In their 2005 outlook, Rosseau’s Warren Irwin stated … “I am convinced that we will see a major mineral discovery unfold in 2005 as there are just too many good junior resource companies out there with solid expertise and lots of money for a discovery not to be made.” Well it was a prescient call as there were some major discoveries last year. It’s most likely because Warren participated in a similar cycle in the 90s when he was working at Deutsche Bank that he was able to find three outstanding ones that accounted for the bulk of their 30.82% return in 2005.

There is a major exploration cycle taking place at the moment which is independent of commodity price moves. Junior resource companies have lots of money and good prospects to test in the coming years and there will be some exceptional opportunities as a result. Rosseau are therefore playing the exploration cycle not the commodity price cycle. “If we were good at predicting commodity prices, we would be running a commodity futures fund” opines Irwin.

The first company they discovered was FNX Mining. They bought the stock after the announcement of a major “footwall” discovery in the Sudbury Basin. “If you don’t know what a “footwall” deposit is, you are not alone” adds Irwin. “Few people knew at the beginning of 2005. A footwall deposit is a massively rich underground copper deposit that is found in the rock adjacent to many of Sudbury’s large nickel deposits. We took the initiative and dug deeply into footwall discoveries, speaking to leading experts on the subject and became aware of just how significant the discovery was, and we did so well before other market participants.” In any event, they purchased the stock in the $8.50 range and it finished up the year at $13.59. Looking ahead to 2006

In 2006, this discovery cycle will continue and lots of money will be made in companies that have used their exploration dollars wisely. Sticking their necks out a bit, after a trip to Guyana to check out their investment in Guyana Goldfields, the team at Rosseau think they are onto a major system and that they will be bought out by a major before the end of the 2006. “We simply hope they have enough time to drill off as much of the property as they can before they get bought. We first bought this stock on the strength of Pat Sheridan Jr., the President and CEO of the company, in 2003 for $0.45 with a half warrant at $0.70.” claims Irwin. The stock closed the year at $3.88.

“Actually, looking at a number of the names in the resource portion of our portfolio, it is hard not to get excited about the prospects. We have some truly exceptional nickel, gold and diamond companies in our portfolio. With a little luck, we could make a lot of money from these stocks in 2006. Outside of the resource sector, we have some exciting opportunities in technology and health care that could also make us a substantial amount of money next year” concludes Irwin