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

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: 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

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...

Good Investing,

Greg McCoach
Editor, Gold World

While some of you may know Ian Cooper from past options trading services, his 4,500% cumulative gains of 2007, and gains such as these...

• Fremont General September 2007 12.50 puts - 291% in 16 days
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• New Century January 2008 25 puts - 214% in 16 days
• Centex January 2008 25 puts - 207% in 40 days
• Countrywide January 2008 27.50 puts - 203% in 69 days
• Thornburg October 20 2007 puts - 188% in 6 days
• MGIC Investments December 35 puts - 175% in 80 days
• Capital One January 2008 65 puts - 160% in 59 days
• Accredited Home September 2007 7.50 puts - 141% in 4 days
• Hovnanian November 2007 17.50 puts - 136% in 13 days
• Radian Group August 2007 60 puts - 122% in 19 days
• Standard Pacific September 2007 15 puts - 111% in 2 days
• Autonation January 2008 20 puts - 105% in 49 days
• New Century January 2008 25 puts - 89% in 1 day

...he's decided to launch a new options service, Options Trading Pit, which will look to profit from the market's demise and well as its upside.

In fact, he's been beta testing new strategies in the Options Pit blog, sitting with gains like these:

• Expedia Inc. October 22.50 put: 189% in 31 trading days
• Coca Cola Enterprises November 20 put: 271% in 31 trading days
• Masco Corporation October 20 put: 92% in 27 trading days
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Are gains like these easily attainable? You bet... especially in today's bearish environment.

Options Trading Pit launches shortly. Stay tuned.

Now, for today's Gold World...

Investing in Copper: What to Buy as Copper Price is Forecast to Spike

It was September 2007 when Citigroup analysts Alan Heap and Alex Tonks called for the spikes in coal and iron ore prices "because of demand from China and congestion at ports in Australia and South Africa."

And they were spot on.

So when the two analysts upgraded outlooks for coal and copper, I wasn't going to argue.

The two analysts just increased their price forecast for copper from $3.50 to $5 a pound for 2008, from $3 to $5.50 a pound by 2010, and raised their long term price forecast from $1.45 to $1.60 a pound, asserting that the copper market will "remain very tight until 2011" and on a "looming global power crunch."

Again, who am I to argue? They nailed the coal spike that Pure Energy Trader and SC Trading Pit readers benefited from.

Their analysis further noted that, "lower than expected supply growth will continue as a key factor contributing to tight markets and high prices. Disappointing supply growth has been mainly at existing operations (rather than new projects etc). With negative surprise likely to continue, mine production is forecast to be 900kt less than capability in 2009."

Expected 15% per Year Demand from China

They also forecast 15% annual copper demand from China, as the country continues building out infrastructure, such as:

• The rail network, which is expected to double over the next five years;
• Expressways, which are expected to increase 75%;
• Rural roads, which are expected to increase 66% by 2010;
• Airports, which are expected to grow by 70% by 2010;
• And seaports, which are expected to grow another 280%, according to MineWeb.com.

And that's on top of supply issues in Chile and Central America, water issues in China and Latin America, and costlier fuel and freight cost.

Why Southern Copper (PCU) is a Buy

Fortunately, equity exposure to copper is inexpensive. Southern Copper (PCU), post-split, trades at only $33. With more than 49 million tons of copper, PCU has more copper in its reserves than any other publicly traded company, including Freeport-McMoRan (FCX).

Even nicer, Southern Copper offers a dividend yield of about 6%, a hefty dividend as compared to peers like FCX, which pays about 3.6%, and Rio Tinto, which pays about 2.3%.

In our current economic meltdown, it's best to diversify with stocks that can bring in consistent money to help offset hyper-priced food and energy bills. With the expectation of higher copper cost, plus dividend payouts, we expect further upside in stocks like PCU.

The eventual goal of every investor is to go from supporting a portfolio to having a portfolio that supports the investor. That's part of the reason we love dividend stocks. They produce a steady stream of income despite the direction of the broader market.

Good Investing,

Ian L. Cooper
http://www.goldworld.com

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In case you missed our other investment opportunity highlights, here's what we covered in Wealth Daily, Gold World, Energy and Capital, and your free blogs for the week of July 7, 2008.

IndyMac, a $0 Stock?: The Nail in the Coffin...
In my last position at a competing company, I recommended a buy on IndyMac January 2009 20 puts. And I wasn't the only one that saw the coming IndyMac disaster.

Lehman Breaks $20... Hands Us 143%: We nailed it... Plus, What to Watch for...
On June 3, 2008, Lehman had just broken $30 support before catching a wave of buying. But you'd have to be blind not to see that Lehman was in real trouble. It's why we recommended buying the October 25 put (LYHVE) right here in your free options blog.

Gold Moves Higher on Iranian Rocket Tests: 'Can Hit Isreal'
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.

Progress Or Complacency?: How The G8 Screwed Us Again On Climate Change
So the G8's global warming discussions are officially over. What did they decide? Well, they made a statement that calls for cutting global greenhouse emissions in half by 2050.

Investing in Solar Installers: The Other Side of Solar
It's fair to say that, so far, solar installers have been the red-headed stepchild of the renewable energy investment world. Their counterparts, module manufacturers and silicon suppliers, have been in a noticeably different boat. And rightly so.

Peak Oil Confusion - A Game Whose Time Is Up: Taking IBD to Task
Confusion breeds apathy, and that's not something we can afford anymore. I believe that the impending energy crisis is too urgent to allow misinformation about peak oil to go unanswered. So I am attempting to set the record straight.

Haynesville Shale: Two Stocks Rushing for Haynesville Shale Gas
Another week, another record. Hopefully by now you've gotten used to seeing record crude prices. As usual, we started to see a sell off after nearly reaching $145.85 a barrel last Thursday. This morning, crude dipped over six dollars a barrel before bouncing back over $141 per barrel this afternoon.

Investing in BBVA: Profits Across the Pond
MADRID, SPAIN: You can't blame Spaniards for playing to win. They're on a roll, with a European soccer championship and Wimbledon title in just the past few weeks. Now Spanish players are surging into games of chance, and their top opponent is the slowing economy.

ETF Options Trading: Make Another 58% as the World Goes Mad
Behind the unemployment stats, layoffs are surging, as corporate profits sink. According to the Wall Street Journal, UK homebuilders like Barratt Developments and Taylor Wimpey announced that, together, they'd cut 2,000 jobs.

Insiders Buy at 2-Year Lows
What's interesting is that the last time insiders bought, the stock ran from about $21 to more than $24 between March and April 2008. Hoping the stock will do the same off recent lows, we're recommending a buy. Double bottom support doesn't hurt either.

In preparation for our all-options launch, we're warming up in The Options Pit blog.

How's the beta testing going? You tell me.

• Expedia October 22.50 put: 178% in 24 trading days
• Coca Cola Enterprises November 20 put: 214% in 24 trading days
• Masco Corporation October 20 put: 75% in 21 trading days
• Lehman Brothers Holdings October 20 put: 150% in 21 trading days
• UBS AG September 2008 22.50 put: 165% in 15 trading days

...and we're just warming up for the all-options launch. Stay tuned for more.

Today's Gold World: Where to Invest for the Next Bull Run

In January 2008, solar companies were running amok on $96 oil. But if you took a closer look, you'd have seen that the industry was running out of power, and fast, unless they could build up polysilicon supply to keep up with demand.

Thanks to a desperate influx of spending along with the insane increase in demand, the polysilicon market was in the midst of a veritable feeding frenzy. Any company with polysilicon supply had a license to print money.

In 2008, oil rallied above $143 a barrel on supply and demand issues. Oil companies, including domestic oil producers, skyrocketed as a result.

Supply and demand issues even forced coal prices to historic highs this year, taking coal-related stocks along for the ride.

It's basic economics 101. Any company with supply in a market, where there's heavy demand and low supply, has a license to print money. The same thing is happening in the aluminum industry.

Aluminum Could Skyrocket to $4,000 a Ton

Word on the Street is that tight supply and heavy demand could push the price of aluminum to an average $3,150 a tonne, or $1.43 a pound in 2008, and $3,525 a tonne, or $1.60 a pound in 2009. And it could rise as high as $4,000 a tonne over the next two years.

That follows the 2007 average of $2,640 a tonne, or $1.20 a pound.

And it's mostly thanks to the structural boom in Chinese demand, which accounts for some 80% of global demand over the last three years. That growing demand, though, is being met with low supply.

Worse, according to UBS, the world aluminum market is heading for a 200,000-tonne deficit this year and in 2009, as coal supply becomes scarce and producers cut output. "We expect market fundamentals to continue to tighten as global restraints on energy supply grow and impinge on the aluminum industry," they said.

Aluminum supply is also struggling to keep pace with demand because producers don't have access to the electricity needed to create the metal. And as a result, historically high aluminum prices are expected to rise another 33% over the next two years.

What to Buy as Supply Remains Tight

Some of the companies on SC Trading Pit's radar screen of aluminum stocks include:

• Alcoa (AA) at $33.87
• Alumina Inc. (AWC) at $17.06
• Aluminum Corporation of China (ACH) at $28.33
• BHP Billiton (BHP) at $80.20
• Century Aluminum (CENX) at $61.69

But the team is currently doing its due diligence on these aluminum-related stocks, including an under the radar stock that trades at only $7.90. Stay tuned. SC Trading Pit is looking to release the stock shortly.

Good Investing,

Ian L. Cooper
http://www.goldworld.com

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In case you missed our other investment opportunity highlights, here's what we covered in Wealth Daily, Gold World, Energy and Capital, and your free blogs for the week of June 30, 2008.

BIS: Global Economy Near a "Tipping Point": The Unsustainable has Run its Course
According to a report released today by the Bank for International Settlements (BIS) the global economy has reached a "tipping point". The result says the group may be a far deeper crisis than is expected and a bout of deflation in the world's biggest economies.

Dear President Obama: Signed, William H. Gross, Ordinary Citizen
"You have inherited a mess. Your predecessor, fixated on emulating a former Republican icon from a far different economic era, chose to emphasize tax cuts for the rich and excessive consumption for all Americans."

Oil Speculators Are Not to Blame: But a "dearth" of new supplies are...
For weeks, oil speculators have been blamed for skyrocketing oil prices... but it's not their fault. It's a supply and demand issue.

Caution: High Risk Trade
Modifications suggest included further optimizing the social project in the area, mitigating the impact of open vein deposit in the affected areas of the Imataca, and improving the remediation plans at the end of the mine life as well as remediate the existing environmental damage caused by illegal miners.

The 2008 Oil Forecast
The stock was recently upgraded from "speculative buy" to "buy" with a $10 near-term price target on news that the company successfully drilled its Costayaco-4 well in the Costayaco discovery in southern Colombia.

Uranium Mining Stock: Buy and Hold American Uranium
In just two decades the world's demand for electricity is projected to nearly double! To meet this rising demand, the worldwide power sector will need to add an estimated 4,800 gigawatts of new electrical capacity to the global grid. To put that into perspective, a city the size of San Francisco requires about 1 gigawatt of electricity to function.

Investing in Algae Biofuel: The Only Biofuel that Can Take on Oil
When the price of oil rises just one dollar, the Pentagon's fuel expenses climb an astounding $130 million. So the $50 rise in oil prices over the past six months has taken over a half billion dollar toll on the U.S. government. And that's on your dime.

ANWR Drilling: Will ANWR Oil Production Come Too Late?
There's a new game being played in the media. From what I understand, the rules are easy. Simply pick somebody (other than yourself, of course) to blame for oil prices. Then, you can watch as the blame is bounced around. Unfortunately, there's no way to win the game since the blame goes back and forth repeatedly.

Investing in China: Warren Buffett's New Friend in China
The stock markets in Shanghai, Shenzhen, and even the technically-foreign Hong Kong exchange are hurting since global credit worries yanked down buoyant investor confidence last fall.

Jim Rogers on Oil and the US Dollar: What Jim Rogers Is Advising Now
Also not helping our oil woes, OPEC President Chakib Khelil is out predicting $170 a barrel before the end of 2008. According to Bloomberg, Khelil said, "Oil prices are expected to reach $170 as demand for fuel is growing in the U.S. during the summer period and the dollar continues to weaken against the euro.''

Consider this: A single kilogram of uranium can yield approximately 20,000 times as much energy as the same amount of coal. This makes nuclear energy remarkably more efficient compared to current electricity generation.

A typical 1,000 megawatt electrical coal-fired power plant has a fuel requirement of about 3,200,000 tonnes of black coal a year.

A nuclear power reactor of the same capacity, has an annual requirement of only 27 tonnes of fuel.

Producing this amount of uranium fuel requires the mining of between 45,000 and 70,000 tonnes depending on the grade of ore. This yields about 200 tonnes of uranium oxide concentrate which is sold and enriched to yield the 27 tonnes of actual fuel.

The US Department of Energy reports nuclear power costs 1.72 cents per kilowatt-hour (including operations and maintenance costs). Compare that to:

• Coal at 2.37 cents per kilowatt-hour;
• Natural gas at 6.75 cents per kilowatt-hour; and
• Oil at 9.63 cents per kilowatt-hour

The bottom line is that nuclear energy is almost guaranteed to make a comeback. And with a troublesome supply/demand imbalance, we are at the beginning stages of a massive bidding war in uranium.

And that makes for a great opportunity to invest in uranium mining stocks.

The Uranium Mining Stock To Invest In: American Uranium Corp. (OTCBB: AUUM)

	Company	American Uranium Corporation
	Exchange: Symbol	OTCBB: AUUM
	Share Price	~$0.57
	Market Cap	~$26 million
	Website	www.AmericanUraniumCorp.com

Investment highlights:

• The stock is a U.S. uranium pure play.
• The Reno Creek project contains 15.7 million pounds of NI 43-101 compliant U3O8 resources.
• Reno Creek has two historic positive feasibility studies completed.
• An Underground Injection Control Permit for Class I Injection Wells for the Reno Creek project was recently obtained from the Wyoming Department of Environmental Quality.
• The Pine Tree project contains 8.4 million pounds of historic U3O8 resources.
• Both projects are amiable to In Situ Recovery (ISR) uranium mining.
• ISR uranium production is expected to begin by 2012.

American Uranium Corp. offers investors a pure investment play in what is considered to be the most prestigious undeveloped uranium project in the United States.

From this base, the company plans to become a significant participant in US uranium production by 2012.

Let me give you some more details on American Uranium's two advanced-stage uranium mining projects.

The Reno Creek and Pine Tree Uranium Mining Projects

The 18,000 acre project is located in the world-class Pumpkin Buttes uranium district of Wyoming's Powder River Basin.

The State of Wyoming has a long history of uranium mining and is still the largest uranium producer in the United States. Recent estimates suggest that Wyoming contains approximately 600 million pounds of uranium oxide (U3O8) reserves, which represents about 40% of the known uranium reserves in the entire US. Wyoming's history of uranium mining provides a solid business climate and American Uranium's focus on uranium properties in Wyoming is more than well-justified.

All of the critical infrastructure—including paved and gravel access roads, power lines, and water—needed to support the area is already in place. American Uranium's Pine Tree and Reno Creek properties neighbor other distinguished uranium projects, including AREVA's Christensen Ranch project and Cameco's Smith Ranch mine/plant, which is the largest uranium production facility in the US yielding about 2 million pounds of U3O8 per year. Both projects are less than a half-hour drive away from Pine Tree and Reno Creek.

Uranium mineralization on the Reno Creek property has been known to be present for several decades. Since the 1950s, tens of millions of dollars have been invested into the project with extensive exploration and testing. American Uranium has acquired the bulk of the most important data from the historic testing campaigns. This data includes evidence that shows Reno Creek is amiable to In Situ Recovery (ISR) uranium mining—the most cost efficient and environmentally friendly method to extract uranium from the ground—and two positive feasibility studies.

In January 2008, American Uranium completed a National Instrument 43-101 Technical Report that estimated the presence of 10.8 million pounds of U3O8 on the Reno Creek project.

Subsequently, a second independent NI 43-101 report documented the resources in the southwest extension of the Reno Creek deposit. This estimate showed an additional 4.9 million pounds of U3O8 across the entire project.

In total, American Uranium's Reno Creek project contains 15.7 million pounds of U3O8 resources.

The Pine Tree uranium trend is a series of satellite deposits near Reno Creek with an historic resource of another 8.4 million pounds of U3O8 based on extensive drilling by previous owners. This resource was estimate before, and therefore not compliant with, National Instrument 43-101 standards. However, there is little to no reason to doubt the validity of this resource estimate.

In total, American Uranium's Pine Tree and Reno Creek projects contain historic and current resources of 24.1 million pounds of U3O8. Compare that to Cameco's Smith Ranch project—again, the largest uranium production facility in the United States—which has 13.3 million pounds of U3O8 reserves.

American Uranium recently obtained the Underground Injection Control Permit for Class I Injection Wells for the Reno Creek project from the Wyoming Department of Environmental Quality (WDEQ).

This permit was obtained from its previous owner by assignment in accordance with WDEQ regulations and process. The permit has a ten year lifetime and will be renewed before its June 2008 expiration date.

The Underground Injection Control Permit is one of three major permits/licenses needed for development of the Reno Creek project. The other two are WDEQ Mine Permit and US Nuclear Regulatory Commission (NRC) license for Uranium In-Situ Recovery mine and processing plant. American Uranium anticipates the submission of the NRC and WDEQ applications during the fall of 2009.

For now, the company will drill 18 hydrologic test wells at Reno Creek this summer for baseline groundwater characterization. Baseline environmental studies and preliminary well-field and processing plant design work will also be completed over the next few months.

American Uranium's principal focus over the next few years will be to meet its contractual obligations under the joint-venture agreement with Strathmore Minerals and to further expand the resource base of the both Reno Creek and Pine Tree projects.

To facilitate meeting these financial obligations, American Uranium plans to build an institutional following for our projects and securities. The company also recently said that it was, "holding discussions with potential Asian and other strategic partners with a view to securing funding. " However, no partnerships have been reported yet.

American Uranium anticipates to have the Reno Creek and Pine Tree projects into production by 2012. After the initial production phase, we expect the Pine Tree/Reno Creek complex to develop into a project that rivals Cameco's Smith Ranch project. This will launch American Uranium's stock.

American Uranium Mining Stock Conclusion

American Uranium has experienced a recent decline in share prices. However, this decline is more a reflection of the general state of the capital markets and correction in uranium prices than the company's performance, given the progress made during the past year.

As mentioned above American Uranium's two current projects show robust resource estimates that already well exceed the largest uranium producing facility in the United States. The company is making moves to fast-track the Pine Tree/Reno Creek uranium complex into production within the next four years and is well positioned to take advantage of the strategic opportunities that they have secured.

This is not a trade... it's an investment. We recommend holding AUUM stock for the long-term. Buy the stock and put it away.

For more information on American Uranium, visit the company's website at: www.AmericanUraniumCorp.com

Good Investing,

The Gold World Research Team

P.S. You don't need to buy a bunch of physical bullion to make a fortune from today's metals bull market. And the fact is this: Investors who'll end up making the most profit will be those who've put their money into in the right junior mining companies. Of course, finding the 'right' junior stocks to invest in is the tricky part. However, Greg McCoach is here to help. To find out more about how Greg can help you find the stocks and profits you're looking for, just click here.

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

At the time, Venezuela refused to grant a permit to KRY for the Las Cristinas mine after deciding not to grant licenses for open-pit mining for gold, diamonds and coal. Instead, they opted to step up oversight on the mining industry. Citing ecological damage for the move, Venezuela dashed KRY's hopes to mine in the nine million acre reserve.

But that was in May.

Today, shares of Crystallex may be a buy after the Venezuelan government said it was willing to reconsider the cancellation of the permit for the Las Cristinas project. In this release, the company said it was invited to a meeting by representatives of the Ministry of the Environment, and was told that possible modifications of the Las Cristinas project could result in an issued permit.

Even better, from the minutes from a National Assembly committee meeting, Crystallex learned that representatives from the Ministry of Mines "confirmed support" for the company.

While nothing is set in stone just yet, so far the news is good for the company and shareholders of the beaten down stock. Keep it on radar.

Good Investing,

Ian L. Cooper

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In case you missed our other investment opportunity highlights, here's what we covered in Wealth Daily, Gold World, Energy and Capital, and your free blogs for the week of June 23, 2008.

Platinum Mining Companies: Zimbabwe Set For a New $400 Million Platinum Mine
Platinum is extremely rare, occurring at only 0.003 parts per billion in the Earth's crust. This makes the most precious of all precious metals about 30 times rarer than gold. In fact, it's so rare that if all the platinum in the world was poured into one Olympic-size swimming pool it would scarcely be deep enough to cover your ankles.

The Big Picture on Q2 2008, Part 2: Commodities and Renewables Charge While Market Tanks0
In part 1 of this series, we reviewed the trends in financials, fossil fuels and electricity. This week, we take a look at renewables, food and fertilizer.

Brazilian Ethanol: The Break-Out Brazilian Energy Play
Brazilian sugar refiners are ready to satisfy America's energy sweet tooth. Here's what I mean, and why the Brazilian ethanol recommendation noted below is about to explode.

Investing In Safaricom: The Coming African Stock Boom
Nigeria is mired in oil turmoil, and Zimbabwe's elections just turned bloody again. But regional growth is at 30-year highs and has room to run. That's why today I'm telling you to buy Africa. Across Africa, outbursts and opportunities pose huge potential for risk and reward to the international investors swarming in. Here's how you can make money in African investments.

Investing in Wind Energy: How to Own 52 Wind Stocks for $30
As oil prices stay high, the wind power and alternative energy themes are becoming increasingly popular, making the latest ETF issue even more enticing at $30.

Investing in Electric Vehicles: The DIY Strategy for Energy Price Hedging
If you think $4 at the pump is bad, just wait. It's not getting better anytime soon. By now, we've heard all the reasons for escalating prices: rising demand in India and China, a falling dollar, speculative trading and many others.

Microsoft-Yahoo Deal Back On?: Don't get too excited, though.
TechCrunch is reporting that Yahoo and Microsoft talks are back on. "The information we have is thin, but what one source is saying that Microsoft is talking a price lower than the $33 they were offering when the talks disintegrated in May," the report said.

When Will the Credit Crisis End?: Peak by Q1 2009, says Goldman Sachs
The credit crisis will not peak until the first quarter of 2009, said Goldman Sachs. And, according to the latest Goldman forecast, global financials will need to raise another $65 billion by this time next year to deal with losses.

Dow Does it Again...Tack on Another 25%: Chemical Giant Hikes Prices for a Second Time
The last time I wrote about Liveris was less than a month ago, when he decided that his company had no other choice but to raise prices 20% across the board. His input costs (read the price of oil), he complained had simply become too high crushing his margins.

El Paso Calls Heating Up: Why it's still a buy...
You may want to keep El Paso (EP) on radar. The El Paso August 2008 23 calls are seeing interest with 7,986 call contracts trading hands versus open interest of 69. The spike is being attributed to news that the company has expanded land holdings in the Haynesville shale area. While the stock has since retreated on the comments made at the Wachovia Nantucket Equity Conference, it and the call options are a buy.

How to Protect for Downside
This rally won't last, we said June 12. Bank earnings are next week. The world is on the edge of severe crises. Israel and Iran are ready to fight. Oil is heading up. Gas is skyrocketing. Thousands of homes are in foreclosures. Global banks are struggling. Home equity loans are the new subprime fiasco. Unemployment is rising. Food riots are daily. Bond insurers are losing ratings. Oh, and then there are the hundreds of trillions in derivatives.

Early attempts at mining the platinum out of the ground were generally unsuccessful, and it has only been relatively recently that platinum production has reached significant levels.

Zimbabwe Platinum Mines

Zimbabwe's oldest platinum operation is the Mimosa mine, located in the southern part of the Great Dyke on the Wedza geological complex. Ownership of the mine is currently split 50/50 between Impala Platinum Holdings Ltd. (JNB: IMP, OTCBB: IMPUY) and Aquarius Platinum Ltd. (ASX: AQP, LON: AQP, OTCBB: AQPBF, JNB: AQP).

Platinum mining at the Mimosa complex has a long history. The deposit was exploited briefly in the 1920s, and trial mining was undertaken by Union Carbide Zimbabwe (private) between 1966 and 1975.

Zimasco Ltd. (a private ferrochrome mining and smelting company) took over the Mimosa operations in 1992. The pilot plant was refurbished, and mining recommenced in 1994, gradually building up to a rate of just under 30,000 tonnes of ore per month. Although small, the operation was very successful, and began to attract the attention of the South African platinum producers.

A proposed acquisition of the complex by Anglo American Plc (NASDAQ: AAUK, LON: AAL, NAM: ANM, JNB: AGL) collapsed in 2000. The following year Impala Platinum acquired a 35% stake in the mine. In 2002 Impala took a further 15%, with Aquarius Platinum taking the remaining 50% of the company.

Since 2002, output at Mimosa has gradually been expanded, and the mine, which is among the lowest-cost platinum producers in the world, extracts around 85,000 ounces of platinum annually.

During the early 1990s, a second mine, the Hartley Platinum project, was developed by a joint venture between the Australian companies BHP Billiton Ltd. (NYSE: BHP, ASX: BHP, LON: BLT, JNB: BIL) and Delta Gold Ltd (now a part of Zimplats). It opened in 1995, but following a string of geological and metallurgical problems, underground operations were suspended in June 1999.

BHP's interest in Hartley Platinum was sold to Zimplats Holdings Ltd. (ASX: ZIM), a spin-off of Delta Gold's platinum assets, which began to develop a new open-cast mine further south, at Ngezi. Operations began in 2001, following the acquisition of a share of the project by Impala Platinum and the South African bank Absa Bank Ltd. Over the next two years, Impala increased its holding in Zimplats, and by June 2006 it held 86.9% of the company.

In 2006, Ngezi produced about 90,000 ounces of platinum, from an open pit and from a newly-developed underground section. Impala now plans to increase production to over 150,000 ounces of platinum per annum, which will involved the construction of two new underground sections and will cost an estimated US$258 million.

A third platinum mine, Anglo American's Unki project, is expected to begin producing 58,000 ounces per year of refined platinum by 2010. Anglo American recently said that they plan to invest $400 million to build the mine despite pressure from the British government to withdraw from the country. Zimbabwe president Robert Mugabe has been condemned over violence against the political opposition ahead of the second round of presidential elections. The $400 million investment would be the largest foreign investment in Zimbabwe ever.

Until next time,

Greg McCoach

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 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.

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

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