TGR: What jurisdictions do you prefer?

RW: The three or four spots we like are Northern Mexico, Northeastern Nevada, Canada and Alaska. In Canada, we like Québec, in particular—it's probably the best place of all. And Alaska has more than enough good companies, both seniors and juniors, to work on.

TGR: Another company in Northern Mexico, and your newsletter, is Timmins Gold Corp. (TSX.V:TMM).

RW: Timmins is a great company. I've had probably three or four visits with Timmins management. CEO Bruce Bragagnolo was a Canadian Securities Commission mining lawyer for 20 years. He knows the mining business inside and out, takes things very carefully and thinks things through. Benefiting from the work he did before he got control of this mine, Bruce saw all the mistakes many of the miners made simply because he worked for them as an attorney. That experience is extremely valuable. They've got great production. They've got super financing. They had a big pop in their stock recently because their first quarter production showed about 11,000 ounces of gold. That is one of our best choices. We like Timmins very much.

TGR: Do you have a price target on Timmins?

RW: I can't remember off the top of my head, but it just had a breakout based on the first 11 Koz. of gold production. They've got top-drawer managers and geologists and a steady plan to remain there and expand into more mines. I think you'll see a double on that stock easily, perhaps even something higher than that. It's a very high-quality operation.

TGR: A couple of other companies in Trader Tracks are Exeter Resource Corp. (NYSE.A:XRA; TSX:XRC; Fkft:EXB) and Extorre Gold Mines Ltd. (TSX:XG; Fkft:E1R; OTC:EXGMF), which were once the same company. You recommend them both.

RW: Well, first of all Exeter was the mother company. They split off Extorre because it made a lot of sense as far as management and things to do for the stock and stockholders. It's proven to be a good thing. We know the managers; I've had visits and meals with them and asked their top guy, Yale Simpson, about capital. He said: "We never have problems with capital because we only work on the best projects we can find." That's true.

We like Extorre over Exeter simply because of the quality of the property and what they're finding. They're so excited about what they found that they're adding more drills; and this month, they're moving equipment and assay-lab people onsite for core evaluation because they've had some magnificent findings and they're continuing to focus on those. That's a great goal. Are they going to make a mine? Sure they will; but I think it will be sold to others who are going to take it over and run with it. That's a fantastic opportunity—one of our best picks, in my opinion.

TGR: Do you have a target price on Extorre?

RW: Extorre could easily double from where they are today. I don't want to say anything further.

TGR: What about Exeter?

RW: I can't tell you as much about Exeter because I haven't followed it since the companies divided. I focus more on Extorre, but we do still have that one in our newsletter. Where does the stock behavior go from this point? I think it's going to go up. We'll have to see what develops and how it goes. I might mention, at this point, that I'm a technical analyst. I'm self-taught. A year and a half ago when we were trading futures strictly on tech analysis, I had 18 wins in a row. I asked my broker how I was doing. He said: "You're walking on water." We had our comeuppance when the Lehman event arrived, but we traded our way out of it.

TGR: There were lots of good buys at that point, if you had cash. I think Hecla Mining Co. (NYSE:HL) went under $2.

RW: They did. I was appalled when I saw that because they're one of my favorite big companies. In 2006, we were suggesting and recommending stock call options on Hecla, Newmont Mining Corp. (NYSE:NEM), Goldcorp Inc. (NYSE:GG; TSX:G), Coeur d'Alene Mines Corp. (NYSE:CDE; TSX:CDM) and maybe a couple of other big ones. We had a good run. We were buying them and making anywhere between 100% and 300%, usually in 90–180 days. I was a happy camper. I thought, "This is easy!" But the minute you think that, you're going to get smacked. Of course, the Lehman thing came and, when they crunched the gold market, it was the end of that opportunity for a while.

I believe you're going to see this again. We're starting to trend that way. It's going to be easier, I think, to trade options in some of these senior companies because they have a lot of cash. We see them making a lot more money with rising metal prices this year and next. Hecla had a couple of problems that they resolved. When those problems surfaced, their stock went under $2.

Considering what we knew about the company at the time, we told everybody to buy it. I had one of my top traders put his mother into it. She made $100,000 in two months. It's a good stock. They've got the cash and the experience. Their Lucky Friday Silver Mine in Idaho is being expanded and they're buying more property around the mine. They were getting down to 5,000 or 6,000 feet, which gets expensive. I think they're back mostly at the 3,000-ft. level. They also bought the other half of the Greens Bay Mine from Rio Tinto Ltd. (LSE:RIO; NYSE:TP; ASX:RIO) in Alaska for $750 million. Now, Hecla owns it all.

TGR: What are some other companies that you're following?

RW: We've got some smaller silver companies like Endeavour Silver Corp. (NYSE:EXK; DBF:EJD; TSX:EDR). I've spoken at one of their luncheons and have followed them closely because I believe in the stock. They're in Northern Mexico. It seems that, in Mexico on the east side of the mountains away from the Pacific Ocean, there's a long seam of property where silver and some of the other metals are prevalent. Juniors find a property in that area where there's already been a lot of gold and silver removed. They buy that property, and then buy more next door. They do more exploration work and, more often than not, they're successful. Endeavour and some of the other companies in that area are going to be great.

TGR: Do you have a target on Endeavour?

RW: The Endeavour stock has been lingering, I think, at about $3.50–$4.00. We expect it will probably be around $6 or $7 by spring next year, if not sooner.

TGR: Do you have some parting thoughts Roger?

RW: I don't mean to terrify people with some of the things in my letter, but I'm a realist. I get so angry because of all the nonsense we see in the news and media. You have to be an original thinker. Most often when a bank, the media—or, particularly, governments—say something, just the opposite is true. What you do is focus on things that are proven moneymakers. Go there and control your risk. Like I said earlier, there is a chance that you're not going to see this opportunity again for many years. Historically, commodity rallies go anywhere from 13–17 years. I think we're probably seven, eight, nine years into this one. We've got at least five years left, maybe longer. You're going to see some brand-new minted millionaires in the next three–five years in gold and silver junior stocks, the physical metals and in the related futures.

By arrangement with: www.theaureport.com

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