exploration target, page-5

I do declare up front, that I have sold out of LRC late last week, so that you know that from the outset.

But I make a general comment that I believe is valid.

LRC is continuing to quote its assays in "gold equivalents" in its major headings. Clearly it is doing that to take advantage of the recent substantial rise in gold price. If gold keeps going down, maybe they will re-consider that marketing strategy!

The basis of that gold equivalence, is quoted as: "...RAu/RAg = 60, based on long-range prices of gold at US$800/oz & silver US$15/oz".

You should take note that the 5 year basis for gold equivalence of 60 is in contrast to the spot prices of the metals today, say gold at US$1,093.60 and silver at US$17.01 at the time I checked them on Kitco. This equates to a "gold equivalence of 64.29", which therefore is reasonably close to the 5 year historical price used, but it should be noted that major headings in the announcement has a POSITIVE BIAS (ie over-states the gold equivalent values by average of 4.29% referred to in the announcement!).

And of course it can go both ways, that in times when gold outperforms then the ratio should be higher, at the moment gold has come back and silver has remained strong.

I believe, from my past review of market announcements, that basically Arqueros is a silver play with associated gold, not a gold play, and I posted that view much earlier on in LRC - especially since in the drilling program announcement that LRC was aiming to pursue gold rich parts of the mineralised system, clearly to increase gold ratio, but I am not sure if that has been successful with the drilling results today based on my quick perusal, even though there are some higher gold amounts, predominantly it has confirmed the continuing higher silver ratio of precious metals.

Certainly the drilling continues to provide "meat" to the theory that there is a lot of precious metals in the project and has the potential eventually to add to the existing inventory of metal estimated.

I am sure that Arqueros, given more drilling will add to its sizeable silver inventory and may develop into an economically viable project, but the current mixed message of it being called a gold project really confuses me.

Am I missing something in my analysis, I am not sure. If someone has a clearer and perhaps closer idea then I am happy to hear their view and discuss. I may decide to speak to Nick on this when I have some time to do so, is someone else doesn't.

Since its share price is so low, any possibility should result in it re-rating, but for now I will keep watching it.