XL: Let’s start at the beginning. Can you tell us a bit about your background, education, and why you got into mining?

Ron: Sure. I got a degree in geology from the University of Alberta in 1964. As part of that, I started working in the bush in northern Saskatchewan on government surveys. I found that was a lot better than working on the railroad as a section hand, so I became a geologist.

XL: So… you’d been working on the railroad?

Ron: Just in the summers. It was kind of amusing. I was a city kid. My first job in the bush was my first time camping, using a canoe, or an outboard motor. It was an interesting learning curve, but I decided I liked the lifestyle. So I got my undergraduate degree in exploration geology, then went on to get a Masters from the University of Calgary in 1967.
XL: And what made you decide to study geology in the first place?

Ron: It was a fluke in life. Basically, I took geology as a first-year option. I was supposed to be geared for the sciences, and I didn’t like biology, didn’t like a lot of the other sciences-my math wasn’t that great. I knew nothing about geology, so I took it, and found that I like rocks.

XL: That’s interesting-no childhood dreams here.

Ron: The only thing I can add is that when I used to shovel gravel for the railroad, I used to pick up the shiny ones. [laughs]

XL: How did you get started after graduating?

Ron: As you know, it’s a very cyclic business. When I finished my graduate degree, there weren’t a lot of jobs around. So, I went almost immediately from being a student to being a consultant-which is another word for being unemployed. I was fortunate, though, to already have some experience running bush camps and that sort of thing, so I got into consulting and contracting right then and there. I remained in that mode for many years… until the ‘70s, when I got my first exposure to public companies. I ended up as lead contractor in a lot of the staking that happened during the uranium rush in Saskatchewan, until about 1974.

XL: We saw in the Santoy story that you had early experience in Saskatchewan uranium exploration, but coal too, right?

Ron: The uranium rush started in ’69, after the original Rabbit Lake discovery. I was already exploring for uranium in northern Saskatchewan, well before the key deposits at Rabbit and Key Lake were discovered. I was actually working with another group at the time when Key Lake was discovered-a company called Comaplex, which is a very successful exploration company with gold and oil and gas interests-and a predecessor company to Claude Resources (T.CRJ).

We were all up in northern Saskatchewan. Unexco (a partner in the Key Lake discovery) made a premature announcement of the discovery, and I happened to be in the mine recorder’s office that day, and we had field crews within 30 miles of there, so we got into the land game that cycle. Before it was over, we staked well over a million acres. We were able to sell that, and go from starving to death to being fairly prosperous. That was the core money that helped build Claude Resources, and a good chunk of the core money that helped build Comaplex as a successful company. We all kind of started from the same roots. That was my early exposure to uranium, which ended when the Three Mile Island accident hit the news. By that time, I was running a consulting business called Taiga Consultants, with some partners. We were a fairly large consulting business-it’s still in business, still doing quite well as a consulting business, but I sold out many years ago.

XL: So, you started by hanging your own shingle, then it grew into a larger consulting business as you added partners?

Ron: That’s right. I went from there to getting involved-as an outsider, really-in public junior companies. I think one of the first companies I had a share position in was a company called Universal Uranium.

XL: Being in the right place at the right time, you benefited from the Saskatchewan uranium rush. Is there anything else from that consultancy period that’s particularly noteworthy, or that you’re particularly proud of?

Ron: Well, I did uranium exploration all over North America, but after Three Mile Island, I recognized that the uranium cycle was coming to a close, and within a week of that, we started acquiring our first properties in the northern Saskatchewan greenstone gold belt. Those properties became the seeds for my first public involvement. That was a company called Golden Rule Resources, which I started in about 1982. We were one of the first junior companies to get on the gold bandwagon after the price changes. We put together a property portfolio that was quite extensive in North America. We basically had the entire LaRonge greenstone belt-a good percentage of the properties that are now in Golden Band were in Golden Rule and were probably identified by my field crews at that time. Some of those did prove up and go into production as small gold mines-the Jasper deposit was one.

XL: So, jumping forward a bit to Golden Band, these aren’t just properties some old prospector wandered in with; these are prospects you have long been familiar with.

Ron: Yes, that’s right. We’ve already got most of the learning curve behind us there. We were involved with the discovery of Weedy Lake, which is now called the Golden Heart zone… Wedge Lake, which we do not control in Golden Band… and a number of the other deposits. We definitely expanded the resource base there.

XL: So, what happened?

Ron: I stayed with Golden Rule for many years as co-founder, until we had a “management difference” [chuckles], which happens in our business. That was probably very fortunate, because we made Golden Rule into a fairly serious explorer, but unfortunately it was hit by a salt job-well after I was gone-and it’s been pretty much wiped out of the business.

XL: Salt job?

Ron: That’s when someone takes material and adds gold to it.

XL: You mean they spiked the samples?

Ron: Yes, they spiked the samples. I believe that it wasn’t one of the principals of the company that did it, but one of the outsiders that benefited. It’s one of those things that trashes a company.

XL: Certainly.

Ron: Prior to that, I had left the company and focused on another company called Delaware Resources. That would have been about 1987. It actually took us a couple years to get it public-another one of those learning curves. It was one of those deals where people came to us and said, “You know how to run one of these companies. It’s all set up. We’ve got this property in southern B.C. It’s wonderful. We just need someone to run the company.” So, I took it on, and two years later we finally got it public. The reality was that it was initially a bit of a shambles.

XL: Financially?

Ron: The company’s properties weren’t very good, in the sense that the deals weren’t workable. So we had to renegotiate, and when we finally got the company public, the IPO was at about the same price as our private placements were done at. Then we finally got to drill the property, and unfortunately-I used the term salt job once, and I hate to use it again, but there was something wrong with the assays. Fortunately, we were able to catch it before they were released and that was the end of that particular property. So, we had a company with some money, and tried again.

Fortunately, even though we had no money, we did have good connections with Cominco – and we had another project – the Snip in Northwest B.C. — that we were able to work a deal on with them. This was probably one of the earliest uses of flow-through funding. We barely had enough money in our treasury to start -we definitely needed good drill holes on that one right away. It took a few years, but it turned out to be a good decision for everyone; Snip went on to become a very successful mine. It produced over a million ounces, out of about a million tonnes of ore, so it was running at about an ounce per tonne. It was a very profitable mine. That was probably my first major gold success, aside from some of the Saskatchewan discoveries, which were smaller.

XL: And that was still in Delaware Resources?

Ron: That’s right. We actually had three prospects in Delaware when we hit on the Snip deposit. We had a large package of prospecting permits in northern Labrador-we actually had a lot of the land that’s now a major nickel play-we were just too early. In 1987, we had a market crash.

XL: Black Friday.

Ron: Delaware was doing very well at the time, trading around C$6 or C$7, we were just closing a financing, and the market crash came and our private placements disappeared. The company owed Cominco about C$2 million at the time, for the exploration they’d been doing on the property. So, I had to bring in new outside investors immediately.

XL: That must have been a Herculean effort.

Ron: Fortunately, we found a company that had cash within the Ned Goodman group-Bob Buchan was involved with the company, called Western Goldfields. They had a Nevada project called the Hog Ranch that wasn’t doing very well, but they had a lot of money in the treasury. So they did a private placement which, with their warrants, ended up giving them a potential 25% interest in Delaware. That was at C$5, but it was better than having the company default on payments.

XL: So, what happened after you did the Delaware financing?

Ron: Well, we ended up with essentially a 25% partner, a good partner, a healthy stock and cash. Within a month and a half of the crash, they swapped the stock to a company that became Prime Resources. Actually, Delaware Resources was the public company that they put all their other interests into. That’s how they ended up in control of the Snip. I stuck around for a bit because it was good for our shareholders, even though it was a target for a takeover at basically $10 or $12. Within a year the stock was at $28. So, it was a pretty good time.

Then John Tofan who was an associate in the Delaware days came to me with the Eskay Creek project. They had sort of a shell company called Calpine Resources which ended up doing a deal on the property with Consolidated Stikine Resources which was controlled by Marguerite MacKay. Her husband, who had died, had had the property for over 50 years. She insisted we do a placement in Stikine and, as part of the deal, John joined the board. In time, I joined the board as well.

XL: This is through Delaware Resources you were doing this?

Ron: Yes. Though Delaware had, by this time, become Prime Resources. The Eskay Creek discovery initial work was financed by Calpine. The first exploration program for about $250,000 resulted in the discovery hole.

XL: You said the property had been owned for 50 years. How much work had been done at Eskay when you acquired it?

Ron: Everyone and the kitchen sink had taken a shot at this property. It had been explored for over 50 years. The majors had one or two shots at it. We went in there with about a $250,000 program, did the first drilling and essentially hit the discovery hole.

XL: Wow. How did you succeed where everyone else had failed?

Ron: It had probably got down to the point where there weren’t any places left to drill. [laughs] There was a junior company a few years prior to us that got into regulatory grief but which had some interesting holes, although they were sub-ore grade. And they probably would have followed up except they got suspended and a number of guys got banned from trading for life. So the property didn’t advance at that time.

XL: And you were the next group to acquire the property.

Ron: We were the next group to take a shot at it.

XL: How did you end up with it?

Ron: Marguerite’s husband had died, and he was running this little company, which was essentially broke at the time, but he had been a stock promoter in Vancouver for years and had always believed in this property. As I said, he originally staked it in the mid-1930s.

XL: So he had been optioning it out all this time?

Ron: To various parties, yes. And after the company was orphaned, Marguerite realized that she might as well get some people to help her with it. And it was a real advantage for Consolidated Stikine because we did a private placement financing at 28 cents with full warrants at 35 cents. Four of us took it. John ended up taking three units because he couldn’t find any other parties to take it. I think within two or three years, we were taken out at $70.

XL: How was Eskay developed after you hit the discovery hole?

Ron: We hit the discovery hole and then a geologist called Chet Idziszek had his exploration team, from Prime Resources, pushed forward and continued drilling all through the winter. Nobody in his right mind would normally drill with a hundred feet of snow in the winter. But they were successful. By the end of that program, the real discovery holes were sunk and the real deposits got hit. The first deposit that we drilled off there is probably still not in the reserves. That’s the way it goes sometimes.

XL: What made Prime so enthusiastic about it that they wanted to press on through the winter?

Ron: They got some very nice grades in the early holes. Even though the mineralogy was very nasty.

XL: Nasty?

Ron: It’s what you’d call a refractory ore. It was full of realgar and orpiment, antimony, arsenic and mercury.

XL: But despite that, the grades were good enough to be interesting?

Ron: The grades were good enough.

XL: And after the winter program, what happened?

Ron: We worked continuously from there on and then Prime made a successful takeover bid for the balance of Calpine. We were out shopping the property to various majors. We cut a deal with Corona, Ned Goodman’s group, and they negotiated a price of about $55 per share. Behind the scenes, Placer Dome had been negotiating with them to jointly do it, but then they ran into disagreement about who was going to be the operator. One Friday morning, I was about to go home and got this phone call from the chairman of Placer saying that they had just made a takeover bid for Stikine at $67, cash.

XL: Nice premium.

Ron: Four of us really had the control block-five with Marguerite-and so we basically allowed Corona to match that. They ended up with it, but unfortunately I think they had to pay off so many costs that Ned lost control of the company to Homestake, and now it’s in Barrick’s hands.

XL: When did Eskay end up changing hands?

Ron: We basically did about a two or two-and-a-half-year program. The hole that really triggered the company, I think, was called hole 109, so that tells you how many holes we drilled. It was a spectacular hit for gold and atypical of the ore body, but it was the one that moved the market. Markets always need a signature.

XL: So, this wasn’t really a case where you applied any ground-breaking geological thinking to make the discovery.

Ron: Not really. [laughs] That’s what I always say-it’s better to be lucky.

XL: That’s certainly important. So, after that, were you involved in the project when it transferred to Corona?

Ron: No. Once we sold our shares, that was it.

XL: What was next for you?

Ron: I started working on a project in the Yukon for a company called Loki Gold-the Brewery Creek mine. We had joint-ventured with Noranda, which then dealt all their gold assets to Hemlo. Loki purchased Hemlo’s interest and permitted the mine in an 18-month period. It was a partial success-the gold price killed it as much as anything. And then it was about 1993 that I started once again looking at Saskatchewan with Golden Band.

XL: Tell us about that.

Ron: After the markets crashed in 1990, I slowed down somewhat. One year we were pretty aggressive in B.C. with all kinds of projects, and the next year we weren’t doing anything there. So, we did like everyone else in the business and ran off all over the world, getting new lessons taught to us by foreigners.

XL: What countries did you work in?

Ron: Indonesia, Australia, Africa-particularly West Africa, and we made a few discoveries there, in Mali and Burkina Faso. We had some producing gold mines in Zimbabwe with a company called Trillium. I remember one trip there with Doug Casey when the plane almost crashed. Fortunately, it didn’t.

XL: Happily not or there wouldn’t have been an Explorers’ League, and we wouldn’t be having this conversation. How big were your Zimbabwean mines?

Ron: They had a resource base of about a million ounces, before Mugabe and those people made the place untenable. We almost lost all our assets when that happened, but we had a nickel project with Falconbridge in the Ivory Coast that we were able to sell for about US$3 million to refinance the company. That’s where Trillium really became a shell company and was merged with Viceroy Explorations, part of Viceroy Group. The other company we had was called Oliver Gold Corp. We sold our interests in a mine in Mali to a group that sold it again a couple of times, and we got $5 million cash. That’s the shell company that eventually became Canico. So, we were able, in the worst of times, to recover some of the money and move some of our companies in new directions. That’s part of what we do, really-find opportunities for companies.

XL: This was a case where North America was down, so you had to go elsewhere in the world to find the money.

Ron: Yes.

XL: Are you still interested in working in exotic locales?

Ron: I’m kind of looking north-south. We’re active in Argentina with Viceroy, and in Ecuador with Skeena. I’m tired of doing all those long trips to Africa- and I’m just not very comfortable doing business in Africa anymore. I always find that the countries I pick, which are supposedly the good countries, end up being the crappy ones. And the crappy countries get better. So, I’ve always guessed wrong where to go.

XL: What happened after you rolled Trillium into Viceroy?

Ron: We took the parent company because we had a huge tax pool from past mining episodes in Australia. We made a bad management decision on buying a mine in Australia. Don’t buy a mine called Bounty. [laughs]

XL: Why not?

Ron: We lost $70 million dollars on it. We struggled through and converted the company into a merchant bank and it’s Quest Capital now. Some of the assets in the company were exploration opportunities, which the bankers don’t like to pay you for. So, what we did was spin out Viceroy Exploration to our shareholders and they did a very complicated merger with some other companies, and we also spun out what was Spectrum Gold, which became part of NovaGold. This was part of the cleanup. As I say, we don’t walk away from our things, we try to optimize them.

XL: And Golden Band was happening at the same time? Or was that later?

Ron: That was a little company that I’d ended up with, up in northern B.C. We’d bought it off of Reese McDonald in the heyday of the Smith discovery, and we’d worked there for quite awhile. It was essentially a shell company when B.C. politics went bad. And I had worked in uranium in Saskatchewan in the 1970s and ‘60s, plus I‘d initiated the exploration and the staking on the LaRonge gold belt. Historically, after I’d left there, the companies had spent about $50 million on that belt. And we were able to re-acquire the guts of that play with a lot of resources in place. I looked at it as unfinished business.

XL: So, when was it that you’d initially done the work there?

Ron: The first gold claims I staked there were a week after Three Mile Island.

XL: 1979.

Ron: Yes, the uranium business went just south after Three Mile Island. I was in gold the next week. Staking these gold claims.

XL: You staked there, and what kind of work did you do?

Ron: Using geochemical techniques we initially started looking at some of the old prospects that were left over from the 1930s and ‘40s and made some new discoveries, in part based on what the old-timers had done. We found about three or four deposits there fairly quickly, and other people started working in the belt. There were two small, successful producers. Our properties were probably larger, but lower-grade, which didn’t get into production at that time. So, we’re now thinking that the cycle is ready, and the gold price is ready-we have the database from the $50 million of exploration there to work with.

XL: Have you been holding some of these properties all this time?

Ron: We’ve been exploring since we took them back on. We’ve been growing our property position since about 1996.

XL: So, you let them lapse after the initial work decades ago, and now have picked them back up.

Ron: Well, what happened was that the big landholders were all fighting each other. Golden Rule Resources, which became CDG, was one of the big holders. Another big player there was Cameco. When gold was still $250, $260 and Golden Band was trading at a nickel-we were able to convince all these people to give us their interests. We got a hell of a land package, plus all the historical work and data.

XL: This was in 1996?

Ron: I think it basically got finished by about 1998 or 1999. We were accumulating land and having a few modest discoveries, but things weren’t going fast enough. So, we thought that if we could consolidate everyone’s resource base there and get rid of all the partnerships and all the joint ventures that weren’t operational, we would have enough of a resource to potentially go into production.

XL: And you’re the major landholder there now?

Ron: Yes, we’re the major player in the gold belt in Saskatchewan right now. We’re getting some competition, which is good. I always like having healthy competition, because it draws attention to the area.

XL: And having other operations in the area is actually an advantage for Golden Band because you own the Jolu mill, the only one there.

Ron: Right.

XL: What kind of potential do you ultimately see out of the LaRonge Belt?

Ron: With some of our neighbors, we can probably start up the mill at 20,000 to 30,000 ounces a year. But the main potential is in what we call the Waddy Lake area. It’s probably over a million ounces in resources. And we think that most of the deposits in that area are within 10 to 15 kilometers distance of each other. So, we feel that a central mill complex-because most of these are lower-grade, open-pit deposits-would make these things economic. But we have to complete a scoping study, which is what we’re working on this year. By the end of the year, we’ll have a preliminary economic assessment that tells us if we are correct and if we have a sufficient resource base to be economic at these gold prices. That would require a new mill; probably something that would be capable of 2,500 tonnes a day, whereas Jolu mill can only do 500.

XL: Is Jolu operating now?

Ron: No, it’s on care and maintenance, on stand-by. It’s still permitted, so it will probably take us less than a year to get going.

XL: So, this whole play in the belt is sort of a new economic idea rather than a new geological idea.

Ron: It’s partly that and partly consolidating ownership of various reserve bases. All of the deposits were owned by different people or controlled by different people. But they weren’t economic on a stand-alone basis. And we feel comfortable that in the belt, we can find more deposits. After all these years of exploration, we’re not confident we can find an elephant, but we think we can find bread and butter. At this point, we think we have a resource base to support maybe a ten-year mine life.

XL: And you think you can add more on top of that?

Ron: Yes. And that we’ll be capable of producing something like 75,000 to 100,000 ounces a year.

XL: How do you find more gold in an area that’s been so extensively explored already?

Ron: We keep looking for deposit types that historically weren’t explored for. Most of the gold within the LaRonge Belt is associated with the intrusive rocks. There were structures that cut the intrusive rocks because they’re more brittle. But a number of our new discoveries are not in the intrusive rocks, they’re in the volcanics. These didn’t have as much work done on them, so we think there’s some pretty good room to find more of these.

XL: So, you’re consolidating the old deposits and finding new ones.

Ron: That’s right. And our techniques for exploring in glaciated areas-we’re probably one of the leading companies in using till surveys to find gold. I mean, the techniques are used extensively in the diamond business, but they haven’t had as much recent use in the gold business. We process bulk till samples on site within a few days of collection instead of having a three- or four-month turnaround, which is traditional with the diamond sector. We are able to get that data and follow up fairly quickly. One of our new prospects is called Birch Crossing, a new discovery in the same structure as a lot of the other deposits, and it’s a direct result of this bulk till sampling. That one is quite interesting. We’ve drilled over 200 meters of strike length and across about 150 meters and hit multiple mineralized intersections.

XL: This till sampling hasn’t really been used before for gold?

Ron: It’s really the field processing that we’ve refined to be very effective.

XL: How have you managed to make it that much more efficient?

Ron: We have a little concentrator in camp. It’s techniques that other people could use, but we’ve sort of pioneered the method.

XL: Very good. So tell us about Skeena-how did you get involved in that?

Ron: It was the same person who got me involved in Baja Gold, a gentleman by the name of Bill Grafham. It was originally an oil company called Prolific Petroleum. That was back in the boom part of the last cycle. They went out and started drilling in some place like Utah, and it’s my understanding that they had the wells part way down when they discovered they didn’t have title. [chuckles] It became a shell and some years ago was brought to my attention, so we took over management and started moving it into the minerals business. It’s been around a long time, eventually changing its name to Skeena. We’ve tried a few things, and now hopefully we have a project that’s going to make it.

XL: Yes, how did this Ecuadorian project come up on your radar screen?

Ron: The president of the company, Rupert Allen, brought it to my attention. One of his associates knew the project from a previous cycle. The previous junior to take it on lost the property when the gold market collapsed and they couldn’t meet their financial obligations. Many of our opportunities in this business relate to the cycles we deal with. So, it was a property that had significant merit, but in a high-risk area, in the sense that Ecuador wasn’t necessarily a great place to do business then. Part of the reason we felt comfortable with Ecuador is because I’ve been involved as an outside director with a company called Pacalta that was very successful in the oil business in Ecuador. So, my attitude was, “I like Ecuador-it made me money.” [laughs] You always like a place that makes you money, no matter what anyone says about it.

XL: But, objectively, that’s a country that has frozen the assets of foreign nationals and done all kinds of things that are not good for business.

Ron: Yes… when I was working the oil patch, our risk was not in finding the oil, as in other places. In Ecuador, our risk was making sure no one took our oil away from us. But they do have a new mining act in, and they seem pretty serious. It’s a democracy-in general, it’s not as bad as people seem to think it is. I admit it took us a while, but we got the title to this particular property, and things seem to be operating under the letter of the law, so we’re going to give it a shot. Mainly because we think it’s got excellent geology.

XL: They fight it, but a lot of these countries seem to realize that they can’t be too business-unfriendly, if they don’t want their whole populations to starve.

Ron: That’s right. As long as you have patience and play it straight in these places, you can survive.

XL: All right then. Now we come to Santoy. That seemed to be a company in search of a mission for a while-what’s the story there?

Ron: Santoy is actually sort of a spin-off of a previous company I was an outside director for, called Manchester Oil & Gas. It was a junior oil and gas player in Alberta. We got involved in various mineral assets…

XL: Funny how that happens when you’re on board…

Ron: Yes, I can’t explain it. [laughs] Well, Manchester had an interest in several mineral properties, including one in northern Saskatchewan called Santoy Lake. It was a joint venture with Claude Resources, near their mine up there. Claude actually owns the property now; we sold it for shares and cash quite a while ago. I think they are looking at possibly putting Santoy into production. So, basically, Santoy was a shareholder dividend again, from the oil company, as it went off into another merger; we sold the oil company, and we all ended up holding shares in Santoy. So, as you say, I spent some time looking around. Our previous projects were in base metals, like nickel and platinum group metals. We ended up with some reasonably advanced projects that are still in the company, but unfortunately, the one we had high hopes for in Mexico, the grades just didn’t quite meet expectations or needs. We had Sumitomo spend well over US$3.5 million on that project. The surface results looked right, but the drilling didn’t yield the same grades.

XL: They can’t all work out.

Ron: Yes. So, Santoy was sitting, going nowhere, to be honest. Had several projects, but not one that would attract market attention and enable us to finance the company. As a shareholder, I got a little frustrated sitting on the outside, seeing it going nowhere… and by that time I’d started getting back into the uranium business a bit-about a year ago.

XL: Ah… so the real question is, how clear is your crystal ball, and did you start picking up uranium properties before the price jump mid-summer last year?

Ron: Well, I started getting involved indirectly through JNR Resources (V.JNN). It was by accident.

XL: Sounds like there’s a story there.

Ron: JNR was sort of sitting there starving to death, trading at three to five cents, but they had a project in the Athabasca basin that everyone I talked to kept saying looked like a great target. So, I mentioned it to the Lundin group, as I am sure several others did as well, but the Lundin’s ended up doing a deal with JNR and helping them get financed at 10 cents-I was a participant in the financing… which I’ve enjoyed. [chuckles]

XL: I’m sure you did!

Ron: [laughs] Yes, since then JNR has been quite healthy. So, I started giving some technical advice to various people that knew the uranium business, and started picking up some pieces of land for them. I’ve been tempted to get back into uranium a few times, but until recently, the timing just wasn’t right. Now, you know, it’s really exploded, as far as the land game…

XL: Yes.

Ron: Even all the bad uranium properties are being staked. [laughs]

XL: So, Santoy is still in the early stages. It doesn’t have a specific property or properties it’s developing, but it’s still in the process of putting its package together?

Ron: That’s right. In the next few weeks and months, you should start seeing some properties come in. We’ve filed for some prospecting permits in a couple provinces, and we’re negotiating with a number of parties on a number of properties we think are of merit. We think we’ll have some coming in pretty soon. We’re also looking at coal-Santoy does have a coal property that we had in the old company, a joint venture with Almaden Resources (T.AMM)-and we’re negotiating on a second coal property. It’s a good business. The whole energy business is a good business, the way the future is looking. I think that anything you can get into in the energy business, on a low-cost basis, is worth getting into.

XL: That’s interesting, we didn’t know Almaden had any interest in coal.

Ron: [laughs]

XL: Let’s turn to your main show these days, Viceroy Explorations (V.VYE). What’s going on in Argentina?

Ron: We’ve had a pretty exciting time. As I mentioned earlier, the new Viceroy Explorations was spun off from the old Viceroy, along with the Gualcamayo project in Argentina. Over the past year and a half, it has gone from being an exploration project to something considerably more. One of the scoping studies completed last December showed the potential for annual production at 100,000 ounces of gold for 10 years with cash operating costs of about $133. And that’s just on QDD, one of three deposits. We have two drills on site now, defining further opportunities for expansion. My feeling is that that the resource is still wide open… and ultimately could contain 3 million plus ounces.

XL. What’s your main focus at Gualcamayo now?

Ron: Getting a full feasibility done, which should happen early next year. As part of that, we are working to expand the resource and move the indicated and inferred into the measured category. In order to do so, we are expanding the camp so we can accommodate additional rigs – which means we should soon have 4 rigs on site. To pay for this phase, we’re pretty well cashed up – with about $12 million in the bank.

XL. What was it about Gualcamayo that initially attracted your attention?

Ron: When we originally saw the property, we saw correlations to a Carlin style deposit, and the more we look at it, the more that correlation holds up. In addition, we had a fair amount of data from previous operators, including Anglo and our predecessor company. Between those two companies, they had spent on the order of $12 million exploring the project and creating an exploration model… no small feat because the terrain, which is very steep, is very hard to explore. But we had a good exploration model to work with and when we begin drilling, we starting hitting good mineralization right out of the box.

The silver lining in the steep terrain is that, while exploration was expensive, mining should be inexpensive because the mineralization is basically contained in a thick slab, so should be able to use gravity on our side when mining.

XL. How has the share price been doing?

Ron: We’re up from about C$.85 a year ago. When I last looked, despite the overall weakness in the market, the stock is trading in the area of C$3.14 so the shareholders are happy. We’re looking to make them a lot happier.

XL: You obviously know how to kick rocks, but you also know how to cut deals, and you know how to find prospective areas for a good play. Is there a Netolitzky Method?

Ron: First, it is important to recognize that our business is cyclic. I think the last downward cycle has got to be one of the worst I’ve experienced. Maybe we had bad ones before, but I was young enough not to notice them-but I don’t think they were as lengthy or as bad as that one. So, I’m hoping we’ll have an up cycle that’s at least equivalent. But the important thing is to recognize that our business is cyclic, so you pick things up during the low part of the cycle. Let’s face it; the best way to get deposits is to get them off somebody else’s shelf. My thinking is that if you can find a resource that has significant grade and significant potential, you can wait out the cycle for an opportunity to buy-the cycle will come your way. You look at the commodities, and they all have a cycle, so the opportunity is to get involved with them when they are out of favor.

XL: So, it’s not just, “buy low, sell high,” but “wait for the low, then look for things where other people have done the early, hard work.”

Ron: Yes. Very few deposits go from discovery to production in one cycle.

XL: It sure seems like most properties go through many hands, including those of a major that decides they don’t want it…

Ron: And then a junior takes it to the next step and a major buys it again.

XL: In these interviews we always like to ask is who else you know out there who “does it right”-who do you respect as a prospector?

Ron: I think you’ve got a lot of them already in the Explorers’ League. You’ve got Duane Poliquin, the Hunter Dickinson group… there are some young guys. Rick Van Nieuwenhuyse has grown NovaGold (T.NG) into a hell of a company (some of his seed money actually came out of the old Viceroy company). Tim Termuende at Eagle Plains (V.EPL) is one of the few that goes out there on a grassroots basis. Actually, I hired him in our consulting business when he was a student. Simon Ridgway of Radius (V.RDU) has “done it” several times. He’s more of what we might call a follower of the traditional prospector approach. A lot of people do that, but Simon is one of the most successful ones.

XL: What about companies? Are there any you’d add to your own personal investment portfolio right now?

Ron: I’ve been so focused on what I’m doing with my own companies, I haven’t thought about where I should be investing my money, besides my own companies.

One young company you might want to watch is Shore Gold. They’re into diamonds in northern Saskatchewan, but they’ve also spun out a gold company, working right next to us. It’s run by Ken MacNeill-he’s the type of young guy who’s grown up in the business and is really going after it. He’s not a prospector, not a geologist, but he understands the business.

XL: Our readers like to know where Explorers like you see the resource sector going in the coming years. Do you see gold going “to the moon” as Doug Casey does?

Ron: I believe there’s a lot of upside to go. I think that China, for example, has grown to where it doesn’t need the U.S. as much as the U.S. needs China. So, even if there’s trouble ahead for the U.S. economy, China can create a lot of its own demand. Last year, in 2004, I thought gold would break $450. In 2003, I kinda thought it would break $350. This year, I think it’ll go to $500. I think it’ll do that as a function of supply and demand, and I think the U.S. will continue to quietly devalue the dollar-hopefully they can control it. None of us want to have a recession or hyper-inflation. From my perspective, sitting here in Canada, it looks like the U.S. has been exporting dollar bills for a long time. Now they are going to have to pay some of the price for that, and the only way to do it is by devaluing the dollar.

XL: Well, thank you very much for all your time.

Ron: It’s been a pleasure.