Mr. Brownlie: Capital Gold is a producing gold mining company with operations in Mexico. It was formed out of a U.S. company, Leadville Mining & Milling, which had properties in Leadville, Colo. After that venture proved unsuccessful, the company acquired the El Chanate project from AngloGold. In 2006, when Standard Bank had money to lend towards the project, Capital Gold needed to have an operator on board, and that's when I came into the picture. From about April 2006 through July 2007, we built the mine for a capital cost of $18 million. We began producing at the end of July 2007 and have been producing gold ever since at a profit. El Chanate is located in Sonora, Mexico, near an urbanized town, which makes the operation quite simple, as our people go home at night.
Capital Gold has been in a growth mode and recently purchased an exploration property, Saric, located about 60 miles north of our current operation in Caborca. In December 2009, we released our initial drilling results on Saric that were quite positive. We plan on drilling there again in January. The El Chanate mine, which originally started with about 250,000 ounces of proven and probable, now currently hosts just over 1.5 million proven and probable ounces. So we've had great success in increasing the reserve base at El Chanate.
TWST: What is your perspective on how the commodities markets performed in the past six months? Where do you think they may be going over the next six to 12 months?
Mr. Brownlie: The commodities market started to get some traction in the last six months. Copper and some of the other base metals gained, but gold and silver took off significantly. I think there are many reasons for that. Unemployment, the continued increase of a few currencies, the continued talk from the government about increasing the money supply, the resistance of the banks to push money into circulation to support the economy all contribute towards a bit of a fear factor for 2010. More recently, with Greece as a nation being berated, I think what we're going to see is more and more people investing in either physical metal, gold mining stocks or ETFs. The gold space and the global economy are very small, so all it takes is a slight shift in portfolio perception and acquisition of gold in any form to drive the gold price. This will obviously significantly affect the share price of juniors and pure gold companies. So I'm very bullish on the precious metals sector.
Tickers included in this excerpt: CGC
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