http://www.theaureport.com/pub/na/7192

Taylor MacDonald: Off the Beaten Path

TGR: Any other particularly interesting holdings in your portfolio?

TM: Bayfield Ventures Corp. (TSX.V:BYV) is a recent favorite of mine. The company has a large block adjacent to Rainy River Resources Ltd.'s (TSX.V:RR) main gold zone. The earn-in wasn't completed until late 2008 largely because of the economic collapse, despite a number of holes showing gold in that location. But Bayfield retained its 100% ownership.

Bayfield recently financed, assembled a good war chest and has undertaken a 20,000-meter drill program, which is one of the most aggressive juniors I follow. The company said that its drill program intersected gold in four holes and confirmed that Rainy River's ODM 17 gold zone extends onto their property, and then just yesterday they reported a barnburner of a hole—9m grading 12.88 g/t gold with a high-grade zone of 3m grading more than 1 oz./ton. Assay results are pending on another 11 holes, and I'm very excited to see these and the other holes they are going to complete this season.

The debate is on whether Rainy River is an open pit, open pit with an underground portion or whether the deposit hangs together as a pure-underground mine. I expect eventually they will have to purchase Bayfield's block or the company as a whole, and if Bayfield manages to pull some more good holes out of the ground and discover new zones, this could be a very painful purchase for Rainy River.

TGR: Will Rainy River have enough cash to acquire Bayfield?

TM: I don't know if it will be cash or cash and stock, but the company does have some $60 million in the till. I can't speculate on that at this point; however, Rainy River does have a market cap of about $500 million, so they certainly have the paper to make an acquisition.