TGR: Another company I think you followed is Linear Gold Corp (TSX:LRR), which seems to have sold off a little bit.

BL: They have and I really view that as an opportunity. This is a company with good financial resources, a great management team, and a very aggressive business plan to go from a junior explorer into a producer. They have the project in hand to do that. I think they will be in production probably within a year. Although they may not have detailed the timeline yet, the project is sitting there—the Goldfields Project with the Box and Athona mines in Saskatchewan.

Linear made a tremendous acquisition by buying that project at a fire-sale price from a financially distressed company coming out of the global credit crisis. They quickly updated the feasibility study and improved the numbers tremendously. It has great economics. There's really nothing holding the company back and, moreover, they have the financial resources to acquire new projects and are pursuing them aggressively. I really like Linear both as a direct play on gold and a growth story in its own right.

TGR: And with the stock selling off from its peak.

BL: Yeah, it's a great entry point.

TGR: Any others on your radar?

BL: Golden Predator Royalty & Development Corp. (TSX:GPD) is one. Great projects, great management, and an exciting plan. The management team can put that plan into effect. When you talk rollups, there's no better manager or executive to have on your team than Bill Sheriff. He did such a great rollup in the urani-mania play a few years back.

TGR: He's now part of that Yukon story.

BL: Yes, the Yukon story, and the Nevada story. They have a tremendous property position in the Yukon. The Nevada story encompasses having a central, even portable, mill around some satellite high-grade deposits that are being overlooked by the majors, getting revenue from their satellite deposits' really early-stage gold production, as well as property royalty payments. In fact, the company may never need to finance again.

TGR: Because of that royalty.

BL: Yes. Its goal is to get cash flow positive.

Another company, Great Panther Silver (TSX:GPR), is my top silver play. Long term, its Guanajuato property is just tremendous, particularly when you realize that over 500 years of mining, development there really didn't venture below the water table. Not only is Great Panther finding new areas and new resources above that level, but also deep resources that could essentially double what's been mined over the history of that project.

In many respects, it's a typical Mexican silver play, where there's as much silver ahead of the company as they can mine. But in this case, it's multiplied because they're expanding their capability and they just won't run out of ore. I really like that. I like the team. Bob Archer does a great job at that company, great local relations. The mine is a standard for the region. For a play on silver, I think it will get a much higher profile in the months and a year or two ahead as they dramatically expand their production capacity.

TGR: The stock has done incredibly well. I think it's up close to 100% from last year.

BL: Yes. And frankly, I forecast similar gains over the next year to 18 months, especially as Great Panther continues along its development plans. But also I think silver has a big bounce ahead of it.

TGR: Why do you say that?

BL: The last correction in gold and silver was much more dramatic in silver.

TGR: But isn't there always?

BL: Yes, the swings are more volatile in both directions, but silver hasn't made up that ground yet.

TGR: Going back to what you said earlier about see gold up to $1,250 in the next six to eight weeks, if that's the case could silver could have a run to, say, $20?

BL: Oh, absolutely, to $19 at least. The gold-silver ratio has gotten out of whack once again and silver's just due for a bounce. I may have seemed a bit pessimistic on gold. I am worried about it, but over the last couple of weeks it seems to me that gold has exhibited a real desire to take off. All that's really kept it back have been headlines here and there about tightening in China, etc. That's exacerbating the volatility in speculative, derivative gold —speculators going in and out of the futures markets. Overseas and worldwide outside the U.S., we've seen very strong physical demand and some of the commercials have begun rolling back their short positions. So from a technical standpoint, gold looks fairly positive in the short term.

TGR: But you're even more positive on silver.

BL: Oh, yes.

TGR: All right. Finally, Brien, what's your take on the rare elements story? Is it a bubble or is it just the beginning?

BL: I think it's very similar to the uranium story of a few years ago, where the logic is inescapable, but the timing is indeterminate. It obviously got ahead of itself last year, and I think our good friend, Jim Dines, had a good bit to do with that. It was kind of a self-fulfilling prophecy, but as usual, he was very smart in pinpointing an area that deserved attention. So I think it's going to be here for a while, but be cautious and play it correctly.

TGR: Who do you like in that space?

BL: I was a very early investor in Rare Element Resources Ltd. (TSX.V:RES) back when nobody knew or cared about rare earths. At that time, the company was trading as a gold play more than anything else, and really didn't stress its rare earth aspect. I'm still a very large holder of Rare Element. If it gets in the mid-$4 area, people who were early in the play need to take some profits. It's probably a buy anyplace in the low- to mid-$3 area. I expect it to oscillate in that range for a while, until we get some more meat on the bone of the overall story. A general economic recovery obviously would help that as well.

TGR: As usual, you've been very enlightening and full of lots of ideas for our readers to digest. We appreciate it.

BL: It's always a pleasure.

By arrangement with: www.theaureport.com

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