The BarkerLetter

March 17, 2008

Greetings investors.

Call me an old fuddy duddy, but I was taught to wait for two consecutive quarters of negative growth before raising the recession flag, We haven’t even had one.

Nor have unemployment levels come close to the peak reached during the last recession in 2001.

And hey, what’s with the bookies over in Chicago betting the farm on a 1-point interest rate reduction by the Fed?  If money gets too cheap in the U.S. they’ll just end up creating a carry trade like they had over in Japan last year, and I don’t think anybody wants that.

And I don’t get how the Bear Stearns bailout relates to interest rate policy. The bailout was a move by Bear’s cronies on the Board of Governors of the Fed, not the Federal Open Market Committee which determines rates.

Oh, and are the financial markets really collapsing like the media tells us?

I haven’t lost my shirt yet, have you?

While we were all wringing our hands over the terrible misfortunes of Bear Stearns and Lehman Brothers, both companies reported earnings this morning that were above projections.  Lehman reportedly has $34 billion in liquid assets.

I think the FOMC is going to leave a few bullets in the gun. Anyway they already took action over the weekend, which I interpreted as a deliberate move to separate monetary policy from the alleged ‘tumoil’ over in the capital markets.

The smart money is on a 50 basis point cut … if that!

Ya know I think Federal Reserve Chairman Ben Bernanke is  a real nice guy – a bit aggressive, but nice.  Of course a bit of zeal is to be expected. It’s his first year in the job after all.

Anyway, to answer the most pressing question about the stock market I went to my friend Britney. You know, Britney Spears?

She said,”…well, like, I’m not really sure? But I s’pose the stock market kinda goes up and down ya know? Like a yo yo. And, well jeeze, if it goes up it goes down too.  I know ’cause I took an economics class in high school, riiiight? And like … well, ok .. it’s like this. The stock market goes up, right? It goes way, way up. And then people start to get panicky and take profits and it goes waaaaaaaaaaay down. So like if the index goes down by like 10%? That’s called like ….um, wait, I know this …ummm a correction.”

Well whaddya know. Britney, you’re right. The Dow Jones Industrial average is down just over 10% since last year. Then what happens?

“Well then it goes back up — silly!”

Oh. Really? Wow, this new knowledge astounds me. Thanks Britney.

Be careful out there.

Kb

March 4, 2008

Greetings investors.

We got news yesterday from a popular BarkerLetter pick, TiRex Resources Ltd. (TXX.TSX-V), which has an active precious and base metals project in southeastern Europe (Albania to be precise).

I’ve said it before, and I’ll say it again - ‘ … ay caramba!’

The results of the first round of drilling at the Mirdita project are among the best set of polymetallic assays I have ever seen. They intersected one, almost continuous 65 metre (213 ft) mineralized section including:

0.9% Copper,

11.6% Zinc,

1.0% Lead,

141.6 grams per tonne silver

5.5 grams per tonne gold ………………………over 14.1 meters.

and …….

2.3% Copper,

34.8% Zinc,

2.4% Lead,

376.1 grams per tonne Silver,

14.6 grams per tonne Gold ………………………over 3.1 meters.

and ……….

0.8% Copper,

12.5% Zinc,

13.0 g/t Silver

2.2 g/t Gold ………………………………………….over 27.5 meters.

That’s not bad for just one hole!

Of special note is the very high grade mineralization (53.8% Zinc was encountered in one intercept of 0.8m) and significant gold values (such as the 14.6g/t Gold over 3.1 meters). Tirex hasn’t made a determination of true width but quotes an estimation from historic drill data of about 30 meters.

Tirex owns an entire district of projects there, comprising 17 known but only partially drilled deposits on the property. The company believes it has great potential for a zinc-rich deposit which was not mined because of a lack of facilities.

TiRex says the first hole at Koshaj was drilled vertically and was designed to verify the drill data from the 1970’s. Two additional vertical holes are being drilled nearby to verify the previous drill hole locations and the deposit, and report the results to NI43-101 standards.

The company is angle drilling the Mirdita District (the previous holes were vertical) to develop an updated interpretation of the geometry, orientation and potential size of known deposits and exploration targets, including Koshaj.

Tirex is a company purpose-built to explore and develop the large 344 square kilometer Mirdita Property in Albania. The property is readily accessible by paved and gravel roads and is located 70 km north of the capital city of Tirana.

The stock has zoomed from under $2 to pushing $4 per share in the past 30 days. I started following the company back in October at $1 per share. Now I’m developing a missionary type zeal for this project over there on the border with Greece and Turkey. TiRex is one of my prime candidates for a $20 stock, medium term.

Careful out there!

Kb

March 3

Greetings investors!

Last spring we wrote up Aussie zinc producer Zinifex Ltd. , based on the long term pricing fundamentals and the company’s immediate prospects for enhancing its reserves.

We’re advising investors to sell on the heels of a successful takeover offer by rival base metals producer Oxiana Ltd. The company is buying Zinifex at a 14% premium (all stock) to last Friday’s closing price. That’s a better than 30% gain over the past 9 months. 

Buying Zinifex will more than double Oxiana’s sales and give the copper and gold mining company zinc, lead and silver projects in Australia and Canada.

Zinifex has A$2.2 billion of cash to fund new projects and acquisitions.

Oxiana is trading at 19 times estimated earnings, or A$3.93 per share on the Australian Stock Exchange today. Zinifex, which trades at 11 times earnings, rose A$1.15, or 10 percent, to A$12.28 - but still below the A$12.68 Oxiana offer price.

The combined company has A$2.8 billion in revenue and posted net profits of A$918 million in 2007.

Be careful out there.

Kb

February 25, 2008

Greetings investors!

Here’s a cheapie, Wave Mobile, trading as symbol NWWV on the pink sheets (www.pinksheets).

Now before you go all stiff and formal on me, let me tell you that the pinks are not just a home for extremely speculative and in some cases downright suspicious equities. Walmart Mexico trades on the pinks, and so does Air France.

About 18 months I got involved in a pair of pink sheets deals, Playstar - which was a kind of a cell-phone, text-messaging tech play, and Pluristem, a biotech. Both delivered returns in spades. In fact  I bought Playstar for an eighth of a cent per share and it went to $0.18 within 12 weeks.

You like the math there? So do I.

Welcome to the topsy turvy world of the North American grey markets, people!

Anyway, Playstar got bought out late last year by Wave Mobile which was trying to sell lottery tickets by cellphone.  They’ve since applied for an OTC BB listing and changed the business plan to mining. Wave has about 237 million shares issued and trades at a cent a share. They’re not planning a roll back, which is kind of interesting. The stock price has doubled in recent sessions.

The company has recently recruited an exploration geologist with experience in Nicaragua to develop its newly-acquired La Curva gold property comprising approx 2,000 acres in the Bonanza mining district of the so-called Golden Triangle.  La Curva has never been exploited commercially but there are some artisanal workings there, and it neighbours a producing gold mine.

Nicaragua has just recently come onto my radar screen as a viable mining destination, now that the new government has sorted out its mining code. Also the staking costs are quite cheap compared with Mexico and Peru.

Kb

February 21. 2008

Greetings investors.

We’re following a pair of gold stocks with active drilling operations in Mexico and Albania in Eastern Europe.

Rochester Resources Ltd. (RCT.TSX-V) has moved a second drill onto its Minas Real property in Mexico’s Nayarit State, not far from the mid Pacific Coast. They’ve also staked an additional 13,000 hectares there. TiRex Resources (TXX.TSX-V) meanwhile is drilling its second hole at Mirdita, where historical drill data left by the Russians has indicated potential for new VMS deposits or extensions of existing ones.

And we’re still keen on the 2008 prospects for iron ore explorers, notably Northland Resources Ltd. (NAU.TSX-V) with an active project in Scandinavia.

Kb

February 18, 2008

Greetings investors.

Here’s a stock that’s been on a tear lately, TiRex Resources, trading as symbol TXX on Canada’s TSX venture exchange.

I wrote them up last November shortly after they began trading, and was gratified to see the stock rise to $3.00 CDN per share and beyond within weeks of that.  It began another, similar meteoric rise in January as drilling began on its Mirdita District properties in eastern Europe.

The first hole intersected sulphide mineralization starting at a depth of 42 metres, and we’re awaiting the results of that as they drill the second.

Tirex’s focus is the exploration and development of the large 344 square kilometer Mirdita Property in Albania. The property is readily accessible by paved and gravel roads and is located 70 km north of the capital city of Tirana.

The property covers the core of the historically productive Mirdita base metal district.  I’m hoping the use of modern exploration techniques will result in the discovery of new VMS deposits or extensions of known zones. In addition to the 17 historical deposits identified by previous state-run exploration, Tirex has identified numerous high priority exploration targets resulting from the 2007 airborne geophysical survey and ongoing field work.

Stay tuned for further developments!

Kb

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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