TGR: Does Virginia Gold have some active prospects?

BC: They don't have any mining prospects. They do, however, have a royalty on the deposit they sold to Goldcorp; it nets them $1.2 million a year, more when it goes into production. They're also sitting on about $38 million in cash. That's an exploration company that's actually making money and they've got a lot of ground out there they're exploring. In this business you bet on smart, honest and hard working people that love their work.

TGR: Who else?

BC: For a mining company that's out there producing, I like CGA Mining Ltd. (TSX:CGA) (ASX:CGX) in the Philippines. They're just now into production with about 3 million ounces in reserves and 8 million in resources. I think people are going to start recognizing it, more institutional investors. They'll be producing around 120,000 ounces a year, then up into 200,000 ounces a year. It's a good deposit.

The richest discovery out there right now is held by a company called Andean Resources (TSX:AND) (ASX:AND) in Argentina. It's in a good pro-mining province, which is important for Argentinean projects. They're drilling out a very high-grade vein system that will be a very profitable project. It's not a cheap company but quality costs money.

San Gold Corporation (TSX.V:SGR) in Manitoba—that's another one that's been in the Exploration Insights portfolio for some time. San Gold has a small mining operation, maybe 80,000 ounces a year. It'll be increasing, but what's important there is that they've been discovering new high-grade veins along trend. It's based on a geologic concept that's working. A number of larger mining companies should be looking at that deposit for the exploration upside and safe jurisdiction.

TGR: So San Gold's mining is near these new veins?

BC: Yeah, San Gold's interesting. It's an old, old mine; been going for quite a while, and they just recently stepped off a new geologic concept and drilled some holes and found a whole new setting for this mineralization. It's averaging about an undiluted 25 grams gold across about three meters and they just ramped right into it. So it's in production right now—and that's over a period of only a year. The thing's permitted, ready to go, they're into in and mining. And they're beginning to find parallel structures with potential. So we're looking at a company that could rapidly not only find and define a resource, but they can put it straight into production.

TGR: Any others come to mind?

BC: I have Kaminak Gold Corporation (TSX.V:KAM) on my watch list. It's one of the companies that generates ideas, and then vends out the projects to people with more money, thereby keeping your dilution in the company to a minimum. They are a very good group, young guy running it, Rob Carpenter. Very aggressive. I like the way the guy works. He's worked in Canada most of his life and knows it very well. Kaminak has picked up some property in the Underworld Resources Ltd. (TSX.V:UW) area in the Yukon, where Underworld has a gold discovery going. Kaminak is trenching there now. I'm very interested to see what their trenches will come back looking like. The surface geology looks positive, so they've got something there that could warrant drilling. But it is a long way from sort of interesting ; I'm willing to put some money on that concept.

TGR: When are the trench results expected?

BC: I'd guess we'll see those sometime in August. They've also got some property around another company in our Exploration Insights portfolio in Thunder Bay, Ontario. It's Magma Metals Ltd. (TSX:MMB), an Australian company. They've got what I believe is probably the most promising platinum-palladium discovery anywhere in the world. It's under the radar, given it's an Australian company, but this Thunder Bay property is really prospective and something I would suggest anyone look at—high risk but the geology is right.

Kaminak has ground in the same general area. They're doing some work on it now to see if the structures and mineralization continue on to their property. So that's pretty prospective as well. This is Rob's first company; he's got his heart and soul and family into it. I know that over time he will do well.

TGR: What about silver plays?

BC: The one company is in our portfolio with a bona fide silver deposit is MAG Silver Corp. (TSX:MAG) (NYSE:MVG). I like it because it has a high-grade, high-margin deposit, and those are very few and far between. Most silver companies, I hate to say, are mining or exploring marginal deposits. They go into an old mining district or camp in Mexico or Peru, come into something that's probably been mined off and on for centuries and hope to make money on what the Mexicans missed. On the whole, these deposits average about 250 grams of silver with a bit of gold and that's just barely above what it actually takes to drill it out, develop it and mine it. So it's hard to find good high-grade high-margin deposits such as MAG Silver's. In terms of deposit, that is the best silver deposit out there.

I also just visited Fortuna Silver Mines Inc. (TSX.V:FVI) deposit in Peru. They are actually focused on making money and drilling out new higher-grade silver veins on the property. I believe Fortuna will continue to grow so that is one to watch.

TGR: Any other insights you'd like to share with our readers?

BC: In terms of a person's portfolio, the exploration side of things is certainly a high-risk proposition, but I think it can be done intelligently. A person needs to really put the work into understanding what exploration is all about, how it works, and then correctly interpreting results. If you can do that you outsmart three fourths of the competition.

I would say half of my portfolio is in the exploration sector. In the newsletter we started, what I called a gamblin' stock portfolio in May, is up better than 140% on six stocks—more if you consider the two dogs I indicated didn't have much of a chance. So it's a good sector for me to be in, and I think in particular gold discoveries are going to be worth a lot more as we move forward. We already discussed the decline in global production and major mining companies needing to replace their reserves. So intelligent investing in the speculative side of minerals exploration is a smart place to be, if you are informed about it.

One thing any investor could do is when a news release comes out or when they're investigating a company, go to the website and see what's there. The website and disclosure provided tells you a lot about a company. Make sure that when a company reports drill results, for instance, that a map's included. They need to report all the drill holes. Often a company reports results from hole numbers 5, 8 and 20. Okay, there's 17 holes there we're not hearing about. Why aren't they reported, and what was drilled in the past? Just seeing how a company discloses information can tell you whether they're honest or not. I think that test alone cuts out half the companies; you won't need to bother with them. If a company doesn't fully report information, assume they're hiding something. Anybody can do that easy test. You don't even need to know what the information means, just know whether they present and report everything.

I've actually written three free reports that are available on my website discussing things to beware of. One's about geologists, one's about drill holes and one's about resources. Each of these is written in such a way that is not difficult to understand and I have tried to throw some humor into it. I think it's certainly worth reading because you can get a sense of the games that can be played.

TGR: Anything else you want to pop in here before we say goodbye?

BC: In summary, I think I'd just say gold exploration is a good sector to be in, albeit only with your risk capital. Exploration success offers the highest possible returns if you are careful; a bit of luck doesn't hurt either. But you have to be intelligent about it.

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