Luke Burgess - Angel Publishing

Invest in Gold

The market gods are about to present us with a more than generous gold buying opportunity. Will you take it?

Gold prices fell sharply again today extending their losses from last week as a decline in oil prices and strength in the US dollar put downward pressure on the yellow metal. And we're coming to the perfect time to invest in gold for new speculators.

Gold for October delivery plummeted almost $40 during intraday trading today, bottoming out at US$820.50/oz and closing the day at US$828.50 an ounce.

For over three and half weeks gold prices have consistently pulled back. And there's no doubt that the gold bull has stalled, at least for now. But the fact is, this stall was expected.

Back during the great gold bull market of the 1970s gold prices shed roughly 40% for almost two years between 1975 and 1977 before the mania stage pushed prices a staggering 750% higher.

At that time—and as it is today—we heard most of the mainstream analysts sounding the gold bull's death knell. But the smart money went against the grain. And they profited like never before. Now it's your turn to invest in gold and be the smart money.

Oil prices are headed further south as demand weakens and the US dollar will continue to bounce back against other currencies in the short to mid-term. This will continue to lead the major funds away from gold, and other commodities including silver, depressing prices further. But, this will also create the perfect opportunity to re-establish a position in gold.

Investing in Gold: The Gold Bull Is Far From Over!

Despite weakness in prices, global gold demand is growing faster than supply. Over the past several years we've seen a massive influx of capital flowing into the exploration and development of gold properties. Nevertheless, overall world gold production continues to drop. In fact, global gold mine production was at an eleven-year low last year. And total production costs were up by US$99/oz.

The fundamentals of supply and demand are enough to push gold prices significantly higher. But the real kicker is going to be the massive growth in money supply and the poison fruit of unsecured debt.

Howard Ruff, the legendary author and financial advisor, put it nice and bluntly in a short commentary a few days ago:

With government unfunded liabilities (for Social Security, Medicare and Medicaid) more than $50-trillion, and no end in sight, and government doing its ostrich act (head in the sand) hoping the pain will just go away, and their standard practice of just throwing money at every intractable problem, we have set the stage for continuing soaring inflation. I am doing a lot of radio talk show interviews, and the hosts keep asking me "what proof do you have of future inflation?" My answer? "Haven't you been to the grocery store lately, or bought any gas? It's here now; the proof is all around you."

I expect gold prices to continue dropping in the short to mid-term. And I urge you to take advantage of this opportunity to get back into gold investin g. Be the smart money this time around.

Good Investing,

Luke Burgess
Editor, Gold World

Copper Mining Stocks

In Part 2 of our Argentinean copper mining stocks report, we'll take a look at the rest of Coro's copper mining prospects, which are numerous and conclude with specific details regarding my recommendation.

Barreal Seco Deposit: The Copper Mining Resource

The Barreal Seco deposit is one of four properties on the Flores project, located on the border of Region II and III of Chile, approximately 70km northeast of the port of Chanaral.

The Flores project is in the Altamira mining district near Centenario Copper Corp.'s (TSX: CCT) Franke property, which is currently being development in a mine and boasts 26.3 million tonnes of mineral reserves with an average grade of 0.95% total copper. That's over 550 million pounds of copper.

The Barreal Seco deposit currently has a NI 43-101 compliant resource totaling over 351 million pounds of leachable (oxide and mixed material) measured and indicated resources plus another 37.7 million pounds of inferred resources.

The deposit also looks to have a significantly-sized primary sulfide zone. But there has not been enough drilling to define a measured resource.

Below you'll see the most recent resource estimate for the Barreal Seco deposit. Please note that there is no estimate for measured resources of the primary sulfides due to limited drilling.

Barreal Seco is different from the San Jorge property because there are no restrictions in Chile on using sulfuric acid. So the company is working to quickly development the deposit into a heap leaching operation.

Coro Copper Mining: A Comparison to Peers

Considering the known measured and indicated resources from the San Jorge project and Barreal Seco deposit, Coro appears quite undervalued compared to similar companies working in the same area, with similar properties.

I calculate that Coro Mining has the right to earn a 100% interest in about 2.33 billion pounds of measured and indicated copper resources from San Jorge and Barreal Seco combined. At $3.00 per pound, the in-ground value of these resources is worth about $7 billion. Coro Mining's current market cap of about $41.6 million represents only 0.59% of the value of the in-ground measured and indicated resources.

Compare this to Los Andes Copper Ltd. (TSX-V: LA), which has a property in the same general region with indicated resources of 165 million pounds of copper and 47.6 million pounds of molybdenum. The value of this in-ground resource is approximately $1.685 billion based on copper prices of $3.00/lb and molybdenum prices of $25/lb. Los Andes Copper's market cap of $30.3 million represents about 1.8% of the value of their in-ground indicated resource.

Or we can compare Coro to Apoquindo Minerals (TSX-V: AQM), whose property has about historic resource of about 300 million pounds and market cap reflects almost 2% of the value their in-ground gross metal resource.

So let's lowball it and assume that Coro's market cap should reflect 1% to 1.25% of the in-ground value of the company's 2.33 billion pounds of measured and indicated copper resources. That would put Coro's market cap between $70 million and $87.5 million. Or that would put share prices between $1.94 and $2.43 based on 36 million shares outstanding, significantly higher than current market prices.

So I think it's safe to say that shares of Coro Mining are relatively undervalued.

And if that's not enough to wet your whistle, consider the fact that the company could become a full-blown copper producer through a new option-to-purchase agreement in a matter of months.

Cerro Negro Producing Copper Mine

A few months ago Coro announced that it has entered into an exclusive option agreement to acquire an effective 100% ownership of Compania Minera Cerro Negro SA whose sole asset is the operating Cerro Negro copper mine, located in Region V of the Republic of Chile.

Cerro Negro (Black Hill) comprises a combined open pit and underground operation producing copper cathodes and copper sulfate using the heap leaching method and copper-silver concentrates via flotation, as well as toll treating third party oxide ores via an agreement with Enami, a Chilean State owned mining company.

Current copper cathode production capacity at the Cerro Negro mine, including toll treatment, is approximately 6,000 tonnes per year, concentrator production capacity is approximately 9,600 tonnes of copper-silver concentrates per year, and copper sulphate production capacity is approximately 4,200 tonnes per year.

The existing resources at Cerro Negro have not been prepared in compliance with NI 43-101 so Coro can not comment on resource estimates or actual production levels. However, the company will be completing the necessary evaluation and work program to define a NI 43-101 compliant resource.

Coro has agreed to effectively acquire 100% of Compania Minera Cerro Negro SA and the Cerro Nergo mine for a total purchase price of $40,000,000. The company has until September to make the final payment on the mine.

Conclusion

With the new option agreement on the Cerro Negro mine the company expects to be a revenue generating producer in the next few months and they're looking to quickly move the San Jorge project through development and into production of up to 50,000 tonnes of copper concentrate per year with a new flotation operation plan. Overall, Coro Mining (TSX: COP) looks like a solid copper/gold play.

More Information

Even though this is a fairly detailed and lengthy report, I did not have time today to delve into the nitty-gritty of company's management or talk about their seven other properties through Argentina, Chile, and Mexico. So if you'd like more information on Coro Mining, visit the company's website at: www.coromining.com

Until next time,

Luke Burgess
Editor, Gold World

P.S. Part 1 of this report can be found here: A Copper Mining Company To Watch - A Big Surprise in the Copper Market

A Copper Mining Company To Watch

Last summer, I heard about Coro Mining (TSX: COP), a brand new gold and copper mining company with the bold ambition to become a mid-tier production firm in under three years.

Prior to going public, everything looked great; Coro was built by proven mine-finders and developers who have extensive geologic knowledge of the region and strong relationships with local communities, and the known resources on the company's earn-in projects totaled over 2 billion pounds of copper.

The plan was to fast-track the company's San Jorge copper/gold project through the development stage and into production. But because of a new environmental law, which was passed right before Coro began trading publicly, the company ran into a slight bump on the road to production for San Jorge. As a result Coro's share price took a hit right off the bat.

The months passed. The seasons changed. And despite ever climbing—and record breaking—metal prices (including an all-time high for gold of $1,032/oz and copper of over $4/lb), COP continued to fall even further over the past several weeks as part of the overall global market downturn.

Generally speaking, there has been a lowering valuation tide for junior firms specfically market-wide, fueled in part by higher energy prices, the sub-prime mortgage meltdown, and the devaluing of the US dollar. This ebbing of the tide, however, has revealed some pearls in the junior mineral branch of the larger stock market river and presented a few solid investment opportunities for guys like you and me. And Coro Mining is one of these pearls, even despite the issues with the mining legislation.

San Jorge: The Copper Mining Resource

Coro Mining has the option to earn a 100% interest in the 115,000 hectare San Jorge copper/gold project, which is remotely located in the Province of Mendoza, Argentina approximately 45km north of the town of Uspallata and 250km northeast of Santiago, Chile.

The property is situated in the El Indio mineral belt and regionally near many large open-pit and underground mines including Los Pelambres and El Teniente.

Los Pelambres is the world's fifth-largest copper mine and is owned 60/40 by Antofagasta PLC (LSE: ANTO) and a Japanese consortium, which includes Mitsubishi Materials Corp. and Nippon Mining and Metals Company Ltd. Los Pelambres currently produces about 320,000 tonnes of copper concentrate annually.

El Teniente (The Lieutenant) is owned and operated by Corporación Nacional del Cobre de Chile (CODELCO), the largest copper mining company in the world. El Teniente is the largest underground mine in the world, having 2400km of underground tunnels. CODELCO's mining plan for El Teniente includes total reserves and resources of 122 million tonnes of copper plus additional identified resources of 196 million tonnes of copper.

So, in general, the San Jorge property is certainly in the right neighborhood for large copper deposits.

Last year Coro completed a drill program at San Jorge that comprised 27 diamond drill holes totaling 4,177 meters, which included stepout and infill drilling. Based on the results of this program, Coro was able to add further in-ground resources to the San Jorge project.

On January 18, 2008, Coro announced a newly revised copper and gold resource estimate for San Jorge. Results from the new National Instrument 43-101 complaint estimate showed total measured and indicated resources of 2,050,979,000 pounds of copper and 1,257,000 ounces of gold.

The new estimate also included inferred mineral resources of 592,182,000 pounds of copper and 337,000 ounces of gold.

The table below shows the details from the most recent resource estimate.

Despite this rather attractive resource, however, there is a small hiccup in actually getting the metal out of the ground. And that's the mining legislation that I mentioned earlier.

San Jorge: Mining Legislation

In response to environmental activism in the region, the Mendoza Provincial Legislature passed a new law in June 20, 2007 that prohibits the use of toxic chemicals including sulfuric acid in metalliferous mining activities in the Province.

This means that Coro Mining, or any other company working in Mendoza, is not be permitted to produce copper from with a low-cost heap leaching operation.

Heap leaching is the process of stacking crushed ore into heaps on a sloping impermeable pad usually made of rubber. A leaching agent (sulfuric acid in the case of copper mining) is then pumped to the top of the heap through hoses and sprinkled or dripped out to percolated through the ore. The leaching agent slowly dissolves the copper, and/or other valuable metals, to create a pregnant solution, called leachate, which is collected in a reservoir at the bottom, or toe, of the heap. This leachate can then be processed into copper cathode, the raw material for the production of continuous cast copper rod for the wire and cable industry. Cathodes are also used to produce high quality copper tube, brass and other extruded copper products.

Below is a very basic illustration of how a heap leaching operation works.

Now, the resources at San Jorge contained within the oxide material (see the resource estimate table above) can only be processed by heap leach methods. But due to the new Provincial legislation that prohibits the use of sulfuric acid in metalliferous mining operations, heap leaching the copper from ore produced at San Jorge is out of the question.

However, and this is very important to remember, the enriched and primary material (see the resource estimate table above), which accounts for 81% of the measured and indicated resources and 98.5% of the inferred resources, can be processed by the flotation method, a different production method that does not use sulfuric acid and does not conflict with the new provincial mining legislation.

Flotation is a process by which mineral particles are induced to become attached to bubbles and float while others sink. This process separates valuable minerals and concentrates them. These concentrates are then sold to refineries for further processing.

The most important factor of the flotation process for Coro and its shareholders, however, is the fact that sulfuric acid is not used. And the new legislation and existing environmental regulations do not preclude conventional flotation treatment.

The oxide material can not be economically processed by flotation and has to be heap leached. This is the main reason the stock sold off last summer. But I believe investors overlooked the fact that the oxide material only accounts for 18.5% of the measured and indicated material and 1.5% of the inferred resources. See the resource estimate table above for exact figures.

San Jorge: The New Road to Production

In Feburary, Coro announced that the company has commissioned a Preliminary Economic Assessment to evaluate a 10 million tonnes per year flotation operation capable of producing 35,000 to 50,000 tonnes of copper concentrate annually.

The assessment will examine producing these concentrates from the enriched and primary material only at the San Jorge project. Oxide material would be treated as waste and stockpiled separately.

In the cross section below you can see that the oxide material can be essentially scraped off the top to reveal the enriched and primary sulfides.

The Preliminary Economic Assessment is scheduled for completion in the second quarter, and assuming a positive outcome, Coro says that it intends to complete an Environmental Impact Study and initiate permitting activities.

San Jorge: Hope for Heap Leaching Persists

In July 2007, after the Mendoza Provincial Legislature passed the new law banning the use of sulfuric acid in mining, Coro filed an action to have the legislation declared unconstitutional. Several other organizations also filed similar actions. The company says that there are ongoing negations with officials to get this law overturned or at least amended.

San Jorge is located in an area with a very low population and no competing agricultural interests. There is also no competition for water resources and the project is not upriver from any agricultural activities.

An Environmental Baseline Study has been completed and shows no significant issues. So there is still a chance that the province will allow Coro to heap leach the copper out of the ore from San Jorge in the future.

A new pro-mining Governor was just elected into office. On October 28, 2007, Mr. Celso Jaque was elected as Governor of Mendoza and has stated that he will revisit the legislation and its constitutional status. Of course there's never a guarantee with politicians.

But in the event that the new environmental legislation is overturned or amended so that sulfuric acid is allowed to be used at the San Jorge property, Coro is also finalizing a 25,000 tonne per year copper cathode leach only pre-feasibility study which examine treatment of the oxide and enriched material by heap leaching. This study is also scheduled for completion in the second quarter.

The San Jorge project is the company's flagship property and represents a solid opportunity for Coro to quickly become a mid-sized copper/gold producer. However, the project is only one of the ten properties the company is currently working...

Check our Part 2 of this report: Copper Mining Stocks - A Big Surprise in the Copper Market - Part 2

Luke Burgess
Editor, Gold World

Gold Mining in Mexico

In Part 2 of our Gold Mining in Mexico, report we'll take a look at the rest of Rochester's gold mining prospects, which are numerous and conclude with specific details regarding my recommendation.

Gold Mining in Mexico: Rochester Expands Land Holdings

Tajos Cuates Mine and Area

Tajos Cuates currently comprises five vein systems and is located just one kilometer southwest of the Florida gold mine site. Tajos Cuates is a primary target in the near-term for outlining additional potential ore sources for the existing milling operation.

The mineralization at Tajos Cuates is silver-rich compared to the Florida vein system, which is why the company is waiting until they increase silver recoveries at the Mina Real facility before processing the ore from these veins. Silver grades have been found as high as 1,300 g/t silver across a 1.70-meter-wide sample.

Three drill holes completed in 2006 provided confirmation that the mineralized vein structure continues to depth and established a base for the mineralized horizon. Drill hole 800-7-04 intersected 2.42 meters (estimated true width 1.5 meters) of mineralization that assayed 4.9 g/t of gold and 310 g/t of silver.

As I mentioned yesterday, Candian gold producer Rochester Resource (TSX-V: RCT) is currently drilling 2,000 meters at the Tajos Cuates target to further delineate the lateral and vertical extent of the system.

Drift development activities are also currently underway to supplement more extensive trenching and surface sampling activities. In December 2007 the company began a 600 meter drift development program at Tajos Cuates.

Dating back to the summer of 2007, Rochester has been conducting drift development at the Tajos Cuates vein system. The average grade from samples taken along the drift was about 4 g/t gold and 400 g/t silver. Higher grade silver from drift samples includes 1,140 g/t silver, 758 g/t silver and 833 g/t silver.

Like drift development at Florida, the current 600 meter drifting program will provide bulk sample - such as information and assistance in generating an NI 43-101 compliant reserve report.

Macedo Area

The Macedo area at Mina Real is a reconnaissance exploration project that was recently initiated. Four primary vein structures have been identified to date in the area, with follow-up work planned for later this year.

To date Rochester has discovered three main vein systems at Macedo. The most prospective of the three at this point is the El Gringo vein system. Sample results from the El Gringo vein include 0.70 meters grading 14.2 g/t gold and 235 g/t silver and 0.80 meters grading 1.57 g/t gold and 200 g/t silver.

The Santa Fe Property

Rochester Resources holds a 70% interest in the Santa Fe gold/silver project comprising 3,823 hectares of exploration and mining concessions. To date the company has identified an impressive 26 vein structures on the project across three main areas, Clavellinos, San Jose and Samuel.

Below you can see the three main areas outlined in blue and mineralized veins in red.

The Santa Fe project has seen only very limited exploration until now. The project, specifically the Clavellinos area, is the primary target of gold exploration and development for the company for 2008.

Clavellinos Area

Work to date at the Clavellinos area has defined three main vein systems as the initial exploration target. From west to east, these are the Clavellinos, Tajitos and Jonas systems.

Surface sampling highlights from the Clavellinos system include 1.40 meters grading 2.94 g/t gold and 271 g/t silver and 1.90 meters grading 2.29 g/t gold and 234 g/t silver. Surface sampling from the Tajitos and Jonas System includes 1.20 meters grading 3.52 g/t gold, 1.50 meters grading 0.23 g/t gold and 425 g/t silver, and 1.20 meters grading 3.56 g/t gold and 796 g/t silver.

A 3,000 meter Phase 1 diamond drill program has recently been initiated at the Clavellinos area of the project. The program is slated to test each of the three major vein systems. Results from this drilling will also be reported within the next few months.

Drift development has begun at Clavellinos. Rochester recently kicked off a 600-800 meter drift development campaign. The company is targeting a 40-meter-wide mineralized zone at Clavellinos. The results of the campaign will help define the average grade of the vein system and will assist in calculating an NI 43-101 compliant reserve report.

Samuel Area

To date Rochester has identified five epithermal veins at Samuel, all of which have historic workings—a good indicator for a strongly mineralized vein system.

Until the company began a systematic and detailed exploration program at Santa Fe to assess its potential there had been no modern exploration techniques applied to this project. Now there are a total of 1.7 kilometers of epithermal vein strike length traced from outcrops.

Rochester will continue exploration efforts and expects to significantly increase its understanding of the extent of these mineralized vein systems. The company says that "this area [Samuel] is highly prospective and is a high priority for exploration follow-up in the near term."

San Jose Area

The San Jose area comprises five vein systems identified as San Jose vein systems numbers 1 to 5. San Jose is currently a reconnaissance-stage project where the company is following up on previous work by past companies.

No assay results have been published to date. But all the veins have been traced at surface with strike lengths close to one kilometer. There are more than five kilometers of strike length noted at the San Jose area. This area will be aggressively explored over the coming months, with assay results to follow.

Other Gold Mining Properties

Several weeks ago Rochester announced that it has staked and now holds a 100% interest in an additional 13,164 hectares contiguous to the Mina Real and Santa Fe properties.

The El Cora property comprises 1,568 hectares contiguous to the northwest of Santa Fe. The company additionally staked the El Cora II claims, which comprise 11,596 hectares and are contiguous to the north and west of both the Santa Fe and Mina Real properties.

With the addition of these claims, Rochester's total land package in Mexico covers over 24,000 hectares.

Rochester Resources (TSX-V: RCT): Conclusion and Recommendation

Rochester is a very attractive stock buy, especially at current levels of about C$1.00.

By producing cash flow in an ever-rising gold and silver spot price market while increasing production and mineral recovery rates, Rochester helps protect shareholders from the potential downside risk of a negative stock market. With this model, the company can contribute to development and exploration programs from cash that will not be needed from the dilutive equity market.

Meanwhile Rochester continues to add value to its properties through drift development programs at Florida, Tajos Cuates and Clavellinos. This is progressing daily, further defining a larger and larger resource while supplying early feed for the mill. This in turn contributes to positive operating cash flow every month and an extensive database for compiling a thorough NI 43-101 reserve report.

The company also offers shareholders exploration upside, as drilling has just commenced at both the Mina Real and Santa Fe projects. This is the first extensive drill program ever to take place in the area. I have high expectations that the drill program will add substantial growth to the company in the coming year.

While implementing these strategies for growth, Rochester will continue to look at acquiring additional strategic mining projects that will add substantially to our overall growth-producer model.

The company is expecting to become a short- to mid-term, mid-tier player in Mexico's silver/gold production market through acquisition and internal growth. From the way it looks now, it's all just a matter of time. After that the sky's the limit. Rochester's most recent corporate presentation says that there is a potential of up to 10,000 tonnes per day. But for now the next major milestones will be the increase of gold and silver production at the Mina Real facility and drift development and exploration drill programs on the company's four properties.

For more information on Rochester Resource, visit the company's website at: www.RochesterResourcesLtd.com

Good Investing,

Luke Burgess
Editor, Gold World

Gold Mining in Mexico

Over the past several weeks and months, the market has really beat up a lot of junior gold stocks. Much of the downward pressure can be attributed to stagnant gold prices. After a hearty run up to $1,032.80 per ounce in March, spot gold prices corrected, shaking out a lot of the hard money. However, with the impending bank crisis in the United States and continued trouble throughout the Middle East, gold is starting to regain its luster as a hedge against disaster. And this makes for a perfect time to jump back into junior gold stocks.

Over the next two days I am going to report on one of my favorite Canadian gold stocks mining in Mexico. The company's stock has fallen significantly (I believe too much) over the past several weeks, and the stock looks like a great buy a current levels. So without further delay, let's get started.

My Favorite Canadian Gold Stock Mining in Mexico Right Now

Over the past several months, Rochester Resources (TSX-V: RCT) has assembled a very attractive portfolio of four contiguous, high-grade gold/silver properties in Nayarit, Mexico. These properties cover a total of over 24,000 hectares of mineral prospective land in the Sierra Madre Occidental range, the largest epithermal precious metal region in the world and host to the majority of Mexico's gold and silver deposits.

The company has also initiated small-scale gold and silver production at one of its projects, with two mines feeding a processing facility that is currently operating at 200 tonnes of ore per day. Production at this facility is expected to increase 50% within the next few weeks.

Meanwhile, Rochester is actively exploring its other Mexican properties and has identified a total of 36 mineralized veins to date across its large land position.

Overall, Rochester Resources is a fairy tale-type deal . . . minus, of course, wicked witches, talking beasts and magical enchantments. My point is that once this story plays itself it out, investors are sure to live happily ever after.

In this report we will explore the investment highlights of Rochester, with a focus on the company's highly prospective Mexican mineral properties and future growth in gold and silver production and cash-flow reveune. But before we delve too deep into the details, let me give you a very brief history of Rochester.

Rochester Resources Mining: In the beginning...

Every story starts somewhere. Rochester's began on August 25, 2005, when the company was formed by a small group of savvy Mexican and Canadian investors and geologists.

Several months later, on December 1, 2006, Rochester Resources effectively acquired a 100% interest in the Mina Real epithermal gold/silver project located near the capital city of Tepic in the state of Nayarit, Mexico, through its now wholly-owned subsidiary Mina Real Mexico SA de CV. This is when things started really moving.

Subsequently, on March 12, 2007, the company acquired a 70% interest in the 3,823-hecate Santa Fe gold/silver property located immediately east of Mina Real. And the most recent property acquisition, occurring on February 12, 2008, increased the size of Rochester's land holdings by over 100% bringing the company's total property package to 24,368 hectares.

Let me start with Rochester's flagship project, Mina Real.

Gold Mining in Mexico: The Mina Real Project

The mining history of the Mina Real property is not well documented. However, older local residents living near the property say that amateur mining was conducted during the 1940s and 1950s. Some also say that earlier workings date back to the 1920s.

Prior to its ownership by Rochester, Dr. Alfredo Parra Davila (founder and current president and CEO of Rochester Resources) and his sons explored the Mina Real property via rustic boot-and-hammer-type prospecting. They would often ride mule-back for many miles into the mountain forests and return with heavy loads of rock samples. Later, Dr. Parra Davila personally funded the construction of access roads to historic mine workings and drift development into one of the veins on the Mina Real property.

Today the Mina Real gold/silver project comprises 7,381 hectares of exploration and mining concessions and encompasses three main areas named Florida, Tajos Cuates and Macedo.

These three areas host five major vein systems named Florida-Florida North, El Puerto 1, El Puerto 2, Tajos Cuates and Tajos Cuates 1, as well as six recently discovered systems that are scattered through the property's land. The company has also recently reported that it has located several outcrops at Mina Real indicating the existence of additional veins that were previously undiscovered.

Below you will see the three main areas outlined in blue and mineralized veins in red.

A 4,000-meter Phase 1 diamond drill program has recently been initiated at the Mina Real project. There will be 2,000 meters of drilling at the Florida North target to identify the continuation of the system and 2,000 meters at the Tajos Cuates target to further delineate the lateral and vertical extent of the system.

Florida and Tajos Cuates are the main areas of activity at Mina Real for Rochester. These areas each host one producing underground mine, and Florida is the site of the company's production mill.

Florida Mine, Area, and Production Mill

The Florida mine site and the surrounding Florida exploration project were Rochester's first priority in exploration and development dating back to the middle of 2006. A tremendous amount of work has been accomplished in this short time.

The Florida mine is comprised of a triple vein structure that, to date, appears to have a vertical mineralized continuity of over 300 meters. With the current exploration program the company is in the process of proving the vertical continuity to greater than 350 meters.

Extensive drift development has taken place at the Florida triple vein structure, and a clearer understanding of the ore body has been gained through a theoretical geological model developed over the past several years by Dr. Alfredo Parra.

To date, independent assays of channel samples taken every two meters from 775 meters of drift development mining have produced an average grade of 12.1 g/t of gold and about 209 g/t of silver. Higher grades of up to 30 g/t gold were also subsequently reported in ramping to lower levels.

The average grade of these samples is significantly higher than the average grade previously announced from the 2005 bulk sample at the Florida mine of 4,400 tonnes, which produced an average mill head grade of 8.3 g/t of gold and 165 g/t of silver.

Rochester recently completed 600 meters of drift development at Florida and discovered four new gold/silver veins on the Florida NW area. The most significant of these new veins is called La Vibora. So far, the La Vibora Vein has been traced on surface for 200 meters. A series of four trenches have been completed to date, with all encountering strong mineralization. Of particular note is trench 2 which uncovered 1.9 meters grading 35.26 g/t gold and 297.63 g/t silver including 0.70 meters grading 93.1 g/t gold and 500 g/t silver. Overall, the four trenches have an average vein width of 2.08 meters grading 16.5 g/t gold and 174 g/t silver.

Three other veins have been discovered including the Vuiruco Vein, a vein parallel to La Vibora and perpendicular with Florida 4, where the width of the vein intersected is reported at 5.9 meters. Additional follow up to these results is ongoing.

Data from this development program will provide bulk sample-like information and assist in generating an NI 43-101 compliant reserve report while at the same time providing feed for the mill.

The company is also in the middle of a 2,000-meter drilling campaign at the Florida North target to identify the continuation of the system. Assay results from the this drilling will be out within the next few months.

Below you'll find two aerial views of the Florida mine site. In the bottom photograph you'll get a closer look and can see the adit entrances.

Ore from the Florida mine is being trucked to the Mina Real production facility, which was built and commissioned in the summer of 2007. The Mina Real facility is currently processing about 200 tonnes of ore per day. The revenue from this small-scale operation has yielded significant cash flow for Rochester since August 2007, recently resulting in monthly sales in excess of one million dollars.

A second back-up power generator has recently been put into operation, which now provides the power capacity to operate when service from the main grid is disrupted. Downtime due to unforeseen infrastructure malfunctions will now be limited. Rochester has also completed the construction of a tailings pond and upgraded the road access to the mine and exploration sites.

A third, larger ball mill and an additional secondary crusher have recently arrived at the mill. These additions will enable the company to increase production at the Mina Real facility by 50% to 300 tonnes per day. Foundations for the mill and power supply are being integrated and the company is expecting to have this equipment operational by mid-2008.

The recovery rate for gold at the Mina Real mill is currently about 91%, which is a good number for Rochester's type of operation. The silver recovery rate, on the other hand, has only averaged between 41% and 46%. However, the company expects to increase its silver recovery to greater than 90% in the next few months.

Once Rochester ramps up the recovery rate for silver, the mill will begin receiving even higher-grade material from the Tajos Cuates system.

Based on current spot market prices, implementing these upgrades simultaneously should significantly increase monthly cash flows.

Rochester also says that it expects to lower gold mining and milling costs from $348 an ounce (gold-equivalent) to as low as $190 an ounce (gold-equivalent) by the third quarter of this year.

The cash flow generated from milling activities will allow Rochester to fund ongoing exploration and development activities without further share dilution.

Below you'll see some photographs from the Mina Real processing facility. The first is of the conveyor carrying crushed ore to a storage tank. The next is of the three ball mills. Last you'll see the tanks filled with agitators and thickeners used to separate the gold and silver from the rock.

There are several other photographs of the Mina Real processing facility to be seen by clicking the following link: http://www.rochesterresourcesltd.com/medSlideshow.aspx

To be continued tomorrow...

Gold Moves Higher on Iranian Rocket Tests

Gold regained ground on Wednesday as speculators resurfaced on news that Iran had test-fired nine long- and medium-range missiles, lifting the metal's safe-haven appeal in times of uncertainty.

Iranian General Hossein Salami, the air force commander of Iran's elite Revolutionary Guards, said the exercise would "demonstrate our resolve and might against enemies who in recent weeks have threatened Iran with harsh language."

Wednesday's war games were being conducted at the mouth of the Strait of Hormuz, a strategic waterway through which about 40% of the world's oil passes. Iran has threatened to shut down traffic in the strait if attacked.

Iranian state media showed footage of at least three missiles firing simultaneously, and said the barrage included a new version of the Shahab-3 missile, which officials have said has a range of 1,250 miles and is armed with a 1-ton conventional warhead. That would put Israel, Turkey, the Arabian peninsula, Afghanistan and Pakistan within striking distance.

- luke

ETF Securities Gold, Platinum Holdings Hit Record

ETF Securities Ltd. reported its holdings of gold and platinum rose to record highs in the week to June 29, while its palladium holdings increased 11%.

The fund, which issues exchange-traded securities backed by stocks of precious metals, said the amount of metal held for its physical gold ETF rose to a record 1.266 million ounces by June 29, against 1.194 million ounces the previous week.

Holdings for its physical platinum ETF climbed 8% to 394,000 ounces in the same period, up from 365,000 ounces in the week to June 22.

Its physical palladium ETF grew by 11% to 232,000 ounces from 208,000 ounces a week before, its highest since March 12, the fund said.

Holdings in its physical silver ETF were unchanged at 9.4 million ounces.

- luke

Australian Gold Production Drops 7% in 12 Months

Over the past 12 months, gold production in Australia, the world's third-largest miner, has fallen 7%.

Gold production is estimated at 231 tonnes—or about 7.6 million ounces—in the financial year ending June 30th. This estimate is down from a previous forecast of 243 tonnes due to the closure of old mines and below par output at some newer lodes across the outback.

Output in the 2006/07 year came to 249 tonnes, equivalent to about one-tenth of the world's production. Output for next year was also revised down to 256 tonnes compared with a previous forecast for 268 tonnes, although the growth rate remains at over 9%.

The drop comes as China flexes new-found muscles in gold as the world's top producer ahead of South Africa, traditionally the sector leader but also facing a decline.

- luke

South African Gold Output Down 10.1% in April

South African gold output fell 10.1% in volume terms, while overall mineral production declined 2.0% in April compared to the same month in the previous year. Statistics South Africa added that production of non-gold minerals also fell by 0.7% in April.

Mining output in South Africa has taken a hit after State-owned power utility Eskom struggled to provide sufficient power to mines, following a near collapse in the electricity grid in January, which led to a five-day countrywide mine shutdown. Eskom has since supplied around 90% to 95% power to mines in the country.

- luke

Tokyo Stock Exchange to List First Gold ETF

The Tokyo Stock Exchange plans to launch the nation's first bullion-backed, gold exchange-traded fund on June 30, in a bid to draw more investors and help enhance Tokyo as a financial center.

The exchange announced today that SPDR Gold Shares ETF, which is sponsored by a subsidiary of the World Gold Council, will be offered to investors and the end of the month. SPDR Gold Shares ETF is currently traded on the New York Stock Exchange as well as bourses in Mexico and Singapore.

The Tokyo bourse has been studying the possibility of listing such ETFs as a means of offering a broader variety of listed financial products and attract more investors.

A bill passed by Japan's parliament last week allowed for the creation of ETFs for commodities, and made it possible for banks and other firms to engage in emissions trading.

- luke

Chinese Jewelry Sales up 36% Yr-on-Yr

Growth of the jewelry industry in China has been developing much faster than anyone expected.

Since 2005, Chinese jewelry sales have increased by over US$3 billion, making China's jewelry sector the nation's largest consumer hot spot preceded only by real estate and automobile industry.

Recently published statistics show that sales of gold and silver jewelry have kept a forward progressing momentum in China over the past few years. During 2007, the value of Chinese gold and silver jewelry trade products totaled US$14.2 billion, up 36% for the year.

It was reported that there are now over 10,000 independent jewelry proprietorships throughout the mainland of China.

- luke

Top Five "Gold" Songs of All-Time

Just for fun...I put together a list of my top five favorite "gold" songs of all-time. Click on any of the song titles to be taken to a YouTube video of the song.

Rank	Artist	Song Title	Reason

5	Steely Dan	Your Gold Teeth	Awesome jazz/rock fusion typical of Steely Dan
4	Kanye West	Gold Digger	Cool beat and humorous lyrics
3	Beatles	Golden Slumbers	Helped to close Abbey Road
2	America	Sister Golden Hair	A buoyant tune with memorable lead guitar
1	Neil Young	Heart of Gold (live)	A soft, acoustic masterpiece

- luke

Canadian Gold Hunter

A little over a year ago, junior explorer Canadian Gold Hunter Corp. (TSX: CGH) signed a letter of intent with Almaden Minerals Ltd. (AMEX: AUU, TSX: AMM) to acquire a 70% interest in the Caballo Blanco gold property in Veracruz State, Mexico.

The Caballo Blanco (White Horse) property is located on the Gulf of Mexico roughly 60 kilometers north of the port city of Veracruz. The project consists of seven mineral concessions totaling over 15,000 hectares, roughly 10 kilometers wide by 15 kilometers long.

Infrastructure surrounding the area is excellent. The property is accessible by the Pan American Highway Main power grids and and a natural gas line also crosses the project area.

Caballo Blanco is a large, high-sulphidation epithermal gold system. High-sulphidation deposits are a result of fluids that have been channeled directly from a hot magma. These fluids interact with groundwater and form strong acids which rot and dissolved the surrounding rock leaving behind silica, often in a sponge-like formation known as vuggy silica. Gold and sometimes copper-rich brines that also ascend from the magma then deposit their metals within the spongy vuggy silica bodies.

Examples of major high-sulfidation gold deposits are the Yanacocha mine in Peru, which contains 13.4 million ounces of gold in 377.2 million tonnes grading 1.1 g/t gold and the Veladero mine in Argentina, which contains 11.4 million ounces of gold in 337 million tonnes grading 1.1 g/t gold.

Low-sulphidation epithermal gold systems have been well developed in Mexico. High-sulphidation gold deposits, however, have not. This is due in large to the fact that high-sulphidation systems tend to occur as large bulk-tonnage deposits, which require advanced technology to discover and mine, whereas the high-grade narrow veins typical of low-sulphidation deposits were more easily explored during Mexico's early mining history.

In the last decade, however, two significant high-sulphidation systems have been identified in Mexico and are currently in production. In 2007, the high-sulphidation Mulatos mine, owned by Alamos Gold Inc. (TSX: AGI), produced over 100,000 ounces of gold and the high-sulphidation El Sauzal mine, owned by Goldcorp Inc. (NYSE: GG, TSX: G), yielded over 300,000 ounces.

Canadian Gold Hunter and Almaden Minerals hope to develop the Caballo Blanco project into a similar operation.

Caballo Blanco covers three large areas of mineralization known as the Northern Zone, the Highway Zone and the Central Grid Zone.

Prior to Canadian Gold Hunter's earn-in option, drilling in the Northern Zone intersected 108 meters grading 1.14 g/t gold in drill hole CB-05-03, 92.7 meters grading 1.0 g/t gold in CB-06-01 and 76 meters grading 1.70 g/t gold in CB-06-03. The Central Grid Zone is a gold-rich porphyry target, in which drill hole CB-04-01 intersected 56 meters grading 0.84 g/t gold and 0.34% copper.

In November 2007, Canadian Gold Hunter initiated a modest 5,000 meter drill program to follow up previous testing of the three areas of mineralization. Since that time the company has reported assay results on 11 holes. The results from these holes can be seen below...

Drill Hole ID	Width (m)	Gold (g/t)	Silver (g/t)

07CBN-001	10.67	0.005	22.8
and	3.05	0.009	40.7
07CBN-002	9.14	0.10	28.3
and	216.41	0.60	3.1
08CBN-003	82.30	1.08	2.8
08CBN-004	94.49	2.09	1.4
08CBN-005	131.06	0.53	1.4
08CBN-006	10.77	0.03	425.7
08CBN-007	no significant intersections
08CBN-008	158.80	0.85	2.3
08CBN-009	50.30	0.66	5.9
08CBN-010	no significant intersections
08CBN-011	89.92	1.11	1.4

Initial drilling has been widely spaced and focused on the Cerro la Paila target area of the Northern Zone high-sulphidation gold system, which covers an area of some 20 square kilometers.

Two core rigs continue to drill the Cerro la Paila gold zone, which is targeted by a strong resistivity anomaly 800 to 900 meters in length and up to 450 meters wide. Detailed in-fill drilling will be undertaken after the full length of the Cerro la Paila gold zone has been explored by widely spaced holes.

Based on the drill results that have been published so far, it looks like there's a decent chance for Caballo Blanco to develop into a significant bulk-tonne grade gold project. We will continue to follow the Caballo Blanco story further in Gold World as the project advances.

Until next time,

Luke Burgess
www.GoldWorld.com

India Benchmark Gold ETF Sees Record Holdings

Physical gold held by the exchange-traded funds (ETFs) listed on the National Stock Exchange of India peaked to the highest level ever at 4.57 tonnes during May. The total gold by India's five gold ETFs (seen above) showed an approximate 10% rise in physical bullion holdings compared to April.

The rise in physical gold held by India ETFs was boosted by the Akshaya Tritiya festival, which took place on May 7th and 8th. Akshaya Tritiya is a traditional Indian holiday that celebrates the beginning of Treta Yuga, the second of four ages of man, and is recognized as the day that the Ganges River, the most holy and sacred river of India, descended to the earth from heaven. Indian tradition says that buying gold during the Akshaya Tritiya festival will provoke prosperity.

Reuters India reported that Sanjiv Shah, executive director at Benchmark Asset Management, the largest Indian gold ETF, believes that the months ahead may see continued rise in gold ETF purchases with weak stocks, high inflation and softer dollar drawing more investors to gold.

- luke

1Q 2008 South African Gold Production Falls 15.6%

South African gold production fell by 15.6% to 52,228 kilograms during 1Q 2008 compared to 4Q 2007 due to the national electricity emergency which effectively closed the gold mining industry from January 25th to 31st.

Since that time South African mines have been forced to operate with only 90% of their normal electrical requirement as Eskom, the major South African electricity public utility, has been unable to meet power demand and has rationed power to avoid a collapse of the electricity network.

Eskom has warned the power crisis may last for years and blames its problems on several factors including the failure of the government to invest in electricity generating plants, maintenance problems at its power plants and low coal supplies.

On a year-on-year basis, the rate of decline in gold production was 16.8% in the first quarter of 2008. Overall mining output fell by 22.1% in the quarter—its lowest growth since the second quarter of 1967—largely due to the electricity shortages that forced mines to halt production.

South African gold producers has felt the pinch of lower production since the beginning of the year. AngloGold Ashanti Ltd. (NSYE: AU) has shed 30.8% while Gold Fields Ltd. (NYSE: GFI) has given back 27.7% since mid-January.

- luke

Gold Mining in Brazil

Believe it or not, the Brazilian equivalent to the Dow Jones has skyrocketed 306,622% in the past 15 years alone.

The Bovespa Index is the main indicator of the Brazilian São Paulo Stock Exchange and reflects the exchange's largest and most heavily traded stocks. The Bovespa has increased almost unbelievably from 24 in April 1993 to almost 74,000 last week.

By comparison, the Dow Jones Industrial Average has increased a relatively meager 317% over the same time period and 4,531% in its nine decade history dating back to 1929. That means, throughout its entire history, the Dow has tasted only about 1% of the growth experienced by the Brazilian stock market since 1993.

The massive boom in the Bovespa stems from the development and exploitation of Brazil's treasure trove of natural resources and sound macroeconomic policies that have bolstered international reserves to historically high levels, reduced public debt, and allowed a significant decline in real interest rates.

Brazilian GDP is now the highest of Latin America with large and still growing agricultural, mining, manufacturing, and service sectors, as well as a large labor pool.

Major export products include timber, aircraft, coffee, automobiles, soybean, iron ore, orange juice, steel, ethanol, textiles, footwear, corned beef, electrical equipment, and gold, which has recently become a major source of income for several countries of the Amazon region, especially Brazil.

Gold Mining in Brazil

With over 2,500 currently known gold occurrences within the country, Brazilian gold mining, development, and production is expected to continue increasing significantly in the foreseeable future, presenting us with a river of investment opportunities.

Over the past several months, I have been following many Brazilian gold projects. One of particular note is the Cuiú Cuiú project, owned by Magellan Minerals Ltd. (TSX-V: MNM), a recently listed and well financed Canadian-based junior exploration company focused on mineral exploration and development in the state of Para in northern Brazil.

The Cuiú Cuiú district is located about 180 kilometers southwest of the small city of Itaituba, the regional hub for the Tapajós Mineral Province in northern Brazil.

In its heyday, from 1972 to 1992, the Cuiú Cuiú district was a significant alluvial gold producer, yielding between 1.5 and 2 million ounces, and part of the largest gold rush in history. It's been estimated that over a million people rushed to northern Brazil to seek their fortunes during this gold rush. Approximately 300,000 of these miners, or "garimpeiros", ended up working the rich alluvial deposits draining into the Tapajós River. It's estimated that 5,000 to 10,000 people lived and worked in the Cuiú Cuiú area alone.

This frenzy of gold exploration activity attracted the attention of both major and junior mining companies, and in the mid to late 1990's, several major mining companies as well as a handful of juniors arrived on the scene. During the period from 1996 to 1999, TVX Gold, Phelps Dodge, Rio Tinto and Altoro Resources all carried out work at Cuiú Cuiú. This work included gridding, soil and rock chip sampling and a small amount of shallow drilling. However, due to the inability of any of these companies to make satisfactory agreements with the majority of the local miners, and also due to the fall of the gold price in 1998, interest in the area waned.

In response to rising gold prices in 2004, Magellan Minerals acquired the exploration rights over a 47,000-hectare (116,000-acre) area from the Brazilian National Department of Mineral Production. A year later Magellan reached an agreement with the owners of the traditional surface rights whom have historically worked and lived at Cuiú Cuiú to explore the area.

To date the company has identified a mineralized structure that stretches for more than 17 kilometers across Magellan's license area. The company has found five major gold-in-soil anomalies as well as several minor anomalies along this zone. The largest of these anomalies is the Central anomaly, which is approximately 450 meters wide and extends for 2 kilometers.

In late 2006, and prior to going public, Magellan completed a small Phase I 10-hole, 2,700 meter drill program at the Central anomaly. This initial exploration program returned significant near surface, bulk tonnage grade drill results including 159.0 meters grading 0.91 g/t gold in hole CC-02-06 and 134.5 meters grading 1.10 g/t gold in hole CC-03-06.

One year later the company initiated a Phase II exploration drill campaign that was increased to 7,000 meters after Magellan raised $11 million with its IPO in February. This Phase II exploration program has been recently completed and the final drill results were just released this morning. Highlights from the entire 41-hole drill program include:

65.8 meters grading 3.54 g/t gold in hole CC-13-07, including 6.1 meters grading 23.53 g/t gold;
179.6 meters grading 1.06 g/t gold in hole CC-15-07;
174.2 meters grading 1.46 g/t gold in hole CC-16-07, including 59.0 meters grading 2.86 g/t gold and 2.0 meters grading 26.15 g/t gold;
220.7 meters grading 2.02 g/t gold in hold CC-32-07, including 9.8 meters grading 17.91 g/t gold and 4.2 meters grading 25.69 g/t gold; and
101.1 meters grading 0.79 g/t gold in hole CC-38-07.

These drill results suggest a large, untapped gold resource. To date, Magellan has spent over $2 million on exploration at its Cuiú Cuiú project. Based on Magellan's success so far at Cuiú Cuiú, I expect that the company will begin a Phase III exploration drill program within the next few months followed by an NI 43-101 resource estimate calculation. Magellan Minerals is a company that I will be following closely over the next few months.

Brazil's gold and mining sector is going through a phase of real growth. New mine projects and expansions in progress are expected to ensure that the country retains its leading position in global mineral commodity production for years to come. Brazilian gold explorers like Magellan Minerals should do very well over the next few years.

Until next time,

Luke Burgess
www.GoldWorld.com

P.S. I'm currently putting together a new report on Brazilian gold that I will be offering to all Gold World subscribers for free. Keep an eye out for that report in the next two to three weeks.

P.S.S. My colleague Sam Hopkins has been bullish on Brazil since most other international newsletters were chasing down the China story. This has given his readers a pole position on superior returns in this underappreciated emerging market mammoth. Sam is fluent in Portuguese and is going to Brazil later this year to drum up some recommendations and meet with companies. He told me this morning that he's already got a few triple-digit gains in Brazilian stocks. To learn how to invest with Sam in Brazil, simply click here.

Oil Price Correction

EDITOR'S NOTE:

The following is a short excerpt from last week's issue of Secret Stock Files. And even though the piece does not deal directly with gold, I wanted to share it with you because I know that many Gold World investors also dabble in oil stocks.

- Luke

Oil Price Correction Coming: Time to Take Profits

Crude contracts for June delivery hit an all-time high of $127.82/bbl this week in a rally that has advanced prices over 35% higher since the beginning of this year alone.

The rise in global oil prices over the past 6½ years has been largely based on worldwide supply/demand fundamentals. Oil prices have rocketed from $20/bbl in December 2001 as the world's largest oil fields and main suppliers struggle to increase production to meet growing demand and new oil field discoveries capable of significant production are very few and extremely far between.

I suspect that the recent run-up we've seen over the past few weeks, however, has had more to do with global financial market volatility than classic supply/demand fundamentals.

In the past six weeks alone, oil prices have spiked 28% higher as many major global companies reported severe fiscal losses in the 1st quarter of 2008. Among the biggest losers was Dow component and provider of insurance and financial services, American International Group, Inc. (NYSE: AIG), which dropped $7.8 billion in the 1st quarter.

Two weeks ago, the US Department of Commerce reported that initial 1st quarter figures showed a meager 0.6% in GDP growth. Those serving the Plunge Protection Team were quick to point out the small step forward, but failed to mention that quarterly inflation out paces this 0.6% increase, and therefore negates growth. Final GDP figures should be released later this month.

Meanwhile the US Department of Labor said today that jobless claims increased by 6,000 last week to 371,000 indicating further labor market weakness. And new data showed US foreclosure filings surged 65% in April since one year ago.

Why It's Time for an Oil Price Correction

Yes, we're in the eye of the storm, and I expect things to only get worse before they get better. However, I believe that oil prices have moved a bit too far from their supply/demand fundamental roots. And considering the rapid forward progression in the past few weeks, I think it's high time for a good old-fashioned correction.

Considering crude's momentum, we'll probably continue to see short-term strength...maybe up to $130-$135/bbl. But in the next few weeks I expect oil prices to pullback significantly. I believe that we'll see a pullback all the way back to near $100/bbl in a +20% correction.

What this means is that you'll want to start taking some of those big profits that you've made in your oil stocks over the past few weeks. Besides, it's best not to get too greedy anyway. The correction, of course, also means that you'll want to hold off on establishing any new positions in oil companies for a while.

I noticed this morning that even OPEC, now the world's source of two of every five barrels of oil, has begun signaling that oil is becoming overbought. The 13 country strong oil cartel released its Monthly Oil Market Report this morning that suggested a significant decrease in global oil demand growth during 2008.

"Oil demand growth is expected to experience the typical seasonal low consumption in the second quarter," the report said. "This year's summer driving season is not likely to show its normal annual growth due to the anticipated weaker gasoline demand in the US."

Over the long-term I still remain very bullish on oil prices as the supply/demand fundamentals and the connected imbalance will sooner or later come back into play. However, I think we'll see a decent set-back in the next few weeks. So, don't be afraid to hit the cash register on your oil stocks at this point. Take your profits now, and jump back in at lower levels.

Remember we're only here to court these stocks, not to marry them. Don't be afraid to break their heart.

Until next time,

Luke Burgess
www.GoldWorld.com

P.S. My colleague Ian Cooper is on an absolute tear with his oil plays in the Pure Energy Trader service. His tight-knit group of Pure Energy Traders just closed their 28th straight winning trade since November 30th. Each one is averaging 60%. If you would like to read more about Ian's success, and start profiting right alongside him, just click here.

Platinum Hits 2-Month High of $2,160/oz

Platinum prices jumped to a 2-month high today reaching $2,160 an ounce on concern supplies may fall short of demand as production declines in South Africa, the world's biggest producer of the metal.

Power failures have hampered mine output in South Africa, and production in the country may drop 10 to 15% this year.

Consumption is expected to exceed production by at least 400,000 ounces this year and the most precious of precious metals may test the $3,000 an ounce level within the next few months.

The metal, used in jewelry and pollution-control devices in cars, climbed 1.4% this week. Platinum prices have more than doubled in the past three years as demand outpaced supply.

-luke

Investing in Physical Gold

There is a herculean mountain of inaccurate information floating around about investing in physical gold bullion.

Among these erroneous concerns is the belief that storing physical gold is a difficult and that physical gold bullion is illiquid, making it an unwise investment.

Since it is the main objective of Gold World to provide fair-minded and balanced gold investment advice, I would like to take some time today to address both of these myths and hope to shed new light on these subjects.

Investing in Physical Gold Myth #1:

Storing Physical Gold is a Problem

I am unsure how this belief originated. My guess is that when considering investing in physical gold people initially think that they'll have to store and keep safe large bricks of gold, like those kept (supposedly) at Fort Knox and seen in Hollywood movies.

And, sure, if you had 50 or 100 of these large 12.5 kilogram gold bricks (like the ones seen below), you may want to build a small fortress to store your bullion investment.

On the other hand, the street value of 100 of these large cast gold bricks right now is about US$40 million. And I'm assuming that if you have $40 million to invest in physical gold, you probably won't have a problem shelling out the cash to build a safe storage stead.

Most speculators in the world will invest less than $1 million in gold coins and bars. And storing up to this amount of physical should not pose much of a problem.

The truth is that gold is very heavy. In fact, it's over 70% heavier than lead. The specific gravity for gold is 19.32, which means that gold is over 19 times heavier than an equal volume of water. Meanwhile, the specific gravity for lead is 11.34.

What this means is that one ounce of gold is probably much smaller than most people think. The actual size of a one ounce gold bar minted by Credit Suisse is approximated in the image below.

Finding a secure place to store up to 1,000 of these small one ounce gold bars should not be difficult. My suggestion is to simply buy a good safe and keep it in a place no one would ever think to look...like in the floor of your basement, or inside one of the walls of a closet, or even buried in your backyard.

I would recommend against keeping your bullion in a bank. Most banks are open only a few hours a day, limiting your access to a safe deposit box. Moreover, for Americans, gold kept in a bank is susceptible to confiscation from the US government, which actually happened in 1933.

Storing physical gold is not difficult, unless you're storing a ridiculous amount of it. Buy a good safe, and keep it out of sight.

Investing in Physical Gold Myth #2:

Physical gold is illiquid

Gold is not the most liquid of investments. But is much more liquid than most people think.

Gold's liquidity has increased significantly over the past few decades. During the gold bull market of the 1970s, buying and selling physical bullion was several times more limited than it is today.

The two most popular ways to buy and sell physical gold are through 1) brokers, and 2) private individuals.

There are many more gold brokers today than there were just a few years ago. Physical gold coins and bars can be purchased from and sold to many online brokers, including Kitco and AmeriGold. These brokers have made buying and selling physical gold through them as easy and attractive as possible by offering near instant payments and a guaranteed sales prices.

Most brokers will sell gold slightly above spot prices (unless you buy a lot) and buy gold slightly below spot prices. But when buying and selling gold to private individual, prices are almost always over spot prices.

Gold sold on online auctions, such as eBay, generally sell for over spot. I saw several one ounce gold bars on eBay that sell this morning for $900 a piece. Meanwhile, the official cash spot price is about $882 an ounce.

While gold is certainly not the most liquid of investments, investors many more buying and selling options than they did just a few years ago.

Let me leave you with one tip that will increase the liquidity of your physical gold investments...

Buy Very Small Gold Coin and Bars

Gold coins come as small as 1/10 of an ounce, and you can get gold bars as small as 1 gram. These small gold coins and bars offer higher liquidity than their larger cousins.

A 12.5 kilogram gold bar is a lot of money for many people and comes under the category of big ticket items. Such bullion bars would really be sold to dealers who have a high cash flow. And it is much easier for private individuals to afford the smaller gold bars and coins, hence increasing their marketability.

Gold coins seem to sell the best. The Canadian Maple Leaf, American Eagle, and Sovereigns are always popular with buyers and consequently very easy to sell for cash.

Until next time,

Luke Burgess
www.GoldWorld.com

Editor's Note: About a year ago, Greg McCoach began telling readers about a special situation taking place in Northern China. A North American gold company landed a find so massive that investors could pick up an ounce for just $57. At that time, the stock was trading for $1.17 a share. Today the company sells for $2.48 - already turning every $10,000 into more than $21,197. But this thing is just getting started. Check this out....

Iamgold Increases 1Q Net Earnings by 205% yr/yr

Canadian gold-miner Iamgold Corp. (NYSE: IAG, TSX: IMG) increased its 1st quarter net earnings by 205% year-on-year, to $34,4-million, lifted by higher gold prices and an increase in output.

Iamgold produced 234,000 ounces of gold during the quarter, compared with 219,000 ounces one year ago, and realized an average gold price of $899 an ounce, 39% higher than in the same period of 2007.

Production costs increased to $476 an ounce, from $416 an ounce in the year-ago period, mainly owing to increased royalty costs because of the higher gold price and weaker US dollar. However, the effects of higher fuel prices were reduced by "operating efficiencies", the firm said.

Iamgold, which reported a 17.5% decline in gold reserves over 2007, spent $16.7 million on exploration and development during the quarter.

Iamgold is faced with the challenge of either discovering or buying additional gold resources and reserves, if it is to replace output from several aging mines and take better advantage of record gold prices.

The company has also run into difficulties at two of its planned projects this year, after the French government said it would not issue a permit for the firm's Camp Caiman project, in French Guiana, and Ecuador's constitutional assembly approved a mandate earlier this month, halting work on most mining projects in the country for as long as 180 days.

- luke