The BarkerLetter

January 28, 2008.

Greetings investors.

Friends of this column know I’m determined to get ahead of the world’s next big gold discovery.

The search has led me of late to Mexico’s southern Sierra Madre mountains, and a very aggressive junior there called Rochester Resources Ltd., trading under the symbol RCT  on Canada’s TSX venture exchange (RCT.TSX-V).

Before I launch into a description of RCT and its Santa Fe project in Mexico’s Nayarit State, I want to make a couple of points about how to make the really big money as a mining investor. Basically you need to buy a stock that has a world-class, company-making project while it’s still trading for pennies or at least under $5 per share. There are literally hundreds of these so the question becomes, which one really has what it takes - in the ground - to become a major gold story?

That`s the only question worth asking in the current market. If you answer it correctly you will never need to ask another.

The conventional wisdom is to buy a basket of juniors and hope one of them will take you over the top. I don’t follow this investing strategy.  My approach is to research them all but buy only three - the right three - and ride them all the way!

I don’t want to double or even triple my money. That was last year. The drills have been turning all over the world for several years now and we are absolutely due for one or maybe even two major discoveries. By major I mean + 20 million ounces of recoverable gold which is mineable at a cost of $250 /$350 per ounce.  In 2008 I want cumulative profits in the percentile of thousands, not hundreds. I want quadruple or preferably quintuple digit gains!

Finding these projects takes patience, yes, but mostly it just requires a lot of faith. I’m tired of buying the Dia Mets and the Diamond Fields and the Aurelians and selling a few months later for a mere 100% profit, only to watch the stock go on doubling and tripling for the next 18 months without me!

I repeat -  I am not playing the odds this year. I’m not offering dozens of stock tips to my readers in the hopes of averaging  out ahead at the end of the year. I only want to buy three gold stocks - the right three - and I want to ride them right to the end and retire a rich man!

So, how do we find them …

It’s been my observation that truly world-class projects are discovered in one of two ways: Either the early going is really, really tough and tests the resources, patience, and faith of the company to the max (like Hemlo for example), or it’s an absolute cake walk like Voisey’s Bay. Surface showings, maybe a bit of trenching and an aeromag flyby, a handful of drill holes, and presto … huge discovery! Bingo, bango, bongo! 

In either case there is usually an element of extraordinary luck, either good or bad, and lots of serendipity.

Tune in tomorrow for more about that …

(Cont …)