Hi JM,

My college background was in English and Business. My Family's careers allowed me to quickly advance in metal investing. My Dad traveled the entire world for over 45 years repairing all types of ore scales at every type of mine. During each trip he usually was invited to stay with management and he learned an amazing amount of mining info. He became the top person in the world for engineering mining scales. My older brother was a Wall Street wiz kid who was written up a few times in the W.S. Journal for being one of the youngest ever to manage a magor corporation's entire investment portfolio. He was in charge of all investing for Sun Oil, ( Sunocco ). They have both passed away but, between the two of them, I was very lucky to learn about both investing and mining.

For decades, I ignored the mining sector because I owned two successful businesses of my own but, several years ago, I had a heart attack that caused me to question everything in my life, and while I was at home taking it easy, I was reading news on the internet and I noticed that several billionaires were purchasing gold and silver mines at the same time. I wondered why and I started researching the metal sector. The more I researched, the more I believed it was the right place to invest. I started with a bullion portfolio and then decided to pour all my energy into junior share research.

At first I did subscribe to Jay Taylor and Lawrence Roulston. Knowing all the metal laymanship and how to create and analyze technical charts, I was absorbing everything quickly. After massive diligent research, I started finding top jrs. to invest in before the subscription services recommended them. In fact, I shared two with this Cafe' before anyone recommended them. Endeavour Silver and Great Panther Resources.

I did create specific criteria that I use to evaluate a junior. I have fine tuned it over the years.

1. Management - The single most important factor. I prefer juniors run by geologists or mining engineers that were instrumental in multi-million ounce discoveries by a magor company. These experts with magor discovery backgrounds, are the true bloodhounds in this industry. It is also very important that management will get their complete story out with excellent public relations and to obtain listings on multiple exchanges.

2. Location and properties - Most property owned must be in mining friendly countries that have a near zero chance of implimenting nationalization. A junior must own multiple properties with known gold or silver resourses and or mines in production. I now consider only juniors with 2+ million ozs. of gold or 25+ million ozs. of silver. The properties owned must have above average potential to increase the resource and learning the metallurgy of the resource is very important. Is the gold easy to seperate from whatever metal it is mixed with. If a metallurgy report is not yet availabe, I research nearby mines on the same fault which usually contain the same metallurgy. Not all gold or silver can be mined for a profit. Also extremely important is a property's infrastructure. Being close to a power line, a water supply, and a work force is a huge advantage for any Jr.'s rapid success.

3. Share structure and cash position - I only invest in juniors that have under 200 million shares. Each must also have one years worth of cash on hand to fully fund an aggressive drill program and or improving production if a producer. If the junior must raise near term cash, I pass on it but, I might revisit it if it becomes cashed up at a later time.

4. Market Cap and Entry point - What value does the market currently give for every ounce in the ground ? This is very important to define if a junior is undervalued. Is it's value way below all peers in the junior sector ? If yes, and the junior also has the above criteria, the chances of hitting a home run greatly improve. When to buy ? I never chase a stock.

If any professional recommendation or great drill hole announcement suddenly causes a stock to rise, I simply let the train pull out and wait at the next station. The train always stops at the next station for a decent entry point and on occasion a lower one.

5. Before buying - I always try to talk directly with management. I review how aggressive the company's plans are and ask what setbacks are possible over the next year. Most junior management are willing to talk to private investors but, please do not call often. Be patient and let them do their work.

6. How to find a quality jr. - Yes, there are thousands of juniors listed. I personally dismiss all those in base metals. There are very few that seek only silver and many new juniors have no resource at all and can be eliminated quickly. They are known as moose pasture explorers. My only exception to not having a defined resource is if I notice a large number of drill holes hitting high grades. Then I monitor the junior closely to evlaluate the potential size of the discovery. I read Yahoo mining news releases and Kitco releases evey day. If I notice a great drill hole announcement for gold or silver or a new resource property obtained by a junior I am unfamiliar with, I read the release. If I am further interested in the junior, I devour the web site. Then I analyze and compare all its criteria to the current holdings in my portfolio. I rarely switch juniors or add another but, on occasion I have found a gem that is off all radar screens and poised to blossom.

Over the years I have shared many winning juniors in this Cafe'. I also have had a few that were very disappointing. The most recent one being, ATW Gold. No-one could foresee the sudden sheer splintering of almost all high grade veins in multiple directions until they started excavating the fractured zone. It is a rare occurence but it can and does happen. That is why a diversified portfolio of at least 10 to 12 juniors is best to hold. I also never give advice on when to sell. When to sell is a personal decision based on personal goals and the needs of each investor.

Best, Gold Fish

This message was edited by Gold Fish on 11-20-09 @ 4:42 PM