key projects we are working on right now. WSR: What about your recent acquisition of Private Green Energy companies this past March? Tell us a little bit about that.

them grow the business through our lifetime of contacts that will add to our success and help them as well. Our short−term growth strategy is through acquisition; there is quite a bit of interest because the experience of our management team. We are very optimistic about our ability to acquire these companies. WSR: What is so unique about your company? What gives your company competitive advantages within the energy space?

“If you started up an organization like ours and tried to go out and actually hire people like we have, you would have a multi-million dollar tab just for the salaries alone. We decided that we’re not taking salaries because we want to get something up and growing.” ide from the emissions of both coal−burning and gas−burning plants. It’s a unique patent that a scientist developed for us. We see that being useful to bring to the market in light of the recent changes that will require plants to reduce their CO2 emissions. We also have a fuel additive, which adds ethanol to natural gas when you burn them in turbines, which will reduce the cost of operating the gas turbine. Also, we have a device that captures electricity from lightning. We can convert the strikes into electricity and put it on the grid. There is a portable ver-

AEHI: We believe our strength is in our management team. We think we can help some of these smaller start– up companies that are in the alternative energy market. Those that have different products than we do have more on the demand side like helping people save on their electric bills. We hope to acquire between five to 10 of those smaller companies. We have two companies that we’re presently working with, that are ready to sign up; the idea is to get standalone companies that have a product and a service in an area where we could help

SUMMARY: Alternate Energy Holdings (OTC: AEHI) is developing a portfolio of clean energy projects and technologies. A team of extraordinarily seasoned industry executives founded the company as an incubator. Current activities include the construction of a proposed nuclear power complex in Idaho, which when complete will incorporate ethanol and methane production. The company’s portfolio also includes a system for converting lightning into grid−capable electricity; a portable version of the device is already commercially available. Additional technologies under development include a technique for adding ethanol to gas − and coal−burning power plants to reduce emissions. Additional acquisitions are planned. Management notes that given the recent Supreme Court ruling allowing the EPA to regulate carbon emissions, alternative energy “is here to stay.” www.alternateenergyholdings.com

Phone: 540-586-7470

AEHI: Just our team’s experience, and the fact that if you started up an organization like ours and tried to go out and actually hire people like we have, you would have a multi−million dollar tab just for the salaries alone. We decided that we’re not taking salaries because we want to get something up and growing. We are essentially using stock. We all have some stock in the company and want to move the stock forward, but we are all incentivized to do that instead of taking large salaries from the company at this stage. We think that our skill set is to help these smaller companies that have started up, but have stalled in the growth area. This is a good marriage of experienced personnel with young folks with good ideas. They could not put together a Board or a management team like we have on their current cash flow. WSR: Tell us about the management team and some of their contributions to the company?

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C E O I N T ER V I E W A lternate E nergy H oldings , I nc . • O T C/A E H I

AEHI: I will start with myself. I have been in this business 40 years as a Senior Executive; I helped to operate a number of nuclear plants, start them up, and turn them around when they were struggling. I helped start a consultant business in Atlanta called INPO – they are consultants in the nuclear energy field. I was also involved in the start-up of a nuclear operating company called Nuclear Management Company in Hudson, Wisconsin – the first such company in the United States − which operates six nuclear power plants. We were given an award by Forbes Magazine as best−in−class for innovation. Next is Greg Kane, one of the best plant managers in the history of the industry. He’s operated top plants around the United States and has a consultant company that does quite well. He is my Vice President of Operations and in charge of operating our new plant. Our Chairman of the

James Taylor is a past head of the Nuclear Regulatory Commission. He was a senior executive for President Bush as well as President Clinton. We have a couple of other people, Ken Strahm and Ralph Beedle, who have been involved in running organizations like INPO and NEI in Washington and also have a wealth of experience and many political contacts. We just added John Franz, who has started up five new plants through the construction phase. He also has 40 years’ experience.

core business, and how do you feel that the company can capitalize on these trends? AEHI: We finally see people beginning to understand nuclear power. It is not dangerous, despite some of the history dating back to Three Mile Island. There are 30 new nuclear plants on our drawing board right now in the United States and over 100 in the world. If you look at the price of uranium, it’s a good indication of what’s going to happen. It has

“Alternative energy companies started back in the ‘70s with the oil embargo – after which most of those were closed after oil prices came back down. I don’t see that happening this time. Alternative energy is here to stay! We’re in a good position.”

Board, Leon Eliason, has been the President of two nuclear utility business units. He has managed almost every part of the business including nuclear power, solar and hydro plants. There’s not much he hasn’t done and/or overseen in the energy world.

We look to add to this group as we add holdings to get the right people with the right background to help direct the holding companies we acquire. WSR: What are some of the major trends you see affecting your

gone from USD$8 a pound to the current price of USD$95 now. I see it going up more. This is not because there’s a shortage of uranium, there’s plenty of it around; it’s just a lot of mines and processing plants were shut down when nuclear power was kind of stagnant. They are now trying to play catch up, and so the price is going up. It will turn over within five to seven years and will probably fall back down, but that is a strong indication. The recent Supreme Court ruling giving the EPA rights to regulate CO2 will cause a heavy blow to fossil fuel plants. The world oil situation will make all alternative energy attractive, particularly in terms of ethanol and other similar products. Alter-

native energy companies started back in the ‘70s with the oil embargo – after which most of those were closed after oil prices came back down. I don’t see that happening this time. Alternative energy is here to stay! We’re in a good position to pull together some of the better companies in this business and have some long term success. WSR: Where do you see your company in the next six to 12 months? AEHI: Probably adding five to 10 more organizations underneath us that are involved in the entire spectrum of alternate energy – solar, hydro, ethanol, and other unique products we’re working on like lightning to electricity. I believe that will give us a distinct advantage in the marketplace. There are many companies starting up in this business, but they all have one thing in common − they aren’t making a profit. Why? Because energy is capital intensive and it takes time to develop, there will be a lag. In fact, if you choose wisely in this investment arena, you should still do very well. Some of these companies are going to make a lot of money. WSR: In closing, why should Alternate Energy be considered a good long−term play? AEHI: We have a very experienced management team with strong backgrounds. I think we will filter through some of these start-up companies and pick the best ones; we will be doing some of the investors’ homework for them. When you pick us, we have already done the homework, so you don’t have to do it from scratch. It’s hard to do something from scratch – these companies generally do not have a long track record. When we put them in our group, we think they have the potential to grow, and we will help them.

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O T C B B/C T V W F • C ity V iew C orporation L imited C E O I N T ER V I E W

In the front row to develop Angola’s onshore energy assets CityView is an ASX-listed energy company which is also listed on the OTCBB. The company has diverse interests in Indonesia, the Middle East and especially Angola, where it has built up a potentially substantial portfolio of oil, uranium and mineral opportunities.

CityView has refocused its operations on the untapped energy resources of Angola. CEO Mark Smyth tells us his company has a front−row seat to help develop what he calls a paradise for oil and minerals exploration and production. (Interview of August 30, 2006.)

WSR: Bring us up to speed on the company’s assets and operations. CTVWF: The company has three assets. First, it has two carried interests in Indonesian oil fields: one of them, Konang–3, is being drilled right now. Second, it has a strategic investment in the Middle East; and third, and most exciting of all, it has a large investment in Angola. WSR: Expand on these plays and give us a better feel for where the company is in terms of drilling, development, reserves, and so on. CTVWF: In Angola, we have 30% of a major uranium project. This project is in conjunction with a group called Petro-African, a large Black Economic Empowerment group based in South Africa. Within the project area, we have three major target areas – Longonjo Carbonatite, Catabola and Caqueti. The fourth is the Ucua beryllium project. Any one of those could end up becoming a mine. WSR: Educate us in terms of the infrastructure as well as the political climate within these regions. CTVWF: Angola is a most interesting country. Jim Rogers, the well–known fund manager, describes Angola as low−hanging fruit in his book Adventure Capitalist. The reason for his comment is that it is an extremely wealthy country devastated by war. The war ended three years ago, and the country is on the mend. Angola’s economy is growing fast because the country has significant oil production; at the moment, it is pumping 1.5 million barrels a day and will soon rise to 2 million barrels a day. U.S. companies have a strong presence: Exxon is pumping over 400,000 barrels a day, and many of the other majors are in there as well. In

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C E O I N T ER V I E W C ity V iew C orporation L imited • O T C B B/C T V W F

addition to oil, the country is mineral rich. CityView is concentrating on oil and uranium. Through our contacts, we have been promised an onshore oil field in Angola. There have been to date no onshore oil fields awarded in Angola and when this occurs, we will be in the front row. WSR: How important are strategic alliances and joint ventures for this company moving forward? CTVWF: Absolutely essential. The way to succeed in Africa these days is to link up with powerful Black Economic Empowerment Groups and not work against them – that is exactly what we have done. We have linked up with the Bongani Group who are local Angolans. They are based in Johannesburg, South Africa, and they specialize in the provision of infrastructure. They are an efficient group and provide the backup so essential in a newly developing country. WSR: On the M&A side, will the company look to additional acquisitions in the near to midterm? CTVWF: Very much so. Once we have progressed a little further down the road, we will be taking on more projects through our partnership with Petro –African. They are sitting in the box seat, and

“Angola is an oil and minerals paradise. It has just been opened up. CityView is in the box seat, and any investor coming in now is joining the play on the ground floor. I can see no reason at all why we will not soon be granted an oil field.” they can’t handle all the projects which will be coming through the system. Everybody is trying to get into Angola. The Chinese have recently bid USD$1 billion dollars for an offshore acreage.

pany Secretary.

to what it was.

WSR: Does the investment community fully understand this company and the direction it’s going in?

WSR: In closing, why should investors consider CityView as a long-term investment opportunity?

WSR: Tell us about the present board and management team.

CTVWF: No, not yet. CityView went through a bad patch and I was brought in earlier this year to fix it. I have turned the company around and got it refocused; the general public is not aware of what has happened. It is a very interesting company now because of the projects emerging in Angola. The price now is about 4 cents US. CityView has had a great history and it will get back

CTVWF: The real reason is Angola. Angola is an oil and minerals paradise. It has just been opened up. CityView is in the box seat, and any investor coming in now is joining the play on the ground floor. I can see no reason at all why we will not soon be granted an oil field. Once that happens, the company will be completely re–rated.

CTVWF: The board consists of three veteran executives. Starting with myself, I have been involved in the mining industry now for almost 40 years. I started off my career as Treasurer and Company Secretary of Selection Trust Australia, now BP. CityView’s Chairman, Mahmood Ansari, runs Quest Energy in the Middle East. He was educated in Michigan and from there went into the Abu Dhabi National Oil Company – he has lifetime of experience in the oil business. The third member of the team John Jacoby, comes from a mining area in the north of Australia and has been involved in mining all his life: he is CityView’s Director and Com-

SUMMARY: CityView (ASX: CVI / OTCBB: CTVWF) is actively developing the natural resources of Angola as well as pursuing other opportunities in the global energy space. The company has a 30% stake in a uranium project with three delineated target areas plus significant beryllium; management believes any or all of these could become a viable mine. Local connections are expected to translate into onshore oil concessions. Angola is described as “an oil and minerals paradise” and BEE partners are expert providers of infrastructure in the region. Additional assets include Indonesian oil interests and a stake in a Middle Eastern developer of various energy projects. Board is extremely well-versed in running resource operations and members have focused to refocus the company. www.cityviewcorp.com

Phone: 011-61-8-9226-4788

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O T C B/I XO G • I ndex O il & Gas C E O I N T ER V I E W

Building an impressive track record for successful drilling Index is a gas-based oil and gas exploration and production company, with activities in Kansas, Texas, Alabama and Louisiana. It has offices in Houston, Texas and Bath, England.

Index Oil & Gas has distinguished itself by building an impressive track record of drilling success. Daniel L. Murphy, the company’s chairman, gives us a tour of his balanced portfolio of exploitation properties. (Interview of January 25, 2007.)

WSR: Start with today’s announcement concerning the commercial discovery from the company’s Taffy Program in Texas and bring us up to date on the details. IXOG: We are pleased with Taffy’s results. This is a three-well back-to-back program with the Taffy 1 well coming in as a commercial success. It could be put into production very soon because the pipelines shared in the facilities are all on short-time delivery. We expect Taffy to be adding to our revenues in the second quarter of this year. WSR: Bring us up to date on the West 1 drilling program. IXOG: We are excited about West 1, our most significant well to date. When we originally took our 15% initial interest, it was all that was available. Subsequently, one of the partners was overcommitted elsewhere and had to relinquish their interest; we were able to pick up the extra 5%. This was a very positive move on our part, and we are looking to be drilling that well next quarter. WSR: Give us a better understanding of the combined cumulative production from nearby fields. IXOG: These are in the New Taiton area; the combined production to date has been 400 billion cubic feet of gas, equivalent to 67 million barrels of oil. This production is from the Edwards limestone. This particular field lies between two of the older existing fields, and if successful, it will lead to more well development programs. In addition, in the leased area, there are similar structures of the same character and size. We see this as a high– potential area. WSR: Bring us up– to – date on the balance of the company’s portfolio, particularly in regard to the Stafford

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“The funds raised in 2006 are being employed to support the full development of the wells currently in progress. For example, the West 1 and Ilse projects are very successful. They require many wells in order to fully develop those areas.” County and Barton County plays. IXOG: In Kansas, we have an ongoing drilling program that has been annualizing. Toward the end of 2006, we embarked on a six-well program, with three in the Seward Project and three in the Katy Project. We have four wells that have been commercially successful. Our success rate in Kansas is still high at 66.7%. Unfortunately, these results incrementally add to our revenues. We have a modest 5% in Kansas; we look at it as bread and butter, very low–risk, low – capital demand, but constantly adding income to our revenue. WSR: The company has a conservative low−risk approach to these projects. IXOG: Yes. Our risk profile is changing−the West and Ilse wells are examples. Ilse is the well currently being drilled; it is well into the drilling. We have a 10% working interest, and that’s in a significant high-reserve potential area. We are also finishing up the drilling on the Vieman #1 project, which we expect to make an announcement on within a matter of days. We have either drilled or are in the process of drilling ten

wells in 2007. The West well will be done shortly thereafter. We still have the Taffy 2 well to drill−there was a weather problem. The site got too waterlogged, and we have to wait for it to dry out. We are active on the drilling size. WSR: Is the level of infrastructure within these regions highly developed? IXOG: All the areas we are drilling in are between fields. In the Taffy area, there was a discovery north of it; the operator was laying in a pipeline we will tie into, which is fairly straightforward. In all the other fields, we have substantial infrastructure already in place, and tie-in should be fairly quick from discovery. Also important, but previously unmentioned, is that our role is basically as a non-operating partner. We don’t direct the work being carried out in the exploration project or in operating the production property. We just share in the benefit, and we own our working interest percentage of the money invested in facilities, leases and wells. We don’t own any drill rigs − those are all leased in. Our role is to manage our investments using our experience to influence the operator to do things of benefit to our

shareholders. WSR: So the high demand we’ve seen for rigs, equipment, and personnel is not a limiting factor for Index? IXOG: We’ve seen a bit of that. We’ve had some delays in getting rigs to site; a lot of those delays have been just delays in programs being conducted in front of us. Demand last year was quite high. It’s dropping off just a bit, which is okay with us, because all these projects are multi– year projects. What’s happening today is not determining your success or failure or what’s going to happen over the next five years once you make a discovery. If the price comes down, it doesn’t bother us that much because it allows us to move our program out a bit faster. WSR: Towards the end of 2006, the company conducted several rounds of fund raising. How have these funds been deployed? IXOG: The funds raised in 2006 are being employed to support the full development of the wells currently in progress. For example, the West 1 and Ilse projects are very successful. They require

SUMMARY: Index Oil & Gas (OTCBB: IXOG) has pursued an aggressive drilling program so far this year across its properties in Kansas and the Gulf Coast. The company’s Taffy wells are moving toward production and should be shortly revenue-accretive. Additional Texas projects are in a region that has historically produced 400 BCF of gas total and management sees significant potential ahead. Although the company has enjoyed drilling success in Kansas, its stake in these wells is a relatively modest 5%. Substantial infrastructure is in place on all fields. Proceeds from recent funding rounds are being held in reserve to support full development; strategy is to maintain a diversified risk profile. Graduation to a senior exchange is contemplated. www.indexoil.com

Phone: 713-715-9275

many wells in order to fully develop those areas. We are holding that money in reserve until we get the results on these particular programs. We have a few projects in the pipeline. Typically, we review between five and six projects per week and will select one to two every three or four weeks to invest in. We have a strong opportunity pipeline we are constantly evaluating. It’s going to take us time to invest this money, but we don’t want to overcommit ourselves. We were forced to drop out of a successful project. We are waiting for the results on the West 1 and Ilse projects to see if they have follow−on wells. WSR: Can we expect to see additional partnerships or joint ventures in 2007? IXOG: We are continuously investing money; last week, we reviewed six prospects − some of them were with existing partners and some with new partners. We are eager to continue working with the partners we’ve built good relationships with, and we are also interested in finding new partners that are aligned with our way of doing business. WSR: What differentiates Index within the sector? What sets the company apart? IXOG: There are five points. One is our team. We have seasoned oil industry professionals with proven track records. They have a significantly broad and comprehensive experience that doesn’t overlap. Our top four executives have a total of 120 years of experience. Secondly, our approach to business as a non-operator is to build a balanced portfolio. We are risk-mitigation conscious, and we don’t want to expose the company to any single critical event. We diversify our investments across a wide range of opportunities. Thirdly, our opportunity network is generating high−quality

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O T C B/I XO G • I ndex O il & Gas C E O I N T ER V I E W

opportunities consistent with our ability to invest, which appears ongoing. Next is our track record. Since January, we’ve participated in eight wells, five of which have been commercial, giving us a 62.5% success rate with one well currently drilling and two more wells to be drilled in the near future. Over the past 12 months, we have been very active, and we have capital to continue to be active. WSR: Tell us about the Board and executive team. IXOG: I have 40 years experience in the energy industry, the last seven−and−a−half years with an independent oil company in the North Sea called Intrepid Energy; I was the Engineering Production Director. One of the big results we achieved was that we invested in, explored, and discovered a USD$500 million recoverable oil field; I was part of that development until the company was sold. I’ve also worked for other major companies such as Shell Oil, Occidental, and IIAPCO, an independent out in Indonesia, as well as contractors such as Santa Fe International. Lyndon West has 26 years’ experience in the oil and gas business. He was New Venture Services Practice Director and previously the CEO of IHC’s International Division. IHC bought a company that he co−founded called IEDS Limited, and he was the founder director of Intrepid. Andy Boetius, Finance Director, has 15 years’ experience with Amerada Hess. He’s been a finance director for the U.K. oil business and was a member of the management team that sold the gas division to the TXU group several years back; he was also the Founder Director. In August 2006, John Williams joined us from ConocoPhillips. John is a seasoned professional with 31 years’ experience in global oil and gas exploration. He has worked in over 25 countries and conducted

“The results are well proven, whether that potential is justified or not. We have a very strong track record, and we tell investors what we are going to do and then we do that. We don’t deviate very much off that path. We are a company that can be trusted.” businesses in more than 10 countries. In addition, we have several non-executive directors, one of which is Dave Jenkins with 31 years’ experience in global hydrocarbon exploration. He is formerly of ConocoPhillips, involved in ranking over 50 basins and 100 plays. Dave helped ConocoPhillips develop a focused exploration program before he left. He is also a Founder Director of Index. Last but not least, we have Mike Scrutton with 33 years’ experience in the upstream petroleum business and was formerly with Robertson Research. He served as the Director of Robertson Research and several of its subsidiaries until he left in 2004 and joined Index. WSR: What are the major milestones we can expect to see for Index over the next 12 months? IXOG: We are looking forward to develop our West 1 and Ilse 1 opportunities; we are waiting to

see what the results are. Our real focus is to maintain a balanced portfolio approach to our investments in respect to both risk and capital employed. Potentially, we are looking for acquisitions. We think with the price of oil coming down somewhat, some of the potential acquisitions are starting to look more reasonable. We have our eyes out for acquisitions compatible with the company’s strategy and objectives and ones that also make commercial sense. We have raised some funds to invest in land plays, and we also have a number of opportunities under evaluation also, looking at developing some opportunities in conjunction with other partners. In 2007, our focus is land play. We are also doing some background work and preparing the company to graduate market so that when it’s appropriate for us to do, we will be ready and won’t get overwhelmed by the regulatory burden that exists in doing that.

WSR: So the company might consider the American Stock Exchange? IXOG: We’ve had discussions with them but haven’t come to any decision yet. WSR: Give potential investors some of the key pointers they should consider when looking to Index. IXOG: We are a relatively new company. We are trading below our value range, especially with some of the potential significant prospects we have such as West and Ilse. The results are well proven, whether that potential is justified or not. We have a very strong track record, and we tell investors what we are going to do and then we do that. We don’t deviate very much off that path. We are a company that can be trusted to do what it says.

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C E O I N T ER V I E W B urleson E nergy L imited • A S X /B U R

Drilling in-fill wells other explorers would love to chase Burleson Energy is an Australian-based oil and gas exploration company. Burleson Energy has the unique opportunity to be partnered with an experienced Texan Oil family in drilling and potential development of hydrocarbon in one of the most valuable energy provinces of America.

Burleson Energy has minimized its exploration risk by concentrating on in-fill development wells with substantial production potential. Michael Sandy, the company’s executive director, tells us about his initial drilling plans. (Interview of January 11, 2007.)

WSR: Bring us up to speed on the company’s assets and operations. BUR: Burleson listed with an IPO in the early part of 2006 and raised AUS$4 million (USD$3 million) to be involved in its initial two wells in Burleson County, Onshore Texas. These are Austin chalk wells. We have a 40% working interest in those wells. More recently, we’ve received shareholder approval for another fundraising. Our U.S. partner, AKG Energy, a private company based in Austin, came up with a new project that was just too good to pass up. We raised another AUS$12.3 million (approx USD$9 million) to enable Burleson to be involved in at least seven more wells, also in Austin Chalk but in other counties onshore Texas. We have 40% working interest in the Burleson County wells and 17.5% equity in the later wells. Should I go on and talk a little bit more about the second project? WSR: Expand if you would. BUR: The second project that came about was a bit unexpected from our point of view, but we already had the relationship built with AKG Energy, which is owned by the Kugler Family, a private company based in Austin. I’ve known the principal of that company for 30 years. When I was looking to set up an Australian company, the obvious person to go to was Andy Kugler because he has a great deal of experience in the

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A S X /B U R • B urleson E nergy L imited C E O I N T ER V I E W

“The wells we’re looking to drill are all Austin Chalk Wells. The ones in Burleson County should produce between 3 and 5 BCF and flow initially at 3 to 5 million cubic feet a day. Not that these are development wells and not exploration wells.” Austin Chalk area. We raised the initial money and were preparing to drill when another opportunity came up that was too good to pass up. Marathon had approached AKG Energy to assist them with drilling some wells drilled because they had experienced difficulties. AKG handed part of that project over to Burleson Energy. The reason for that was the Kuglers are all significant shareholders in Burleson. If all goes well and all performance shares kick in, they should own over 20% of the company. Andy Kugler, the principal, is one of the three Directors of Burleson. The wells we’re looking to drill are all Austin Chalk Wells. The ones in Burleson County should produce between 3 and 5 BCF and flow initially at 3 to 5 million cubic feet a day. Note that these are development wells and not exploration wells; you would find that some explorers would love to be able to chase those size targets−what we’re looking

at are drilling wells that are a lot lower risk than rank exploration wells because we’re drilling into existing producing chalk fields. With the second project, we have a lower equity, but the wells are deeper and higher pressure; some of the wells in the region have produced well over 15 BCF, but what we’re looking at is averaging 4 to 5 BCF per well and hope there may be some wells producing 8 BCF or more. Some of these wells can also produce at very high initial rates, with 10 million to 15 million cubic feet a day being conceivable, and we’re hoping we might see those kinds of results. Initially, these wells flow very strongly for a while, so you recover costs extremely quickly, but then drop off dramatically and flow for many years at a much lower rate. We’re looking to drill at least nine wells – two in Burleson County with most of the others in Grimes County in association with Marathon and

SUMMARY: Burleson Energy (ASX: BUR) is developing various hydrocarbon interests in the Austin chalk of Texas. The company has a 40% stake in an initial two-well drilling project in Burleson County with potential to produce 3-5 BCF in total at an initial rate of 3-5 MCF per day. Land position of over 10,000 acres provides at least a dozen other drill prospects. A second project area offers lower overall equity (17.5%) but high potential production; management expects wells in the area to tap an average of 4-5 BCF apiece at relatively high flow rates. Initial plan is to drill seven wells in the near term. Counting additional prospects, the company could spend several years simply drilling current properties. www.burlesonenergyltd.com

Phone: +61-8-9325-8888

AKG, and one other in Brazos County. WSR: Tell us about the present Board and management team. BUR: First, let’s talk about the people on the ground, who as far as I’m concerned, are the key elements. By itself, Burleson could not hope to compete in the very competitive Onshore Texas market, so we don’t pretend to be experts. Although I’ve had considerable U.S. experience, little of it has been on the ground. Andy Kugler is the patriarch and is also on Burleson’s Board. Andy’s three sons are all skilled oilmen who worked for big companies such as Marathon. A few years ago they all got together as AKG Energy. They’re all extremely experienced people on the ground as shown by Marathon’s invitation for AKG to operate the drilling phase in the Champion area (Grimes and Montgomery Counties). In terms of the Board, our Chairman, John McAlwey, has a considerable amount of resources experience. He is a c o m m e r c i a l – t y p e p e r s o n. A s for myself, I most recently spent ten years with Novus Petroleum. I’m a geologist, but have mainly held commercial roles like business development. I spent much of 2003 running Novus’ U.S. operations out of Houston. Andy Kugler is also a geologist and has over 40 years’ experience. We first worked together many years ago in Papua, New Guinea.

WSR: Does the investment community understand this company and the direction it’s going in? BUR: We still feel we are a very young company. We only listed (our IPO) in April/May 2006. We got the initial interest mainly from sophisticated private investors, mostly out of western Australia. They were prepared to go along with us into these first two wells, and there was a certain element of patience involved. This new project then came up, which still requires a bit of explaining to the market. We just recently got shareholder approval for this latest fundraising, where we raised the additional AUS$12.3 million. There is still a fair amount of work to do to get the share market up to speed with what we’re doing. We’re hoping to drill our first well very soon, hopefully within the next couple of weeks. We’re in the process of getting our story out in the market. Our share price has stayed relatively flat, which is okay considering we haven’t had any drilling activity yet. WSR: Where do you see Burleson Energy two to three years from now? BUR: We started out as a twowell company, so we had an initial shelf life of four to six months’ activity. We have over 10,000 acres in the Burleson area. We also have at least a dozen other prospects in that area. With the

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C E O I N T ER V I E W B urleson E nergy L imited • A S X /B U R

new project, we’ve gone from having two firm wells to nine firm wells, giving us at least 18 months of drilling. In both areas, there are a lot of other prospects. If all goes well, we’re probably going to continue this program that will go from three to five years just with our current portfolio; there are other possible projects we could be looking at as well. The beauty of what we’re doing is that it is very low risk with a very high chance of getting some production and early cash flow. Each well has a very good chance of at least recovering costs if not making good money for the company and its shareholders. So for the next two years, we’ll continue to review what we’re doing but will not be adding any more to the portfolio. We’ve got plenty to keep us busy. We’re going to be drilling wells, every two months and might even get a second rig in operation. I would hope that we have good positive cash flow from the majority of the wells we’ve drilled and more commercial successes than commercial failures. WSR: In closing, why should investors consider Burleson Energy as a long-term investment opportunity?

BUR: We have a firm program of at least 18 months of drilling with nine wells; and have up to 20 more prospects we could be looking at drilling (assuming success is along the way). In that case, we could be looking at a three to five-year program of drilling just within the company’s current portfolio – without looking at doing anything else. There is going to be regular news flow, which is very important for share investors. You don’t want to have the company sitting around doing nothing for six months. We’ll be having news flow in terms of drilling results every couple of months, and then as quarterly reporting and half-yearly reporting comes in, we’ll hopefully be able to report positive cash flow as well. Again, we’re hoping that most of the wells we drill will be outstanding commercial successes. The thing that sets us apart is that we’re drilling targets that have the potential for levels of production and reserves that a lot of explorers would be keen on targeting, but we have taken out much of the risk of exploration drilling. We have a large portfolio of in-fill development wells with an appraisal component and a very high chance of a positive commercial outcome.

“The thing that sets us apart is that we’re drilling targets that have the potential for levels of production and reserves that a lot of explorers would be keen on targeting, but we have taken out much of the risk of exploration drilling.”

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A S X /F L X • F elix R esources L imited C E O I N T ER V I E W

Building new coal mines to unlock huge growth potential Felix Resources Limited is an Australian resources company investing in, developing and operating resource-related projects with a primary focus on coal. The company has grown strongly since 2003 through expansion, new developments and acquisitions.

WSR: Begin by bringing us up to speed on the company’s assets and operations. FLX: Felix Resources is a relatively new listing. It’s basically two private coal companies. Their major shareholders have been in the industry for 30 years in Australia and developed quite a lot of the large mines that are now owned by the major companies. These two groups came together under the banner of Felix Resources 18 months ago. We have three operating open−cut coal mines in Queensland and New South Wales supplying the steel industry, and the power generation industry. We have 20 customers worldwide. We are currently producing six million tons of coal, of which just over four million is Felix’s equity tons the rest is in joint venture tons with a couple of Japanese partners, and we are going to eight million tons next year and 15 million tons by 2010. We have one underground longwall mine to come on next year in the Hunter Valley in New South Wales. The gate roads are 60% completed, and the longwall is being shipped from Germany for commissioning in March 2007. Then we have a large open-cut mine, which is coming on the year after in New South Wales. We’ve got a big growth plan coming up, and we have achieved all our targets in the last 18 months quite comfortably. WSR: Expand on some of the main plays and educate us in terms of where you are in that developmental phase as well as the infrastructure in place within this region. FLX: In Queensland, the coal being exported is from two open-cut mines; we have the Yarrabee mine, supplying mainly PCI coal to Asia. We also supply some of that to America and some to Europe. That coal ships out of Gladstone, which is in Central Queensland. Our other mine in that region that goes down the same rail track to Gladstone is the Minerva mine. This is a joint venture with a Japanese group, Sojitz. They have 45% and we have 55%. That mine is producing mainly thermal coal, and we are selling 2.5 million tons a year of that coal to the electricity generators in Japan and Korea. These two Queensland mines are running at 4.2 million tons per annum, and we are selling that coal as fast as we are producing it. In New South Wales, we have an open-cut mine called Ashton, which ships out of Newcastle. That mine is producing 1.6 million tons of metallurgical coal. It is semi-soft coking coal going to steel mills in Asia, mainly Japan and Taiwan. We are expanding that mine because the demand is strong as several steel mills are now looking to blend semi–soft with the higher priced hard coking coal

Felix Resources is boosting its growth profile as an Australian coal producer. Managing Director Brian Flannery tells us how his team is working to open new mines in order to meet intense demand for his company’s billion-ton assets. (Interview of September 21, 2006.)

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C E O I N T ER V I E W F elix R esources L imited • A S X /F L X

and hence reduce their overall cost for blast furnace coke. This expansion is by underground longwall. When commissioned in March 2007, this mine will produce 2.4 million tons of metallurgical coal to augment the open–cut coal giving total exports of four million tons from Ashton. At Ashton, we have 60%, a Singapore–based group, International Marine Corporation has 30%, and the Japanese trading company Itochu has 10%. WSR: What is unique about Felix Resources that defines and differentiates this company? FLX: Our growth has been considerable. There are only a few small to medium sized players in the Australian coal industry. The large groups like BHP, Rio, Xstrata, Anglo, and Peabody, who have recently expanded in Australia, account for a large part of the export tons. We have grown our profitability from a bit over AUS$1 million three years ago to AUS$30 million last year. We are on target to expand further this year with substantiallyincreased tonnages. The key executives and directors have been in the coal industry for plus 30 years and have a detailed knowledge of the industry and the export market for coal. They also have a large stake in the Company of around 70%. We are very hands on and concentrate on our cost structure in

order to maintain our competitive position. WSR: Tell us about the present board and management team. FLX: Myself as the MD, I’ve been involved for 33 years. I started with Peabody in Central Queensland when they first came to Australia in the early ‘70s. I have been involved in open-cut and underground mining in Queensland, New South Wales and India and developed a number of other mines for our previous group, called White Industries Limited. Our Chairman, Ian McCauley, spent a large part of his career as a mining engineer and mine manager with Shell Coal. Our Deputy Chairman Travers Duncan, a civil engineer, has had forty years experience in civil construction and coal mining. He and I worked together for Peabody at Moura in the early ‘70s. The other directors have a wide experience in mining and finance. Another director, John Kinghorn, established a number of finance companies in Australia such as Allco Leasing and Rams Home Loans. WSR: Does the investment community understand this company and the direction it’s going in? FLX: I believe the investment community is now starting to understand the potential of Felix. Eighteen

months ago, we had two medium– sized operations, and by early next year, we will have four significant operating coal mines with diversified locations, ports and customers. We also have a large exploration acreage in Queensland and New South Wales, and our current drilling programs are proving up expanded resources. Our total resource base is well over one billion tons. We will start construction in March 2007 of our biggest mine, which is the Moolarben open cut in New South Wales. It is the best undeveloped deposit of export thermal coal in Australia, perhaps even the world. This world class asset of over three hundred million tons with a ratio starting at one–to – one and averaging less than three – to – one over the life of the mine is 100% owned by Felix, and when it comes on stream the second half of 2008, it will have sales of nine million tons per annum, making Felix a significant exporter. In addition, Moolarben has 198 million tons of underground coal. We are just starting to move around the investment world and explain to some of the investors and fund managers our detailed plans. WSR: In closing, why should investors consider Felix Resources as a long–term investment opportunity? FLX: We are a mid-sized company with a substantial growth profile

“We are currently producing six million tons of coal, of which just over four million is Felix’s equity tons, the rest is in joint venture tons with a couple of Japanese partners, and we are going to eight million tons next year and 15 million tons by 2010.” exporting coal worldwide with the bulk going to an expanding Asian market. We have a huge potential to grow our profitability, and hence, our return to shareholders. Collectively, the directors and key executives have a large stake in the Company and perhaps a strong incentive to grow shareholder returns by dividends and capital growth.

SUMMARY: Felix Resources (ASX: FLX) combines the assets of two of Australia’s long-term coal suppliers. The company produced a gross six million tons of coal (4 million tons net) from three open-cut mines in 2006; work is underway to bring production to 15 million tons by 2010 as additional mines come online. Most customers are in Asia, although some PCI coal goes to North America and Europe. Demand for the company’s metallurgical coal is intense. Profitability has increased from AUS$1 million in 2002 to AUS$30 million in fiscal 2005. Resource base is above one billion tons, including 300 million tons of 100%-owned thermal coal. Exploration holdings are also extensive and the company is actively drilling to replace reserves. www.felixresources.com.au

Phone: 011-61-0-7-3211-7900

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A S X /S G L • S ydney Gas Ltd C E O I N T ER V I E W

Perfectly placed to supply gas to Australia’s biggest city Sydney Gas is a major coal seam methane (CSM) producer in New South Wales. Its tenements cover the major energy markets in NSW extending across the Wollongong, Sydney and Hunter Valley regions. The company’s key producing asset is located at Camden. WSR: Tell us where Sydney Gas is today versus 2005. SGL: A few small points first. I only came into the Chief Executive position six weeks ago today. I already believe it is perfectly clear that things are changing for the better. If we go back a year, the company has been through a difficult time, with a series of board and senior management changes; in fact, at one stage, the stock fell to USD$0.23 or USD$0.24. In the last six weeks since I joined, the stock is up approximately 40%, about half of which is due to my efforts and half due to the clear beginnings of consolidation in the East Coast gas sector. The first clear driver for investors is that our development plans are starting to move forward. The second driver for investors looking at oil and gas stocks, particularly CSM stocks in Australia, is it is now clear they have become respectable in a way they weren’t before. Seven years ago in this country, unlike the United States, there was no CSM industry at all. It is now providing 15% of gas on the east coast of Australia. WSR: Expand on the company’s assets and operations. SGL: The company’s assets are all inside the state of New South Wales, the principal state by population, which is the important issue from the point of view of Australian markets. Sydney is the main financial center as well as the largest city in Australia. It consumes 140 petajoules a year, and the tenements in which Sydney Gas is currently developing, will be supplying 10% of that volume. In terms of Sydney Gas’ tenements, we are in a joint venture with Australia’s oldest company, AGL –The Australian Gas & Light Company. We are 50–50 in all of the tenements. The main project under development at the moment is the Camden Gas (CSM) field, 60 kilometers (40 miles) to the south and west of Sydney. The important thing about the Camden site is that it fits almost exactly on the main gas line to Sydney. It has easy and immediate access to market. That project has gone through a pilot stage, which started five to seven years ago. It’s now in the principal development stage, which is an ongoing exercise. The main ramp-up will be occurring over the next two years. Of our other tenements, the most interesting one from the point of view of near–term exploration and appraisal, is to the north and west of Sydney, in an area called the Hunter Valley; we are looking for the next calendar year at drilling a number of core holes to assess that area for potential CSM reserves. WSR: Will the company look to additional strategic alliances or joint ventures moving forward? SGL: In all of the New South Wales tenements, we are in a powerful joint venture with AGL. AGL is a useful party to have as a JVP because they are the largest domestic gas marketer in Australia. All of the gas from the Camden

Sydney Gas is a major Australian coal seam methane producer. Dr. Philip Moore, the company’s recently installed CEO, tells us how he’s turned the business around and how it’s ideally suited to serve Australia’s biggest market. (Interview of October 12, 2006.)

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C E O I N T ER V I E W S ydney Gas Ltd • A S X /S G L

area is sold to a different arm of the AGL company. Looking further forward in the nascent Hunter area, it’s further away from gas infrastructure, so I can’t stress this enough: An intelligent explorer or appraiser starts thinking about markets from the very beginning. In fact, Frank Sartor, the Minister for Planning for New South Wales, has just given a designation of enhanced status for a pipeline coming down from Queensland through the area of Gunnedah through the Hunter Valley to Newcastle, which would potentially open up new direct access links for the Hunter Valley as we scope up gas there. In the alternative, and the more likely case, because there is already existing electricity infrastructure, we would convert gas reserves to electrons, which is likely to mean combinations of other parties in the joint venture, owning or leasing electricity–generating plants. To that end, we’ve just added two new members to our Board from the well-known finance company, Babcock & Brown, both of whom have specific experience in electricity generation. WSR: What is unique about Sydney Gas that defines and differentiates this company? SGL: It has some very nice features. The first, potentially shocking to U.S. stockholders, is that gas market pricing in eastern Australia is very low compared to U.S. domestic gas prices. For example, when you are looking at gas prices at the Henry Hub of the order of 6 or 7 mcf or higher, we are looking at equivalent prices of 2 to 3.5, depending upon where you are in eastern Australia. The gas prices are all one-third to one-half of what they are in the United States. You can imagine that in

“The company’s assets are all inside the state of New South Wales, the principal state by population, which is the important issue from the point of view of Australian markets. Sydney is the main financial center as well as the largest city in Australia.” the longer term, there has to be pressure to raise prices. That’s an overall position that applies to all of the east coast producers. However, in the specific case of Sydney Gas, we are the closest party to Sydney, the main gas market. For our Camden asset, we are already receiving a premium price, compared to any other CSM producer in the country. As Camden develops, that revenue will be building. Overall, we are the largest CSM company centered in New South Wales, the major population center of the country. All the other large CSM companies are based in Queensland, which has much less population and less infrastructure. WSR: Tell us about the present Board and management team. SGL: The Board has been completely turned over in the last 12 months. The new Board is headed by Mr. Raymond Schoer, the former head of NCSC, the Australian equivalent of the U.S. Securities and Exchange Commission. I am the new MD; my background is with Royal Dutch Shell and BHP Billiton, both well– known to investors. Other members of the Board have specific interests, either in electricity generation or project finance for major projects, specifically tailored to infrastructure and utilities. We are a small company in terms of staff. An important change has occurred in our major assets; although

we are quite influential on how it’s being developed, we have become a non-operating party. Essentially, we are a small E&P company with specific interests in geology and reservoir engineering and project management. Beyond that, we are bringing in specific experts for new reviews. Currently, I am reviewing the potential for conventional gas in the Sydney Basin within our own tenements, which looks interesting. WSR: Does the investment community understand this company and the direction it’s going in? SGL: The current stock price is 40% more than the day I walked in the door six weeks ago. There has been both response and support. I suspect the answer is not completely; the investment community can be forgiven for that because there have been a lot of structural changes in the company in the last two years or so. If I am saying what’s new, what should they be aware of? Well, essentially the clear message is that Sydney Gas is settling down to business. The clear intention expressed by the Board in our statement of strategic intent just over one month ago is, first, to get on with developing Camden in the most cost–effective manner, and second, getting on with the exploration appraisal of our Hunter tenements.

WSR: In closing, why should investors consider Sydney Gas as a longterm investment opportunity? SGL: In the long-term, gas prices in east coast Australia are unsustainably low. They are one-third to one half of what they are in the United States. The major new source of gas anticipated to arise was coming from the neighboring country of Papua in New Guinea. The pipeline that was going to deliver that has been significantly postponed – for how long, it is hard to tell; at least five years, possibly ten, possibly permanently. We can start to see a good course while gas prices in eastern Australia will be rising. The traditional sources of conventional gas to these markets has been coming from central Australia, an area called the Cooper Basin. That area is now in long-term decline. In fact, it is the nature of that decline that has given rise to the opportunity for the CSM or CBM industry, which did not exist seven years ago. It has been an astonishing transformation that these new CSM companies have come into business. For Sydney Gas in particular, we are very well placed geographically in close proximity to the existing infrastructure for the city of Sydney, the major domestic gas market in Australia. We are close to where new infrastructure, including pipelines, are likely to be constructed.

SUMMARY: Sydney Gas (ASX: SGL) is an Australian coal seam methane producer operating in New South Wales. The company has partnered with AGL, the country’s largest gas trader, to commercialize its assets; pilot work on its primary project (practically on the main Sydney gas line) has succeeded and more aggressive development is underway. Exploration drilling elsewhere in the region is forecast for 2007. While follow-up projects are further from pipe, management notes that a proposed extension would create direct access, and that in any event, output could be used for generation purposes. The company enjoys premium pricing due to proximity to end markets. Currently low Australian gas prices are seen as unsustainable given a dearth of new regional supply. www.minefinders.com Phone: 604-687-6263

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L S E /R E H • R enewable E nergy H oldings P L C C E O I N T ER V I E W

Wave power technology adds upside to green Euro assets Renewable Energy Holdings plc is an international company established to be an operator of and undertake active investment in both proven and innovative renewable energy technologies.

WSR: Give us an overview of Renewable Energy and the markets you are targeting. REH: We are a company that’s almost two years old. We floated on the AIM stock market in February 2005 with the intention to invest proceeds raised in Renewable Energy technologies, primarily in Europe, where there are some strong financial incentives for Renewable Energy technologies. At the same time, we invested in a mid–stage technology we had found in Australia and brought on. It’s in the fairly late stage now. It’s a wave energy device, and one we should be able to commercialize over the next 18 months. WSR: I believe your projects are primarily in wave, wind and bio energy? REH: Yes. We have a large wind asset in Germany, currently 32.5 megawatts but should grow to over 50 megawatts over the next 12 months. That’s in the German regime, which pays 85 Euros per megawatt–hour, a very lucrative wind regime. We also have an asset in landfill gas methane recovery in the U.K., where we are in the Rocks regime or the Renewable Energy certificate. In U.S. dollars, it would be close to $150 per megawatt-hour. They are small investments but very lucrative. WSR: I also see you are exploring another wind farm in Poland. REH: Yes – we are in the late stage discussions with developers in Poland. We’ve reached commercial terms and are now doing due diligence on our part and legals. We expect we will close on that project this year with turbine commissioning in early 2008. It’s a wind farm, which is in a very good region of Europe. It’s in southeast Poland in the mountains where the winds are quite high and is also a very good financial regime put in place by the government. WSR: With the wave energy project – is that what you call CETO? Tell us a little more about that technology. REH: Yes – CETO is a technology that takes the kinetic energy of a wave and transfers it to a pump system,

Renewable Energy Holdings combines a portfolio of green European energy assets with a novel generation technology that runs on the kinetic energy of seawater. CEO Michael J. Proffitt fills us in on his near-term expansion plans. (Interview of February 13, 2007.)

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C E O I N T ER V I E W R enewable E nergy H oldings P L C • L S E/R E H

which then transfers pressurized sea water from an offshore location to an onshore location, using standard oil and gas pipe technology. Once onshore, we put it through a standard Pelton turbine and generate electricity. In some parts of the world, one of the key benefits is that we also have desalination capability without carbon footprints. We believe the CETO technology could also be rocket fuel. WSR: Are there any other major trends affecting the Renewable Energy business? REH: I have just come back from Australia, where if you open any newspaper, they are talking about climate change. Climate change breaks into a number of areas. One, what can we do to slow or change climate change? Obviously, some of those things are using Renewable Energy because of the clean emissions. I believe there is a fundamental element people are missing – we have a finite amount of fossil fuel and whether it’s going to last for another 150 or 200 years, it is still finite; we need to start using wind and solar and wave or tidal as much as possible because it’s free; and it just keeps on coming. WSR: What are some of your key goals and strategies over the next year or two?

REH: Over that period, we intend to grow the megawatt capacity of our balance sheet from where it is today (50 megawatts) to over 250 megawatts. In addition to that, we intend to fully commercialize our wave energy technology, which is not only an electrical solution but is also a drinking water solution in some parts of the world. WSR: Tell us about the company’s board and senior management and what’s driving Renewable Energy Holdings. REH: Our Board starts with John Baker, our Chairman; he had privatized the U.K.’s Electricity Generating Board back in the 1980s. He has also chaired the World Energy Congress and is a well-known city player in energy stocks. I have been involved in the electricity distribution industry, natural gas pipelines, and various high grid interconnection projects. I am an accountant by training. We also have engineers on the Board. Lastly, but by no means least, we have Alan Burns, the inventor of CETO. His proven track record over the years of successfully commercializing inventions is a matter of record. We believe we have a Board that has commercial drive. It has a unique traditional strength in the sector as well as an inventor style that allows us to be entrepreneurial. WSR: Does the investment com-

SUMMARY: Renewable Energy Holdings (LSE: REH) has assembled a diverse portfolio of non-traditional energy assets. The company operates a German wind generation facility that currently delivers 32.5 megawatts of electricity, expanding to over 50 megawatts by early 2008. A UK landfill methane project brings biofuel into the mix; both assets benefit from advantageous financial incentive regimes and are “very lucrative.” Negotiations to build a wind farm in Poland are at an advanced stage. Incentives are not required for profitability. The company is also developing a wave-based technology that uses seawater to run turbines while potentially desalinizing it as well. Commercialization could begin by late 2008. Goal is to expand capacity to 250 megawatts over the next few years. www.reh-plc.com

munity understand Renewable Energy Holdings and what you are trying to do? Are there any misconceptions affecting the value of your stock? REH: The investment community is beginning to engage in Renewable Energy as a sector. Because they are only now beginning to engage, they are seeking the answers to a number of questions. They tend to be the obvious sort of thing for us that have been in the industry for a while, but to the newcomer, they need answering. For example, the financial incentives created by Kyoto, will they stay around? Will they be changed? Will they be changed upwards or downwards? These are critical questions underlying the viability of a new company. We are set up to be profitable beyond these existing incentives. We believe that even if they did change downwards, we would be okay, but we think the communities around the world are going to be more empathetic to these incentives, and they are going to increase them. The only other aspect of our company that is misunderstood is our CETO technology; I believe the misunderstanding is a simple one. I don’t believe the investment community realizes just how far down the road we are with the technology and how close we are to commercializing it. For that reason, I recently hired Parsons Brinckerhoff, the global energy engineering company, to do a review and report on the CETO technology to give us the confidence that we are where we think we are; that report is available on our Web site and indicates we got it right and should be on schedule for commercializing it within 18 months. When the investment community realizes just what CETO is and what it can do within this Renewable sector, our stock may show a more realistic reflection of our value.

Phone: +44-0-1624-641199

WSR: What are the best reasons

“We have a large wind asset in Germany, currently 32.5 megawatts but should grow to over 50 megawatts over the next 12 months. That’s in the German regime, which pays 85 Euros per megawatt-hour, a very lucrative wind regime.”

for investing in Renewable Energy Holdings for the long term? REH: We are undervalued at the moment. We have terrific medium-term growth potential. In the long-term, our CETO technology gives us a global entry which could be very interesting.

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T S X /E S N . U N • E ssential E nergy S ervices T rust C E O I N T ER V I E W

Aggressive growth and insulation from drilling downturns Essential Energy Services Trust is an independent oilfield services organization based in Calgary, Alberta. The company provides essential production services to existing oil and gas wells in BC, Alberta and Saskatchewan. Essential Energy Services Trust is uniquely focused on providing rigging and truck services to fields with existing oil and gas production. CEO James Burns tells us why a downturn in drilling can’t dent his company’s growth. (Interview of February 15, 2007.)

WSR: Bring us up to speed on the company’s assets and operations. ESN.UN: Essential Energy Services Trust provides a range of production services to the oil and gas industry across western Canada, from Saskatchewan through Alberta into British Columbia. We provide services in two main areas – rigs and truck-based services. The rig services are things such as service rigs and coil tubing as well as rod and swab rigs. On the trucking side, we provide vacuum trucks, pressure trucks, hydrovac steamers, hot oilers, and so on. We have an increased presence providing tank truck services to move produced water and other fluids, and we also do a small amount of chemical sales to the oil and gas industry. WSR: As we look to these growing markets, tell us about the key drivers, the major trends you see affecting your core business, and how Essential is favorably positioned. ESN.UN: As most people are aware, there has been a downturn in the oil and gas industry, which has negatively affected producers, due to low commodity prices; this is funneled through into lower capital spending. Capital spending drop– off mainly affects the areas of drilling and seismic — the more upstream part of the business. Our business is focused on production services, or the maintenance and enhancement of existing production. Our revenue is derived from oil and gas operating budgets, not from capital budgets. In that regard, our revenues are more stable than service companies that focus on drilling. What we see in the oil and gas industry is that when drilling slows down, producers find their production starts to fall off. They then start to look to production activities such as well re–completion, clean-outs, and other enhancements to maintain their base production. We are not affected by that slowdown and, in fact, our business is very robust at the moment, even though the rest of the industry is in a bit of slowdown. WSR: Will the company look to M&A activities as a catalyst towards continued growth?

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ESN.UN: We concluded the acquisition of JaCar, a company which provides truck–based services in southern Alberta, in September 2006. JaCar provides services similar to those of our other truckbased operations in the northern part of western Canada. We are seeing that with both the slowdown in activity and the turmoil in the trust sector, there are significant opportunities to acquire both private and public companies at attractive prices; we are presently evaluating a number of opportunities. WSR: What is so unique about Essential Energy Services Trust that defines and differentiates this company? ESN.UN: I always have to keep coming back to our focus on production services and our very conscious avoidance of getting involved in drilling or any of the activities that support drilling. Drilling is a great business – for those who specialize in it, but it tends to be more volatile than the businesses we focus on. We focus on providing stable, growing cash flows and not look at the glamorous, volatile side of the business, or drilling. That differentiates us from every other service company. There are very few companies that have the relentless focus on production services we have. WSR: Tell us about the present Board and management team. ESN.UN: They haven’t changed sine Essential’s spinout from Avenir, which took place in May 2006. We have five people on the Board,

two of which – Bill Gallagher, our Chairman; and Gary Dundas, both of whom are from Avenir and stayed on the Board for continuity purposes. In addition, we have Dennis Balderston, a retired Ernst & Young audit partner, who chairs our audit committee. We also have Neil MacKenzie and Jeff Scott, well–known in the western Canadian oil patch. This is a strong, independent-thinking Board. The management team has been bolstered at the operational manager level, but senior executives have not changed. We have a small and focused team. For an enterprise our

slow process and a learning process for a lot of people. WSR: Where do you see Essential Energy Services Trust two to three years from now? ESN.UN: There is a high likelihood we will be in the same line of business, only larger. I would like to see the company double in size over the next two to three years. We are constrained by the rules that the Canadian Government has put on us, but we are constrained to only double over the next four years. We intend to

WSR: In closing, why should investors consider Essential Energy Services Trust as a long-term investment opportunity? ESN.UN: Several reasons. We offer a unique window on a very stable part of the oil and gas business. Most people have a positive long-term view on energy in North America. We have shown we are a business that can survive and even prosper during lean times. We have also shown we are effective at acquiring and growing the company and that we intend to focus on those two items. We

“Drilling is a great business – for those who specialize in it, but it tends to be more volatile than the businesses we focus on. We focus on providing stable, growing cash flows and not look to the glamorous, volatile side of the business, or drilling.” size, we only have nine people in head office and 600 people in the field working for us. We are a lean and focused organization. WSR: Does the investment community understand this company and the direction it’s going in? ESN.UN: They are starting to. We are relatively young – having gotten started just last spring. We are a new company, and people are starting to look at our numbers and see that they are continuing to be good. When our fourth quarter results come out, most people should be pleased, which would show the validity of our business plan. They are coming around, but it’s been a

use all of the space we can. We will remain focused on our current lines of business and will not expand into other lines of business. We are going to mostly focus on acquiring private companies and consolidating them into the structure we have.

will fully use the four-year window, which may be extended, for trusts to provide tax-advantaged distributions. We are very opportunistic, growth-oriented and entrepreneurial. We are a superior investment, and we plan to continue on that trend.

SUMMARY: Essential Energy Services Trust (TSX: ESN.UN) provides a wide variety of rigging and truck services to Western Canada’s oil and gas industry. The company is unique in its concentration on supporting fields with current production profiles; as such, its revenue derives from operating budgets and is insulated from downswings in drilling activity. If anything, management says, as exploration slows, operators become more active enhancing their existing wells in order to maintain levels of production. The company has engaged in some M&A and is presently evaluating additional opportunities to expand its current lines of business. Goal is to double in size before the tax advantages offered by the Canadian income trust structure are scheduled to expire. www.essentialenergy.ca

Phone: 1-403-263-6778

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T S X /PA R • P etro A ndina R esources I nc . C E O I N T ER V I E W

Applying Western Canadian expertise to Argentine heavy oil Petro Andina is engaged in the exploration for and development and production of oil and natural gas in Argentina and, to a lesser extent, in Canada. The Corporation is continuing to develop its existing reserves and to conduct appraisal and exploration drilling on its 457,000 acre (265,000 acre net) land position in the Neuquén basin. Petro Andina is headquartered in Calgary, Canada.

Petro Andina Resources is applying Western Canada’s heavy oil expertise to the largely untapped unconventional resources of Argentina. CEO Wayne Foo tells us how his company is boosting production and building for the future. (Interview of June 1, 2007.)

WSR: Petro Andina has just very recently been listed on the Toronto Stock Exchange. However, the company was formed back in 2003. Perhaps you can start out with a little bit of background on the formation of the company and maybe an overview of the assets and operations? PAR: Absolutely. The company was founded by five individuals, two of whom had experience with start-up companies in Argentina in the 1990s and two (Bill Hogg and myself) who had been at a Canadian public company called Archer Resources ten years ago. In the evolving frenzy in the Western Canada basin in the 2003–2004 period, we made the observation that as crowded as this basin tends to get, there was likely to be a move to international at some point in the next three years. We anticipated that, looked at the range of opportunities and decided that it was worthwhile to fund a prospecting effort in Argentina. We went for about a year before we acquired our core properties, which were two licenses in the Neuquén basin. The Neuquén basin in Argentina is about 20% of the size of the Western Canada sedimentary basin and about 30% of the production of the Western Canada basin. Our initial concept was that we wanted to look at shallow gas and heavy oil accumulations, and in particular, the heavy oil along the eastern flank of the Neuquén basin, and we were able to position with buying a company that had formerly been Unocal’s company in Argentina. We acquired it by buying the offshore subsidiary, so we had no issues with closing on title, and we closed that deal in March of 2004 and then commenced operations in September of 2004, and we’ve been active ever since. The company is really an oil producer. We do not intend to produce gas in Argentina other than for our own lease fields and for enhanced recovery. We see the South American gas market as something that’s quite political and not an open market at this time, and we prefer

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the security of the oil markets. And the Canadian interest is largely non-operated production. It’s only about 50 barrels a day, and that’s largely for tax efficiency, to provide us with deductibility for our Canadian head office expenses. WSR: Looking at the company’s main activities in the Neuquén basin of Argentina, perhaps you can give us a better understanding of where you are in terms of sampling studies, drilling and so on. PAR: Up to this point, the company has drilled approximately 110 wells. We’re in development on four oil pools, the largest of which, El Corcobo Norte, is in the range of 150 to 200 million barrels of oil in place, and half of that would be net to Petro Andina’s account. The numbers that I’m quoting are what shows in our reserve report, which has been done by GLJ Petroleum Engineers out of Calgary, and that’s attached to our prospectus. It’s all filed for open disclosure. The company has internal views, but we always try to go back to the regulator’s view. Of those 110 wells, we currently have about 75 on production and through the period of the IPO we’ve been producing. We ended the first quarter at 5,000 barrels per day net. We’re operating 10,000 -- our partner Repsol−YPF gets the other 5,000 of that – and production has been growing through the last month and over the period leading up to

the quarter end we’ll be making a release providing some indication of where we think that’s going. WSR: Now, perhaps you can give us a better understanding of the kind of infrastructure in place in the Neuquén basin. PAR: Argentina is a country that is about the same population, and a very similar sized economy to Canada. The population is about 37 million. The relationship between Argentina and Brazil is very similar to the relationship between Canada and the United States: one is a resource-driven economy and the other is driven by population and industry. In Argentina, oil and gas production up until the 1990s was controlled by a state company, YPF, which is now part of RepsolYPF. The production in the country peaked post-privatization of YPF at about 750,000 to 800,000 barrels per day but that has declined down into the 500,000 to 600,000 barrel per day range. Refining is roughly the same capacity. Of that production, about half comes from the Neuquén basin, so it’s a basin that produces in the range of 250,000 barrels per day of oil and about half of the country’s gas production as well. This is really the energy center of the country. Within the Neuquén basin, about two thirds to three quarters of the production comes from two complexes, one in the Puesto Hernández area at the town

SUMMARY: Petro Andina Resources (TSX: PAR) was founded to apply Western Canada’s heavy oil expertise to the largely untapped unconventional hydrocarbon assets of Argentina. The company has amassed a 457,000-acre land portfolio in the highly productive Neuquén basin, sandwiched between two billion-barrel projects and offering substantial development upside. Reserves are currently about 16.8 million barrels and many of the 110 wells drilled so far have delivered “tremendous” initial production in the 300-500 bpd range. Net production is 5,000 bpd. Water flood has been successful; trial steam program will start in September. Management is reviewing bids to build pipe to JV partner YPF Repsol’s refinery. The company is bidding on additional blocks as Argentina’s provincial governments take the lead in offering land. www.petroandina.com

Phone: 403-265-4800

of Rincón de los Sauces and the other in the Medanito to Señal Picada area near the town of Catriel. Petro Andina has positioned itself in a remote area just north of the river that bounds the provinces of Neuquén and Río Negro from the provinces of La Pampa and Mendoza to the north. The river was a boundary to exploration activity and the area was very under explored north of the river, so we’ve positioned to pick up that under explored area between a complex at Puesto Hernández that has produced about a billion barrels and the complex at Medanito that has produced about three quarters of a billion barrels. Our view is that if you have a billion barrels at one end and a billion at the other end, it’s not a bad place to look for another billion. WSR: Indeed. So essentially the Petro Andina strategy is really to transfer heavy oil expertise and technology from the mature Western Canadian basin to the Neuquén basin. Is that the case? PAR: That’s absolutely correct. The founders of the company, and in particular Bill and myself, had a career history in Western Canada where we looked at some of our competitors who were developing heavy oil, and we stayed away from it. I spent an entire career thinking of heavy oil as a dirty, gooey project that had high costs and low margins. But through the 1980s and 1990s, production in Western Canada shifted from about 5−10% heavy oil to about 50−70% heavy oil in terms of the conventional production. Costs were brought down, the production rates were brought up, margins were improved considerably, and I’ve often reflected that if I’d been smart enough to recognize that potential 20 or 30 or even 50 years ago, there was a lot of money to be made. When we went into the Neuquén basin, we recognized that in the 1930s there had been a discovery on the eastern flank of a giant heavy

“In the evolving frenzy in the Western Canada basin in the 2003-2004 period, we made the observation that as crowded as this basin tends to get, there was likely to be a move to international at some point in the next three years. We anticipated that.”

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oil accumulation that really hadn’t been followed up commercially. We found ourselves in a situation where we really are working in an environment that’s similar to Western Canada 50 years ago. Our staff works with the mission statement that we want to transfer 50 years of Canadian heavy oil learning to the Neuquén basin in a period of three to five years.

“The approach is low risk because we have very low costs for exploratory and development activities. Our exploratory wells, dry and abandoned, are in the range of USD$250,000 to USD$300,000 gross and we have a 50% working interest in those.”

WSR: For investors, is that essentially the message as to what differentiates Petro Andina? PAR: I think so. We believe that we’ve found a considerable resource and that it just has not been exploited in the past. The opportunity for the investor is to take a very low−risk and high−performance approach and to see it overseen by an experienced management team. The approach is low risk because we have very low costs for exploratory and development activities. Our exploratory wells, dry and abandoned, are in the range of USD$250,000 to USD$300,000 gross and we have a 50% working interest in those. We have a large inventory of development locations within the existing well control. We have several hundred wells to drill, which will keep rigs busy for some time. The objectives are shallow. We’re the operator; we’re not dependent on moving other parties along. The performance of the wells has been tremendous. We went into this area thinking that we might get something like Western Canada rates, which are 50 to 75 barrels per day for good wells, and within our initial development at El Corcobo Norte, it’s not unusual for wells to have initial production rates between 300 and 500 barrels per day. We’re now 18 months past the discovery of El Corcobo Norte. We have a battery facility that will be commissioned in the next two to three months that’s capable of putting through 15,000 barrels per day and expandable to 24,000, and we’ve commenced work on an export pipeline to link to our partner

Repsol’s refinery at the city of Mendoza. That pipeline should be online close to year−end or perhaps middle of the first quarter ’08. That pipeline has an initial takeaway capacity of 25,000 barrels a day. So we’ve been able to demonstrate a rich resource and to develop the infrastructure to produce it quickly, and now we have the opportunity to use that foundation of cash flow to expand our operations within the existing land and also moving onto new lands in the trend and looking at future growth opportunities. WSR: You refer to the construction of an 80 kilometer pipeline. What will the company’s share of the capex be there? PAR: Company share is 50%. We’ve received bids on the pipeline construction for USD$37 million, which is in line with our projections. We’ve also received proposals from two parties to take financing of that line off balance sheet should we wish to and operate it as an outside common car-

rier. Our approach was that we wanted to see the bids and drive the process before we considered allowing someone else to finance it. We wanted to know the price before we decided that someone could finance it for us. So the net cost on the balance sheet could be high case USD$20 million to Petro Andina; low case would be just a tariff. Against the current reserve of 16.8 million barrels proved plus provable in the February 28, 2007, reserve report, pipeline cost is about a dollar a barrel and that should be diluted down as we add additional reserves. WSR: The company also has procured equipment for a thermal recovery project. When is the steam injection scheduled to commence? PAR: We have plans to drill the initial two wells for a cyclic steam project in September. The specialized equipment for that has been ordered and is currently being delivered into Argentina. The scheme there will involve steaming the

reservoir for a month and then producing for a month, steaming for a month, producing for a month, steaming for a month and then producing out, so we’ll get a pretty early indication as to whether it works. We should know whether that has commercial potential sometime in the second quarter of 2008. WSR: You currently have three rigs under contract with a fourth coming online shortly. Any difficulty in sourcing equipment or skilled personnel in the region? PAR: Not recently. When we started, I often refer to some of the meetings that we had where I invited people to run a Dun & Bradstreet on us. If they wanted to, they would have found out that we had a few thousand dollars in the bank and some good references from people that we’d worked with before. When contractors recognized that we really were going to have an inventory of several hundred wells for the next two or three years, it became very easy to attract equip-

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ment. In the proposal for the last drilling rig that we went out on, we received six proposals from a variety of North American, South American and local Argentina contractors, so the company is very well regarded in the contractor community. In terms of staff in the field, we’ve built an operating office in Buenos Aires now that has approximately 70 people, and we’re able to bill off overhead to our partners against the capital program. We’re not bearing the full cost of that office. That staff oversees a contract work force now that’s in the range of 1,000 people as we complete the central production facility and as we start pipeline and as we start running the rigs and service rigs and other operations in the field. It’s always difficult to compete for people, but we’ve been successful in that. We seem to be both an employer of choice and a customer of choice in Argentina right now. WSR: Petro Andina was also recently awarded an additional concession by the La Pampa government there. Do you find that the overall political environment is quite favorable? PAR: We like to point out that in North America, we tend to look at everything south of Texas as being a pretty homogenous Latin America. The countries are very different. Argentina is a very unusual place even in the Latin American context. It’s going through a political evolution now similar to what Canada went through in the period from the 1930s to about 1985. The courts have awarded jurisdiction of resources to the provinces from the former federal control, so we’re just now seeing the transition: the passage of laws and the passage of administration of resources into provincial hands. This bid round in La Pampa was the first offering of land that they’d made. They actually had two offerings last year. The process ran reasonably smoothly. We’re comfortable with the title that we’re receiving. We have a

very positive working relationship with the government there. I think that it’s comparable to what we saw in Western Canada during that period of transition. There’s uncertainty about who does what, but in the end, we get to an answer. WSR: And do you see additional acquisition opportunities being offered by other provincial governments? PAR: Absolutely. The government of Mendoza has a program to offer 13 blocks in total over the coming two years. The first set of those blocks will be up for bid on July 23. Some of those are of interest to us. We’re evaluating them now and will determine whether we want to take partners on those and how we want to proceed. WSR: Changing direction here for a moment, you mentioned earlier your own background. Perhaps now you could introduce us to your board and the rest of your management team. PAR: I’m a geologist by training. I like to refer to myself as a “recovering” geologist, so our board complements that to some extent. Our chairman is Norm McIntyre. Norm was formerly the president of Petro−Canada and he was responsible for taking Petro−Canada international with the purchase of Veba shortly before his retirement. Norm jointed Petro−Canada in the 1980s and participated in the growth of that company to its current size of 500,000 barrels a day. He also sits on the board of Canadian Natural Resources, which is one of the top three producers based in Western Canada. As part of Norm’s planning for the board, he involved Alf Peneycad, who had been his Chief Counsel at Petro−Canada. Alf is a lawyer by training whereas Norm was a petroleum engineer, and in 2004 − 2005, Alf was recognized by our National Post newspaper in Canada as the Governance Officer of the year. He had been the

Chief Compliance Officer at PetroCanada, and bringing Alf onto the board was part of the steps we took to prepare the company for operating in the public market. Another director is David Holm; David is the Chief Financial Officer of Provident Energy Trust. David was our counsel to Bill and me when we ran Archer Resources and after we sold it to Dominion Resources out of Richmond, Virginia. We have a 10−year working association with David, a very talented individual who’s gone from a career as a lawyer to an investment banker and now a chief financial officer; a very diverse experience. And then the other two directors, Curtis Bartlett and Ron Miller, were the venture capitalists who through their fund, Morrissey Hawthorne Inc. provided the seed capital for the initial expansion of the company from partnership to corporate entity in the 2003−04 period. WSR: Perhaps you could outline for potential investors the key reasons why Petro Andina represents a good long-term investment opportunity? PAR: If there’s anything we’d like to highlight, it’s the scale of what we’re doing. The land position that we’ve assembled in the Neuquén heavy oil trend represents something in the range of 10% of the conventional heavy oil area in Western Canada. There’s basically three elements to the story. The first is that with what we have in hand, we’ve only worked the initial four discoveries. We’re going to expand our resource through additional drilling on the lands that we have. There’s no doubt that on the first three or four seismic lines we have not found all the oil on this block. The second aspect is that we’ve put in place the programs to demonstrate higher recoveries of oil from the resource that we have. We now have a two−year history with a water flood and our independent engineers have recognized the success of that water flood, and

“Net cost on the balance sheet could be high case USD$20 million to Petro Andina; low case would be just a tariff. Against the current reserve of 16.8 million barrels proved plus provable in the February 28, 2007 reserve report, pipeline cost is about a dollar a barrel.” we’ll be piloting thermal recovery as well. So there’s a coupon clipping aspect, just to wait and see the higher recovery factors recognized with performance of these initial discoveries. And then the third basis is that we’ve built a company that has shown the ability to position in the right place and to put the logistics in place, to execute, and we’re not planning to stop at this point. We see additional opportunities, both within Argentina and outside, to continue. We’ve been very successful in understanding what we do and finding where to apply it, and we’re looking for more of those. I think that’s basically the story. It’s low risk; it’s high performance; and it’s an experienced international management team with a proven track record of value accretion.

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T S X-V/AT R • A nterra C orporation C E O I N T ER V I E W

Balancing high-impact prospects against proven production Anterra Corporation ("Anterra") is an emerging energy company with a focus on the exploration and exploitation of oil and gas reserves, and the development of the associated fee-based projects in western Canada.

Anterra combines multi-million-BOE exploration potential with proven production and processing capacity. CEO Owen C. Pinnell tells us how he’s pursuing “remarkable” upside while efficiently exploiting lower-risk assets. (Interview of February 21, 2007.)

WSR: Bring us up to speed on the company’s assets and operations. ATR: Anterra is a Calgary−based energy company focused on the exploitation and development of oil and gas properties. What’s unique about us is that we also exploit the associated infrastructure for midstream processing, and we are also in a search for high−impact Devonian Swan Hill reefs in Western Canada. Our model combines the exploitation of low-risk oil, and gas reserves as well as processing facilities with the selective pursuit of higher−risk, high−impact exploration projects. The company currently produces 300 barrels a day, primarily from its main producing property, Breton in Alberta and has three high−impact exploration projects it’s pursuing in 2007. WSR: Expand on the main plays, and give us a feel for where you are in terms of production levels, reserves, and so on. ATR: In terms of the producing property, there are two areas where the company is producing a total of 300 barrels a day. Anterra has a 100% working interest and is the operator in nine sections of land at Breton in Alberta, currently produces oil and natural gas from two different zones, and operates a midstream processing facility at the same location. Since 2004, Anterra has completed an extensive technical assessment of the pool, re−completed several wells, and drilled one development well. Current production from Breton is 250 barrels a day, comprised of 150 barrels a day of oil and 600,000 cubic feet a day of gas. The company has plans to drill four development wells during 2007 and to further exploit the large remaining resource in the Belly River sands. There is an enhanced water flood program that will also be implemented during 2007.

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WSR: Will the company look to strategic alliances, joint ventures, or farm-in opportunities moving forward?

targeting one−quarter of a Tcf of natural gas from the Crooked Lake prospect. 3−D seismic is planned for the prospect in 2007.

ATR: Yes. The company has a joint venture with one company in two different areas. In Judy Creek, Alberta, one of the high-impact exploration projects Anterra operates, the company controls seven sections of land, has a re-entry planned for this summer, is about to commence running a CDN$1 million 3−D seismic program in early March, and drill two exploration wells on the same property. Anterra is targeting gross reserves of over three million barrels from the Judy Creek prospect, and this is a high-impact Swan Hills Devonian reef complex. With the same partner, Anterra holds a 26.25% working interest in the MacLeod prospect. The MacLeod prospect is again a Swan Hills Devonian reef prospect; there is a re−entry planned for the summer of 2007, when the company will deepen an existing well from 2,450 meters to 3,200 meters. The partners have 3−D seismic over the MacLeod prospect and have identified an analog to the Rosevear ‘A’ and ‘B’ pools, which have produced 160 Bcf each, and these pools are six miles to the south. The target is gross reserves of up to 160 Bcf of natural gas from the Swan Hills Devonian reef complex. The company is also pursuing a third Devonian reef prospect with its joint venture partner and has a 50% interest in what’s called the Crooked Lake prospect; this is a very early stage prospect, but the company is

WSR: Tell us about the present Board and management team. ATR: I am an engineer as well as Chairman and CEO. Our Executive Vice President and General Manager is Bob McCuaig, a 25−year oil and gas engineer. We have Douglas Wine as our Chief Geologist, and he has over 25 years’ experience in Devonian reef exploration in western Canada. Our CFO, Giles Parker, is a CA. The Board is made up of a high-profile group − Jim Coleman, partner of Macleod Dixon, an international law firm with offices in Moscow, Toronto, Caracas, and Calgary; Ronald Woods, a retired investment banker from Toronto; Jake Haldorson and John Read, both partners of Colt Engineering, recently sold to an Australian engineering company for CDN$1.2 billion, and John McGilvary, another director who is a professional geologist. In other words, a very high-profile Board. WSR: Does the investment community understand this company, and the direction it’s going in? ATR: Everyone says their company is undervalued, and Anterra is definitely an out−of−favor story. It has a very attractive market valuation of CDN$0.25, and the company is trading at less than 50% of its net asset value of CDN$0.63. But the real story is not the fact that it’s out of favor or that it’s underval-

ued, but it lies in the remarkable upside potential of the company’s exploration projects. WSR: Is the company making any additional efforts to get this message out, relative to where you are at this stage, what you have here, and so on? ATR: We have done a poor job on our Investor Relations up until now, but with the new projects only recently acquired during the last four to five months, beginning in March, we will be embarking on an extensive Investor Relations program, which involves hiring an Investor Relations company to help get our story out, going on the road, putting on luncheons, and meeting with investment banks throughout Canada and New York and Boston. WSR: In closing, why should investors consider Anterra as a long−term investment opportunity? ATR: The company combines the pursuit of these high−risk, high−impact Devonian reef projects with the exploitation of its low−risk oil and gas properties and the associated processing facilities. This changes the risk profile of a company. Although we are pursuing high−impact, high−risk exploration projects, the value of the company is underpinned by proven producing reserves. The balance sheet is in reasonable condition. The remarkable upside lies in the potential of the exploration projects, and that’s what an investor’s buying; the downside is covered by the reserves the company owns on its producing properties.

“The company is also pursuing a third Devonian reef prospect with its joint venture partner and has a 50% interest in what’s called the Crooked Lake prospect; this is a very early stage prospect, but the company is targeting onequarter of a Tcf of natural gas.”

SUMMARY: Anterra (TSX-V: ATR) combines high-impact exploration potential with proven reserves, production and processing capacity. The company is currently producing around 300 BOE a day from two projects in western Canada. Over the last few years, the company has recompleted several wells and now plans to drill another four development wells in 2007 in order to further exploit the large resource. Exploration projects target Devonian reef oil and gas reservoirs in the 3-40 million BOE range; two are at the 3−D seismic stage and work to deepen a well on a third will begin over the summer. The company also owns various treatment, terminalling and disposal facilities and will cooperatively develop additional projects on a third-party basis. www.anterra.org

Phone: 403-215-3280

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T S X-V/DJ E • D ejour E nterprises Ltd. C E O I N T ER V I E W

Tremendous prospects and the capital to see them through Dejour is a Canadian energy company devoted to finding uranium, oil and gas. They are leveraging the opportunities that exist as a result of the global market’s decreasing conventional supply and increasing demand for energy. WSR: Give us a progress report and update on the Drake play. DJE: The Drake play is one of part of Dejour’s three major focus areas. We have our interest in the Athabasca Basin uranium and in the Piceance Basin in natural gas properties, but the Drake Play is our first discovery in the Peace Arch area of northwestern Alberta and northeastern BC. The Drake Play is the first of seven significant properties we are going to be drilling with the excess capital we had left on the Canadian side of the company, following our transactions with Titan Uranium regarding our Athabasca Basin plays. The Drake play is a field extension to over 210 wells, drilled by Canadian Natural Resources known as the Drake field, and we have had significant success with it. We have drilled and tested these wells. They will produce to pipe it at better than a million and a half, possibly as much as two million cubic feet of gas a day. We have at least two offsets. I would propose that after the road bands are taken off this area due to a spring break-up, we would hook these wells up for production by mid−summer. The key to this particular play for us isn’t the size or volume of the gas wells, but the fact we own 100% of them. All of that revenue accrues to Dejour until payout. WSR: Expand on the company’s asset and interest portfolio. DJE: We are currently trading at CDN$2.70 per share on the TSX Venture Exchange. We have 64 million shares outstanding. That’s a market cap of CDN$170 million. We have three major areas of strategic focus in the energy patch. The first is uranium − we got involved in Athabasca Basin with a million acres of exploration land in 2004. Uranium was CDN$18 a pound; it is now CDN$113 a pound. In the meantime, we spent CDN$7 million on an advanced geophysics and turned that play to publicly−traded Titan Uranium for what is now valued at CDN$50 million in securities and another CDN$5 million to CDN$7 million in carried interests. The second area we have gone into was oil and gas − bear in mind that Dejour’s key executives come from an oil and gas background. We made a CDN$25 million investment in 300,000 acres of exploration lands in the Piceance and Uinta Basins of western Colorado and eastern Utah. This area, not unlike the Athabasca Basin as is to uranium being that the world’s number one address, the Piceance Basins, is one of North America’s largest accumulations of natural gas. As a matter of fact, the Rocky Mountain basins produce more gas than the Gulf of Mexico does. In fact, every major oil company is drilling thousands of wells there every year, and it is projected that they will drill 43,000 wells in the next five years and spend over CDN$25 billion in their

Dejour Enterprises recently farmed out its Athabasca uranium assets for CDN$50 million and is now focused on developing its gas properties. CEO Robert L. Hodgkinson tells us to expect drilling to generate near-term results. (Interview of April 10, 2007.)

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continued search to extract natural gas for the North American market. This is a very key area. We expect our first drill permits on some of these 300,000 acres to be issued in May; we are just now opening our offices in Denver, and we will be very active doing the same kind of deals to twist returns out of these lands prior to making sizable discoveries. That’s all part of the value−add we bring to the program. The third area is the Peace Arch Area of northern BC and northern Alberta. This area was discovered by Imperial, just before the turn of the century in 1997 and the giant Ladyfern Gas Discovery. What happened is that through a combination of a rapid drop in natural gas prices last year, the tax fiasco with the Canadian Investment Oil Trusts, the fact that land tenders in Canada have five−year terms, and a significant amount of expiries are happening, there are tremendous opportunities to get into goodquality exploitation and exploration plays in this particular area. We have taken on seven of them where we currently have operations proceeding on five of them. The Drake was the first discovery, and we will be able to comment on the balance of these other plays probably before the end of June. WSR: In addition to these strategic alliances, will the company look to M&A activities as a catalyst towards this continued growth? DJE: Absolutely − part of our plan in the Piceance Basin is maybe to acquire a private operator. If things persist in Alberta the way we see them, there are a number of juniors, whose production would be very accretive to our particular purposes. These are the things we are constantly considering. WSR: Have there been any changes on the Board and management team?

DJE: We haven’t changed the Board or management team, but just re-organized the way things work internally. We have set Dejour USA up as an independent profit center, but it’s the same people. We are increasing the number of personnel. We have reorganized some of our uranium experts to work directly with Titan for at least a period of time. As

continue. We see 2007 this way − for the first time, we are drilling in all sectors; we are drilling on the uranium properties; we’ll be drilling in the Piceance Basin; and we’re actively drilling in the Peace Arch area. This would be the first year we can show a significant growth in production revenues. Of course, on the horizon at the bottom of every drill hole

cle is in a strong cycle, and we are going to see much higher prices. It’s incumbent on every investor to have significant investments in the energy sector − number one to reap the capital benefits, but number two, to protect their wealth as prices begin to rise, and the cost of energy becomes more expensive. Dejour is one of those companies that has a focused strategy about

“We have had significant success with it. We have drilled and tested these wells. They will produce to pipe it at better than a million and a half, possibly as much as 2 million cubic feet of gas a day. We have at least two offsets.” a result of that, we have brought down Dejour’s overhead from a management and contractor point of view. As we increase our profile and pursue senior listings on the various exchanges available to us, you might just see some changes to the Board. WSR: Where do you see Dejour two to three years out? DJE: We have been incubating this company since fall 2004. That’s two-and-a-half years of putting the lands together, getting the personnel, getting the strategies, and making sure that the timing for entrance into the natural gas markets, which back in 2004 were way too high, was appropriate. The uranium market speaks for itself, it’s been a one−way street, and it looks like it’s going to

is the advent of a very significant discovery. That’s what we are in this game for. WSR: Does the investment community understand this company, and the direction it’s going in? DJE: I believe the investment community is beginning to understand. That’s as much a condition of our ability to tell that particular story. We are making those efforts, and I am pleased with the response we are getting. I believe that in 2007, we will get more publicity as some of these discoveries become known. WSR: In closing, why should investors add Dejour to their longterm portfolio? DJE: I believe that the energy cy-

how to create wealth in the energy sector. We have shown how we do it on the uranium exploration side. We are in a position to be able to show that in the Piceance Basin and in northern Alberta. The sense of timing to get into these deals at the proper time in the cycle is very important. That’s the first part. The main fact is that we have been incubating these lands for a two−year period, and that drilling for the advent of a big discovery is now happening. We are trading at CDN$2.70 a share, and we have over CDN$2 a share in cash, liquid securities, and land values, barring the valuation of any discovery. The premium being paid for the opportunity to have a piece of some of these large discoveries is extremely small, yet we have the capital to see the projects through.

SUMMARY: Dejour Enterprises (TSX-V: DJE) recently farmed out its uranium exploration properties in the Athabasca Basin for CDN$50 million and is now concentrating on its oil and gas assets. Drilling to extend the company’s portfolio of 210, 100%−owned gas wells on its 49,000−acre Peace River land base has produced at least two viable offsets with the potential to produce 1.5 Mcf or more a day when hooked up to pipeline. The company also paid CDN$25 million for 300,000 acres of the Piceance Basin along the Colorado-Utah border; drill permits have since been granted. An operating partner or partners may be pursued. Uranium assets are now held by Titan Uranium, in which the company is now a major shareholder. www.dejour.com

Phone: 403-266-3825

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T S X-V/R O R • R un of R iver P ower I nc . C E O I N T ER V I E W

Emerging BC hydro producer meets the need for green power Run of River Power completed its first full year of operations in 2006. With its first project in operation at Brandywine Creek, it is looking forward to continued growth as its development projects are completed.

Run of River Power is developing the hydroelectric potential of British Columbia. CEO Jako Krushnisky tells us why the province is “the Saudi Arabia of green renewable hydroelectricity.” (Interview of February 27, 2007.)

WSR: Give us a progress report and update on the Pitt River project. ROR: The Pitt River project is actually a cluster of projects. There are eight streams totaling 161 megawatts of potential installed capacity. When completed, these projects will produce power for 55,000 homes or 550 gigawatt hours of energy output. We recently submitted the project to what’s referred to as an Environmental Assessment review through the British Columbia Environmental Assessment Office, which will provide the company fixed timelines by which we can expect to have our projects reviewed by all stakeholders leading up to the granting of an environmental certificate. Achieving this milestone will allow us to proceed with the development of the projects. WSR: Expand on this play as well as the balance of the company’s project and interest. ROR: The Company has developed Brandywine Creek near Whistler, BC. It currently produces 40 gigawatt hours of power, providing electricity to 4,000 homes. It was submitted to an earlier BC Hydro call and has been in operation since August 2005. At that time, we identified three projects in the Mamquam watershed, located close to one of our neighbors, Canadian Hydro Developers, another TSX venture−traded

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company. Those three projects, which total approximately 35 megawatts of installed capacity, which when combined with the 161 megawatts, we’ve identified and are pursuing in the Pitt River area, represents 194 megawatts of installed capacity or energy for 65,000 homes. WSR: Talk about the key drivers in place, the major trends you see affecting your core business, and how Run of River Power is favorably positioned. ROR: The North American marketplace is focused on green alternative energy as a way to reduce its carbon footprint and to improve the environment we live in. In this regard, we believe we are in a tremendous growth industry, and in Canada, we think we are probably in a marketplace that’s still not fully realized the potential of renewables. The need for new sources of energy is a reoccurring theme across North America. Here in British Columbia the utility, BC Hydro, has indicated that it will need to import 15% more energy to meet domestic usage this year, and if no new power projects are developed by the year 2020, the province would need to import as much as 40% more energy to meet domestic needs. I believe that this story is being told across North America. Another key driver is that there is an overwhelming preference for green renewable energy. I might add that in the USA, there are many states now enacting legislation that requires

utilities in those states to derive a portion of their portfolio of energy from green sources. California is a good example. PG&E, the utility in California, has just received approval from the Utilities Commission of California to spend CDN$14 million to study how they can move green energy from the province of British

Columbia to California. These key drivers are creating a favorable environment for green renewable energy projects and for Run of River Power. WSR: Tell us about the present Board and management team. ROR: We have one of the best

“The company has developed Brandywine Creek near Whistler, BC. It currently produces 40 gigawatt-hours of power, providing electricity to 4,000 homes. It was submitted to an earlier BC Hydro call and has been in operation since August 2005”

teams in the province in which covers project design, field work, public company and management expertise. We have a 35−year veteran of British Columbia Hydro who was involved in every major power line built in the province and has probably walked 200 streams. Our Chief Financial Officer was previously overseeing the energy resources of a large utility, including run of river hydro and wind power. WSR: Does the investment community understand this company and the direction it’s going in? ROR: I would say we are an undervalued story and that in the weeks and months to come, you are going to see more awareness of the sector and Run of River Power. WSR: In closing, why should investors consider Run of River Power as a long−term investment opportunity? ROR: Green renewable energy has a strong future. We are creating energy that provides a solid alternative to how we currently power our homes. Our projects are considered to be some of the best and are located in close proximity to Vancouver. The province is blessed with tremendous hydroelectric potential; steep glacier−fed mountainous terrain combined with a lot of rain truly makes British Columbia the Saudi Arabia of green renewable hydroelectricity.

SUMMARY: Run of River Power (TSX-V: ROR) is developing the hydroelectric potential of British Columbia. The company’s initial project on Brandywine Creek currently produces 40 gigawatt-hours of power for 4,000 homes. An additional three projects have been identified in the Mamquam watershed; these would represent another 35 megawatts of capacity. Finally, the company has submitted paperwork to develop a cluster of projects on Pitt River that would generate another 550 gigawatt-hours of power. Management is profoundly experienced in the renewable energy field and notes that demand for “green” power is expanding throughout North America. Furthermore, in British Columbia alone, demand for power is rising so robustly that local utilities will need to generate or import 40% more power by 2020. www.runofriverpower.com

Phone: 604-946-9232

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O M X / W S I B • W est S iberian R esources Ltd C E O I N T ER V I E W

Independent Russian producer on an accelerated growth track West Siberian Resources Ltd. (WSR) is an independent oil company that produces oil, develops oil fields and conducts oil exploration in Russia. WSR’s main assets are the Middle Nyurola, Kluchevskoye, Puglalymskoye and Khvoinoye oil fields located in the Tomsk region of Western Siberia.

West Siberian Resources is on a dramatic growth trajectory. Managing Director Maxim Barski tells us how recent M&A and successful exploration of existing fields boosted his company’s production 170% last year. (Interview of March 12, 2007.)

WSR: Bring us up to speed on the company’s assets and operations. WSIB: The company is currently in three Russian main oil provinces. We are producing oil in West Siberia in the Tomsk region, in the Timano−Pechora region, and also in the Samara region. WSR: Expand on some of the main plays, and give us a feel for where you are in terms of drilling, development, production, reserves, and so on. WSIB: In 2005, the company produced 2.9 million barrels of oil. In 2006, we produced 8 million barrels, or an increase in growth of 170%, compared to the 114% growth rate from the development of existing fields. Basically, through our development and drilling program, we doubled our production from existing assets. We have also had a huge increase in our reserves. We have 307 million barrels of reserves, an 80% increase over 2005 – this was mainly done through the acquisition we finalized in the Timano−Pechora region, where we acquired Kolvinskoye, as well as through the organic growth of our reserves due to our exploration program. For the exploration program, we have increased our reserves by 12%. Our financial results also experienced some record growth. Our revenue increased more than 200%, or an average of EUR$225 million. Our EBITDA amounted to EUR$82 million, or a 200% increase from 2006, and our net income was EUR$30 million versus just below EUR$1 million in 2005. WSR: Educate us in terms of infrastructure as well as the political climate within these regions as it relates to resource development, production, and so on.

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WSIB: We have our own infrastructure in all regions. In TimanoPechora, it’s a 50−kilometer pipeline; in the Tomsk region, it’s a 120−kilometer pipeline connecting us to the Transneft. As soon as you are in Transneft, then you can sell domestically, and you can sell to the export market. We sold domestically 60% of our crude, and we export 40% of our crude. In terms of political stability, we don’t see any changes. For the last seven years, Russia’s political situation has been stable. Being a foreign company, we haven’t seen any different relationships to us than to any other Russian company. I believe that is because we have Russian management and key Russian shareholders within our shareholder structure.

“For the last seven years, Russia’s political situation has been stable. Being a foreign company, we haven’t seen any different relationships to us than to any other Russian company. I believe that is because we have Russian management.”

WSR: Will the company look to additional M&A activities as a catalyst towards this continued growth? WSIB: Yes. At the beginning of 2006, we conducted a very successful acquisition of a company called Saneco from the Samara region. At the time of our acquisition, the company was producing 4,500 barrels per day. By the end of 2006, Saneco was producing 11,000 barrels a day. We have almost tripled production from that asset and are delighted with its development. We have also found two new oil fields in the same region. We have 14 exploration licenses in Samara; we drilled out two of them, both of which were very successful.

We found two oil fields with good flow rates of more than 2,000 barrels a day from each well. In terms of the other acquisition – in November 2006, we acquired a company called Nortoil at a very good price. Nortoil contains a license to explore and develop Kolvinskoye field, and this field has been shown by independent appraisal DeGolyer & McNaughton’s to have 122 million barrels of 2P reserves. We paid EUR$150 million for that acquisition, or a little bit below EUR$1 per barrel of 2P reserves. We feel it’s a great success. The field contains

SUMMARY: West Siberian Resources (STX: WSIB) continues to enhance its profile as an independent E&P within its eponymous region of operation. In 2006, production jumped 170% to 8 million barrels of oil through both development of existing fields and M&A. Reserves climbed 80% to 307 barrels, again through a combination of exploration and acquisitions. About 60% of all production is sold domestically, with the rest exported via Transneft. Management is Russian and characterizes the local political situation as stable. Recent M&A been accretive, with a November 2006 acquisition in particular closing for about €1 per barrel of verified reserves in the ground. Future deals are likely. Goal is to boost production to 12 million barrels in 2007. www.westsiberian.com

11 wells, and the results on those are showing good potential. Some of the wells have been producing as much as 2,500 barrels a day. We are currently conducting a field development plan and exploration program on our newly-acquired field. WSR: Tell us about the present Board and management team. WSIB: I believe we have the most professional team among all independent oil companies. There are many companies listed in different exchanges, but none of them have shown the kind of production growth dynamic that our team has shown. We have the full support of our Board, which consists of two independent Swedish directors, one American independent director; two representatives from among Russian shareholders, which are myself and another Russian shareholder, Mr. Fomenko; and we have a representative of Repsol, Mr. Fernandez−Cuesta, who is the Head of Repsol E&P.

Phone: +7-095-723-0718

WSR: Does the investment commu-

nity understand this company and the direction it’s going in? WSIB: Yes − I believe we are presently trading at very low multiples. We are trading only at EUR$3.25 a barrel. Taking into account our growth, I consider that a very low number. We are trading at EUR$125 to production, the lowest numbers among all Russian Independents. We doubled our production in 2006. We almost doubled our reserves with an 80% increase, but our market cap hasn’t increased. Currently, we are trading at EUR$1 billion, the same market cap we had last year. We feel that we’re very much undervalued, and certainly that’s the case if you will look at what our plan is. Our plan for 2007 is to reach production of 40,000 barrels and produce a total of 12 million barrels, or a 50% increase from 2006. We are looking forward to substantially increasing our reserves from our exploration program. So from looking at the history, the perspectives, and the multiples, I believe we are the most undervalued among all Russian Independents. WSR: In closing, why should investors consider West Siberian Resources as a long−term investment opportunity? WSIB: West Siberian Resources has reserves for the next 30 years. We are going to show a substantial increase in our production. Our deep production we estimate at 75,000 barrels, compared to the current 30,000 level, which means more than double in the coming three or four years. West Siberian has shown a good track record of aggressive M&A and consolidation strategies, along with aggressive development, operations, and controls. West Siberian Resources has a strategic partner, Repsol, which is showing the quality of the reserves and management team. Taking into account current levels, I believe West Siberian is a good long−term bet.

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N YS/P C U • S outhern C opper C orporation C E O I N T ER V I E W

Mining the world’s biggest copper reserves at a low cost Southern Copper Corp. engages in mining and processing as well as produces copper, molybdenum, zinc, silver, gold and lead. WSR: Bring us up to speed on the company’s assets and operations. PCU: In terms of assets and operations, we are in three countries. We have similar operations in both Mexico and Peru and exploration activities in Chile. We have two open−pit mines in Peru, Toquepala and Cuajone; in Mexico, our two open−pit mines are Caridad and Cananea. In Mexico, we also have five polymetallic underground mines. In both countries, we have metallurgical complexes with smelter, refineries, and precious metals plants; we also have a rod plant in Mexico that we don’t have in Peru. In addition, we have a metallurgical complex in Mexico that is for zinc and copper production. WSR: Give us a feel for where you are in terms of production levels, reserves, and so on. PCU: In production, we are at 700,000 metric tons per year. Over 95% of these are sold as refined copper, smelted and refined in our own metallurgical complexes. In Mexico, we produced 340,000 tons of refined copper and in Peru, 360,000 tons; with the increase of ore grade in Cananea in the next years we will be even. For the coming future, we are planning expansions in Cananea and new projects in Peru that we will continue on that basis with a 15% production increase forecasted for 2009. Our sales in 2006 were USD$5.5 billion and EBITDA of USD$3.3 billion, which together represent 61% of EBITDA margin. 76% of our revenues are copper, and the remaining 24% is in zinc, silver, and molybdenum, with Peru’s 3.9 million ounces of silver and 6,000 metric tons of molybdenum. In Mexico, we have similar sales for molybdenum, but with a higher production of silver and a small amount of gold. We also have some mining concessions in Chile, in the exploratory stage. WSR: Will the company look to M&A activities as a catalyst towards continued growth? PCU: We have looked into several possibilities in the international markets for mergers and acquisitions. Basically, we believe we have to find opportunities that cover three conditions. The first one is that they have to be accretive from day one for our shareholders. The idea is that we will not go ahead unless this is a good deal for our shareholders. The second condition is that it has to enhance our copper asset portfolio. The third one is that it has to be a low-cost operation that fits fine with our current operations.

Southern Copper has the largest copper reserves of any publicly traded company and some of the lowest cash costs in the industry. CEO Oscar Gonzalez Rocha tells us to expect near-term growth to support his company’s truly long-term business. (Interview of March 12, 2007.)

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The reason for this last condition is that one of the key characteristics of Southern Copper is that it is a very low-cost operation with a strong reserve base. In 2006 our cash cost per pound of copper was USD$ 0.15. This figure compares with a copper price of approximately USD$ 3.00, twenty times higher. Since we can operate at the current production rate for over 50 years, we don’t have pressure in acquiring new reserves. Our reserve base is excellent.

and the direction it’s going in?

WSR: Tell us about the present Board and management team. PCU: The company is controlled by Grupo Mexico, with a 75% interest; the remaining 25% of shares are mostly with institutional investors from all over the world. We have more than 30,000 investors in Peru, Mexico, Europe, and North America. The senior management of our company is composed by a high quality staff from our operations in Mexico and Peru. They have a strong mining background and have been running this same asset for more than 30 years. They know our mining operations and metallurgical plants very well. We believe we are prepared for the expansions we are thinking in Peru and Mexico with the same people; we may only hire some additional personnel to support the technicians we already have in place.

“In Mexico, we produced 340,000 tons of refined copper and in Peru, 360,000 tons; with the increase of ore grade in Cananea in the next years we will be even. For the coming future we are planning expansions in Cananea and new projects in Peru.”

WSR: Does the investment community understand this company

PCU: The investor community is beginning to realize that we have significant value to offer them; since the beginning of the year, our stock price has appreciated over 40%, a clear indication that we are being more closely looked at by our investors. One of the reasons investors mention is that we have a very high dividend yield. The current price of our stock is in the range of USD$70 per share, with our dividend yield at about 7%. This has been an aggressive policy the company has recently implemented. WSR: In closing, why should investors consider Southern Copper as a long−term investment opportunity? PCU: We have the highest copper reserve of any listed corporation; in addition, our cash costs are very low, 15 cents per pound for 2006. We are well− diversified in assets and projects and have shown significant organic growth. We are heading towards 15% growth by the end of 2009, and another 20% increase by 2012. 95% of our production is sold completely refined, allowing us to have a good income because of the premiums obtained on top of the market prices. We believe that all these attributes make Southern Copper one of the best pure copper players for the investment communit y.

SUMMARY: Southern Copper (NYSE: PCU) produces a wide range of base and precious metals from various properties throughout Latin America. Annual copper production is around 700,000 tons, roughly split between operations in Mexico and Peru. Work to expand in both regions is expected to boost production 15% by 2009 and another 20% by 2012. Almost all ore is refined in company−owned facilities Copper accounts for 76% of the company’s $5.5 billion in revenue, with zinc, silver and molybdenum driving much of the remainder; EBITDA is $3.3 billion. Management notes that as existing reserves should support another 50 years of mining at existing levels, pressure to acquire new assets is relatively low. Dividend yield is a high 7%. www.southernperu.com

Phone: 602-494-5328

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A S X /A G M • A llegiance M ining N L C E O I N T ER V I E W

Nothing but nickel miner aims for a 2007 production start Allegiance Mining NL is a Sydney-based, Australian Stock Exchange-listed, junior concentrating on exploration for and mining of nickel sulphides in Tasmania. WSR: Tell us about the recent Saxon nickel discovery. AGM: The Saxon nickel discovery is a potentially major development for both the company and the Avebury Nickel Project in Tasmania, Australia. It’s the first time we have been able to set our sights wider than normal. We have been focusing on bringing our mine into production and have mainly been looking at the ore reserves with our drilling. We have stepped up and looked a bit broader than just the mine, and we believe our exploration techniques have turned up what could be our second mine in what we think is a nickel sulphide province. WSR: Could you expand on that and also give us an update on the Avery project? AGM: The Avery project is in full swing construction mode with a view to getting into production and selling nickel concentrate into China starting in the third quarter of 2007. The critical long-lead items have all been ordered and have received favorable delivery schedules; to date, the project has been on budget and on time, but one can never know how things are going to pan out in the future, given the constraints of the global construction market. So far, things are looking very positive. WSR: How important are strategic alliances, partnerships, or joint ventures for this company moving forward? AGM: The company is an emerging nickel miner, and we have been given wonderful support from the Australian capital market. We don’t critically need strategic alliances or strategic partners right now, but we have greatly benefited from a strategic alliance in the past with Jinchuan Nickel of China. They provide 90% of China’s nickel, and Jinchuan is our single off−take partner. They will buy all of the nickel we can produce, and they will pay spot market prices on a cash basis; they also have very favorable off−take terms. That’s the main strategic alliance to date. WSR: What is unique about Allegiance Mining that defines and differentiates this company from its competitors? AGM: It’s the first new nickel province in the world to get into production, and it is also located in a major mining province on the West Coast of Tasmania, which has existing mills that can process this ore. We are able to be a lot more flexible than most of the newly emerging operations. We are investigating a potential opportunity to process our ore through the nearby Renison Mill, which may go into production by January or February 2007. We have

Allegiance Mining is going full speed ahead to start producing nickel by late 2007. CEO Ian Levy tells us how his “nothing but nickel” focus could pay off in the face of tight global supply the metal and high demand. (Interview of August 11, 2006.)

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a lot of opportunities ahead of us, and we hope to capitalize on that and build shareholder value. WSR: Tell us about the Board and management team. AGM: We’ve got a Board that has taken the company through the exploration stage, the high−risk tough stage of mining. They have done a superb job in bringing the Avery nickel discovery into being. We strengthened our Board a couple of years ago by putting a well−known industry project manager, Barry Sullivan, as a Non−Executive Director. Our Chairman, Tony Howland-Rose, is a 40−year−old professional in the Australian mining scene and is a great explorer. David Deitz, our CFO/Company Secretary/Executive Director, was the founder of the modern mining company and is our driving influence. We also have Eddie Lee, a well-known capital market player. We have all the bases covered, but the Board will evolve over time. WSR: Does the investment community understand this company and the direction it’s going in? AGM: The investment community has been very good to Allegiance. We have no complaints and believe we are being fairly treated in the capital market. One of our problems is getting wider publicity and to start appearing on the global radar screens in the nickel industry. We are “nothing but nickel,” and we produce a remarkable nickel

product, a very high grade concentrate, second to none; this product will become known as nothing but nickel, generically speaking, over the next few years. WSR: Where do you see Allegiance two to three years from now? AGM: I’m hoping Allegiance will be in the top three Australian nickel producers, probably from two and three mines. I’m also hoping we are feeding into a much larger mill than the one we’re building. We are building a 900,000−ton a year mill. I would like to see us expand that by another 600,000 tons over the next few years. I want to see this company as a growth stock for a few years to come. WSR: In closing, why should investors consider Allegiance Mining as a long-term investment opportunity? AGM: Nickel is a terrific base metal; right now, the global supply of nickel is very constrained, and it’s unlikely we will get any major expansion in the production sources for nickel. Meanwhile, global economic demand is booming, and nickel is a leading indicator of economic growth because it is used in the manufacture of stainless steel, an extremely modern alloy for both modern and emerging economies. We are also fully exposed in China and the industrial miracle that’s going on, and that’s where our market niche lies.

“We are nothing but nickel and we produce a remarkable nickel product, a very high grade concentrate, second to none; this product will become known as nothing but nickel generically speaking over the next few years.”

SUMMARY: Allegiance Mining (ASX: AGM) is in the full swing of constructing a Tasmanian nickel mine to get into production by late 2007. A second discovery in the district could turn into another mine, creating the first new nickel sulphide province to emerge in some time. The company has entered a strategic alliance with Chinese nickel supplier Jinchuan Nickel, which has agreed to pay spot market prices in cash for all nickel concentrate produced. No other partnerships are necessary at this time. Management is investigating local processing options while the company builds a 900,000−ton mill; additional capacity may be necessary. The company’s sole focus is on nickel and product will be exceptionally pure, effectively nothing but nickel. www.allegiance-mining.com.au

Phone: +61-2-9397-7777

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O T C B B/H P M E F • H omeland P recious M etals C orp. C E O I N T ER V I E W

Proven minefinders set up at the heart of the Eureka Trend Homeland Precious Metals Corp. is a resource exploration company with the objective of finding and developing high-grade, economical precious metal assets. WSR: Give us a progress report and update on the Water Canyon play. HPMEF: The Water Canyon play is our flagship property, a significant feather in our cap. Several other companies tried to get this property and failed, but we were happy to acquire it, and are ecstatic about doing so. We completed the acquisition agreement in February 2007, after a long process of negotiation with Newmont. The property is approximately four square miles in size and located in the Battle Mountain−Eureka Trend area. We are surrounded on all sides by multi−million ounce gold mines and are right in the middle of the gold mine district. We have Barrick’s Strike Gold Mine, the Newmont Gold Quarry Mine, as well as Newmont’s Mule Canyon and Carlin Area Gold Mine – most of which are multimillion ounce gold mines. WSR: Expand on this play as well as the balance of the company’s project and property portfolio. HPMEF: We believe the piece of property we have has exceptional potential because of the area. We are on trend with the other mines and deposits. We also have two other properties as well, Bell Flat and Montgomery Pass, which we have been working since 2005. These two properties are in the Walker Lane Trend area of western Nevada. One of the nice things about all of our properties is that they sit alongside of major highways, so we have great properties in the sense that, aside from the geology, we are able to work them easily without the huge costs involved in putting road systems in.

Homeland Precious Metals has successfully added a property at the heart of Nevada’s highly prospective Eureka Trend to its exploration portfolio. CEO Bruce Johnstone tells us how his expert team plans to unlock its potential. (Interview of April 19, 2007.)

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WSR: Will the company then look to strategic alliances or joint ventures moving forward? HPMEF: We are always looking at that and are also looking at new opportunities. We have Newmont as a strategic alliance partner with the Water Canyon Project, with joint venture back−end ability for them, once we find a gold strike or a viable ore body. One of the advantages of having Newmont as a partner is the fact that their Mule Canyon mine is only two miles away and Mule Canyon has an existing mine infrastructure; so if the ore body is found, the cost of working Water Canyon becomes considerably less than if we had to develop a full−blown mine. WSR: What is it that defines and differentiates this company from others in the industry? HPMEF: Our people. Our Board of Directors, our Advisory Board – it’s the people that make up our company. Our geology team is headed by George Eliopulos, who has over 30 years of exploration experience in Nevada. He is a proven mine finder. He has assisted in developing the Illipah gold mine, the Borealis gold mine, and the Manhattan gold mine, all of which are in Nevada. He was also responsible for a lot of the deep−drilling at the Barrick Bullfrog mine, which produced over 3.5 million ounces of gold. Another Board member, Dave Mallo, has over 25 years of exploration experience. He helped to find the Eskay Creek gold and silver mine

in central British Columbia. He also worked with the Petaquilla District in Panama, where they found an immense gold and copper resource. Those are some of the great people we have on our Board. On our

30−year−old veteran CA, MBA, and management consultant. Again, the right people to do the right job. WSR: Does the investment com-

“One of the advantages of having Newmont as a partner is the fact that their Mule Canyon mine is only two miles away and Mule Canyon has an existing mine infrastructure; so if the ore body is found, the cost of working Water Canyon becomes c o n s i d e r a b l y less.” Advisory Board, we have Doug Turnbull, a professional geoscientist. He is a hands-on exploration expert, a proven mine finder. We have Ian Marshall, who worked for Placer Dome for over 20 years. Ian is now essentially retired and acting as a consultant, but when working for Placer Dome, he was the associate Counsel General for the company. We have Gerry Humphries, a

munity understand this company and the direction it’s going in? HPMEF: Yes, I do. The motivation remains the same as it did 50 years ago. We are just using different methods. We are using the most up-to-date exploration techniques to find an ore body. From an investor’s prospective, we are a fledgling company; however, people are going to start to realize who we are, and where we are working. We should then start to see dramatic changes.

WSR: Is the company making any additional efforts to get this message out there loud and clear? HPMEF: Yes − through various print and electronic media. We are just starting to get the ball rolling on that. Our Web site, in particular, is full of information useful for the investors. WSR: Where do you see Homeland Precious Metals two to three years out? HPMEF: Mining and metals is a risky business; we could find a deposit, or not − it’s hard to say. However, we believe that with both the properties and the management team we have, we have very good potential. WSR: In closing, why should investors consider Homeland Precious Metals as a long-term investment opportunity? HPMEF: Exploration and mine building is a long-term commitment, there is no doubt about that. It takes several years to find a deposit and longer to turn it into a viable mine if such a deposit is found. We have a great opportunity with Newmont as a partner, with their mine infrastructure only two miles away. We have a great management team, and we have good properties, one of which is located right in the middle of the Battle Mountain area. With Barrick and Newmont literally having four mines around that area, I believe we are in a good position.

SUMMARY: Homeland Precious Metals (OTCBB: HPMEF) has successfully acquired the hotly pursued Water Canyon property at the heart of Nevada’s eminently prospective Eureka Trend. The property is four square miles in extent and is bracketed by several multi-million-ounce gold mines owned by some of the world’s largest producers. Newmont Mining, the project’s previous owner, remains onboard as a strategic partner; the relationship opens up access to production infrastructure in place nearby at Newmont’s Mule Canyon mine. The company also has two properties on the Walker Lane Trend. The Management team brings together substantial experience in finding and developing large gold resources. The goal is to apply the most technologically sophisticated exploration methods to the acreage. www.homelandpreciousmetals.com



Phone: 604-922-6663

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A S X /A R U • A rafura R esources Ltd C E O I N T ER V I E W

A solid rare earths opportunity with byproduct potential Arafura listed on the Australian Stock Exchange on November 5, 2003, but the company’s history spans over a period of 20 years. In 1984, it first commenced acquiring ground in the Northern Territory.

Arafura Resources aims to become one of the world’s most significant producers of rare earth metals. CEO Alistair James Stephens tells us about his project and why he expects it to generate a 9,990% return on exploration investment. (Interview of March 8, 2007.)

WSR: Tell us about the pending NuPower listing, and what it means for the company going forward. ARU: Last year Arafura’s Board agreed to transfer our uranium assets and cash into a new company specifically looking at a strategic, growth−oriented, uranium−focused company. We undertook a nonrenounceable rights issue within Arafura and raised enough funds for a compliance listing of NuPower Resources Ltd. That rights issue was completed in December 2006. This enabled us to undertake an inspecie distribution to all our shareholders and option holders into NuPower. We then issued the prospectus for the listing of NuPower with the record date for eligibility for an in−specie distribution in February 2007. We have now received confirmation that holding statements to NuPower shareholders have been posted and receipted. Option holders will receive holding statements when NuPower has been officially listed on the ASX in the very near future. We will inform shareholders of NuPower’s (ASX: NUP) listing as soon as we get confirmation from the ASX. WSR: Bring us up to speed on the company’s assets and operations. ARU: Arafura’s flagship asset is the Nolans phosphate hosted rare earths and uranium project. The project is located about 135 km from Alice Springs in Australia’s Northern Territory. The increased confidence in the test work for the recovery of rare earths, phosphate and uranium from Nolans provided us with the opportunity to focus on the development of the Nolans resource, allowing NuPower to grow uranium. The Nolans deposit contains at least 18.6 million tonnes of rare earths, phosphate, and uranium. We project a mine life of at least 20 years, and the drilling we have undertaken last year has identified

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“The Nolans deposit contains at least 18.6 million tonnes of rare earths, phosphate, and uranium. We project a mine life of at least 20 years, and the drilling we have undertaken last year has identified additional mineralization outside the resource categories.”

year before going into engineering and design work in 2008. On the basis that we receive regulatory approval to proceed with development, we hope to construct in 2009 and be producing in 2010. In addition to the Nolans project, Arafura will retain 10% of NuPower, ensuring the company has an interest in uranium assets. We also have a number of joint ventures and iron ore royalties to flow in 2008. We have a nickel joint venture with a company called Mithril Resources, on our Hammer Hill project. In addition, we are still looking to realize our Mt Porter’s gold resource located at Pine creek, now that GBS Gold, a Toronto-listed organization, has recommenced operating the Pine Creek gold mill. We will continue exploration at our Kurinelli gold project near Tennant Creek. A new project we have on the books is the Jervois vanadium project located northeast of Alice Springs. The initial drill results look very promising with drill intercept of magnetite mineralization up to 48 metres in thickness over an area 6 kilometres in diameter. Assay results from this drilling are due very soon. WSR: In addition to these strategic alliances, will the company look to M&A activities as a catalyst towards continued growth?

additional mineralization outside the resource categories, which gives us confidence that we have a significantly large resource that will sustain either a longer mine life or increased production rates. The opera-

tion will have multiple revenue streams. Initially, the project will be focused on rare earth oxides as well as phosphoric acid, but will also produce by−products of calcium chloride and small amounts of uranium. There is

a major market opportunity for us with the Nolans project, and this year, our target is to undertake or complete our metallurgical test work by the end of the first half, leading to a pilot plant study in the second half of the

ARU: We are entertaining a potential partner for the Nolans project, either through equity, a joint venture partnership or a combination of both. We’re specifically looking at a partner

SUMMARY: Arafura Resources (ASX: ARU) has spun out its purely uranium-oriented assets and is now primarily focused on a rare earth project with substantial byproduct potential. Located in the Alice Springs region, the property is being groomed to initially produce 10,000 tons of rare earths (including high-value materials like neodymium and europium) a year, but may scale to double that level of activity. The project will also throw off commercial amounts of phosphoric acid, calcium chloride and uranium. Mine life is in the 20-year range. Revenue opportunity is estimated at $9 billion. The company retains 10% of its uranium spinoff, expects to start booking iron royalties in 2008 and is developing nickel, gold and vanadium projects as well. www.arafuraresources.com.au

Phone: +61-8-9221-7666

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that can bring in technology that will help us fast−track the project. Outside of that, mergers and acquisitions are broadly on our radar but are not a specific focus for us. We are going to focus our resources to the development and production of Nolans project; however, if there was an opportunity for synergies on M&As, we would certainly closely look at that prospect. WSR: What is so unique about Arafura that defines and differentiates this company? ARU: The differentiator for Arafura is that Nolans contains high quantities of high value rare earths like neodymium and europium, along with additional revenue streams from a co-product of phosphoric acid and by-products of calcium chloride and uranium. We are initially looking to produce 10,000 tonnes of rare earths but assessing the market opportunity to upscale to 20,000 tonnes per annum. This would make us a major producer of rare earths with potentially 10% to 15% of market share in 2010. Significant growth in the demand for rare earths will provide considerable opportunities for Arafura. At 20,000 tonnes of rare earths per annum, the project will produce about 150,000 tpa phosphoric acid, 500,000 tonnes of calcium chloride and maybe 200 tonnes per annum of uranium oxide. Ironically, we are likely to be the next uranium producing mine in Australia but as a by−product. However, rare earths are our focus. China produced a little over 95% the world’s rare earths in 2006. But China wants to focus on its own development rather than be a raw material supplier to the remainder of the world. I believe the signals that China sent out last year in terms of the restriction of export quotas, the imposition of a 10% tariff, and the shutting down of some rare earths opera-

tions because of environmental non−compliance indicates that China wants to improve its environmental care, and use its own resources for its own development and not be a raw material supplier for the rest of the world. Arafura is positioning itself to be a supplier of rare earth materials outside China. Rare earths are a strategic mineral for new technologies; some are used for petroleum catalysts, especially in the U.S., others use automotive catalysts, rechargeable batteries, powerful permanent magnets, and phosphors for plasma and LCD screens. Rare earths are a key commodity in new hybrid car technology or electric car technology that has major environmental benefits. The use of rare earths in the electronics industry and energy industry results in these materials being the key to environmental abatement strategies. Products that use rare earths can reduce fuel consumption, decrease greenhouse gas emissions, and provide alternative sources of efficient energy. They are a key commodity in the reduction of CO2 emissions. WSR: Tell us about the present Board and management team. ARU: Peter Walker recently stepped down as Chairman for personal reasons. As a result, Mick Muir, Arafura’s founding Managing Director and presently a non-executive director, has stepped into the Chair role. Ian Kowalick remains on the Board, and we are looking to appoint other Board members who bring a range of skills that are complementary to Arafura’s new direction, in particular as we progress our engineering and feasibility studies for Nolans. We are considering several new Board members with a background in chemical engineering, metallurgy or project management, and another with finance and/or marketing

skills. The Board changes will also reflect Arafura’s changing organizational structure as we approach engineering design and production phases. WSR: Does the investment community understand this company and the direction it’s going in? ARU: The rare earth story is difficult to understand, given that they are a range of minerals with very unique applications. It’s a niche market but a high−value market with priceless outcomes in environmental abatement strategies. The degree of sophistication to the rare earths story is different around the globe with solid understanding in eastern Australia, Asia and Europe. We are seeing an increase in the awareness and interest in rare earths in the U.S.A., and we are looking for opportunities on how we can potentially raise Arafura’s profile within the United States. The U.S.A. is a potential market for our products, and we have to carefully consider an engagement strategy with the investment market and customer markets in the U.S.A. There is a lot of value that we can extract out of Nolans, and, therefore, the Arafura share price. WSR: In closing, why should investors consider Arafura Resources as a long−term investment opportunity? ARU: The Nolans project will be a long−term 20−year plus operation with multiple revenue streams in rare earths, phosphoric acid, calcium chloride and potentially uranium. There is significant growth and upside to our share price that can be achieved through the project’s development and the company’s production plans. Our desktop studies, which will be proofed during our pilot and feasibility studies in 2007, indicate that there is significant commercial

“There is $9 billion worth of revenue to be extracted over a 20−year mine life. We aim to demonstrate the project’s net present value will be superior to many operations across the globe. Turning $9 million into $9 billion will be an amazing outcome.”

value to be identified from our Nolans Project. By the end of 2007, we will have spent about $9 million on exploration and metallurgical testwork. Through our feasibility studies, I expect to demonstrate that there is $9 billion dollars worth of revenue to be extracted over a 20 years mine life. We aim to demonstrate the project’s net present value will be superior to many operations across the globe. Turning $9 million into $9 Billion will be an amazing outcome. In addition, we will be looking for other growth opportunities beyond Nolans so that we grow the company beyond the rare earth story, while increasing our rare earth production platform.

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C E O I N T ER V I E W M onarch G old M ining C ompany L imited • A S X /M O N

Veteran Australian miners gear up to start pouring gold Monarch Gold Mining Company is an independent Australian resources company with a vision to become a substantial mid-tier gold production and exploration company.

Monarch Gold Mining is on the cusp of becoming a significant producer. Michael Kiernan, executive chairman, tells us how his experienced mining team started their new company on the fast track to pouring gold. (Interview of August 24, 2006.)

WSR: Bring us up to speed on the company’s assets and operations. MON: Monarch Gold Mining Company Limited is a newly formed group with a collection of directors and senior management that worked with me in previous companies. We simply formed the company to acquire several gold assets within western Australia to build a mid−tier gold mining producer. Our first target is to produce some 500,000 ounces of gold annually. To that end, we have acquired two assets from smaller companies, and we are in the process of proving up a significant amount of ounces; once we’ve done that, we anticipate we will start producing from one area, north of Kalgoorlie, in the first half of 2007, and we will start producing from the second area in the second half of 2007, 500 kilometers east of a port called Geraldton. These two production centers will produce 175,000 ounces annually; we are in the process of discussing with other groups to merge or make acquisitions, so we will ultimately reach our goal in the next 36 months of being a 500,000 ounce gold producer from several locations within western Australia. WSR: Expand on some of the main plays; also, educate us in terms of the infrastructure in place within these regions. MON: There are many junior gold explorers and producers that don’t have the access to capital to adequately carry out exploration. To that end, our first acquisition was a location 100 kilometers north of Kalgoorlie, the gold mining center of western Australia. It’s a place called Davyhurst, which has 2,000 square kilometers of tenements. It has historically been held by groups of smaller producers/smaller explorers. It is the first time all these tenements have come together. We are now the largest landholder north of Kalgoorlie. We have a processing plant, a 1.2 million ton per annum processing plant, full accommodations for 100 people on site, administrative centers, the replacement value of the infrastructure, some AUS$50 million to AUS$60 million. We have all our infrastructure in place and that’s on care and maintenance. We are commencing to undertake region exploration, taking in a view of the 2,600 kilometers we have identified, some 30 previously untested drill sites. In the southern part of our tenements, we did some preliminary drilling and got outstanding results in the area. We’ve currently got in the ground 2.4 million ounces

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of gold; we would like to build that up so that we’ve got a three to fouryear continuous production horizon in front of us. At that time, we will start producing; we will commence the processing plant, and we will conduct exploration into the future to keep our three to four−year horizon. We anticipate spending in the neighborhood of AUS$10 million to AUS$12 million exploring in the Davyhurst area over the next 12 to 15 months. It’s a significant exploration, which will focus on deeper drilling. Most of the drilling by the juniors has not been done below 50 meters. Historically, one of the large mining companies had a deeper mine at about 800 meters; it was underground. We will be focusing our drilling from 80 meters down to 150 meters, and the early indication is that there is quite a substantial volume of gold deposits in those areas. WSR: Tell us about the present Board and management team. MON: Previously, our management team was at another Australian-diversified producer, Consolidated Minerals. We started Consolidated Minerals as a group some eight to nine years ago. I was the MD. Colin Smith, our Chairman, is an astute mining engineer. Allan Quadrio, one of our Directors, was the Operations Director for Consolidated Minerals. We also had David Macoboy, our Finance Director. We built Consolidated Minerals from

scratch, and it is now in the ASX S&P 200, the Top 200 companies in Australia. Prior to us moving, it was capitalized at some AUS$700 million or AUS$800 million. It is a diverse miner with operations in manganese, nickel, chrome, iron ore, copper, and zinc. We could see there was going to be a strong demand for gold. We recognized a couple of years ago that the Chinese are starting to buy gold. Historically, the Chinese have been purchasing one−third or one−quarter of what the other Asians do. We consider that with the growing middle class in affluence and wealth in China, there is a significant demand pool for gold. It’s now being translated into a very strong gold price. Each year, over 30 million people in India are classified as millionaires, and their disposable income is growing. When we all decided we would like to step down from Consolidated Minerals and hand it over to a more youthful management to drive the company into the future, we then focused on gold. Gold mining is very simple; there is no marketing. With all those previous commodities, there is a demand for significant marketing effort. Gold is sold through a central bank here. It focuses on exploration and production, which we are comfortable with. WSR: Does the investment community fully understand this company and the direction it’s going in?

SUMMARY: Monarch Gold Mining (ASX: MON) has established a large land position north of Australia’s historic Kalgoorlie gold district. The company is on the verge of producing from the area, which had previously been held by a fragmented assortment of small players. Over AUS$50 million in infrastructure, including a 1.2 million-ton processing plant, is in place. Experienced management team expects to spend another AUS$12 million or more drilling below the shallow historical works; early indications of “quite a substantial” resource have been good. A second project should come online in late 2007, bringing total production to around 175,000 ounces a year. Middle-term goal is to pursue M&A in order to bring annual production to 500,000 ounces by mid-2009. www.monarchgold.com.au

Phone: 011-61-8-9481-6422

MON: It’s still in the early days, very preliminary. We have accumulated large land tracks of tenements. We are now exploring and carrying out drilling in those areas. It’s an educational process. We basically launched Monarch’s at the recent Diggers & Dealers conference in Kalgoorlie, and the investment community in Australia is becoming aware of quite an aggressive gold explorer and ultimately producer. We will be doing road shows in the United Kingdom. We intend to list Monarch on the AIM market in London. My role over the next six months is to introduce and inform the investing marketplace that Monarch is in the early stages of its growth. If one looks at why investors would become involved with Monarch − once we start production, in the first six months of next year, we will be producing at 100,000 ounces, which will contribute to AUS$20 million after-tax profit, which equates to AUS$0.07 or AUS$0.08 earnings per share. Once the group gets into production, historically, the value curve shows this is the lowest that the share price would be, and as we move up the development curve and production curve, there will be strong capital growth in our stock within the next 12 months. For any investor considering investment, people always like to get in on the ground floor. There are two types of business, one that will sit and watch and see it go up the value curve, and the second group will be people that will invest in our stock and see a healthy capital return as we did with Consolidated Minerals some eight years ago. There were people that sat on the sidelines and watched us go from AUS$0.20 share to AUS$4 share. The Monarch shares at the moment are between AUS$0.24 and AUS$0.25. Once we hit production, particularly when we start producing 500,000 ounces, which indicates a AUS$100 million profit after-tax, or AUS$0.50 a share earnings. As we bring it into production and increase our production profile, the capital growth in our stock would be quite significant.

“Our first target is to produce some 500,000 ounces of gold annually. To that end, we have acquired two assets from smaller companies, and we are in the process of proving up a significant amount of ounces; once we’ve done that, we anticipate we will start producing.”

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C E O I N T ER V I E W R ange R esources Ltd. • A S X /R R S

Geopolitical misconceptions cloud 5 billion-BOE potential The company’s principal activity is directed toward finding and delineating natural resources in the oil, gas and mineral sectors in Puntland, Somalia. WSR: Tell us about the Puntland PSAs, and what this means for the company going forward. RRS: In January, the company had two PSAs for its two onshore basins in northern Somalia, unanimously approved by the Puntland Parliament and Range in Range Resources is conjunction with its joint venture partdeveloping the ner, Canmex Minerals Corporation out geological wealth of Somalia’s autonomous of Canada, on the TSX−V, and have now committed to a ASX$45 million dolPuntland region, lar farm−in agreement with the Puntland starting with some government, which will see a minimum potentially huge oil fields. Executive Director of four wells drilled on the two basins, Peter Landau tells us a very significant step in Puntland beit’s a long way from cause those basins have the potential Puntland to Mogadishu. to host up to five billion barrels as their (Interview of February analysis to the Yemen basin directly to 28, 2007.) the North; for Puntland itself, it means the first significant exploration activity in Puntland since Conoco left in the early ‘90s. WSR: Expand on this play as well as the balance of the company’s asset and interest portfolio. RRS: Range is committed to Puntland. It has access as part of the contract at work with the Puntland government, all mineral rights in Puntland, and the two main onshore basins in addition to the offshore rights to Puntland, which is an area of 200,000 square kilometers. Range’s focus is the JV on the onshore basins, but there are also some significant lead zinc provinces with delays in the north, which we will be exploring and then also developing the offshore assets, while nowhere near as advanced as the onshore, given that over USD$150 million dollars was spent on the onshore oil and gas exploration efforts in the ‘80s and early ‘90s. We will be looking at commencing a two-day seismic program on the offshore and looking for further joint venture partners. WSR: Educate us in terms of the infrastructure in place within this region. RRS: For us, it has always been difficult. Not only with Somalia but with the chaos in Mogadishu. What is important to understand is the Puntland is the true horn of Africa. The northeastern part of Somalia and Somalia are segregated strongly on tribal grounds. A lot of the warlord problems in the south have not extended into Puntland, which has been stable for at least the last five to seven years; the recent problems with the Islamic courts in southern Somalia were restricted to southern Somalia. It didn’t move into either Puntland or Somalia lands to the west of Puntland. Puntland has been an autonomous state within Somalia that had democratic elections. With their most recent runs in January 2005, they had their own

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constitution; infrastructure−wise, they have at least a democratic process and parliamentary infrastructure in place to service what we are doing with our exploration efforts. WSR: Tell us about the present board and management team. RRS: We have a mixed board. Our Chairman, Sir Sam Jonah, is quite well known around the world. He was Chairman of AngloGold Ashanti, a New York Stock Exchange−listed company, and has been involved with the Anglo−American Group for a long time. Sam is involved with a number of African countries, including Ghana, but he also advises to the presidents of Nigeria − Mbeki of South Africa as well as our own President Hersi of Puntland. Sir Sam has an active interest. Michael Povey, our Managing Director, has 30 years’ experience in the mining industries as a mining engineer and has worked throughout Africa and North America and Australia with majors Rio and AngloGold. Another member of our board, Mr. Liban Bogor, is considered our Puntland representative. Liban’s family is originally from the Puntland region. He is a Canadian−born, educated citizen, but he is out−linking to Puntland and has strong links not only with the President, but with the members of Cabinet too. Liban enables us to deal directly with all levels of government. We also have Marcus Edwards-Jones, a member of a

“The size of the play, given the work undertaken by Conoco and others in the ‘80s and ‘90s, is not disputed. No one disputes that we have basins, which are totally analogous to Yemen, and they have the potential to have onshore the size of five billion barrels.” boutique capital−raising firm. WSR: Does the investment community understand this company and the direction it’s going in? RRS: We never wanted to take this overseas until we had secured the PSAs and a joint venture partner. However, within the Australian investment community, the Puntland play is well understood. What is not well understood is the political situation in northern Somalia; the ‘higher risk, higher reward’ scenario is one we aim to address in the coming months. The size of the play, given the work undertaken by Conoco and others in the ‘80s and ‘90s, is not disputed. No one disputes that we have basins which are totally analogous to Yemen, and they have the potential to have onshore the size of five billion barrels, which make them some of the biggest onshore basins in the world if we prove them up. What I guess everyone will always track against Range is

Somalia’s political risk, and it is only in the last six months that we have been able to demonstrate that the transitional federal government (TFG), and the Puntland government are committed to range in its joint venture partners. Hopefully, now with the PSA in that joint venture proceeding, we think the investment community will start to get a better understanding of what we are trying to achieve. WSR: Where do you see Range Resources two or three years from now? RRS: For us, short−term is 6−12 months and the biggest issue for the Puntland government, its people, and for ourselves is that there has to be activity on the ground because that is going to generate wealth creation for both the country and for our shareholders. Our short−term vision is that we have to get the holes into the ground. Our joint venture partner, Canmex, is currently processing a significant

amount of seismic and interpretation data, and hopefully, we will see the manganese drilling this year because drilling the holes is the only way we are going to establish the oil and gas potential, and to sell short−term manganese is to drill successful onshore wells in the region. WSR: In closing, why should investors consider Range Resources as a long−term investment opportunity? RRS: We are headed with a current capital raising institutional funds out of both London and New York; we need to work on a capital structure which caps the company at USD$150 million. For us, we see it as a long−term investment for shareholders. You are looking at a shareholder being exposed to a company with a live market cap, but has the potential to have an attributable billion barrels of oil attributable to it. The period of time is significant; remember that it is northern Somalia, and that there is an education process regarding political efficacy and stability going on; however, for someone who wants exposure to an upside that is unparalleled with a lot of other stocks given that the basins are there, and it is simply approving the sales to establish that size, we believe that from a long-term shareholder’s perspective, 85% risk, the multiples and the returns on the investment at the current market capitalization of the company is extremely impressive and significant.

SUMMARY: Range Resources (ASX: RRS) is uncovering the natural wealth of Somalia’s autonomous Puntland region. In cooperation with its joint venture partner Canmex Resources, the company recently agreed to drill at least four onshore oil wells within Puntland; the basins in question could contain 5 billion BOE based on comparisons to nearby Yemen. Conoco historically spent US$150 million to explore the area, which management characterizes as politically stable with full governmental apparatus in place. Virtually independent of Mogadishu and the Islamic courts to the south, the area has its own Parliament and constitution. Further out, the company essentially has access to all the region’s mineral rights, including less advanced offshore oil projects and some potentially significant lead and zinc opportunities. www.homelandpreciousmetals.com



Phone: 604-922-6663

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C E O I N T ER V I E W D iamond C orp plc • A I M /D C P

Mining start looms for start-up South African diamond play DiamondCorp plc is a United Kingdom-based diamond producer. The company’s Lace project is located 20 kilometers from Kroonstad in the Free State Province of South Africa. DiamondCorp is on the verge of mining South Africa’s biggest non-De Beers kimberlite. CEO Paul R. Loudon tells us that while last-minute delays may emerge, his company should be throwing off significant cash by June. (Interview of March 20, 2007.)

WSR: Tell us about the recent AIM listing, and what it means for the company going forward. DCP: For the last two years, DiamondCorp was a private company; over that time, we raised 9.5 million pounds of private money, largely from institutions to develop the Lace Mine in South Africa. We had given those institutions an indication that, at some point, we would be taking the company public. We chose to take it public on the AIM market in February 2007, and we raised another 2 million pounds of extra working capital on the way. This gave all of their shareholders a public quotation for our stock; the London AIM market is one where there are a lot of diamond production companies listed. WSR: Expand on the company’s project and property portfolio. DCP: We chose or looked at lots of diamond projects to acquire over the last few years, and we settled on buying the Lace project in South Africa. The Lace Mine is the largest diamondiferrous kimberlite in South Africa outside of the De Beers Group, and we chose that project as one we wanted to acquire because of its long−life mine potential and its ability to throw out a lot of cash over its life. We worked for 12 months to put together a Black Economic Empowerment Group with some of the leading South African black groups in order to go and acquire that project, and that is what we did. We were successful in that acquisition. The Lace Mine contains 14 million carats. It has been drilled off to a depth of 900 meters, and we know we have a 25−year mine life there. WSR: Educate us in terms of the infrastructure in place as well as the political climate within this region as it relates to resource development, production, and so on. DCP: South Africa is a highly developed mining country. It has many mineral resources. The world knows about its gold capabilities, but it also has huge coal reserves and diamonds. Over a long period of time, you have a highly sophisticated and developed mining infrastructure. As a diamond miner, we chose South Africa as our base largely because of that, because of the infrastructure, because in diamonds, unlike many other commodities, they are so rare to come across a production pipe; you can’t be too choosy about the countries in which you have to go and operate. Usually, if you are not dealing in South Africa, you are looking at the Democratic Republic of the Congo or Angola. Political risk as well as operating costs and risks get increasingly higher as you go throughout northern Africa. South Africa is an easy country in which to operate. From a political risk point of view, we believe that South Africa as a country is going through a strong growth phase; I have worked and operated mining operations in South Africa over many years. Both the climate and the economy are slowly improving. The government has challenges there in terms of creating new jobs. You can slowly see the livelihood of the average worker is getting better. We find it a safe climate in which to operate. Compared to some of those other countries in southern Africa where you have to go to find diamonds, South Africa is better and safer than any of them. WSR: Will the company look to strategic alliances, partnerships, or joint ventures moving forward? DCP: We have two strategic partners in South Africa, and we do that to comply with the black economic empowerment legislation down there. Our black partner is Shanduka Resources, led by Mr. Cyril Ramaphosa, very well−known

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A I M /D C P • D iamond C orp plc C E O I N T ER V I E W

in the international community and a former General Secretary of the ANC. Our other partner is Sphere Holdings, less well−known outside of South Africa, but is a diversified investment and fund management group put together by some bright, young, fund managers who came out of Merrill Lynch. Both of those partners are backed by big banks – Shanduka (Cyril Ramaphosa’s group) is backed by Standard Bank and Investec; Sphere is backed by Nedbank and the Rand Merchant Bank. They are very well−funded groups; they are our strategic partners within South Africa, and are paying a combined 26% equity in our project.

“We will be producing in excess of 400,000 carats of diamonds a year. That will give us revenues of USD$50 million within three years, and we expect gross margins of 50% on that revenue. We would be looking at cash flow in excess of USD$25 million a year.”

WSR: Tell us about the present board and management team. DCP: I myself have over 25 years in the resources sector, both in corporate financing and management of mining companies. Our Chairman is Euan Worthington, the former Chief Mining Analyst for SG Warburg in London and is well-known and experienced in the London mining sector. A key person on the ground in South Africa is Alistair Holmes, our Operations Director. Before joining us, Alistair was Operations Director at Sonop Delwray, the largest private diamond mining group in South Africa; as a private company under Alistair’s control, they move over 250 million tons a year. Alongside him is Gerry Robbertze, formerly Anglovaal’s Chief Mining Engineer in South Africa. Gerry has put mines into operation all over southern Africa. We have a very experienced operational Board, and that is what this compa-

mondCorp two to three years from now? DCP: By that time, we will have completed Phase I of our mining operations, an initial re-treatment of 3.6 million tons of tailings, and we will be re-commencing operations from the underground mine at Lace; that mine will run for the next 20 or so years. We will be treating 1.6 million tons a year of kimberlite material, and we will be producing in excess of 400,000 carats of diamonds a year. That will give us revenues of USD$50 million within three years, and we expect gross margins of 50% on that revenue. We would be looking at cash flow in excess of USD$25 million a year. WSR: In closing, why should investors consider DiamondCorp as a long-term investment opportunity?

ny is about. We are more of a mining company than an exploration company. We are focused on projects that can generate significant amounts of cash for the company. Moving forward, our strategy is how we harness that cash flow to grow the company and maximize shareholder value. WSR: Does the investment community understand this company and the direction it’s going in? DCP: We quietly debuted on the AIM market last month, and we are in the quiet zone at the moment, prior to going into production. Historically prior to production, stock prices for mining companies tend

to sit flat or be discounted to their true worth because most investors would expect companies to encounter some startup or operational problems, typical in the mining industry. Unfortunately, mining is one of those sectors where if something can go wrong, it does go wrong. Therefore, until such time as we demonstrate to the market that we have de−risked our startup (should be by the end of May or beginning of June), and start hitting our targets in terms of cash flow, which we expect to do by the end of June, at that stage we would expect our stock to get a significant re−raising. WSR: Where do you see Dia-

DCP: DiamondCorp provides investors with a pure entry into the diamond market; diamond is a commodity where the fundamentals are very strong. Even on projections of modest economic growth, the world will be consuming more diamonds than mines are producing. The world is in a short at the moment, and that short supply is expected to continue. DiamondCorp is focused only on diamonds. It is a diamond producer, and it has a long−term asset, which is highly cash−generative. The company is managed by a management team that will take that cash flow and grow the company, focused on increasing shareholder value.

SUMMARY: DiamondCorp (AIM: DCP) is on the verge of commercializing the biggest diamond-bearing kimberlite in South Africa outside the De Beers sphere of influence. Project contains about 14 million carats, which should support 25 years of mining at production levels of 400,000 carats per year. At a 50% margin, this should translate into annual cash flow of USD$25 million. Mining should be underway by early June. The company has successfully created a Black Economic Empowerment Group with well-funded and well-connected local interests. An experienced management team notes that while diamonds are in short supply, diamond-producing countries beyond South Africa tend to represent elevated political risk. Strategy is to use free cash flow to pursue additional growth opportunities. www.diamondcorp.plc.uk

Phone: +44-0-20-7256-2651

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C E O I N T ER V I E W C andorado O perating C ompany Ltd. • T S X /C D O

Targeting big porphyries on a 1.3 million-acre territory Candorado is one of British Columbia’s largest mineral rights land holders with copper and gold porphyry targets within the Quesnel Trough, the Serb Creek molybdenum deposit, the Eldorado property next to BC Metal’s Red Chris copper porphyry deposit and the Pitt Island VMS prospect. WSR: Tell us about the company’s business model; also, bring us up to date on the asset portfolio. CDO: Candorado is a company which has traded on the Toronto Stock Exchange for the last 15 years. Since I took over the company three years ago, Candorado has been on an aggressive approach, acquiring properties in both British Columbia and Ontario. Right now, we have a VMS property and a massive sulfite property in Coastal BC. We have a large property next to the Red Chris Mine Development in northern British Columbia, and molybdenum deposits at Serb Creek, a historic resource. Our main focus is on an area in central British Columbia called the Quesnel Trough, which is home to several producing and past-producing copper mines such as Highland Valley Copper, Candorado has built the Mount Polly, and The Kemess Mine in the northern part of the Trough. Candorado has taken a land position in excess biggest mineral acreage of 1.3 million acres by staking, optioning, and joint venturing, and we’re planning on an aggressive exploration apposition in British proach to unlock the mineral value on these properties. Columbia’s history. CEO Rene Bernard tells us how he’s taking an WSR: In terms of each of these properties, tell us where you are as far as sampling studies, drilling, and so on. intelligent and aggressive approach to CDO: Candorado undertook large-scale airborne surveys in 2006. As we go through the interpretation of these searching 1.3 million surveys, several key areas are highlighted here, showing a signature of the potassium high and a potassium and acres for gold/copper thorium low and also the right magnetic features. Why is this important? In the discovery of copper porphyries, potasporphyry targets. sium is important because copper, gold, and molybdenum have been brought up by hot springs in the past, and they (Interview of March 2, carry the potassium with it. The potassium and thorium ratio will allow you to differentiate the natural occurrence of 2007.) potassium and also the alteration. The altered rock is the one we are interested in. These surveys have been helpful in pinpointing areas of interest for Candorado, which will be followed by ground exploration, induced polarization, regional geochem programs, and ultimately, by drilling. WSR: The company has announced a drilling program commencing in April. CDO: Yes. We will be drilling in southern British Columbia starting in the first or second week of April. This is planned as a 26-hole drill program, testing a known copper and gold porphyry system. This particular property is under option from Bearclaw Capital Corporation, and it has historic drill holes with the best hole so far creating 200 meters of 0.3 copper and 0.3 gold. This hole was just part of a seven-hole drill program. The property is fairly large. Induced polarization (IP) surveys have been conducted on the property, and the company is planning to test a better

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T S X /C D O • C andorado O perating C ompany Ltd. C E O I N T ER V I E W

target in this 26-hole drill program, again, starting in the second week of April. WSR: Does Candorado have the financing in place to fully develop these plays? CDO: Candorado did three financings in January and has a cash position in excess of CDN$1.5 million. As the market allows and as we carry on to these programs, Candorado will look at the markets to raise more funds as needed, but we are confident that with no debts on the book, we will be able to get this substantial program started on our properties and carry this throughout both 2006 and 2007. WSR: Give us an understanding of the level of infrastructure in place. CDO: The infrastructure couldn’t be better. We’re in an area that enables us to work 12 months a year. We are not restricted by the need for using helicopters or by weather restrictions in more northerly and remote areas. Most of our properties lie within kilometers of main highways with a pine beetle infestation that has plagued British Columbia

over the last three or four years. Thousands of kilometers of new logging roads have been driven into areas where we hold our mineral rights. With the pine beetles, it’s a race against the clock to salvage as much of the timber as possible. This couldn’t have been better because if we deal in an area of heavy forestry, it is hard to see through. To the logging, the ground has been disturbed, several new showings have been unearthed, and from an infrastructure point, it couldn’t be better. We are also looking forward to development of any deposits that Candorado might define over the next few years. We will have an excellent infrastructure of power and communication. Everything is in place as you would have expected on the outside of a city. WSR: Do you have sufficient access to field equipment and skilled field personnel? CDO: We’ve taken steps to assure ourselves that we have the drilling contractor available to us for the whole year. We are in discussions with several geological contractors who have assured us they will have the geologists and the resources

available that Candorado will need to conduct a meaningful program in 2007. When I say meaningful program, that’s defined as planned large-scale airborne programs, gamma-ray total field magnetic programs over three large blocks of Candorado, and regional geochem programs. Again, it is important to understand that the government of British Columbia is supportive of our efforts in assuring that even with the pine beetle infestation, that enough resources will be made available to explore these areas and maybe down the road replace some of the shops lost in the forestry industry to new shops in newly discovered mining projects. WSR: Update us on the political environment within British Columbia, which hasn’t always been favorable towards mining activity. CDO: You like to see a government which supports mining. Over the last two years, the government of British Columbia has been extremely supportive in helping two new resource companies in many ways − financially, through supporting grants and joint exploration programs, as well as on the public perception

“The government of British Columbia is supportive of our efforts in assuring that even with the pine beetle infestation, that enough resources will be made available to explore these areas and maybe down the road replace some of the shops lost in the forestry industry.”

side, being a very strong supporter of the mining industry and helping in the discovery of new deposits. WSR: As the company moves forward with its drilling program, will you look to enter into additional joint ventures or partnerships? CDO: In the last two months, we have entered into partnerships with two companies. One is Georgia Ventures on our molybdenum deposit called the Serb Creek, which is located near Smithers, British Columbia. Georgia Ventures has taken a 60% interest and will spend significant funds, freeing up capital for Candorado to apply to other properties the company owns. We also recently announced an option of property to Gravity West. That property is next to the Red Chris Mine Development, and again, it’s the same case. Gravity West will apply their own resources to work these properties. As Candorado goes forward and as we define more targets from our large airborne and regional programs, we will look for other junior exploration companies to joint venture with to allow us to move as fast as we can in exploring the entire property package. WSR: For potential investors who are looking for companies in this sector, what should they understand about Candorado that distinguishes the company? What separates you from some of the other players?

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C E O I N T ER V I E W C andorado O perating C ompany Ltd. • T S X /C D O

CDO: Candorado has taken an aggressive approach in British Columbia. We are different from other companies in that we have chosen to stay within Canada and that we see the tremendous potential for new discoveries. In British Columbia, over the last 10 to 15 years, very little has happened on the exploration side. Again, if you look back at the history of British Columbia with its numerous mines operating in areas where Candorado has taken a land position, chances are very good. We have a political environment that supports the exploration activities Candorado is undertaking, and Candorado has acquired a land position of 1.3 million acres. Never in the history of British Columbia has one single company owned this amount of minerals, and Candorado is going to be aggressive moving forward, not only to be the landholder, but also be one of the most active exploration companies in British Columbia. WSR: Tell us about your Board and senior executive team. CDO: All of Candorado’s directors have both past and present public company experience. Mr. Kirk Reed is based in Calgary. He has been with the company as a Director for several years. Mr. Reed has been Director and President of numerous public companies in the past. Mr. Mark Naylor is currently the chairman of Kootenay Energy. He has been a Director of Candorado for the last two-and-a-half years, a successful, Calgary-based businessman who has been helpful in providing direction for the company moving forward. My own public

“The average porphyry in British Columbia, which is economically viable, is a 300 million to 400 million ton resource. There are several of these deposits existing in the area Candorado is exploring. We also have several gold targets.” company experience includes being a Director as well as President and CEO of several companies. I also have much experience in private industries like real estate and manufacturing. On the geological side, Candorado recently put together a high−quality geological consulting committee, which assures us that we can do justice to both the land position and our exploration targets. The gentlemen who have agreed to join Candorado’s geological advisory committee are Dr. Nick Carter, Dr. Vittorio Preto, and Dr. Rodney Kirkham, all of whom are the foremost copper porphyry experts in this particular area within British Columbia, and the Quesnel Trough, in which the company is active. All of them have worked with either the Geological Survey of Canada in a research capacity or with the British Columbia Ministry of Mines and are intimately familiar with the properties covered. They will be providing guidance for the company in terms of exploration activities going forward. WSR: As the company moves from a large mineral tenure holder into an aggressive exploration company, do you feel that this transition is not yet fully understood by the investment community? CDO: I believe the audience has to appreciate that over the last 18

months, Candorado has made the aggressive move in acquiring the land position it now holds. Furthermore, in going back to the political environment in Canada and what’s happening there, the market is only now starting to understand the political stability when it comes down to not only finding mineral deposits, but also the ability to develop and ultimately own it, is such that a country like Canada will provide that security. Candorado is in the process of matching up the necessary funds and designing the programs necessary to unlock the value on a land package. We also recently had several discoveries in the area−Serengeti in the northern part of the Quesnel Trough; GWR Resources, in the same area we’re operating, had some very interesting holes as well; Westar Resources, further down in the southern part of the Quesnel Trough, has announced a 52-meter hole creating over 1 gram of gold and also has some good copper numbers in some of their drill holes, again in a porphyry setting and adjacent to ground Candorado holds to the south, the west, and the north. WSR: Tell us the company’s major strategic objectives over the next 12 to 18 months. CDO: The major objective is to find a copper and gold porphyry

SUMMARY: Candorado (TSX: CDO) has assembled 1.3 million acres of mineral properties in British Columbia as well as Ontario. Initial focus is on the Quesnel trough, a prolific copper and gold and copper porphyry region. Historic drilling on the company’s lead property demonstrated values as high as 0.3 in both gold and copper; a new 26-hole drill program is on the horizon. Aggressive airborne survey, geomagnetic and geochemical work is planned. Given a recent insect infestation in the area, the provincial government is very supportive of mineral development as a replacement for lost logging revenue. The company has also farmed out various projects to free up capital, including a significant molybdenum deposit. Cash reserve is over CDN$1.5 million and has no debt. www.candorado.com Phone: 250-979-2595

system or a sediment gold deposit on our properties. We need to be intelligent about the way we go about it. We fully understand that a large land package needs largescale exploration programs. We’re going to use extensive airborne gamma-ray total field magnetic airborne surveys and regional ground geochem systems to narrow down the target, which will then be followed up by on-ground surveys including induced polarization, more geochem sampling, and basal till samplings − whatever it takes to define drill targets for our programs. The company’s objective is to also have enough money available and to raise enough money in a timely fashion to execute this business plan. WSR: In closing, why do you believe Candorado represents a good long-term investment opportunity? CDO: We have recently seen metal prices going up significantly over historic values. Candorado is mainly a copper and gold exploration company. Porphyries are the targets that are large in size. The average porphyry in British Columbia, which is economically−viable, is a 300−million to 400−million ton resource. There are several of these deposits existing in the area Candorado is exploring. We also have several gold targets, which have the potential for hundreds of thousands or even millions of ounces of gold. Candorado is in a politically stable environment and is very well-financed. Candorado will go forward in an aggressive manner, and over the next 12 to 18 months, we hope that we will start to define porphyry deposits or a gold deposit and get into the definition drilling.

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T S X /D M • D uluth M etals L imited C E O I N T ER V I E W

High grades add sizzle to potentially big base metals play Duluth Metals Limited was founded to acquire, explore and develop copper, nickel and platinum group metal (PGM) deposits in North America. Duluth’s principal property is the Maturi Extension Property located within the rapidly emerging Duluth Complex mining camp in northeastern Minnesota.

Duluth Metals could be looking at a 200 million ton ore body on its Minnesota property. CEO Rick Sandri tells us how the project could produce copper, nickel, cobalt, PGM and even gold and silver over the long term. (Interview of October 13, 2006.)

WSR: Start by giving us some background on the company and its operations. DM: Duluth Metals is a copper, nickel and platinum group metal advanced-stage exploration company in North America. We are not an early stage exploration company, primarily because of the fact we have a very advanced stage property in Duluth Complex in Minnesota. We have over 21 holes in the property. Of the 21, all of them have hit mineralization. The Toronto Stock Exchange looked at our data and determined that we were advanced in our development program. In fact, as we go in to our fall and spring drilling program, we are going to be drilling 35 new holes over 100,000 feet in the property. We hope to take our property to resource classification, which is one of the reasons we are considered an advanced-stage company. WSR: The company was essentially formed to manage the Minnesota assets of Wallbridge mining. Is that correct? DM: Wallbridge was spinning off various assets, including its Minnesota assets into subsidiary companies. 100% of the U.S. assets in Minnesota spun out into Duluth Metals. We became a brand new company internally on November 15, 2005, and we’ve been trading on the Toronto Stock Exchange for three days. WSR: Expand on the Maturi Extension Property and bring us up to speed on where the company is in terms of sampling, studies, drilling, and so on.

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C E O I N T ER V I E W D uluth M etals L imited • T S X /D M

DM: We have a series of historic holes on the Maturi Extension Property, in the northern portion of Minnesota in the Duluth Complex. It is adjacent to Franconia’s Maturi property; in fact, they are our immediate neighbor, and the extension goes from west to east, where we are 1,500 feet in depth on the west before we hit mineralization; on the east, we are 3,500 feet. Our property extends 5 kilometers in length by 1.5 kilometers in width. Historic drilling on the property was done by Inco Limited, the Duval Copper Corporation, Kennecott Copper Corporation, and U.S. Steel Corporation. Last spring, we put six holes in the property as well. All 21 holes intercepted what would be classified as ore grade mineralization; this spring, we will complete our next round of drilling.

Cleveland Cliffs. PolyMet has stated that they may have excess capacity in their mill, and in the future, would like to initiate some discussions with them to see if

hand in terms of their development. All of the companies in the area have been very friendly with each other and are working in association with each other even though

“There are a couple of things we can look at within the sector. First of all, we are in three base metals -- copper, nickel, and cobalt; we’re also in precious metals. We will be able to eventually supply all six platinum group metals as well as gold and silver.”

WSR: What level of infrastructure is in place at the Duluth Complex? DM: The Duluth Complex abuts against the famous iron ranges of Minnesota, which still produces 80% of the iron consumed in the United States. With that, we have phenomenal mining and industrial infrastructure in the area. There is power, water, rail lines, road lines, and communication systems. It’s not like picking a spot in central Africa or central South America. We’re in an extremely industrial area familiar with mining. We have community support. We have local support. Both area miners and the local government have put money forth for the development and diversification into other materials. It’s hard to pick a spot better than this at this point in time. WSR: Will Duluth look to strategic alliances or joint venture partnerships to enhance its development? DM: We will look to whatever we can in terms of our own property as well as what we can assist other people on in the area and take advantage. For example, PolyMet picked up the Hoyt Lakes mill from

market conditions. Do you attribute this to the global demand within the sector? Also, tell us what your outlook is for the industry. DM: We attributed our success partially to the global demand in the sector. Part of the pricing and the success of the IPO was when people looked at our specific stock and what we were doing on our project and its advanced stage. That’s part of the reason. The other part of the reason is that there is interest in the mining sectors, specifically in copper and nickel mineralization. If you take a look at what’s happening globally, especially in China, Pakistan, India, and Brazil, the demand for copper and nickel is high. In the next few years, we believe the demand for these metals will increase significantly; while there will be ups and downs in the marketplace, you will see short-term adjustments in price. Over the long−term, we are in a nickel and copper deficit until and unless new developments and new projects come on stream. There’s no way we can meet current global demand and growth with the mines presently out there. WSR: For potential investors, tell us what separates Duluth from the other players in the sector.

that excess capacity may fit some of our requirements. Some of the other players in the area have also spoken to us about a joint effort dealing with environmental studies and permitting activity so that a uniform system is applied for all of the companies in the area. Nobody wants to be dealt a second

we’re on our own projects. The camp is big enough to support all of the projects in the area; in fact, we believe it will be the next major copper and nickel area to be developed worldwide. WSR: The company’s recent IPO was very successful despite difficult

DM: There are a couple of things we can look at within the sector. First of all, we are in three base metals -- copper, nickel, and cobalt; we’re also in precious metals. We will be able to eventually supply all six platinum group metals as well as gold and silver from our property. The second thing is that we are in the United States, considered by some to be a little bit insecure, but more politically stable in terms of pricing and operations. But if you’re going to operate in a big market, this is the place to be. We’re a strategic source of supply in the United States for materials principally imported into the United States. Not many investors are aware that the United States

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is a net importer of nickel, cobalt and platinum group metals. The third thing is that in the camp we’re in, we have some of the highest grades, at least from the holes we have intercepted at this point. We are targeting a 200 million-plus ton target for development. We anticipate that this spring, with our current drilling program, we hope to achieve numbers in that range, which would make it a sizable ore body with very high grades in the United States. We’re looking at 30 to 50 years’ development and operation, making us an attractive stock. WSR: Tell us about the background and experience of the management team. DM: We are composed almost exclusively of mining personnel, many of which have come from finance and investment backgrounds as well as operations, including geology, mining and metallurgy. I was formerly with Inco. We have a Board member who is ex-Falconbridge and Teck/Cominco. We have other senior officers from Wallbridge Mining Company, the company we spun off from Collectively, senior management has put an estimated 20 mines into operation worldwide, and that is not experience you get in a lot of junior companies. Again, we’re coming into this with not only an advanced exploration-stage project, but a

“We anticipate some rapid growth in development of our project and properties. We look to be a long-term player; we are not in this for a year or two or even five years, but we’re looking for a 30−to−50−year deposit. We anticipate being here for the long haul.” very experienced team as well.

management

WSR: What are the company’s major objectives over the next 12 to 18 months? DM: We have some very simple objectives at this point. We are taking the funds we have raised, and we’re going to be doing confirmation drilling on the western area of our property at the Maturi Extension. We are going to be taking the western area once we get the drilling completed, which will be in spring 2007 and moving that portion of the property into qualified resource, and then initiate our scoping studies for that portion of the property. Hopefully, by the end of 2007, we will be initiating our pre-feasibility for that portion of the property. At the same time, we will be drilling the eastern portion of our property. Our property is split west and east. The eastern portion of our property is, you can almost say, the sizzle with the steak. The steak is the western portion be-

SUMMARY: Duluth Metals (TSX: DM) was founded in late 2005 to commercialize the U.S. assets of Wallbridge Mining. Drilling on the company’s Minnesota property has demonstrated significant quantities of copper, nickel and all six platinum group metals; 21 holes on the property have all hit mineralization. Ore body is estimated as being potentially 200 million tons in size at “very” high grades, supporting a mining life of 30 to 50 years, and is open in several directions. A more extensive drilling program aims to define the resource on a more formal basis. Local infrastructure is “phenomenal” and management has cultivated amiable relations with other companies in the region. Goal is to move to pre-feasibility by late 2007. www.duluthmetals.com

Phone: 416-369-1500 651-389-9993

cause we have a very good idea what’s there, with the eastern being the sizzle. We have some of the highest grades we’ve seen in the entire camp in the eastern portion; it is open to the north, to the east, and to the south on that portion of the property. We have blue sky in the east, and we will have confirmed resources when the drilling is complete in the spring on the west. That’s our program for the next 18 months. WSR: Do investors fully appreciate the company’s potential? What about your neighbors Frankonia and Polymers, who are working the project as well? DM: The investment community has been watching what’s happening in Minnesota. I am not sure that people fully recognize the size and potential of this camp and where it will actually go. The actual size of the Duluth complex is well in excess of 4 billion tons of mineralized material for copper and nickel that has been estimated by the State of Minnesota. This ranks the entire size of the deposits up there in the range of the third largest nickel deposit in the world and the fourth largest pure platinum deposit in the world. This is significant. With the development of the other players and the advancement of their projects, you’ve easily seen the advancement of their stock prices and how they have been moving forward with their projects. We anticipate doing the same thing. We are going to take our project to resource status, go to scoping study, and complete a pre-feasibility. We anticipate that our stock price will

adjust and grow commensurate with the developments we will be achieving and telling the public. WSR: In conclusion, give potential investors a few of the things they should bear in mind when looking at Duluth Metals. DM: The things they need to keep in mind are that we are a North American play, and that we are in the United States. Both of these are very important in terms of security of supply and security of operations. Secondly, what you’re looking at in the United States and in fact North America are some of the highest-grade materials identified in the Duluth camp. We have a very large land package that is open in a number of directions, so we have a lot of blue sky with our property. Our target is to achieve 200 million tons of ore grade material in a resource category by 2007. We anticipate some rapid growth in development of our project and properties. We look to be a long-term player; we are not in this for a year or two or even five years, but we’re looking for a 30 to 50-year deposit. We anticipate being here for the long haul. This project is for the type of investor who likes the metal sector, likes price growth in companies because they are achieving goals, likes a secure supply situation instead of being in central Africa or somewhere else, and likes the current metal combination we have. We are a very attractive investment. I believe we’re underpriced at this point in the marketplace. We’re only 10% of PolyMet’s value, and I believe we’re attractive.

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C E O I N T ER V I E W K han R esources I nc . • T S X /K R I

Getting a Soviet-era Mongolian uranium mine back online Khan Resources is a Canadian mining company with experienced and capable management. Khan controls advanced uranium properties in Mongolia with projected low unit costs of production. WSR: Begin with the recent Toronto listing and what this means for the company going forward. KRI: We were delighted to become listed on the big board of the Khan Resources is Toronto Exchange. We redeveloping a Soviet-era uranium have been anticipating mine in Mongolia. this for quite some time, CEO Martin Quick tells as have our shareholdus that the project ers, and we are now offers USD$150 able to move forward million in extant more diligently with the development of our assets in Mongolia, particularly the Dornod Uranium mine. We are infrastructure as now set to put this mine back into production within the next four years or so. well as a confirmed 40 million pounds WSR: Expand a bit more on the company’s assets and operations. of uranium oxide in place. (Interview of August 18, 2006.)

KRI: The Dornod mine was discovered and developed by the previous Russian owners in the ’80s, when they developed an open−pit operation, and they also did a tremendous amount of drilling in the area. The Dornod deposit is an advanced development project with over USD$150 million already invested by the former Russian owners. This amount includes the construction of the town of Mardai, and the drilling of other deposits outside the immediate Dornod area. As well as the open−pit, they developed an underground mine; although, they didn’t produce ore from underground, they developed the deposit, and with that and the open−pit, it now constitutes a resource of over 40.1 million pounds of U3O8, which is 43-101 compliant. There is a high potential to increase this through further exploration and definition drilling from both surface and underground. At the moment, over 700 diamond drill holes have been drilled in the deposit, and there are approximately 20,000 meters of drifts and cross-cuts, plus three concrete−lined shafts. That is why we believe we can put this deposit back into production in a short period of time. We conducted late last year and earlier this year, a 20−hole confirmation drilling program to verify the Russian data. This program not only verified the data, but in the underground deposit, the results we achieved were 40% greater than the Russian data. Through our resource consultants Scott Wilson Roscoe Postle Associates, we have been able to upgrade the resources from inferred to indicated, and we plan on further drilling work this fall and into next spring. We anticipate that in early spring 2007, we will begin to dewater the mine and take a bulk sample from the underground mineralized zone, which will be a key step in the feasibility study process. WSR: Educate us in terms of the infrastructure as well as the political climate within this region as it relates to resource development, production, and so on. KRI: Let’s look at the political situation in Mongolia. There was a fair degree of uncertainty earlier this year, after the Mongolian parliament decided to introduce a windfall profits tax on gold and copper. They didn’t bring it in on uranium, but it did send a negative message to the investment community. They have now come out with revised Minerals and Tax Laws, neither of which adversely affect us. We believe the political situation in Mongolia has now become more settled, and that it is the right time for us to move forward with the development of

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the project. However, we will first be negotiating with the Mongolian government for a stability agreement or an investment contract, as it is now called, before we start spending large amounts of capital on the project. WSR: How important are strategic alliances, joint ventures, and partners for this company working in this region? KRI: We are confident we will be able to go forward by ourselves or with a joint venture partner to develop the mine. We know that our U308 product will be readily sold in the marketplace. We have our neighbor to the immediate south of us, China, which is going ahead with a huge expansion of their nuclear power industry, and they will need large quantities of uranium from outside of China. There is simply insufficient U308 supply to satisfy demand from existing and new nuclear power plants. The spot price has gone from a low of USD$7 a pound in 2000, to a current price of $48.00 per pound, and we expect it to exceed USD$50 by the end of 2006, and USD$60 by the end of 2007. We are in a very buoyant uranium market at the moment where demand will exceed supply for many years to come. WSR: Tell us about the present Board and management team. KRI: We have an excellent management team. We have just hired an experienced Controller, Paul

Caldwell, who has been in the mining industry for many years. We have as Chief Operations Officer Donald Arsenault, who has been not only in the mining industry for many years, but is also very familiar with the uranium business. Don and I used to work in Elliott Lake uranium camp in Northern Ontario. We both have extensive experience in the uranium industry. We have a first−class Board of Directors led by our Chairman, Mr. Jim Doak, who has had over 25 years’ experience as an economist and Chartered Financial Analyst. We have a fine Director in Murray Lynch, our corporate lawyer working out of Washington, D.C., and Mongolia. His knowledge of, and connections in Mongolia, have proven to be a major asset to Khan. We have two well technically qualified directors, Peter Hooper and Jean-Pierre Chauvin, who are long−term mining executives. We also have our former Chairman and CEO, Ken Murton, who has extensive experience in the investment banking business. WSR: Does the investment community understand this company and the direction it’s going in, particularly with regard to the recent IPO? KRI: No, I don’t believe they do. Investors do not yet realize what this company’s potential is, and how quickly we can develop our prized asset. We have to get out and talk to more potential investors, fund managers, and analysts, to let people know more about the

excellent prospects for the company. We have been held back from going public for various internal reasons; we have now come on−stream in a market less buoyant than it was a few months ago. I believe that our adjusted market cap per pound, compared to several other companies, is at a huge discount. Our adjusted market cap per pound now, with our stock price at CDN$1.20, is CDN$1.72 a pound, whereas other companies like Laramide, Paladin, SXR, and UR-Energy are up in the CDN$5 to CDN$7 range, and producers, of course, are even higher than that. International Uranium is over CDN$10 per pound. We feel we should be trading at least in the area of USD$3 to USD$4, rather than the range we are currently in. WSR: In closing, why should investors consider Khan Resources as a long-term investment opportunity? KRI: There are several reasons. First, we have an excellent asset. We have a former uranium producing mine; it is well−developed, and we can bring it back into production in a relatively short period of time. We have a uranium price which continues to increase. Supply cannot keep up with demand. The spot price is sitting at USD$48.00, and it is likely we will see the price rise substantially in the next few years. We have a firstclass management team in place to move the company forward and to develop and bring the mine into production. Coupled with that, we now have a stable political regime

SUMMARY: Khan Resources (TSX: KRI) is developing uranium opportunities in Mongolia. The company’s lead project was mined and extensively drilled in the Soviet era and represents USD$150 million in onsite infrastructure (including a never-used underground mine) and previous exploration work. On a 43-101 standard, known resource represents 40.1 million pounds of U3O8 with “high” extension potential. New drilling has confirmed and exceeded the Soviet results. Management discounts perceptions of Mongolia as hostile to mining interests and notes that uranium is exempt from that country’s windfall mining tax. China is seen as a ready market for uranium. At time of interview, next steps were to dewater the site and conduct fresh bulk sampling. Production could be underway by mid-2010. www.khanresources.com

Phone: 416-360-3405

“The Dornod mine was discovered and developed by the previous Russian owners in the ’80s, when they developed an open-pit operation, and they also did a tremendous amount of drilling in the area. The Dornod deposit is an advanced development project with over USD$150 million already invested.” in Mongolia. They have settled the issues of the Minerals Law and the Tax Law. We haven’t been caught up in any windfall profits tax issues. We are confident we will be able to work with the government to secure an investment contract (stability agreement) and work with them for the long−term benefit of both the company and the people of Mongolia.

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C E O I N T ER V I E W S kye R esources I nc . • T S X /S K R

On the fast track to becoming a world-class nickel producer Skye is focused on becoming a mid−tier nickel producer. Skye has assembled a seasoned, technically sophisticated management team and acquired the rights to an established lateritic nickel project (the Fenix project) in Guatemala.

Skye Resources has reported a nickel laterite reserve of 40 million tons of ore and is now on the fast track to starting production in the next few years. CEO Ian G. Austin tells us how his company’s next major task is simply a matter of upgrading what’s already in place. (Interview of March 8, 2007.)

WSR: Give us a progress report and update on the Fenix play. SKR: Our Fenix project is a ferro−nickel project we are developing in Guatemala. We acquired our interest in that property from Inco in late 2004. Since then, we have been working on advancing the feasibility study, which we completed late last year. We are getting ready to move into the financing mode for a 50 million pound ferronickel producer, using conventional technology in Guatemala. Our production target date is late 2009, and we are excited about being able to take advantage of the very strong conditions in the nickel market. WSR: Expand on this project, and give us a feel for where you are in terms of drilling, development, resources, and so on. SKR: The project was originally developed by Inco in the 1970s. They built it, spent a quarter of a billion dollars building it, and closed it down in 1980 because of high oil prices. We are refurbishing and expanding Inco’s project, which they kept on care and maintenance since 1980. We are going to be doubling the throughput; to avoid the problems with oil prices, we are converting all of the energy sources to coal or petroleum coke. Because Inco operated there, there is a well−established resource, and with the completion of our feasibility study last year, we were able to report a reserve of almost 40 million tons of 1.63% nickel, enough for a 30−year project. We know in our resource categories that we have enough additional materials to at least double that mine life. We have a proven project using technologies that have already worked. We have a proven resource, and our major task is to refurbish the existing plant. WSR: Educate us in terms of the infrastructure in place within this region. SKR: The plant was originally built by Inco on the shores of Lake Izabal in eastern Guatemala. There is port access to the Atlantic Coast, 100 kilometers away. We will be accessing our plant primarily by road transport, and we are within good shipping distance to the European markets for our product. If we need to go into the Asian mar-

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kets, we ship it to the other side of Guatemala and send it across the Pacific. The project is well−located. The existing plant has been wellmaintained. The plant consists of a 64−megawatt power plant, a smelter, and all the associated infrastructure. We will be upgrading the environmental controls, upgrading the control systems, and doubling the throughput. We have a real running start on this, and because it is a brownfield project, the permitting process is moving along much faster than it would be if we were starting on a greenfield site. WSR: What is so unique about Skye Resources that defines and differentiates this company from its competitors? SKR: There are a number of factors. We are the best undeveloped nickel laterite project out there that could get into production very quickly, because we have nearterm production opportunities that put us in a greater position to take advantage of the current strength in the nickel market. We have a large resource. We potentially expect to have between 200 million and 300 million tons of high−grade nickel resources. Again, that is a major differentiating factor. We have the potential to increase our production to 100 million pounds. We have done engineering work to explore further expansion to 100 million pounds of production. Again, that will make us one of the larger junior

nickel companies in the world. WSR: Tell us about the present Board and management team. SKR: Early last year, we restructured our Board; we have a small, yet strong Board. We have Terry Lyons on our Board, who has good, broad business experience. We also have two people who used to work at Inco and know the nickel business very well, Gord Bacon and Bob Horn, both of whom are well-respected in the nickel industry. The management team is also a very seasoned team, consisting of experienced mining personnel. I started with Inco in the 1970s, on both the business and finance side. Dave Huggins, my Chief Operating Officer, started with Inco, worked on their engineering and metallurgic side, and ended up running BHP’s nickel business before the merger with Billiton. We have a very seasoned group of senior mining people who have been able to advance this project very rapidly since we acquired it in late 2004. We have clearly demonstrated that having this much experience and depth pays off. WSR: Does the investment community understand this company and the direction it’s going in? SKR: I believe we are making very good headway. It wasn’t a well−known or well−understood story. We are getting a broader

SUMMARY: Skye Resources (TSX: SKR) has completed feasibility work on a substantial ferro-nickel project in Guatemala and is now moving into the financing phase. Initial annual production target is in the 50 millionpound range but could be doubled; current reserve approaches 40 million tons of ore at 1.83% nickel and known resource could at least double mine life. Management estimates that the mineralization may represent up to 300 million tons of ore. Inco spent about $250 million on the project in the 1970s, building a power plant, smelter and other well-maintained infrastructure. Formerly oil-based power sources are being converted to run on coal or petroleum coke. Location allows relatively straightforward shipping to markets across either the Pacific or the Atlantic. www.skyeresources.com

Phone: 604-602-9500

understanding through North America. We also have a significant investor base in New York. We have a large New York hedge fund. Amber Capital is our largest investor. So the story is beginning to get out there. However, I think we still have a long way to go to convince people that we will be in production in late 2009. WSR: Where do you see Skye Resources two to three years from now? SKR: Two to three years from now, we will be in production, producing nickel in Guatemala from our ferro−nickel plant. We will be ramping production up toward the 50 to 60 million pound level, which we anticipate achieving in the early years of the project life. At the same time, we will be undertaking our engineering studies and getting ready for construction of the second phase of the project, another 50−million pounds of production using leaching technology. I also anticipate that by that time, we will have acquired interests in other exploration−type properties elsewhere in the world. Our objective is to identify other nickel laterite areas where we can apply our expertise to develop additional production. WSR: In closing, why should investors consider Skye Resources as a long−term investment opportunity? SKR: I believe the first and foremost thing is the strength of the nickel markets. The nickel markets are very strong, and by all measures look as if they will be strong for many years to come. We have an excellent commodity we are producing. We have a well−proven project. It will be in production in the next couple of years and will be a low−cost nickel producer with great expansion capacity. We have a strong management team, which has already proven its mettle. In combination, I believe we have an exciting investment story.

“We were able to report a reserve of almost 40 million tons of 1.63% nickel, enough for a 30-year project. We know in our resource categories that we have enough additional materials to at least double that mine life. We have a proven project.”

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C E O I N T ER V I E W B ra z auro R esources • T S X-V/BZO

Enormous upside surrounds 2 million-ounce gold resource Brazauro Resources Corporation qualifies for immediate attention by virtue of two key factors that are always essential to gold exploration success. The first is the evident strong success record of the company’s management. The second is the evident merit of its unique gold exploration projects in Brazil.

Brazauro Resources has defended its claim to a 2 million-ounce gold project in the Amazon with enormous additional potential. Senior management tells us that the company has put the recent “temporary hiccup” behind it and renewed exploration is underway. (Interview of February 15, 2007.)

WSR: Give us a progress report and updates on the Tocantinzinho play. BZO: We are just now resuming our exploration program at Tocantinzinho after an interruption lasting more than a year. As you know, in January of 2006, we had the title challenge; it took us a year, but we successfully defended ourselves and now have full title. With that behind us we started in January 2007 with a comprehensive exploration program that will include drilling on the main ore body at TZ as well as testing additional anomalies. Because of the title issues, we stopped the exploration more than a year ago just at a time we had outlined an ore body of 650 meters strike length, 100−150 meters wide with continuous mineralization over distances up to 280 meters with average grades of 1.5 to 2.5 grams material. We were on the verge of calculating a reserve base, and we had to stop all of that. On top of that, just before the title issue came up, we had completed a low−flying airborne magnetic and radiometric survey over the area. We came up with airborne geophysical anomalies that were very similar to what we were drilling into, and we realized we had some targets that needed a lot of follow−up work. Because of the legal issues at that time, we couldn’t do that. We are extremely pleased that we have the title in hand and that we can continue following up on the earlier results. WSR: Expand on this play as well as the balance of the company’s project and property portfolio. BZO: We started in this area in 2004; we mainly chose the area because the Tapajos region in the Para State of Brazil saw such a huge gold rush in the mid−1900s and had seen official gold production of 10 million ounces by garimpeiros, very simple miners that operate with pick and shovel. Government officials as well as the literature indicate that this number most likely will be 30 million to 50 million ounces as these operators only report minimum amounts for obvious tax reasons. We were intrigued by that as there is not one single modern mine in the area and as it appeared that very little up−to−date exploration was ever carried out. When we had the opportunity to get the rights to the Tocantinzinho deposit in early 2003, we quickly moved. Solitario Re-

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sources, who had the property in the late ‘90s, already had done some surface exploration, such as soil, channel and deep auger sampling. We had enough information to start drilling immediately. In our first 20 drill holes, 19 detected mineralization with several holes intercepting hundreds of meters (as opposed to feet) of between 1 and 2.5 gram material with some zones of 40 meters at 8 gram material. This encouraged us enough to drill another 26 holes into the deposit and prepare it for a resource calculation. After the title was secured and the government announced this in their government gazette, we announced in December the CNI 43-101 resource estimates by Pincock, Allen & Holt of 1.626 million ounces at a grade of 1.4 g/t Au of inferred and indicated resources, calculated using a block model method and an inferred estimate of 2.04 million ounces at a grade of 1.4 g/t Au, using a sectional method. WSR: Educate us in terms of the infrastructure as well as the political climate within this region as it relates to resource exploration, development, and so on. BZO: We are in the Amazon region, a definite issue in terms of infrastructure; however, over the last few years, the infrastructure has dramatically improved, and they started tarring the Cuiaba

road from the North. This is also called the Amazon Highway from Santarem at the Amazon River all the way to the State Mato Grosso; that road is passing by at a distance of 40 km from our site. At the same time, they are laying a power line along the same road, starting in the South. This has already reached to within 40 km from Tocantinzinho. Power and road access are becoming easier, and the current logging in the area has brought logging roads down to thirteen kilometers from our site. At the moment, the site is being approached by small airplanes. We have two airstrips on site as well as a river coming through. We transported all our supplies by river. WSR: Will the company look to strategic alliances, partnerships, or joint ventures moving forward? BZO: Our modus operandi as a company is exploration. Our charge is to find commercial gold as cheaply as possible and get it to a point where either major companies or other people with infrastructure can take it from there; that has usually been a good formula for us. If you take typical finding costs of USD$10 an ounce and the average purchase price of USD$100 an ounce on the ground then you are successful in your exploration play, and you can see the leverage in that. We

SUMMARY: Brazauro Resources (TSX-V: BZO) has successfully defended its title to its lead gold property in Brazil and is now resuming exploration. Primary ore body represents an inferred resource of around 2 million ounces of gold and management describes extension potential as “enormous,” with strike open to the southeast and at depth. Sampling and wildcat drilling in the area could point to comparable deposits elsewhere on the property. The region historically produced up to 50 million ounces through artisanal activity but has never been mined (or adequately explored) with modern methods. Roadway has approached the site and power is following; however, additional resources will need to be identified to make sure that development in the insfrastructure-challenged region is economical. www.brazauroresources.com

“There are very few exploration companies that can say they have 43-101 compliance resource estimates of 2 million ounces in their hands. A lot of junior companies are trying to find such deposits. We found it. We need to find more of it.”

have discussions with majors. We are open−minded, but our major effort is to maximize shareholder value, which will dictate when we do a strategic alliance and/or sell the company. WSR: What is so unique about Brazauro that defines and differentiates this company?

Phone: 281-579-3400

BZO: There are very few explo-

ration companies that can say they have 43−101 compliance resource estimates of 2 million ounces in their hands. A lot of junior companies are trying to find such deposits. We found it. We need to find more of it, and we need to extend the size of our current discovery because there is still enormous potential. It’s wide open with depth and to the southeast. We have an enormous advantage above most

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“We are going to follow up on that intercept because we feel there is a good likelihood we are dealing with the parallel system of mineralized veins and disseminated granite we have seen at TZ. We are actively continuing the exploration program.”

out while we were negotiating title issues. However, once our title was secured, we came out with this report prepared by Pincock, Allen & Holt (independent). This confirmed exactly what we had always told the market. WSR: Tell us about the present Board and management team. BZO: We have a very seasoned Board and an outstanding management team. Let me talk about Len. Len was a top executive with Newmont for a number of years until 2001. I was fortunate in getting him, and I believe he is largely responsible for the geological success the company has had. Since we are an exploration company, our primary focus is geology, and we have other men in the company with strong backgrounds; the man in Brazil who works and handles our project has worked for many major companies. In terms of management infrastructure, I believe our company is in an excellent position.Elton Pereira, our man in Brazil, had been working for Rio Tinto until we hired him over two years ago. He has worked in the Tapajos for the last 15 years. You can’t get a better man who knows the geology and the problems of working in these kinds of isolated areas. He contributes enormously to our company simply by running our day-to-day operations. WSR: Does the investment community understand this company and the direction it’s going in?

other companies in that we have a resource in hand that we discovered ourselves and have brought to this 401 compliance number over the last three years. It took us a while to bring that across because we didn’t want that number

BZO: Right now, what’s happening is that we are having to translate our story to the investment public because of our 2006 slowdown due to our land debate. We are selling at an extreme discount from what companies typically sell for at this stage. The company is being valued at USD$30 an ounce on the ground, which in the most conservative of cases, is at least USD$30 under the lowest valuations of USD$60; typically, it

would be valued in the USD$80 to USD$100 range, depending on how far they are along with their ounces. I believe we are an undervalued company; I think that translation will occur this year as people realize we are once more doing positive things. Everybody understood exactly what we were doing. We hit a snag about the title. One thing about the new discoveries and title problems is that you never see a title problem arising if the discovery is not a serious discovery. There are always a lot of people who try to sneak into something good. That happened to us. From the moment of discovery, we significantly raised our share price. We started in the order of CDN$0.40. We went all the way up to CDN$2.50. When this hit us, we had to drop back a little bit; we were quiet for a bit longer than one year. For that reason, at the moment, we are actively talking to all of our backers and to people involved in the process to make sure they again understand that this was just a temporary hiccup, that we are continuing with the program as before, and that there is an enormous potential to increase this resource to a size that is economic for this type of infrastructure−challenged environment. WSR: In closing, why should investors consider Brazauro Resources as a long-term investment opportunity? BZO: The major mining companies are continuing to replace huge amounts of production every year, which in some cases is larger than 5 million ounces a year; it’s hard to find 5 million new ounces every year. There will be a continuing issue with major companies to replace produced ounces; in recent years, their exploration records have not supported their production. In that regard, I believe valuations of companies with emerging commercial deposits will be the sec-

tor looked at because those are the ones that will have to go up, given majors will have to come in and acquire them. In that way, I believe we’re in excellent shape. We’re starting out with 2 million ounces and a huge land position with many opportunities. I believe we are extraordinarily undervalued. This is where we are going at the moment. We have outlined resources of 46 million tons at 1.4 gram for a total of 2 million ounces. We are continually drilling that deposit because it is open through the southeast and with depth. At the moment, we are following up on two magnetic anomalies that have the exact similar signatures as the ones over the Tocantinzinho deposit. We are busy with soil sampling surveys over these anomalies and are planning to drill those in a few months time. We have found another old garimpo in the area, in which we have samples. We have come up with values from 1 to 300 grams at surface in the weathered rock, and we’re busy with the team doing a survey over that area to see if this is a duplicate of the TZ deposit. It’s three miles away from where we are. On top of that, we had done some wildcat drilling in the Tocantinzinho area; within a kilometer from Tocantinzinho, we intercepted one drill hole with 15 meters at 1.5 gram. We never followed that up because we have been fighting our title and delineating the deposit. We have brought a drill rig in, and we are going to follow up on that intercept because we feel there is a good likelihood we are dealing with the parallel system of mineralized veins and disseminated granite we have seen at TZ. We are actively continuing the exploration program on some targets that have been lying in wait for a long time. We hope that in the coming two or three months, all soil sampling will be done, and that we will have started exploration drilling on these three projects.

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T S X-V/F R P • F rontier Pacific M ining C orporation C E O I N T ER V I E W

Million-ounce gold project could become a company maker Frontier Pacific Mining is a mineral exploration and development company based in Vancouver. The company’s primary asset is the Perama Hill gold project in northeastern Greece. Drill programs are being carried out on a uranium property in Peru and a gold property in Nevada’s prolific Carlin Trend. WSR: Bring us up to speed on the company’s project and property portfolio. FRP: We are involved in three continents in the world. We have an advanced project in northern Greece, which we bought from Newmont a couple of years ago. We are presently bringing that to a permitting status and hope to put it into production within the next year. We have another project in southern Peru, a uranium project which we have spent a fair amount of money on. We own a very big ground position there, and we have done some drilling which has been getting some interesting results. It could be one of the bigger uranium resource potentials in the world -- we are very excited about it. That’s the second project. The third project is that we are currently drilling in the Carlin Trend in Nevada, in the south end. We have a deep hole going down there. Its location is 14 kilometers south of the Newmont Rain Mine. That’s our focus within the company and where we are active. Our premiere project is presently the one in Greece. WSR: Expand on the main play, describing the infrastructure in place within this region. FRP: The Greek project is on the northern shore of the Aegean Sea near Alexandroupolis, a city of 150,000 people. It’s a port city, we are about a 35 or 40−minute drive out of Alexandroupolis. It’s a deposit that contains 1.4 million ounces of gold near the surface. It has a mining configuration on it that was worked on by Kvaerner Engineering; as a matter of fact, they completed a feasibility study. The deposit was found by Normandy Mining, and when they were taken over by Newmont, Newmont acquired the project. They determined it was a bit small for them, and they put it up for auction a couple of years ago. We bid on it. We paid them USD$12 million for that deposit in cash, which we raised through equity financing in Vancouver. Effectively, we paid USD$10 an ounce for that gold resource in the ground. It contains 11 million tons of almost 4 grams per ton oxide resource and has a 0.4 to 1 waste−to−ore strip ratio. It’s based on the feasibility work Kvaerner carried out. We can produce gold for USD$170 an ounce life of mine. As a matter of fact, in the first three years of production, we can produce 170,000 ounces per year at a cash cost of USD$135 per ounce of gold. It’s a very robust project, the type of project that is a company−maker for a small company like ours, and we have the expertise and the background to put these types of projects into production. We are quite excited about it.

Frontier Pacific Mining expects to graduate into the ranks of gold producers by the end of 2007. CEO Peter F. Tegart takes us on a tour of his flagship project, which he essentially bought at $10 an ounce. (Interview of September 5, 2006.)

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C E O I N T ER V I E W F rontier Pacific M ining C orporation • T S X-V/F R P

WSR: Will the company look to additional strategic alliances or joint ventures moving forward? FRP: We haven’t looked at that. We have been approached with that kind of resource. The economics on the project is very attractive for mid-tier producers. People that are producing 300,000 to 500,000 ounces per year are looking at us in terms of acquiring this project, joint venturing with us, or trying to get their hands on it one way or another. Our strategy at this point in time is not to entertain anything like that simply because we are in the middle of the permitting procedure. As a matter of fact, I’m going to Greece next week to meet with the ministers over there to get approval of our environmental terms of reference, the approval process for the environmental impact assessment; once we have that, we will turn the corner on this project in terms of launching it into production. It’s not the time to be talking until we do have the permits in place. WSR: What is unique about Frontier that defines and differentiates this company from others in the industry? FRP: What makes us unique is that we have focused on asset base; in other words, we have gone into projects, we have all been in the business for 30 years or more, and we have really highlighted getting

involved in projects with economic viability. The Greek project is the type of project that we like. We recognize value at an early stage, and we get involved in those types of projects we believe are economically viable because at the end of the day, you have to make money at this game and the only way you really make money is putting these things into production, and we have got a production history in our group. We have a very strong Board of Directors with a past production history, and that’s what makes us unique in the mining business. WSR: Tell us about the present Board and management team. FRP: The Directors and the management in this company are a highly experienced group of people. Most have been in the business for over 30 years and have developed mines along their paths on many occasions. Premiere in this group is Stu Blusson, the finder of the Ekati diamond mine, along with Chuck Fipke up north, who was instrumental in bringing that mine into production with BHP. He is on their management committee. He is highly familiar with mine development and those types of scenarios connected with mine development. He would, therefore, be a key person. The other key person on the Board is Jonathan Goodman, a member of the Goodman family in Toronto, as well as President and

SUMMARY: Frontier Pacific Mining Corp. (TSX-V: FRP) anticipates starting gold production by the end of 2007. The company’s lead project (in Greece) is at the permit stage and contains roughly 1.4 million ounces of gold; the project was acquired for $12 million and will cost about $170 per ounce over its lifetime to mine. While would−be partners are showing interest, management is delaying discussions until after mining permits are granted. An exploration−stage project in Peru has delivered potentially world−class uranium drilling results. A Carlin Trend gold property (near the Rain mine) represents additional upside. Management is experienced at developing viable metal extraction operations and acknowledges that production is the only way you really make money. www.frontierpacific.com

Phone: 604-717-6488

CEO of Dundee Precious Metals. He has been instrumental in several mine developments and is involved in several other companies. He brings a wealth of experience to us in the form of financial management and production oversight. Brian Lock, our Executive Vice President, has been involved in the construction of no less than half a dozen gold mines and mines in his career in an engineering company. He has joined me in bringing the Perama project on board and bring it into production in Greece. I have been in the business for 40 years. We have got a couple of chartered accountants on our Board, and we have the background and management skills to bring projects into production and that’s our objective in the Company. WSR: Does the investment community fully understand this company and the direction it’s going in? FRP: I don’t believe the investment community totally understands, but that’s not for the lack of what we haven’t put out there. We are a little bit weak on investor relations. Our main objective as far as the company was concerned was to put the correct assets into the company. Initially, we have been focused on that, and with the acquisition of Perama, the focus is on uranium exploration in southern Peru, and drilling in a premier gold district in the Carlin district in Nevada. We’ve really focused on the asset base. The asset base in Perama alone is probably worth 10 times the current capital value of the company. There is opportunity for the investor. What we’re trying to do now is get the message out that the asset base is there, and eventually it’ll come to fruition. That asset base will show up and be reflected in the capital value of the company at some point. That’s dependent on timing of production in Perama, and the recognition of the uranium resources in Peru. When that comes to fruition, that’s the message we have to try to get out to the investor.

“In the first three years of production, we can produce 170,000 ounces per year at a cash cost of USD$135 per ounce of gold. It’s a very robust project, the type of project that is a companymaker for a small company like ours, and we have the expertise and the background.”

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Aggressive exploration yields some of Mexico’s best targets Nayarit Gold Inc. is a Toronto−based junior resource company dedicated to gold exploration in the proven precious metal districts of Mexico. Management’s goal is to rapidly build a profitable resource company and maximize shareholder value through successful exploration and aggressive testing of high-quality targets. WSR: Tell us about the recent placements and what they mean for the company going forward. NYG: This allows us to maintain the rapid pace of exploration we have enjoyed for the past year−and−a−half. We have completed three drill campaigns in Mexico plus the acquisition of over 10 new projects, grassroots exploration from prospecting, trench sampling, and backwoods sampling right up to drilling. WSR: Expand on the company’s project and property portfolio. NYG: We are active in Mexico State, an hour−and−a−half out of Mexico City on a project called Dorosa, a high-grade silver project we acquired in September 2006. Since its acquisition, we have found eight additional vein systems where each vein system varies in strike length from 500 meters to 2 kilometers. This leaves a lot of room where you could hide a couple of mines on each one of these systems, and we are aggressively drilling these. In Nayarit State, we are completing acquisition of a few more key pieces of land. We are going to be commencing a drill program within the next week−and−a−half and continuing our aggressive exploration package. That package is a little larger than the size of Hong Kong, a huge land package, and we have to start with the highest−priority targets and work our way down the list. Fortunately, we have not found anything we don’t like on the property. We keep finding interesting high−grade systems. Some of the results are the best in Mexico. We continue to be aggressive in that exploration.

Nayarit Gold is aggressively drilling a substantial portfolio of precious metals targets. CEO Michael A. Dehn tells us that his company keeps finding interesting highgrade mineralization, including some of the best targets in Mexico. (Interview of January 18, 2007.)

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WSR: Educate us about the infrastructure in place within this region. NYG: We are fortunate that in all the projects we’re active on, we can drive a car right onto the drill set−ups. In Nayarit State, our property concessions run parallel to the Pacific Highway, which transacts our claims. There is the new toll highway running from Mazatlan to Puerto Vallarta that cuts through our properties. We have a good rail system running through the property as well as a few high−tension power lines that come from the highest hydrodam in the world, located in Nayarit State. Nayarit State’s infrastructure is phenomenal. We have our base of operations in Mexico; in the middle of our property holdings in Acaponeta, we have a community of 30,000 people. Along our property holdings, there are another 20 small communities with 20 to 50 families where we can get local help to work on the project. In Mexico State, we are in the historic Taxco mining district where millions of ounces of high-grade silver have come out. By high −grade, we are talking between 30 and 100 ounces per ton silver. In that area, both the road systems and hydro systems are very well developed as are the communication systems, being in one of the more densely-populated areas of Mexico where we are fortunate that we are a little off the beaten highway with a private road into the project. We have a couple of farmers who are near the project, but there is no community, so we have to have heat over community agreements with all historic mining

value for our shareholders.

“We have to start with the highestpriority targets and work our way down the list. Fortunately, we have not found anything we don’t like on the property. We keep finding interesting high-grade systems. Some of the results are the best in Mexico.”

claims. Their land is only dealt with the government there. WSR: Will the company look to strategic alliances, partnerships, or joint ventures moving forward? NYG: Definitely. We always look at wherever the opportunity is best for our shareholders. We have had an attempted joint venture on one of our projects, but our partner had some difficulties with the market to raise equity to continue on with the

project. We ended up retaining that project 100%. We have been in contact with several of the Mexican majors as well as other silver producers in the United States who have shown interest in our projects. We are not by any means looking for a fire sale on anything. We are looking for good technical and financial partners to come in and add value to the projects; if they turn out to be the ones who can help us get the project into production quicker, that might be the best

WSR: What is so unique about Nayarit Gold that defines and differentiates this company? NYG: One of our strengths is its management and Board with a level of experience rarely seen in any junior company on the market. Our Board of Directors is very diverse and experienced, including Senator Eyton, who is on our Board and heads up our Auditing Committee. He is a corporate governance expert in the industry and is on Coca-Cola’s Board down in Atlanta. He also chairs Ivernia, a lead producer in Australia. He is one of the heads of a Canadian/ Mexican trade organization encouraging trade within Mexico, and he also works with the Conservative Party of Canada. Senator Eyton is a good man to have on our Board, and even with his schedule, he still makes time to do any paper we have to send his way. He always finds time to get it done, and he always has great comments and feedback for us. Jerry Shefsky, Board Chairman, has financed construction projects internationally for many years. He has put in the largest shopping centers in Europe and North America, has owned and built casinos in both Las Vegas and London, and currently has a fun project where he gets to design and build large aquariums people run through. Some of his new projects could be seen at some of the nicer destinations in the United States and Canada over the next few years. Dale Hendrick has been in the mining industry longer than any of us on either our Board or management team. He’s

SUMMARY: Nayarit Gold (TSX-V: NYG) has concentrated its attention on Mexico’s known precious metal regions. The company has built a diverse portfolio of projects at various stages and has completed three drilling programs so far. Significant discoveries include eight new vein systems (some of which run for kilometers) on its high−grade silver project; as management notes, each could easily constitute multiple mines in itself and aggressive drilling will follow. Another land package is larger than Hong Kong, forcing the company to prioritize among a number of interesting high−grade targets. Roadway and other infrastructure elements are in place. Board has expertise in construction, finance and corporate governance, as well as mining. Truly accretive partnerships or M&A will be considered. www.nayaritgold.com

Phone: 647-477-6264

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put several mines into production; the most recent feather in his cap is that he’s on the Board of Gammon Lake Resources, who have just hit their target of 400,000 ounces per year in gold and gold equivalent production. John Ryan, President and CEO of Spruce Ridge Resources, is a chartered accountant who makes sure that the company’s books are properly audited. If you want to try something a little different, John always has a critical opinion that helps make sure we’re heading in the right direction or if he thinks it’s something that might be a little too confusing for the investment community to understand. John has a good investor’s eye on his head. We have a good, welleducated Board. In terms of our management team − I was with Goldcorp for 11 years working out of head office with Rob McEwen. I took care of a lot of the regional exploration, and in later years, worked with Rob in marketing. He was definitely the head behind the investment community while I was behind the technical community. Talking to other mining companies or at trade shows where the mining industry was prevalent was part of my job. Rob would take care of the brokers, the analysts, and the institutions. Just spend five minutes with Rob and see what he has to say about the industry and the price of gold going forward. Marius Marei is a new member of our management team. He joined in the summer as our VP in charge of exploration. He came from Placer Dome where he was running exploration in Africa. Prior to that, he was in northwestern Ontario, and he has experience in Mexico as well as internationally. He also has a residence in Mexico very close to our project as well as one in Toronto. It’s easier for us to convince him to spend more time in Mexico where we need him to take care of the guys because he has a bit of a home down there as well. Dennis Waddington, our CFO, is a key projects guy. He’s been in the industry for over 30 years. He

“Nayarit Gold has been successful in exploration. We have been acquiring high-quality projects and examining the best targets in our project portfolio. We put the money in the ground where it is most needed, and we will continue with this focus in Mexico for the future.”

investors that drive the share price. We have some great new investors who’ve picked up nearly a million shares in the market, and those are the kind of guys who really buy, hold and believe in the story; you only need two or three of them to influence your share price and market cap. For now, every little thousand shareholder we have in the United States and Canada makes a big impact. We are methodically telling the story and are not over-promotional by any means. We are very conservative. Until you see a large 43−101 resource in the company, the institutions have shied away from us, and I don’t expect too many institutions to come in. In the last financing, we picked up three new institutional buyers, one from the United States, and two from Europe. Over the last year, we have kept building on that success, and by the end of this month, I believe we’ll be 10% owned by institutions and 90% owned by retail, a significant growth from a year ago when we had no institutional investors. WSR: In closing, why should investors consider Nayarit Gold as a long−term investment opportunity?

has a MBA and knows corporate governance better than anyone I’ve met. He’s the company’s conscience and the voice of reason, as well as one of the best sounding boards I have, and we work very together. We are diverse and complement each other’s skills extremely well. WSR: Does the investment community understand this company and the direction it’s going in?

NYG: I would say that the people who know us and have invested in our company are aware of what we are doing and where we are going. Our biggest difficulty to date has been getting new eyes on the story. The number of shareholders we are adding on a weekly or monthly basis is increasing. But for the first time, it’s hard to get the right people to see the story. We’re always looking for new investors to join the company, and it is new

NYG: Nayarit Gold has been successful in exploration. We have been acquiring high−quality projects and examining the best targets in our project portfolio. We put the money in the ground where it is most needed, and we will continue with this focus in Mexico for the future. We are always looking for the right opportunities. If there is a good cheap acquisition we feel will be of value to our shareholders, we’ll take it, and if we see an opportunity for a partner to come in and add value to both our projects and our share price, we’ll do that. We might be looking at mergers, acquisitions or takeovers or just continue on at the pace we’re going with the high−quality projects we have in Mexico. We’re always looking at what is best for our shareholders, and we keep that foremost in our mind.

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