XL: Good morning, Mr. Lundin, we’re honored to have you join the Explorers’ League. You have quite a reputation and have earned a great deal of respect from the people we work with.

Thank you. I’m happy to be here.

XL: Let’s start at the beginning. You studied engineering; can you tell us a little about what interested you in that and how you got started in the resource sector?

Well, when I was about 14, I read a book on Rockefeller, the story of Standard Oil. After one page, I knew that was what I wanted to do: oil and mining.

XL: So, you had that in mind when you chose your course of university study?

I couldn’t study petroleum in Sweden, so I studied mining, the next closest thing. I graduated from the Royal Institute of Technology in Stockholm in 1956. My first job was with Royal Dutch Shell.

XL: What did you do for them?

I was trained in the oil business for a year in the Netherlands, at the head office, and then I spent two years in South America, in Colombia. We were in the jungle there, drilling for oil.

XL: That must have been quite an adventure.

Yes, it was very good-very exciting for a young man to be traipsing through the jungle.

XL: But after a few years of doing that, you decided to go back to school?

I went to business school in 1960-61. After I got my MBA at the Centre d’Etudes Industrielles in Geneva, I spent five years with the Axel Johnson Group in Sweden. Later I went back to CEI, but this time as a teacher. I think it’s a good school; I’m now sponsoring a chair there in entrepreneurial management. After teaching for a few years, I decided to go into the mining and petroleum exploration business.

XL: And that’s when things really started happening?

It took a while, but that’s when it started.

XL: How did you finance your first petroleum venture out of a teacher’s salary?

Well, it wasn’t that expensive. I had no family money, nor other such resources, but all I really needed to get going was that first plane ticket to Qatar, in the Arabian Gulf, where I set about getting an offshore oil concession. That took us one or two years to get, but we did, and then we were able to raise money on the basis of the concession and assemble a consortium of companies to work on it.

XL: Is it true that you had to bribe an emir to get the concession?

There were delays getting the agreement signed. One day, I told the emir I could predict the weather, and that it would rain the following day at exactly 5:00 o’clock. He laughed and told me that was impossible, so I bet him a million dollars that it would. I lost the bet, he got a million dollars, and I got my oil concession. We drilled the first well on that offshore Qatar concession in 1976. That well hit what is perhaps the biggest gas field in the world: the North Dome field.

XL: Were you involved in the geological analysis that determined where to put that hole?

No. My company, Gulfstream Resources, had an 8% interest in the concession through the consortium, but the operator was a large German oil company called Wintershall. They planned the drilling.

XL: What was next?

Then I got involved in the Vancouver scene, in both mining and oil.

XL: Why did you decide to branch out into mining?

My first mining company was called Adanac-that’s Canada spelled backwards-which had the Ruby Creek deposit in northern BC. It was a large molybdenum deposit. We took the project all the way to feasibility, in 1972, but then the molybdenum fell and the mine couldn’t be financed.

XL: Moly’s back up, has that deposit been mined?

I don’t think so. There may be an opportunity there.

XL: It’s interesting that you started out in both mining and oil, two businesses many people regard as quite different. Why did you do that?

Well, I was looking at the various possibilities at the time, and both mining and oil exploration seemed to concentrate a lot of potential. I’ve never deviated from it.

XL: How do you decide what regions to go into? Why, for example, Qatar and British Columbia?

It’s the way the deals go. I knew I wanted to go to the Persian Gulf, which is the richest area in the world for oil, and Qatar was open, whereas Kuwait you couldn’t get in. And the molybdenum deposit in BC was owned by an existing company I had become a shareholder in and for which I had arranged a few financings. So, I wasn’t the driving force, but maybe one of three driving forces.

XL: So, what we’re hearing is that what you bring to exploration companies is business acumen-you’re not the one they send out to kick rocks.

I would say so, yes. Kicking rocks is very important, of course, and that’s what our companies are doing now.

XL: How did Lundin Petroleum get started?

That was 1980. It started with an offshore concession, Ras Al Khaimah, in the United Arab Emirates. We found oil there, on the second well, and were able to build up the company from there. It was nothing when we started. We got the concession, and used it to finance a company called International Petroleum. The market cap was about $20-30 million. We sold the company in 2001 for $400 million to Talisman, the Canadian company, and gave the shareholders one share in the new company, called Lundin Petroleum. That started with one asset, the Sudan concession, which Talisman didn’t want. Lundin Petroleum is now capitalized at $1.5 billion.

XL: Is there someone at Talisman kicking himself now?

I don’t think so, no. Their interests were elsewhere.

XL: But you had a lot of ups and downs along the way, made money, lost money, formed new companies, merged them-is it true that you worked out the agreement to sell most of your shares in Gulfstream on the back of a napkin in a restaurant?

Yes, it’s true. The Qataris were unhappy because they tried to back out of their concession agreements, and we beat them in court. After that, they were likely to drag their feet on giving us the permits and other things we’d need to develop the gas field.

XL: And is it also true that, before your split with Chester Millar, you helped him finance the development of the heap leaching method of gold extraction?

Yes, that was through a company that later became Glamis Gold, which owned 65 percent of Chemgold and its Picacho gold mine in southeastern California.

XL: What would you say was your best mining deal?

The East Daggafontein tailings project in South Africa. We hired more than four hundred black people from one of the poorest parts of South Africa and gave them good, high-paying jobs. Thanks to our operations, Nelson Mandela had more money in the treasury when he became president in the early 1990s. We were able to work with Anglo and build the plant together, making the venture more profitable for both companies. We were able to extract gold for about $150 per ounce-for years it was the lowest-cost gold operation in the world. And we made a lot of money for ourselves and our shareholders; East Daggafontein stock was at about 50 cents when we took over and rose to about $10 by the time we sold out of the company.

XL: Is there an overall philosophy guiding these business deals you make?

We try to do only very big projects, because they take the same amount of work as small ones, but the payout is much bigger. The Bajo de la Alumbrera deal was both large and risky, given the political risk of doing business in Argentina at the time. But that’s what allowed us to pick up such a large deposit-now producing 509,000 ounces of gold and 172,000 tonnes of copper annually-for a couple million dollars and a 20 percent net profit sharing. We sold it to Rio Aglom and North Limited for $510 million in 1995, and it is now one of the world’s largest producing mines. Then there was the Veladero project that we built up through a company called Argentina Gold and sold to Homestake for $300 million in 1999. Actually, we had done a joint venture on Veladero with Barrick, and they tried a hostile takeover of Argentina Gold, but we beat them and sold to Homestake. Barrick ended up buying Homestake, and we made a lot of money for our shareholders. Ambition pays-and it’s more exciting, too.

XL: Your bio says you’ve trekked through the jungles of Ecuador and the Amazon, climbed Mount Kilimanjaro and hiked in Lapland and the Galapagos. Excitement seems important to you-in your private life as well as in business.

Yes, sure.

XL: Of the different things the Lundin companies are doing now, which do you think are most exciting?

They are all exciting … Lundin Petroleum is a growing oil company, producing about 40,000 barrels per day, and we have plans to reach 100,000 barrels per day within a couple years. Oil will continue to increase in value over the years, so we’re continuing to build reserves. We’re also quite active in Russia. Our Vostok Nafta investment company is investing in oil shares there. We’re drilling for oil in the Moscow Stock Exchange instead of Siberia.

XL: What about the Yukos break-up? Doesn’t it worry you that the government may arbitrarily decide to take down companies it doesn’t like?

Not at all. I think what happened there was a normal process within the rule of law. Yukos was investigated for not paying their taxes. That’s a normal, legal process. I don’t think the Kremlin is all that involved. Our biggest investment is in Gazprom, an enormous gas company over there. They have about 25 percent of the world’s gas reserves and supply 30 percent of Europe’s need for gas. We own about 1.2 percent of that company. Another of our companies in the energy sector, International Uranium, is doing very well, and we think the price of uranium will go much higher. Gold is also up, of course, and we have companies exploring for gold in Canada, in Ghana, in Argentina-and Tenke Mining’s huge copper/cobalt deposit in the Congo.

XL: Do you think Tenke Mining’s resources will be freed up in the Congo any time soon?

Oh, yes, we think they will. The place has always been a basket case, but it’s quiet now. There’s no civil war going on, so I think the country can start developing again. There’s a lot of pressure to get our project started-the country’s rulers want to get things going again, to generate revenue and to become a part of the world again. We think things will get going again next year [2005]. This is a good thing for speculators, because the stock is held down by the Congo stigma, and the deposit is very rich-the ore body is fantastic. And don’t forget that Tenke also has some very exciting properties in Argentina.

XL: Let’s talk about more general economic trends. Where do you see the resource sector going?

Base metal prices are looking pretty good, because of the big demand from China. The global economy is growing faster this year than it has for 30 years. Maybe there will be a bit of a slowdown, but I don’t see a big slowdown coming soon. I don’t agree with the pessimists that are saying the U.S. economy will be in trouble soon. Instead of growing 4 percent, it may grow 2.5 percent, or 3 percent, and that’s still quite a lot. China will continue growing. And the rest of the developing world, they want to catch up, so they will continue growing.

XL: What about uranium-where do you think that’s going to go?

I think it’s just the beginning for uranium. Oil is going downhill. We’re finding less and less oil and consuming more and more-we’re within one or two years from the big roll-over when world supply cannot satisfy world demand. Then the price will move high enough to curb demand. I believe the peak oil phenomenon has already started-we’ve already had 60-70 percent increases in oil prices over the last year. This is the beginning. It’s very bullish for uranium; it has to take up a lot of slack. So, this is good for Lundin Petroleum and International Uranium Corp.

XL: What other companies in the resource sector do you like? Who do you respect?

In the oil business, we’re very impressed with Talisman; Jim Buckee is an excellent manager and they show very good growth. On the mining side, we like Phelps-Dodge. They are focused on becoming very big in copper. They are doing that, building mines, exploring. We like the top management; they have been excellent partners for us.

XL: Anything else?

Well, we’re just very happy that, from the beginning, we’ve had close ties with Canada and that they continue. I got involved in Vancouver at an early stage and that became our intellectual capital.

XL: Any final words of wisdom?

No guts, no glory!

XL: Or, to use the Explorers’ League motto, “Fortune Favors the Brave”… which certainly seems appropriate after speaking with you. Thank you very much for your time, we look forward to staying in touch.

You’re welcome.