Rusoro is the “mining partner of choice” in Venezuela, and is the only foreign mining company to successfully finance, build and operate gold mining operations on a long-term basis.

Rusoro only came into being in 2006. The companies mergered to form Rusoro. Their old name was Newton Ventures Inc. Pretty hard to finance, build and operate a mine in a little over 2 years.

Here is an article from May 2007 that gives some back round.

Malcolm Bucholtz B.Sc, MBA
Analyst

Trading Note

May 20, 2007

We are not the first entity to profile Rusoro Mining nor will we be the last. Sadly, despite all the attention this little gem of a company is receiving, its share price continues to trade at a discount to intrinsic value. The reason is the fear that Venezuela’s leftist wing-nut dictator Hugo Chavez has thrown into the markets and this is where I see a very lucrative contrarian investing opportunity.

2007 Will Be a Big Year

If there is one word that describes Rusoro’s approach - it is “aggressive”. This company is wasting precious little time in pushing forward to build and expand its reserves and resources. Doing a quick bit of math on their 5 properties, we see the company is sitting on about 4 million ounces of gold resources. They are halfway through 2007 drill program of 220,000 meters using up to 10 drill rigs. This will ensure significant progress and investors can look forward to a steady flow of news releases. Rusoro’s goal is to double their 43-101 compliant resources to about 8 million by year end – and go into production.

In addition, the processing mill is being upgraded so as to be able to handle a larger daily throughput. The very fact that such a facility exits places Rusoro several notches above a company that is simply at the exploration stage with some defined resources. Plans call for 100,000 ounces annual production in 2008, 200,000 ounces in 2009 and then 400,000 ounces in 2010 going forward.

Let’s now take a look at Rusoro’s assets that will start producing cash flow in Q4 of this year. As we do so, ask yourself why Rusoro, with all the negative sentiment towards Venezuela swirling around in the markets, was able to easily close a $75M financing earlier this year. But first, a quick look at the financial brain power behind the deal.


Mena + Newton + Grupo Agapov + Endeavour = Rusoro Mining

This 3-way combination deserves a bit of explanation to start.

• Mena Resources (TSXv:MEA) under the leadership of Mario Szotlender has been mining on a small scale in Venezuela for 10 years and has produced just over 300,000 ounces of Gold to date.

• Russian firm Grupo Agapov under the leadership of Vladimir Agapov is the owner of a substantial property base in Venezuela. Canadian Shell Company Newton Ventures moves to make Grupo Agapov one of its subsidiaries.

• Grupo Agapov does a reverse takeover of Newton and then merges with Mena to form the new entity Rusoro Mining. Mario Szotlender is the President of Rusoro and Mr. Agapov moves into the Chairman’s seat. Endeavour Mining Capital acts as the financial advisor – you’ve heard me talk about Endeavour before – they are bar none the smartest mining money in the world (deals to date include UUU, BGO, WRM, NNO, BGC etc.).

Properties and Resources

Increible 6 Project (100%)
This property is located near the town of El Callao and is easily accessible by road. Rusoro owns 100% of this project that lies adjacent to GoldFields Choco 10 Mine. A current 43-101 compliant resource on the property shows 434,000 ounces Gold indicated (grading 2.6g/tonne) and 766,000 ounces Gold inferred (grading 2.9 g/tonne). In both cases a cutoff grade of 0.5 g/tonne was applied.

Valle Hondo (100% owned)
The Valle Hondo Project is located 40 kms southeast of the San Rafael/El Placer Property. 43-101 compliant resource calculations show 103,000 ounces indicated (1 g/tonne) and 1 million ounces Gold inferred (<1 g/tonne). However, don’t let these seemingly low grades scare you off, this is an open pit scenario. The drilling to acquire the data for these 43-101 calculations was limited (ie 13,000 meters over 114 holes). Several of these holes returned grades up to 20 g/tonne and at this time of writing drilling is ongoing on the property to get a better handle on the strike and dip of the ore bodies that host these higher grades.

Emilia (100% owned)
This is where Rusoro’s 2007 production will come from. More importantly, however, is the fact that this property comes complete with a processing mill which has been in use by Mena for the past 10 years. All permits and titles are clear for this mill to produce 100,000 ounces of Gold per year. The Emilia Property is located only 5 kms west of Hecla Mining’s La Camorra Mine. Current development on the Emilia Project includes one open pit mine and two ore zones which have been accessed by open pit and underground methods. 43-101 resource calculations show an further inferred 82,500 ounces Gold (grading 3.9 g/tonne). Drilling will continue through 2007 to acquire enough data to expand this resource calculation.

San Rafael/El Placer (SREP 100% owned)
SREP will be one of the properties that feeds ore to the Emilia Mill. This property is 100% owned by Rusoro and is located adjacent to Hecla Mining’s La Camorra Mine. A 43-101 compliant resource calculation shows 490,000 ounces Gold indicated (grading 16.6 g/tonne) and 367,000 ounces Gold inferred (grading 15.7 g/tonne). Drilling is ongoing right now to obtain enough data to produce a pre-feasibility study later this year.

Ceiba II (100% owned)
Cieba II will also feed the Emilia Mill. The Cieba II project is located 40 kms south of the town of El Dorado. 43-101 compliant calculations show an inferred resource of 459,000 ounces Gold (grading 9.2 g/tonne).

Valuation

Valuing a junior company that has not yet attained cash flow is partly an art and partly a science. My personal approach is to take a look at the net recoverable economic value contained on the company’s projects. In the case of Rusoro, the current market cap is ~$325M CDN. Now, let’s assume that Rusoro can double their resources to ~8M ounces and 85% of that Gold is recoverable leaving Rusoro with a cash flow of at least $300 per ounce.

This then leaves us with a recoverable economic entity of 8 million ounces x 85% recoverability x US$300 = US$2.04 Billlion. Country taxes are of course applicable and let’s peg the tax rate at 25%. This leaves us with assumed valuation of $1.5 Billion. That’s right. $1.5 Billion and the market cap of Rusoro right now is ~$325 million or roughly one-fifth of the value of future recoverable Gold. Now do you see why I said at the outset that Rusoro was a screaming contrarian gold mining investment opportunity? As I also noted at the outset, Rusoro’s share price is not reflecting reality because of the Hugo Chavez fear factor. I have done a lot of reading and research into Mr. Chavez and his background. And you know something – I am perfectly comfortable with him. All he wants is to improve the lot in life for the poorer folk in the rural areas of Venezuela. His noisy outbursts on the world stage and his finger pointing at George Bush are nothing more than a source of entertainment for him.

Conclusions

• Hugo Chavez is not the wild, maniac dictator the popular media has portrayed him to be.

• Rusoro is carrying out one of the most aggressive drilling programs in the world right now.

• Drill results continue to be very successful in expanding known zones of Gold mineralization.

• Rusoro plans to start 100,000 ounce per year production by year end.

• Rusoro’s operations will end up creating jobs in the rural areas which is a positive for Mr. Chavez.

• Rusoro at this time is sitting on 1 million ounces of indicated and over 2.5 million ounces inferred Gold resource – Rusoro intends to double this by year end

• Applying some basic calculations leads to the conclusion that Rusoro at current prices is a screaming contrarian Gold mining investment opportunity.

• Rusoro Mining at current prices should be bought. Any subsequent dips in price going