From Brent Cook's web site, which I do subscribe and recommend others to consider. ($140us/mth is not really expensive when big money is invested and big money is not lost)

Brent really likes San's exploration potential, and no wonder, our story sounds the same as the successes below and the Gold Corp, Red Lake re-discovery under the old mine workings.

Can you tell we've had nothing but rain in Winnipeg for the last week..... I'm posting more than FC at the Outhouse board :)

cheers

The Discovery Process

by Brent Cook

So how does someone actually find an ore deposit? More importantly, how does someone actually make money in the process? A few recent discoveries may provide some insight to the process and demonstrate the potential profit to shareholders when a deposit is found.

Mag Silver’s Juanicipio silver discovery was the result of a different geological interpretation by geologist Peter Megaw combined with some persistence and financial help from Penoles who own the nearby Fresnillo Silver Mine. It was effectively found within sight of the Fresnillo head-frame where the accepted model said it should not have been. The stock increased from $1.50 to peak at around $12.50.

Aurelian’s FDN gold discovery in Ecuador was based on geologist Steve Leary’s interpretation that a fault occurring at depth, where no one could see it, was channeling auriferous fluids into essentially barren conglomerates. The stock increased from $0.60 to around $40.

Bear Creek’s Corani Silver discovery in Peru came about because of Dave Volkert’s and Andy Swarthout’s insights into the nature of the low grade mineralization associated with a large alteration system. The stock ran from $0.75 to $12.80.

IMA Exploration’s discovery of Navidad in Argentina was due to Paul Ladka recognizing the importance of stream data that had previously been considered irrelevant. IMA went from $0.60 to $4.50.

Virginia Gold’s Eleonor discovery was the result of just plain hard work, persistence and insight on the part of Andre Gaumond, Paul Archer and the rest of their team. $1.50 to $10.00 from discovery to takeover.

Esperanza Silver’s San Luis discovery in Peru was originally found by a Peruvian prospector that brought back a rock he thought Bill Pinkus (Esperanza’s President) would be interested in. $0.65 to $4.00.

Acknowledging that nothing happens without hard work and money, it seems to me that in all these cases you had intelligent and perceptive geologists recognizing features that lead to a re-interpretation or re-examination of data that other geologists had either missed or felt unimportant, and that they all got horseshit lucky.

In each of the above cases I was able to establish a stock position for my clients and myself in the very early stages of the discovery. I had either visited the property or was familiar enough with the geology to be able to recognize the significance of the results the respective companies released. Just as important, though not as obvious, are the number of companies whose "stellar" results we passed on and whose stocks subsequently collapsed as geologic reality set in.

There are currently something like 4,000 junior exploration companies supposedly exploring for mineral deposits of which maybe a few hundred are actually doing verifiable work. Juxtapose that with the number of significant discoveries that stand a chance of becoming economic, which you could probably count on two hands and maybe a foot, and it is clear the odds are stacked against the speculator in junior exploration companies. I know of no way to factor in the fickle finger of luck; yet, as a good friend of ours is fond of saying, “luck favors the trained observer”. I believe you can substantially increase your odds of success by identifying the trained observers and thereby populate your portfolio with “lucky” people.