TGR: Any others you could share with us?

VG: There are a few other companies that I've looked at that are, again, in positions to do well. We can look at a company called NioGold Mining Corporation (TSX-V: NOX) (otc: NOXGF.pk) and that's one that I've been following for quite some time. NioGold already has a resource of around 600,000 ounces. They've drilled off a bunch more holes to increase that resource.

At that point they've got the ability and the network, if you will, to go to a mining decision if they want to, or there are enough others in the area, such as Osisko Mining Corporation (TSX:OSK) that could very well just buy it out. NioGold is in a good position here at about 24 cents, because they're due to have a resource calculation reasonably soon—sometime in November, I would hope—and that should appreciate the stock notably if they come out between 1 million and 1.5 million ounces.

What else do we have? I was on Otis Gold Corp.’s (TSX:OOO) property in August down in Idaho and that's a company that has 706,000 ounces of gold already at 1.15 grams per ton. This is a historic resource, so it's not 43-101 compliant, but it was drilled off by some very reputable companies so I'm pretty confident in the data. And I've talked to the people at Otis, Craig Lindsay and so on.

They're looking to build out a high-grade core, a nice sweet spot and then see if there's more to the low-grade halo. As with NioGold, Otis has a lot of risk that has been removed because they have a resource already and they know where they're going. The geologists who are working on this property are the ones who originally discovered it 20 years ago now they're back on the project as managers. This is a fairly new company, very low float. They've got a lot of their market sizzle still because no one's heard much about it; Otis has that ability to really appreciate in value if and when good results come out.

This has to go back to the thesis that we still have some more time for these juniors to appreciate before the market truly does crash. This is the best part about juniors—we're in results season. A lot of these companies are going to have results coming out over the next month, month and a half and that's really going to make sure that the juniors in the gold space do well as opposed to juniors in spaces where the commodity may not be as much in favor.

TGR: You also mentioned Midland Exploration Inc. (TSX.V:MD) in our last conversation. What's going on with them?

VG: Midland's president and CEO, Gino Roger, is a very good guy. I've run into him a number of times and have had a lot of good conversations with him. That is a company that ought to be on the Discovery Channel, How Did They Do That? This company has very few shares outstanding—23 million fully diluted—is three or four years old and still has $3.2 million in the bank. That, in my mind, is very impressive. By that stage of the game, a lot of companies would have up to 60 million shares out and probably a little bit less money. So Midland's done a very good job of managing their float, managing their money, and it shows in the stock.

It also impressed me in the sense that Midland lost less than 50% of its stock value in the market crash and downturn last year and early this year, when most of their peers lost 80 to 90%. Most of their shares are in hands that they know, too, so the stock doesn't normally have a lot of downside risk, which is kind of built into their share structure. So that's the first thing I think was brilliantly done. Secondly, as a project generator they rarely spend the big money. They spend enough to get the project drill-ready or drill a couple of holes themselves and pass it on to a company with deeper pockets and a mandate to drill off a resource or develop the project. They carry an interest and their shareholders benefit from that.

This isn't a new concept. Quite a few companies do this. Midland just manages to do it well. In addition, they recently made a strategic, very well-placed acquisition of a rare earth element property not far from the Strange Lake area. It's very good because it's right beside Quest Uranium Corporation (TSX-V:QUC), which has a resource on one of their projects. This will be attractive to somebody and that's what joint venturing is all about. I suspect they'll do some work on it, get it ready to drill, pass it off to somebody who will do bigger things with it and the shareholders of Midland will benefit. We can see this in the share price; it's a very beautiful chart.

It is constantly moving up slowly. It's not one of those companies that does a 10- or 15-bagger in a year. But it is a company that's a little more consistent. You can sleep a little easier at night.

All these juniors have risk and to think otherwise is deluding yourself. But this company has a lot of risk taken out just by virtue of their model, by virtue of the way their shares are positioned and the size of their float.

So they've done pretty well since the last time we talked. They made a rare earth acquisition, their gold projects are moving along quite nicely, and this is a company I think everybody should look at.

TGR: Any other juniors that pique your interest?

VG: Sure. Eastmain Resources Inc. (TSX:ER). All I really tell anybody who asks me about Eastmain is, "Buy it and put it away." I talk about very few companies that way, and rarely would that apply to a company that is not a major. Eastmain is nowhere near a major, but they're in great shape. They have a beautiful deposit, over a million ounces of high-grade material at Clearwater. They've had results as high as 75 ounces per ton gold, but the lower grade 1 ounce per ton material is consistent throughout the property. The beauty is it's not just some little core area with these nice newsworthy grades. It's everywhere.

This is very attractive to a major, and Goldcorp (TSX:G) (NYSE:GG) just so happens to be very nearby. So as far as I know, Eastmain will continue to develop their project until it's time for Goldcorp to buy them out. Goldcorp already owns 9.9%. But Eastmain is in a perfectly good position. They've got all weather roads, they've got power lines going to the property, James Bay is right there.

So they have all the ingredients and if they wanted to go after this on their own, they could. But they've also got the luxury of being right beside a very interested major. On top of all of this, Eastmain has $17 million in the bank, which is really like having $25 million because for every dollar you put in the ground, you get 50 cents back from the government in Quebec. Very few jurisdictions do that.

TGR: You can't beat that.

VG: Another one worth looking at Mexoro (OTCBB:MXOM). I went to visit their property just an hour outside of Chihuahua Mexico in mid October and was very impressed. This project is really nice, and from what I understand, they've applied to trade on the TSX, which would give it a fair bit more liquidity, a lot more transparency, and a lot more access by the major funds. The company right now has about 1.2 million ounces of gold on the property, grading around 3 grams a ton. That's based on 50 drill holes.

They drilled 103, so they're going to update their resource calculation with the balance of the holes plus some more drilling, so we can expect that the resource is going to increase reasonably significantly, I would say, just by adding the rest of the holes they've drilled already. Some time in early November the mill should be completed and they should be getting into production. Once it's up in full production and ramped up, this company should be producing about 30,000 ounces of gold at a cash cost of around $300. That's very cheap gold, and cash flow is good. I personally like to see a company with a) cash flow and b) exploration upside—and Mexoro has both. The exploration team is one of the best I've seen.

The company is trading at about 40 cents with 50 million shares out. So, really, it's a $20 million company with a mill that is basically complete, a resource of 1.2 million ounces of gold as it stands now, and production once it's ramped up at roughly 30,000 ounces per year. That's all worth more than $20 million, which is why I'm intrigued with this company.

TGR: Any parting thoughts today, Victor?

VG: I'll reiterate that the junior space is a very good place to be because it certainly has the most upside potential. This is particularly the case with the right companies and some of the risk mitigated (i.e., a resource with some production or an acquisition that was done or something else where you don't have to do everything from the ground up). Mind you, if you do get something from the ground up, such as Richfield, you get a big, big return. I would also repeat a caution: We hope we'll see only a small pullback here, and then a continued rally. But it is quite possible that this pullback will be protracted, or will lead into a bit of a crash. It's important to really be on top of the markets to see what they do.

TGR: With those words of caution and optimism, we thank you once again.

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