The BarkerLetter

February 6, 2008

Dateline: Santa Maria del Oro, Nayarit, Mexico - Today I’m wrapping up a three day tour of Rochester Resources’ Mina Real/Santa Fe gold and silver play located a few hours drive from Puerto Vallarta, Mexico.

To summarize: It’s an advanced property on which the owner has personally invested over US$3 million to fund the initial, high-risk exploration and development. These include over 1,500 meters of mine development involving five separate drifts at different  elevations.

The owner, a local geologist named Alfredo Parra, is the current president of Rochester and in every respect a poster boy for mining in Mexico. He’s articulate, savvy, and extremely proficient. He built the current 200 tpd million complex on the property and it runs like a top, with peak efficiency of 300 tpd achievable by April of this year. It currently produces in excess of $1 million worth of gold/silver concentrate per month.

Exploration wise, Rochester is drilling 7,000 meters to test depth and grades of the various epithermal vein systems discovered on properties located an hour’s drive from the mill site. There are 24 separate veins within three systems at Sante Fe (the Jonas, Clavellino, and Tajitos), all sub parallel and measuring 40 meters over four kilometers of  strike at surface. Ultimately they hope to have a geological model for all the recoverable gold completed by this July, at which time they may have a preliminary tally of all the mineable ounces on the property.

At press time, the company was midway through its second hole on the Clavellino, and was continuing to discover additional veins from surface sampling.  If and when the company hits an expected silver rich zone at the  the optimum depth of 1160 meters on the third hole, I’d advise backing up the truck. They’ve already encountered grades of 1,330 Ag per tonne from sampling at the Tajos Cuates area located on the adjacent Minas Real property, which also hosts the mine.

It’s also worth noting the presence of another precious metals explorer called Galena Capital Corp. (FYI.TSX-V) which is active in this region of Mexico and also in Peru. Galena has an ambitious business model which involves finding and taking large projects to production while spinning off lesser but still economic plays into separate vehicles.

* * *

So the only real question left is, what does Rochester have in the ground? Considering the high grades recovered from sampling, the fact that the vein systems are visible at surface over four kilometers, and the mill is already processing ore for concentrate, I’d say things look extremely good.

By ‘good’, do I mean 20-million-recoverable-ounces-of-gold-equivalent good?  Well let me put it to you this way -  there is always a little exposure, and there’s always a little luck, both good and bad. So the question investors have to ask themselves before picking up the phone and calling their broker is this: ‘do I feel lucky?’

Well, do you?

Don’t forget to subscribe to my paid newsletter so I can tell you when to sell. 

Rochester (RCT.TSX-V) trades around  $2.20 Cdn per share and has an approx. $72 million market cap.

Careful out there.

Kb

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 …)