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Author Topic: Ron Struthers' report on PGDP!!
Silverrado
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Here is an article put out by Ron Struthers about last week's market effect on PGDP:

Resource/Tech Update - V11 #10.1, - Markets, SME, LSG, PTM, PGDP - Oct., 17 2005

PO Box 1020 Owen Sound, Ontario, Canada N4K 6H6
resource*bmts.com Yearly subscription $125 cdn/year or US$99

Web Site " http://www.playstocks.net" Phone-519-374-9332

Hello folks, it is good to be back after a long but very good trip to
the Philippines. It never fails though, whenever I go away for a week
or more, it seems a lot happens.

I will update you on what I found in the Philippines in the next week,
but for now I want to touch on the major developments while I was
away.

Paramount Gold OTCPinks:PGDP Recent Price US$0.90
Entry Price $1.35 Opinion - strong buy, average down

Paramount was the one gold stock on our list that got hit harder than
most in this dip in gold stocks. Perhaps because it had run up quite a
ways and also trading on the Pinks, stocks can be more volatile.
Market makers tend to swing the stocks farther and increase spreads,
this is how they make their money and it also helps to panic investors
to drive volume.

The company put out 3 excellent news releases while I was away that
should have supported the stock well over $1.00. Perhaps the fact that
I got concerned the stock would keep going higher was a good signal
that a correction would soon happen, Regardless, the current price
offers an excellent buy level if you missed the stock earlier and if
you paid $1.35, now would be a good time to average that buy price
down towards $1.00.

First the company announced a former senior geologist from Barrick as
Exploration Manager for South America. Alain Vachon, P.Eng., Geologist
has 30 years of experience. Since 2002, he has worked as an
independent Consulting Geologist and Exploration Manager. From 1997 to
2001 he was Exploration Manager for Sulliden Exploration, where his
work on the Mario property in 2000 led to the nomination for the
prestigious "Prospector of the Year" award in Peru. Prior to these
accomplishments, Mr. Vachon worked as a Senior Geologist for both
Barrick Gold (NYSE:ABX) and the recently renamed Noranda Falconbridge.

I spent some time with Mr. Vachon when I was last in Peru, doing some
property visits and this guy is very well connected and a true expert
in his field.

After this appointment, Paramount announced a joint venture with
Barrick Gold on a large property in Peru, know as the Linda property,
totaling 45,000 hectares. It is located within a mining district which
is currently being explored by several junior and major companies
including Newmont Mining (NYSE:NEM) and Southern Peru, some of the
most important exploration companies and mining operators in Peru.

Previous work carried out on the Property led to the discovery of a
kilometric low grade gold system within Cretaceous sedimentary rocks.
In Paramount's view, the system may be suitable for hosting a low
grade large volume heap leached deposit. As of today, the genetic
model of such mineralization has not been clearly identified but it
presents several similarities with porphyry, skarn or Carlin type.
Mineralization and alteration (silicification and decarbonitization)
are spatially associated and controlled by NW and NE trending faults
and hydrothermal breccias.

Detailed sampling (chip and channel) have been completed over an
area covering approximately 1.5 km x 1.0 km. Outside of this zone, the
sediments are covered by young unaltered volcanic rocks. A total of
928 surface samples has been collected, of which 263 (28%) have
returned gold values greater than 300 ppb (0.3 g/t) Au, including 169
with values greater than 500 (0.5 g/t) and, 59 with values greater
than 1000 ppb (1 g/t) Au. Of note, the arithmetic average of these 263
samples stands at 0.93 g/t Au. Paramount believes that this value
compares very well with head grades of several small and large gold
mines in Peru. In 1996, a junior company drilled 8 holes on the
property: 4 holes cut oxide gold mineralization with a high value of
1.5 g/t Au over 26 m in hole 4.

The JV agreement calls for a two-year work commitment including a
total of 6000 meters of drilling, of which 2000 meters is a firm
commitment during the first year of the deal. Once Paramount has
completed the above requirements, they will have acquired a 51%
interest in the Property and will remain the operator. Barrick has
been granted a back-in right to reach a 65% interest, exercisable at
any time after Paramount acquires its 51% interest in the Property, if
exploration work uncovers a gold resource greater than 2 million
ounces. To earn its 65% interest, Minera ABX (Barrick) will reimburse
Paramount an amount equal to two times all exploration expenditures
incurred by Paramount.


While I was in Toronto, a week before I went to the Philippines, I met
with Alain Vachon and went over a geological report and data on the
property provided by Barrick. I can tell you that this is an excellent
property and Alain Vachon is the likely reason that Paramount got this
deal. The other factor is the project has a couple of differences from
the typical exploration model that Barrick is looking for and by
farming out, Barrick down loads some of the exploration risk.
Barrick's own report has a target on this project of greater than 2
million ounces and this is likely why they retained the back in right.
For Paramount, it would still be huge to have a 35% interest in a
multi million ounce discovery, should it happen and a partner like
Barrick. This Linda property is a typical target in Peru that has
potential for a 10 to 15 million ounce discovery.

The surface sampling shows a distinct trend and Alain has some good
ideas already on where to target drilling.

While the average of the surface samples is just 0.93 g/t and may seem
low, this is typical and within range of the huge gold mines in Peru.
Lets have a look at some of the large mines in Peru to get an idea.
Barrick's 9.1 million ounce Lagunas Norte mine in Peru is about 1.2
g/t, Barrick's other Peru mines:
Pierina - 2.5M ounces is about 1.2 g/t.
Pascua-Lama's 17.6M ounces is about 1.5 g/t.
Veladero at 12.8M ounces is about 1.0 g/t.

Newmont's largest mine, Yanacocha in Peru has a whopping gold reserve
of about 32 million ounces and the grades run under 1 g/t, about 0.8
to 0.9 g/t.

Paramount's challenge is to find a higher grade section of 1.5 to 2.0
g/t and to find enough gold (over 2 million ounces) to make the
development of a mine feasible. I think the odds are very good, but
only time and drilling will tell. We know the gold grade on the
surface is there, the key - is to find the 3rd dimension, at depth,
some longer holes than hole #4 that ran 1.5 g/t Au over 26 metres will
be a good start.

Further positive news was a financing announced at a 37% premium to
today's market price of the stock

Last Thursday, Paramount announced that it has concluded arrangements
for a US $750,000 private placement financing of 1-year restricted
stock. The transaction is based on a per share price of US $1.26 with
no warrants attached or finder fees. The price is calculated on the
basis of the average closing price of Paramount's common stock over
the past 10 trading days. Haynes Capital Corp., a global capital
management company that enhances issuer access to the investment
community, arranged the financing.


Investor Relations:
Skyline Communications, 613-226-9881
toll-free: 1-866-481-2233

Website: http://www.paramountgold.com

http://www.stockhouse.com/comp_info.asp?symbol=PGDP&table=LIST

(c) Copyright 2005, Struther's Resource/Tech Report

All forecasts and recommendations are based on opinion. Markets change
direction with consensus beliefs, which may change at any time and
without notice. The author/publisher of this publication has taken
every precaution to provide the most accurate information possible.
The information & data were obtained from sources believed to be
reliable, but because the information & data source are beyond the
author's control, no representation or guarantee is made that it is
complete or accurate. The reader accepts information on the condition
that errors or omissions shall not be made the basis for any claim,
demand or cause for action. Because of the ever-changing nature of
information & statistics the author/publisher strongly encourages the
reader to communicate directly with the company and/or with their
personal investment advisor to obtain up to date information. Past
results are not necessarily indicative of future results. Any
statements non-factual in nature constitute only current opinions,
which are subject to change. The author/publisher may or may not have
a position in the securities and/or options relating thereto, & may
make purchases and/or sales of these securities relating thereto from
time to time in the open market or otherwise. Neither the information,
nor opinions expressed, shall be construed as a solicitation to buy or
sell any stock, futures or options contract mentioned herein. The
author/publisher of this letter is not a qualified financial advisor &
is not acting as such in this publication. Struther's Resource Stock
Report is not a registered financial advisory. Investors are advised
to obtain the advice of a qualified financial & investment advisor
before entering any financial transaction.


Struther's Resource/Tech Report & MicroCap Report
PO Box 1020, Owen Sound, Ont. Canada N4K 6H6
519-374-9332 Editor: Ron Struthers
Email resource*bmts.com Web "http://www.playstocks.net "
Investment Opportunities & Strategies in the Markets for Tomorrow

Posts: 22 | From: Ottawa | Registered: Jan 2005  |  IP: Logged | Report this post to a Moderator
usaa112
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This guy knows his gold stocks, but I don't think PGDP is going to run too high without actual numbers, but hopefully they will be out soon and then.....boom!
Posts: 158 | Registered: Jan 2005  |  IP: Logged | Report this post to a Moderator
   

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