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