Ann: Becoming a substantial holder, page-17

I am one of the people who did well with DEG. I bought in because a fellow I know rang me to tell me how well he had done with DEG, riding it up to 24 cents from about 8 cents then selling out. My friend has a talent for spotting a company with real prospects, something I learned when I used to work with him. Anyway, I looked at the company and read their ASX releases and I realised that Andy Beckwith was doing exactly what the geologists had done with Gold Road. That was enough to get me to by a stake on a pull back to 20 cents. The stock fell so I dollar cost averaged and bought more. It fell more and I bought more - all the way down to 3.7 cents a share. At that point I was a wall of worry and, had I had a financial advisor, I would never have made such a large commitment. Needless to say, Andy delivered the goods, finding the intrusion deposit below a relatively shallow overburden (it was thick - about 50 feet from memory) for the exploratory drill program. A poor geologist could well have identified the wrong spot to sink that hole. Later, the company drilled out that ore body and defined the extent of the first ore body of many ore bodies. Those were exciting days to be a shareholder in DEG.

Anyway, RR1 looks interesting with 41 meters of gold "from the surface" (no overburden to strip off) at grades similar to that of DEG. One drill hole does not make an open pit mine so there has to be a lot more drilling to make this a goer but the speculation that the people at RR1 might have found something is looking compelling. It is in a highly prospective part of WA with multi million ounce deposits all around it and two other companies also working the area ( the ASX listed MEK and the Toronto listed Monument Mining). Monument doesn't seem to have done much exploring themselves but they do have a 260,000 tonne per annum processing plant to process the ore that they do have (maybe 700,000 tonnes of ore). MEK, on the other hand, does look a lot like DEG with "shallow deposits" (34 meters underground) but multiple strata of relatively good grades. The share price has run up from 3.3 cents to 12.5 cents reflecting two good announcements that seem to extend existing open pit mines. With that drill intercept RR1 is no longer a mere nearology play but it might just be a play in it's own right. Another positive drill hole confirming a thick intercept like the last one (especially if from the surface) will draw serious attention. How much attention? Maybe enough to make you glad you hold them. The pull back in price at the moment is not a rejection of RR1, it is a global phenomena and in the case of the junior explorers sometimes the baby is thrown out with the bathwater. This pull back could be a gift. We just won't know until the drill results come in and if they confirm the continuity and the extent of the ore body. This is a speculative play but one worth taking. I just wish I had a cool $400,000 that I could throw at it like Mr Nelson did.